<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0"><B>As filed with the U.S. Securities and Exchange Commission on
July 3, 2019</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 3pt; text-align: right"><B>Registration No. 333-[&#9679;]</B></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 0; margin-bottom: 0"><DIV STYLE="font-size: 1pt; border-top: Black 2pt solid; border-bottom: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0"></P>

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">&nbsp;</P>

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
Washington, D.C. 20549</B></P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM S-1<BR>
REGISTRATION STATEMENT<BR>
UNDER<BR>
THE SECURITIES ACT OF 1933</B></P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ORANCO, INC. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Exact name of registrant as specified in
its charter)</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 32%; border-bottom: Black 1.5pt solid"><P STYLE="border-bottom: Black 0pt solid; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Nevada</P></TD>
    <TD STYLE="width: 2%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 32%; border-bottom: Black 1.5pt solid"><P STYLE="border-bottom: Black 0pt solid; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">5180</P></TD>
    <TD STYLE="width: 2%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 32%; border-bottom: Black 1.5pt solid"><P STYLE="border-bottom: Black 0pt solid; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">87-0574491</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">(State or other jurisdiction of <BR>
    incorporation or organization)</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">(Primary Standard Industrial <BR>
    Classification Code Number)</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">(I.R.S. Employer <BR>
    Identification Number)</TD></TR>
</TABLE>
<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>One Liberty Plaza, Suite 2310 PMB# 21</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>New York, NY 10006</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Tel: (646) 759-3614</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Address, including zip code, and telephone
number, including area code, of registrant&rsquo;s principal executive offices)</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>One Liberty Plaza, Suite 2310 PMB# 21</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>New York, NY 10006</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Tel: (646) 759-3614</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Name, address, including zip code, and
telephone number, including area code, of agent for service)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>Copies to:</I></P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Ying Li, Esq.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Hunter, Taubman, Fischer &amp; Li LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>1450 Broadway</B>, <B>26th Floor,</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>New York, NY 10018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(212) 530-2231</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(212) 202-6380 (fax)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Approximate date of commencement of proposed sale to the
public</B>: As soon as practicable after this Registration Statement becomes effective.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If any of the securities being registered on this Form
are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following
box: &#9746;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering. &#9744;<FONT STYLE="font-family: Wingdings"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. &#9744;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. &#9744;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of &ldquo;large accelerated
filer,&rdquo; &ldquo;accelerated filer&rdquo; and &ldquo;smaller reporting company&rdquo; in Rule 12b2 of the Exchange Act.</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 50%; font-size: 10pt">Large accelerated filer &#9744;<FONT STYLE="font-family: Wingdings"></FONT></TD>
    <TD STYLE="width: 50%; font-size: 10pt">Accelerated filer &#9744;<FONT STYLE="font-family: Wingdings"></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">Non-accelerated filer <FONT STYLE="font-family: Wingdings"></FONT>&#9746;</TD>
    <TD STYLE="font-size: 10pt">Smaller reporting company &#9746; <FONT STYLE="font-family: Wingdings"> </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">Emerging growth company &#9746;</TD></TR>
</TABLE>
<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If an emerging growth company that prepares its financial statements
in accordance with U.S. GAAP, 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 7(a)(2)(B) of the Securities Act.
&#9744;</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B>&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<!-- Field: Page; Sequence: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CALCULATION OF REGISTRATION FEE</B></P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Title of each class of securities </B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>to be registered </B></P></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Amount of shares to <BR>
be </B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>registered<SUP>(1)</SUP></B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Proposed
    &nbsp;<BR>
    maximum &nbsp;<BR>
    offering &nbsp;<BR>
    price per &nbsp;<BR>
    share<SUP>(1)</SUP></TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Proposed
    &nbsp;<BR>
    maximum &nbsp;<BR>
    aggregate &nbsp;<BR>
    offering &nbsp;<BR>
    price<SUP>(1)</SUP></TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Amount of<BR>
 &nbsp;registration <BR>
fee</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 20%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Common stock, par value $0.001 per share, offered by certain selling stockholders</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 17%; font: 10pt Times New Roman, Times, Serif; text-align: right">73,898,080</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 17%; font: 10pt Times New Roman, Times, Serif; text-align: right">0.80</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"></TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 17%; font: 10pt Times New Roman, Times, Serif; text-align: right">59,118,464</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 17%; font: 10pt Times New Roman, Times, Serif; text-align: right">7,166</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 5%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1) </FONT></TD>
    <TD STYLE="width: 95%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Estimated pursuant to Rule 457(a) under the Securities Act of 1933 solely for the purpose of calculating the amount of the registration fee. </FONT></TD></TR>
</TABLE>
<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>The Registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment
which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant
to said Section 8(a), may determine.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 0; margin-bottom: 0"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; border-bottom: Black 2pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>




<P STYLE="color: #D80000; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #D80000"></P>




<P STYLE="color: #D80000; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>


<!-- Field: Page; Sequence: 2 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="color: #D80000; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="color: #D80000; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>The information in this
preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or sale is not permitted.</B></P>




<P STYLE="color: #D80000; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="color: red; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION ON JULY 3, 2019</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><IMG SRC="img001.jpg" ALT=""></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ORANCO, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>73,898,080 shares of Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This prospectus relates to the sale of
up to a total of 73,898,080 shares of common stock, par value $0.001 per share (&lsquo;Common Stock&rdquo;) of Oranco, Inc., a
Nevada corporation, that may be sold from time to time by the selling stockholders named in this prospectus and their successors
and assigns. The shares of Common Stock subject to this prospectus include 73,898,080 shares of Common Stock issued in connection
with the June 29, 2018 share exchange transaction with Wong Ying, Lam Man Hung, Lam Fung, Chan Man Kuen, Zheng Huang, and Stephen
Zhu. Please see &ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations, Business Overview&rdquo;
on page 38  for more information. The shares of Common Stock offered for resale hereby were issued to the applicable selling
stockholders in private placements or other exempt transactions completed prior to the filing of the registration statement of
which this prospectus is a part.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The selling stockholders may sell all or
a portion of their shares of Common Stock through public or private transactions at prevailing market prices or at privately negotiated
prices. Information regarding the selling stockholders and the times and manner in which they may offer and sell the shares under
this prospectus is provided under &ldquo;Selling Stockholders&rdquo; and &ldquo;Plan of Distribution&rdquo; in this prospectus.
We have agreed to pay all the costs and expenses of this registration.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Common Stock is listed for quotation
on the Over-the-Counter Pink Open Market, or OTC Pink, under the symbol &ldquo;ORNC&rdquo;. There is very limited trading in our
Common Stock. On July 1, 2019, the most recent day that our Common Stock traded, the last reported price per share of our Common
Stock was $0.69. You are urged to obtain current market quotations of our Common Stock before purchasing any of the shares being
offered for sale pursuant to this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>INVESTING IN OUR COMMON STOCK INVOLVES
A HIGH DEGREE OF RISK. SEE &ldquo;RISK FACTORS&rdquo; BEGINNING ON PAGE 6 TO READ ABOUT FACTORS YOU SHOULD CONSIDER BEFORE INVESTING
IN SHARES OF OUR COMMON STOCK. NEITHER THE SECURITIES AND EXCHANGE COMMITTEE NOR ANY STATE SECURITIES COMMISSION HAS APPROVED
OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The date of this prospectus is &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2019</P>




<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>


<!-- Field: Page; Sequence: 3 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>




<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TABLE OF CONTENTS</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 90%; padding-left: 10pt; text-indent: -10pt"><A HREF="#a_001">PROSPECTUS SUMMARY</A></TD>
    <TD STYLE="width: 10%; text-align: center">1</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_002">THE OFFERING</A></TD>
    <TD STYLE="text-align: center">4</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_003">SELECTED FINANCIAL DATA</A></TD>
    <TD STYLE="text-align: center">5</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_004">RISK FACTORS</A></TD>
    <TD STYLE="text-align: center">6</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_005">CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS</A></TD>
    <TD STYLE="text-align: center">19</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_006">USE OF PROCEEDS</A></TD>
    <TD STYLE="text-align: center">20</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_007">DETERMINATION OF OFFERING PRICE</A></TD>
    <TD STYLE="text-align: center">20</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_008">DESCRIPTION OF SECURITIES TO BE REGISTERED</A></TD>
    <TD STYLE="text-align: center">20</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_009">MARKET PRICE OF AND DIVIDENDS ON THE COMPANY&rsquo;S COMMON STOCK AND RELATED STOCKHOLDER MATTERS</A></TD>
    <TD STYLE="text-align: center">21</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_010">DIVIDEND POLICY</A></TD>
    <TD STYLE="text-align: center">22</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_010a">SELLING STOCKHOLDERS</A></TD>
    <TD STYLE="text-align: center">22</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_011">PLAN OF DISTRIBUTION</A></TD>
    <TD STYLE="text-align: center">23</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_012">REGULATIONS</A></TD>
    <TD STYLE="text-align: center">24</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_013">INDUSTRY OVERVIEW</A></TD>
    <TD STYLE="text-align: center">29</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_013a">DESCRIPTION OF BUSINESS</A></TD>
    <TD STYLE="text-align: center">31</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_014">DESCRIPTION OF PROPERTY</A></TD>
    <TD STYLE="text-align: center">37</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_015">MANAGEMENT&rsquo;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</A></TD>
    <TD STYLE="text-align: center">38</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_016">CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE</A></TD>
    <TD STYLE="text-align: center">44</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_017">DIRECTORS AND EXECUTIVE OFFICERS</A></TD>
    <TD STYLE="text-align: center">45</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_018">EXECUTIVE COMPENSATION</A></TD>
    <TD STYLE="text-align: center">47</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_019">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</A></TD>
    <TD STYLE="text-align: center">48</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_020">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE</A></TD>
    <TD STYLE="text-align: center">49</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_021">LEGAL PROCEEDINGS</A></TD>
    <TD STYLE="text-align: center">50</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_022">LEGAL MATTERS</A></TD>
    <TD STYLE="text-align: center">50</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_023">EXPERTS</A></TD>
    <TD STYLE="text-align: center">50</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_026">INTERESTS OF NAMED EXPERTS AND COUNSEL</A></TD>
    <TD STYLE="text-align: center">50</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_024">WHERE YOU CAN FIND MORE INFORMATION</A></TD>
    <TD STYLE="text-align: center">50</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_025">INDEX TO CONSOLIDATED FINANCIAL STATEMENTS</A></TD>
    <TD STYLE="text-align: center">F-1</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This prospectus is part of a registration
statement we filed with the SEC. You should rely only on the information provided in this prospectus and incorporated by reference
in this prospectus. We have not authorized anyone to provide you with information different from that contained in or incorporated
by reference into this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any
securities other than the common stock offered by this prospectus. This prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any common stock in any circumstances in which such offer or solicitation is unlawful. The selling stockholders
are offering to sell, and seeking offers to buy, shares of Common Stock only in jurisdictions where offers and sales are permitted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Neither the delivery of this prospectus
nor any sale made in connection with this prospectus shall, under any circumstances, create any implication that there has been
no change in our affairs since the date of this prospectus or that the information contained by reference to this prospectus is
correct as of any time after its date. The information in this prospectus is accurate only as of the date of this prospectus, regardless
of the time of delivery of this prospectus or of any sale of Common Stock. The rules of the SEC may require us to update this prospectus
in the future.</P>




<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>




<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


<!-- Field: Page; Sequence: 4; Options: NewSection; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->i<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<DIV STYLE="padding-right: 5pt; padding-left: 5pt; border: Black 1.5pt solid; width: 99%">

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_001"></A>PROSPECTUS SUMMARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>This summary highlights selected information
contained elsewhere in this prospectus. This summary does not contain all the information that you should consider before investing
in the Common Stock. You should carefully read the entire prospectus, including &ldquo;Risk Factors,&rdquo; &ldquo;Management&rsquo;s
Discussion and Analysis of Financial Condition and Results of Operations&rdquo; and the consolidated financial statements, before
making an investment decision.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In this prospectus, unless otherwise noted
or as the context otherwise requires, <I>&ldquo;Oranco&rdquo;, </I>the <I>&ldquo;Company,&rdquo; &ldquo;ORNC,&rdquo; &ldquo;we,&rdquo;
&ldquo;us,&rdquo; </I>and <I>&ldquo;our&rdquo;</I> refer to the combined business of (i) Oranco, Inc. (&ldquo;ORNC&rdquo;), a corporation
formed under the laws of Nevada, (ii) Reliant Galaxy International Limited (&ldquo;Reliant&rdquo;), a corporation formed under
the laws of British Virgin Islands, (iii) Sure Rich Investment (Group) Limited (&ldquo;Sure Rich&rdquo;), a wholly-owned subsidiary
of ORNC formed under the laws of Hong Kong, (iv) Fujian Jin&rsquo;ou Trading Co, Ltd. (&ldquo;Jin&rsquo;ou&rdquo;), a wholly-owned
subsidiary of ORNC formed under the laws of the People&rsquo;s Republic of China (the &ldquo;PRC&rdquo;), (v) Fenyang Huaxin Wine
Industry Development Co., Ltd. (&ldquo;Huaxin&rdquo;), a wholly-owned subsidiary of Jin&rsquo;ou formed under the laws of the PRC,
(vi) Fenyang Jinqiang Wine Co., Ltd. (&ldquo;Jinqiang&rdquo;), a wholly-owned subsidiary of Huaxin formed under the laws of the
PRC, and (vii) Beijing Huaxin Tianchuang Enterprise Management Consulting Co., Ltd. (&ldquo;Tianchuang&rdquo;), a 51%-owned subsidiary
of Huaxin and a corporation formed under the laws of the PRC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the sake of clarity, this prospectus
follows English naming convention of the first name followed by the last name, regardless of whether an individual&rsquo;s name
is Chinese or English. For example, the name of our Chief Executive Officer will be presented as &ldquo;Peng Yang,&rdquo; even
though, in Chinese, Mr. Yang&rsquo;s name is presented as &ldquo;Yang Peng.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have relied on statistics provided by
a variety of publicly-available sources regarding China&rsquo;s expectations of growth. We did not, directly or indirectly, sponsor
or participate in the publication of such materials, and these materials are not incorporated in this prospectus other than to
the extent specifically cited in this prospectus. We have sought to provide current information in this prospectus and believe
that the statistics provided in this prospectus remain up-to-date and reliable, and these materials are not incorporated in this
prospectus other than to the extent specifically cited in this prospectus.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are engaged in alcohol wholesale in
China through our operating subsidiary, Fenyang Huanxin Wine Industry Development Co., Ltd. (&ldquo;Huaxin&rdquo;), which is 100%
held by Fujian Jin&rsquo;ou Trading Co., Ltd. (&ldquo;Jin&rsquo;ou&rdquo;). We maintain our principal executive offices at One
Liberty Plaza, Suite 2310 PMB# 21, New York, NY 10006, United States. Our telephone number is (646) 759-3614.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><IMG SRC="img002.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

</DIV>


<!-- Field: Page; Sequence: 5; Options: NewSection; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->1<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<DIV STYLE="padding-right: 5pt; padding-left: 5pt; border: Black 1.5pt solid; width: 99%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Our Business</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal">We run
a growing alcohol wholesale business guided by a core purpose: to promote premium alcoholic beverages to China&rsquo;s population.
We currently focus our business on the sale of Chinese Fenjiu liquor and imported wines. We aim to achieve this purpose by catering
to the ever-evolving customer tastes in alcohols through our creative marketing strategies and innovative product designs that
target different age groups of China&rsquo;s population. To that end, we have hired marketing talents who have decades of experience
in effective alcohol brand building. As a result, we believe we have managed to respond to the demand for Chinese Fenjiu liquor
and imported wines in the Chinese marketplace.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that Fenjiu liquor presents
great business opportunities for us to utilize creative product designs and marketing strategies to attract Chinese consumers.
Collaborating with Fenjiu Group, the sole producer of Fenjiu liquor in China, we have been focusing on product design to convey
a modern feel to our Fenjiu products while maintaining Fenjiu liquor&rsquo;s historical elegance. We believe our designer packaging,
symbolized by its bright coloring and prominently fat-bellied jars, stands out from those of our competitors. With creative designs
and stylized names, our registered trademarks, such as Dagangjiu (translated as &ldquo;Big Jar Liquor&rdquo;), are effective in
capturing the attention of Chinese consumers, young and old.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Established in October 2016, we believe
our imported wine distribution business has high growth potential as evidenced from the market prices of the imported wines from
Spain and New Zealand, the two countries where we import most of our wine products from, in the current Chinese market. A great
majority of our competitors have priced their 750mL bottles of wine imported from Spain and New Zealand well above RMB 200. This
price falls within the premium range in the general Chinese wine market. Within the general Chinese wine market, the premium range
enjoyed the highest year-on-year growth compared to other price tiers of wine in 2018. This pricing trend for premium wines is
applicable to imported wines from Spain and New Zealand, which we believe will benefit our growth in 2019. Accordingly, our strategy
is to continue pricing our imported wine products within the premium range levels to generate higher margins. Though marketing
and branding are still integral parts of the wine business in China, wine sales are highly driven by the origin of the wines. Since
Spain and New Zealand are considered prime origins for wine productions, we believe that our imported wine products will continue
to attract the attention of Chinese consumers and promote the sustainable growth of our imported wine business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that effective marketing strategies
and creative product designs are two major contributing factors to our success. To improve and maintain the effectiveness of our
marketing strategies, we have established integrated and collaborative processes to drive coordinated operations across our marketing
efforts and sales. Our marketing strategies enable us to promote multiple sales concepts across two major alcohol categories, effectively
attracting different age and cultural groups of the Chinese population. Our marketing plans are tailored to meet the evolving taste
and demands of Chinese consumers. As a result, we believe that the Company&rsquo;s innovative and highly-customized designs draw
considerable public attention, which in turns is a contributing factor to the volume of our sales.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the nine months ended March 31, 2019,
we generated revenue of approximately 91.4% from Fenjiu liquor wholesale and approximately 8.6% from imported wine wholesale. For
the nine months ended March 31, 2018, we generated revenue of approximately 85.3% from Fenjiu liquor wholesale and approximately
14.7% from imported wine wholesale. For the year ended June 30, 2018, we generated revenue of approximately 84.9% from Fenjiu liquor
wholesale and approximately 15.1% from imported wine wholesale. For the year ended June 30, 2017, we generated revenue of approximately
89.9% from Fenjiu liquor wholesale and approximately 10.1% from imported wine wholesale. We have not experienced any seasonality
in our business.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Business Strategy</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Increasing our market share&thinsp;-&thinsp;</I></B>We
expect that consumers&rsquo; increasing awareness of our brand will lead to increased demand of our products. We intend to continue
focusing on developing Chinese Fenjiu liquor and imported wine wholesale markets. Through creating new designs, expanding our marketing
efforts, developing closer relationships with dealers, and building stable relationships with our major suppliers, we expect to
expand our product lines and improve our brand awareness and customer loyalty to meet market demands and improve our sales performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Expansion of our sources of supply,
productivity and sales network&thinsp;-&thinsp;</I></B>To meet the increasing demand for imported wine and Chinese Fenjiu liquor,
we will continue cooperating with major suppliers to ensure both the quantity and quality of our Chinese Fenjiu liquor and imported
wine inventory. In addition to our present sales network, we expect to increase our investment in training our employees, updating
our website and improving our client information managing system. Our goal is to build a high performance sales network with a
very personal approach to our business partners.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Competitive</B></FONT><B>
Strengths</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Although we operate in a highly competitive
industry, we believe that the following factors provide us with the competitive advantages in the marketplace that could differentiate
us from our potential competitors:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 60pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><B><I>Our Company has a high brand recognition in the Chinese Fenjiu liquor market. </I></B>Our
Fenjiu liquor is sold under the &ldquo;Dagangjiu&rdquo; brand and is one of the Chinese Fenjiu liquor market&rsquo;s most popular
brands. We have relied on the international fame of Fenjiu Group, our inventory manufacturer, to become one of the leading brands
in international alcohol festivals. We believe that our brand&rsquo;s strong recognition reinforces our existing customer goodwill
in Shanxi province and beyond.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 60pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

</DIV>


<!-- Field: Page; Sequence: 6; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<DIV STYLE="padding-right: 5pt; padding-left: 5pt; border: Black 1.5pt solid; width: 99%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><B><I>Our marketing team&rsquo;s extensive experience and reputation in our industry.</I></B> We
believe that our marketing team&rsquo;s industry experience and reputation is unmatched in the industry. We believe our commercial
campaigns are well accepted by consumers and resonate with potential liquor distribution partners. To some degree, we believe our
commercial campaigns influence consumer trends in the Chinese Fenjiu liquor markets.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 60pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><B><I>A Flexible Business Model.</I></B> <FONT STYLE="font-weight: normal">We have a flexible business
model that </FONT>enables us to quickly adjust our marketing strategy and product packaging to meet customers&rsquo; evolving needs
and preferences. Since our brand is well recognized and our current business model is based on flexible dealership relationship,
we can adjust our strategic partnerships to address new product preferences while maintaining our accumulated goodwill.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 60pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B><I>Service-driven and Cohesive Management
Team. </I></B>Our senior management team has guided our organization through its expansion and, we believe, positioned us for continued
growth. Each member of our Huanxin management team has an average of 20 years of expertise. Additionally, our management team possesses
extensive experience across a broad range of disciplines such as alcohol marketing, business negotiation, and financing, which
are essential qualities to help us achieve our goal to &ldquo;promote premium alcoholic beverages to the Chinese population of
all ages.&rdquo; </FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

</DIV>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>


<!-- Field: Page; Sequence: 7; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<DIV STYLE="padding-right: 5pt; padding-left: 5pt; border: Black 1.5pt solid; width: 99%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_002"></A>THE OFFERING</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 44%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Common Stock outstanding before the offering</B></FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 55%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">419,487,480 shares</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Common Stock offered by selling stockholders </B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">73,898,080 shares of Common Stock held by the selling stockholders. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Common Stock to be outstanding after the offering</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">419,487,480 shares.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>OTC Pink Symbol</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORNC. No active market for our Common Stock presently exists.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Use of proceeds</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This prospectus relates to shares of our Common Stock that may be offered and sold from time to time by the selling stockholders named herein. We will not receive any proceeds from the sale of the Common Stock offered hereby.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

</DIV>


<!-- Field: Page; Sequence: 8; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<DIV STYLE="padding-right: 5pt; padding-left: 5pt; border: Black 1.5pt solid; width: 99%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_003"></A>SELECTED FINANCIAL DATA</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth selected
historical statements of operations for the nine months ended March 31, 2019 (unaudited), the year ended June 30, 2018 and the
year ended June 30, 2017, and balance sheets data as of March 31, 2019 (unaudited), June 30, 2018 and June 30, 2017, which have
been derived from our audited financial statements for those periods. Our historical results are not necessarily indicative of
the results that may be expected in the future. You should read this data together with our consolidated financial statements and
related notes as well as &ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations,&rdquo;
appearing elsewhere in the prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Years Ended</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Nine months ended</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">June&nbsp;30,</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">March&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid">Consolidated Statement of Operations Data</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">(audited)</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">(audited)</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">(unaudited)</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">(unaudited)</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">RMB</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">RMB</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">RMB</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">RMB</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; font: 10pt Times New Roman, Times, Serif">Revenues</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">101,759,660</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">91,144,666</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">96,037,641</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">83,258,237</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">Cost of sales</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">27,800,667</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">24,065,113</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">24,395,247</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">23,002,777</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Selling and distribution expenses</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">5,477,457</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,521,950</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3,020,324</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3,338,043</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Administrative expenses</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">7,109,937</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">5,516,707</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">6,159,429</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3,686,062</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Other income</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">155,700</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">227,552</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">90,807</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">131,447</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Interest and other financial charges</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,759,325</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,420,272</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">41,238</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,768,720</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Income tax expense</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">15,095,681</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">14,121,343</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">16,024,012</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">12,623,911</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 4pt">Net income</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">44,672,293</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">41,726,833</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">46,488,198</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">38,970,171</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">Earnings per share</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 4pt; text-indent: 10pt">&ndash; Basic and diluted earnings per share</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1.54</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">7.98</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">0.11</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">8.87</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;<B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">As of June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt">As of March&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid">Consolidated Balance Sheet Data</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">(audited) <BR> RMB</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">(audited)<BR> RMB</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(unaudited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font: 10pt Times New Roman, Times, Serif; text-align: left">Cash and cash equivalents</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">26,504,962</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">6,607,407</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">57,394,020</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Total Assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">109,350,204</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">90,561,289</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">162,725,447</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Total Shareholders&rsquo; Equity</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">5,005,968</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">55,136,192</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">51,494,166</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Total Liabilities and Shareholders&rsquo; Equity</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">109,350,204</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">90,561,289</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">162,725,447</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

</DIV>


<!-- Field: Page; Sequence: 9; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_004"></A>RISK FACTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>An investment in our Common Stock involves
a high degree of risk. You should carefully consider the risks described below, together with all of the other information included
in this prospectus, before making an investment decision. If any of the following risks actually occurs, our business, financial
condition or results of operations could suffer. In that case, the trading price of our shares of Common Stock could decline, and
you may lose all or part of your investment. You should read the section entitled &ldquo;Cautionary Note Regarding Forward Looking
Statements&rdquo; below for a discussion of what types of statements are forward-looking statements, as well as the significance
of such statements in the context of this prospectus.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Related to Our Business</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Our Company is heavily dependent
on its strategic partnership with Fenjiu Group, which is the sole producer of Chinese Fenjiu liquor in China. Any disruptions in
our relationship with Fenjiu Group may have an adverse effect on our profitability and operating results.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">Our business model
focuses on the sale and distribution of Chinese Fenjiu liquor. Revenue generated from our Fenjiu liquor wholesale business accounted
for 91.4% and 85.3%, respectively, of the total revenue derived from our general business in the nine months ended March 31, 2019
and 2018. Revenue generated from our Fenjiu liquor wholesale business accounted for 89.9% and 84.9%, respectively, of the total
revenue derived from our general business in fiscal year 2017 and 2018. We rely on Fenjiu Group to provide and deliver our Fenjiu
product inventory on a continuous basis. We could suffer significant losses in the event of the loss of our strategic partnership
with Fenjiu Group due to our inability to renew our partnership agreement, disruption of Fenjiu Group&rsquo;s distribution network,
damage to Fenjiu Group&rsquo;s reputation or other occurrences that are beyond our control.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Any harm to the reputation of our Fenjiu liquor producer,
Fenjiu Group, may materially and adversely affect our business and results of operations. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">The success of our
business depends heavily upon the reputation of Fenjiu Group since a large majority of our revenue comes from our Fenjiu liquor
wholesale business. We believe that the recognition and reputation of Fenjiu Group among our customers, distributors, and dealers
have contributed significantly to the growth and success of our business. Maintaining and enhancing the recognition and reputation
of Fenjiu Group are critical to our business and market position. Any harm to the reputation of Fenjiu Group may materially and
adversely affect our business and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We face intense competition, and
if we fail to compete effectively, we may lose market share and customers. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">The Chinese alcohol
distribution and retail markets that we are in are highly competitive. We face competition from long-established traditional Chinese
alcohol distributors and retailers as well as new companies which rely on modern technology such as E-commerce platforms. China&rsquo;s
alcohol industry is growing and changing rapidly. Our current or future competitors may have longer operating histories, greater
brand recognition, better supplier relationships, larger customer bases, more cost-effective fulfillment capabilities or greater
financial, technical or marketing resources than we do. Competitors may leverage their brand recognition, experience and resources
to compete with us in a variety of ways, including investing more heavily in research and development and making acquisitions for
the expansion of their products and services. Some of our competitors may be able to secure more favorable terms from suppliers,
devote greater resources to marketing and promotional campaigns, adopt more aggressive pricing or inventory policies and devote
substantially more resources to their website and system development than us. Increased competition may reduce our profitability,
market share, customer base and brand recognition. There can be no assurance that we will be able to compete successfully against
current or future competitors, and such competitive pressures may have a material and adverse effect on our business, financial
condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Our limited operating history makes
it difficult to evaluate our business and prospects. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">We commenced our
Fenjiu liquor distribution business in 2014 and our imported wine distribution business in October 2016. Thus, we have a limited
operating history. Since our inception, we have experienced consistent growth in our business. Our total net revenues increased
by 11.6% from RMB 91,144,666 in 2017 to RMB 101,759,660 in 2018. We incurred a net income of RMB 41,726,833 in 2017 and achieved
net income of RMB 44,672,293 in 2018. However, our historical growth rate may not be indicative of our future performance. We cannot
assure you that we will be able to achieve similar results or grow at the same rate as we did in the past. Growth may slow and
net revenues or net income may decline for a number of possible reasons, some of which are beyond our control, including decreasing
consumer spending, increasing competition, slowing growth of our overall market, fulfillment bottlenecks, emergence of alternative
business models, changes in government policies or general economic conditions. It is difficult to evaluate our prospects, as we
may not have sufficient experience in addressing the risks to which companies operating in rapidly evolving markets may be exposed.
You should consider our prospects in light of the risks and uncertainties that fast-growing companies with a limited operating
history may encounter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>


<!-- Field: Page; Sequence: 10; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->6<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If we are unable to manage our growth
or execute our strategies effectively, our business and prospects may be materially and adversely affected. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">Business expansion
has placed, and continues to place, significant strain on our management and resources. To accommodate our growth, we anticipate
that we will need to implement a variety of new and upgraded operational management systems, procedures and controls, including
the improvement of our accounting and other internal management systems. We will also need to continue to expand, train, manage
and motivate our workforce and manage our relationships with our distributors, dealers and supplier. As we selectively increase
our product and service offerings, we will need to work with different groups of new distributors, dealers and other suppliers
efficiently and establish and maintain mutually beneficial relationships with our existing distributors, dealers and supplier.
All of these endeavors involve risks, and will require substantial management effort and significant additional expenditures. We
cannot assure you that we will be able to manage our growth or execute our strategies effectively, and any failure to do so may
have a material adverse effect on our business and prospects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Our future expansion into new product
categories may expose us to new challenges and more risks. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">Since our inception,
we primarily focused on the Chinese Fenjiu liquor market. However, we have started imported wine distribution in October 2016.
We plan to expand the product offerings to include selected categories of other alcohol products such as Luzhou-flavor liquor and
Maotai-flavor liquor. Expansion into new product categories involve new risks and challenges. Our lack of relevant customer data
relating to these products may make it more difficult for us to keep pace with the evolving customer demands and preferences.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">We have limited experience
and operating history in our future product categories and related marketplace services such as sample tasting and custom bottle
making, which makes predicting our future results of operations more difficult than it otherwise would be. Therefore, our past
results of operations should not be taken as indicative of our future performance. If we cannot successfully address new challenges
and compete effectively, we may not be able to recover costs of our investments and eventually achieve profitability, and our future
results of operations and growth prospects may be materially and adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If counterfeit products are sold
under our brand names and trademarks, our reputation and financial results could be materially and adversely affected. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">Third-party merchants
and dealers are separately responsible for sourcing counterfeit products that are sold under our brand names and trademarks. Although
we have adopted measures to help consumers verify the authenticity of products sold on the general Chinese market and to remove
any counterfeit products found by us, these measures may not always be successful. Counterfeit products may be defective or inferior
in quality as compared to authentic products and may pose safety and health risks to our customers. If our customers are injured
by counterfeit products sold under our brand names and trademarks, we may be subject to lawsuits, severe administrative penalties
and criminal liability. We believe our brand and reputation are extremely important to our success and our competitive position.
The discovery of counterfeit products sold under our brand names and trademarks may severally damage our reputation and cause customers
to refrain from making future purchases from us, which would materially and adversely affect our business operations and financial
results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If we are unable to offer premium
products and services at attractive prices to meet customer needs and preferences, our business, financial condition and results
of operations may be materially and adversely affected. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">Our future growth
depends on our ability to continue attracting new customers and increasing the spending level of our existing customers. Constantly
changing consumer preferences have affected and will continue to affect the general Chinese alcohol market. We must stay abreast
of emerging lifestyle and consumer preferences and anticipate product and services trends that will appeal to existing and potential
customers. Our customers choose to purchase quality products or services from us due in part to the attractive prices and premium
services that we offer, and they may choose to shop elsewhere if we cannot match the prices, products or services offered by our
competitors. If our customers cannot find their desired products or services within our portfolio, they may lose interest in us
and stop buying our products or using our services, which in turn may materially and adversely affect our business, financial condition
and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We rely on the Fenjiu liquor product
marketing and distribution for a substantial portion of our net revenues. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">Since our inception,
we have been relying on Fenjiu liquor product marketing and distribution for a substantial portion of our net revenues. We expect
that this business segment to continue representing a substantial portion of our total net revenues in the near future. We have
increased our offerings to include other product categories in 2017, mainly through the imported wine marketing and distribution;
we also have plan to expand our product offerings in the future to include other popular Chinese liquors such as Luzhou-flavor
liquor and Maotai-flavor liquor. However, our sales of these new products may not increase to a level that would substantially
reduce our dependence on Fenjiu liquor product marketing and distribution business. Any event that results in a reduction in our
branded Fenjiu liquor products or short-term lodging and hospitality services could materially and adversely affect our ability
to maintain or increase our current level of net revenue and business prospects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>


<!-- Field: Page; Sequence: 11; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->7<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If we fail to manage and expand our
relationships with distributors, dealers or suppliers, or otherwise fail to source products or services at favorable terms, our
business and growth prospects may suffer. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">We worked with approximately
111 distributors and they have over 1,000 sale point over the China in 2018 and 2017. In 2018, our major suppliers are 11 in Fenjiu
liquor and 2 for imported wines. In 2017, our major suppliers are 6 in Fenjiu liquor and 2 for imported wines. Maintaining strong
relationships with these distributors, dealers and suppliers is important to the growth of our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">In particular, we
depend significantly on our ability to attract reputable liquor and wine suppliers to offer their products or services on commercially
attractive terms and to procure products from suppliers on favorable pricing terms. However, some of our agreements for imported
wines do not ensure the long-term availability of products or the continuation of particular pricing practices or payment terms
beyond the end of the contractual terms. Even if we maintain good relationships with our distributors, dealers and suppliers, they
may be unable to remain in business due to economic conditions, labor actions, regulatory or legal decisions, natural disasters
or other causes. In the event that we are not able to source products or services at favorable prices, our net revenues and gross
profit as a percentage of net revenues may be materially and adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">In addition, if our
suppliers cease to provide us with favorable payment terms, our requirements for working capital may increase and our operations
may be materially and adversely affected. We will also need to develop relationships with new suppliers to ensure that we have
access to a steady supply of products on favorable commercial terms or to offer sufficient products and services at acceptable
prices sought by our customers. Any negative developments in our relationships with distributors, dealers and suppliers could materially
and adversely affect our business and growth prospects. If we fail to attract new distributors or dealers to sell our products,
or new suppliers to sell their products to us due to any reason, our business and growth prospects may be materially and adversely
affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If we fail to manage our inventory
effectively, our results of operations, financial condition and liquidity may be materially and adversely affected. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">Our business requires
us to manage a large volume of inventory effectively. We depend on our forecasts of demand for and popularity of our products to
make purchase decisions and to manage our inventory. Demand for products, however, can change significantly between the time inventory
or components are ordered and the date of sale. Demand may be affected by seasonality, new product launches, rapid changes in product
cycles and pricing, product defects, changes in consumer spending patterns, changes in consumer tastes with respect to our products
and other factors, and our customers may not order products in the quantities that we expect. It may be difficult to accurately
forecast demand, and determine appropriate product or component.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">If we fail to manage
our inventory effectively or negotiate favorable credit terms with suppliers, we may be subject to a decline in inventory values,
and significant inventory write-downs or write-offs. In addition, if we are required to lower sale prices in order to reduce inventory
level or to pay higher prices to our suppliers in order to secure the right to return products to our suppliers, our profit margins
might be negatively affected. Any of the above may materially and adversely affect our results of operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Our business depends on the continued
efforts of our management. If we lose their services or they are unable to work together effectively or efficiently, our business
may be severely disrupted. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">Our business operations
depend on the continued services of our senior management, particularly the executive officers named in this prospectus. The management
team of Huaxin has been working together since the inception of Huaxin. If they cannot work together effectively or efficiently,
our business may be severely disrupted. If one or more of our executive officers were unable or unwilling to continue in their
present positions, we might not be able to replace them easily or at all. Our business, financial condition and results of operations
may be materially and adversely affected, and we may incur additional expenses to recruit, train and retain personnel. If any of
our executive officers joins a competitor or forms a competing business, we may lose customers, suppliers, know-how and key professionals
and staff members. Our executive officers have entered into employment agreements and confidentiality and non-competition agreements
with us. However, if any dispute arises between our officers and us, we may have to incur substantial costs and expenses in order
to enforce such agreements in China or we may be unable to enforce them at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If we are unable to recruit, train
and retain qualified personnel or sufficient workforce while controlling our labor costs, our business may be materially and adversely
affected. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">We intend to hire
additional qualified employees to support our business operations and planned expansion in product categories. Our future success
depends, to a significant extent, on our ability to recruit, train and retain qualified personnel, particularly technical, fulfillment,
marketing and other operational personnel with experience in the online retail industry. Our experienced mid-level managers are
instrumental in implementing our business strategies, executing our business plans and supporting our business operations and growth.
The effective operation of our managerial and operating systems, customer service center and other back office functions also depends
on the hard work and quality performance of our management and employees. Since our industry is characterized by high demand and
intense competition for talent and labor, we can provide no assurance that we will be able to attract or retain qualified staff
or other highly skilled employees that we will need to achieve our strategic objectives. Labor costs in China have increased with
China&rsquo;s economic development, particularly in the large cities where our facilities locate. Rising inflation in China, which
has had a disproportionate impact on everyday essentials such as food, is also putting pressure on wages. In addition, as we are
still a young company, our ability to train and integrate new employees into our operations may also be limited and may not meet
the demand for our business growth on a timely fashion, or at all. If we are unable to attract, train and retain qualified personnel,
our business may be materially and adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>


<!-- Field: Page; Sequence: 12; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->8<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Any lack of requisite approvals,
licenses or permits applicable to our business or failure to comply with PRC laws and regulations may have a material and adverse
impact on our business, financial condition and results of operations. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">Our business is subject
to governmental supervision and regulation by the relevant PRC governmental authorities, including the competent authorities of
Ministry of Commerce and the China Food and Drug Administration. Together, these government authorities promulgate and enforce
regulations that cover many aspects of the operation of retailing and distribution of food and nutritional supplements, including
entry into these industries, the scope of permissible business activities, licenses and permits for various business activities,
and foreign investment. We are required to hold a number of licenses and permits in connection with our business operation, including
the Liquor Wholesale License and Food Operation License. We have in the past held and currently hold all licenses and permits described
above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">As of the date of
this prospectus, we have not received any notice of warning or been subject to penalties or other disciplinary action from the
relevant governmental authorities regarding our conducting our business without the above mentioned approvals and permits. However,
we cannot assure you that we will not be subject to any penalties in the future. As the alcohol wholesale and retail industry is
still evolving in China, new laws and regulations may be adopted from time to time to require additional licenses and permits other
than those we currently have, and address new issues that arise from time to time. As a result, substantial uncertainties exist
regarding the interpretation and implementation of current and any future PRC laws and regulations applicable to our businesses.
If the PRC government considers that we were operating without the proper approvals, licenses or permits or promulgates new laws
and regulations that require additional approvals or licenses or imposes additional restrictions on the operation of any part of
our business, it has the power, among other things, to levy fines, confiscate our income, revoke our business licenses, and require
us to discontinue our relevant business or impose restrictions on the affected portion of our business. Any of these actions by
the PRC government may have a material and adverse effect on our results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Failure to make adequate contributions
to various employee benefits plans as required by PRC regulations may subject us to penalties.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">Companies operating
in China are required to participate in various government-sponsored employee benefit plans, including certain social insurance,
housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages
of salaries, including bonuses and allowances, of employees up to a maximum amount specified by the local government from time
to time at locations where our employees are based. The requirement of employee benefit plans has not been implemented consistently
by the local governments in China given the different levels of economic development in different locations. Huaxin has deposited
social security premiums in full, and has opened a bank account and contributing housing provident funds as required. As for the
social security premiums, Huaxin may be subject to a late payment fine computed from the due date at the rate of 0.05% per day;
where payment is not made within the stipulated period, the relevant administrative authorities may impose a fine ranging from
one to three times the amount of the amount in arrears. As for the housing provident fund, if Huaxin fails to go through the formalities
to register or open the account within the prescribed time limit, a fine of not less than RMB10,000 nor more than RMB50,000 shall
be imposed. If Huaxin fails to make the payment and deposit within the prescribed time limit, an application may be made to the
people&rsquo;s court for compulsory enforcement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Failure to renew our current leases
or locate desirable alternatives for our facilities could materially and adversely affect our business. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">As of the date of
this prospectus, we leased an aggregate of approximately 2600 square meters of properties for our offices used for communication
and development, customer service and management and our operations in general. We may not be able to successfully extend or renew
such leases upon expiration of the current term on commercially reasonable terms or at all, and may therefore be forced to relocate
our affected operations. This could disrupt our operations and result in significant relocation expenses, which could adversely
affect our business, financial condition and results of operations. In addition, we compete with other businesses for premises
at certain locations or of desirable sizes. As a result, even though we could extend or renew our leases, rental payments may significantly
increase as a result of the high demand for the leased properties. In addition, we may not be able to locate desirable alternative
sites for our facilities as our business continues to grow and such failure in relocating our affected operations could affect
our business and operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We have identified material weaknesses
in our internal control over financial reporting. If our remediation of these material weaknesses is not effective, or if we experience
additional material weaknesses in the future, we may not be able to accurately or timely report our financial condition or results
of operations, which may adversely affect investor confidence in us and, as a result, the value of our shares of Common Stock.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">In connection
with the audit of the consolidated financial statements as of and for the year ended June 30, 2018,  PKF Littlejohn LLP
identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or
combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a
material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">&nbsp;</P>


<!-- Field: Page; Sequence: 13; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->9<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">Based upon an evaluation
the Company&rsquo;s Chief Executive Officer and Chief Financial Officer concluded that the Company&rsquo;s disclosure controls
and procedures were not effective as of June 30, 2018 to ensure that information required to be disclosed by the Company in the
reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time
periods specified in the SEC&rsquo;s rules and forms, and that such information is accumulated and communicated to the Company&rsquo;s
management, including the Company&rsquo;s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
The principal basis for this conclusion is the lack of segregation of duties within our financial function and the lack of an operating
Audit Committee, as well as the Company&rsquo;s failure to engage sufficient resources in regards to our accounting and reporting
obligations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 20pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 20pt; text-align: justify">We have initiated remediation efforts focused
on improving our internal control over financial reporting and to specifically address the control deficiencies that led to our
material weaknesses. These efforts include the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Requiring all of the accounting personnel in the accounting department to take a minimum of 24 CPE credits annually with a
focus on US GAAP and financial reporting standards. We also required the Chief Financial Officer to take a minimum of 40 CPE credits
annually with a focus on US GAAP and financial reporting standards.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Implementing an internal review process over financial reporting to continue to improve our ongoing review and supervision
of our internal control over financial reporting;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Implementing an ongoing initiative and training in the Company to ensure the importance of internal
controls and compliance with the established policies and procedures are fully understood throughout the organization, and we plan
to provide continuous U.S. GAAP knowledge training to relevant employees involved to ensure the performance of and the compliance
with those procedures and policies.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">We cannot assure you
that the measures we have taken to date, and are continuing to implement, will be sufficient to remediate the material weaknesses
we have identified or avoid potential future material weaknesses. If the steps we take do not remediate the material weaknesses
in a timely manner, we will be unable to conclude that we maintain effective disclosure controls and procedures or effective internal
control over financial reporting. Additionally, these material weaknesses could result in a misstatement of our accounts or disclosures
that would result in a material misstatement of our annual or interim consolidated financial statements that would not be prevented
or detected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">As a public company,
we will be required to maintain adequate internal control over financial reporting and to report any material weaknesses in our
internal control&nbsp;over financial reporting. SEC Regulation S-K requires that we evaluate and determine the effectiveness of
our internal control&nbsp;over financial reporting and provide a management report on internal control over financial reporting.
Regulation S-K also requires that our management report on internal control over financial reporting be attested to by our independent
registered public accounting firm, to the extent we are no longer an emerging growth company. We do not expect our independent
registered public accounting firm to attest to our management report on internal control over financial reporting while we are
an emerging growth company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20.15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20.15pt">We are in the process
of evaluating our internal control over financial reporting required to comply with this obligation, and this process will be time
consuming, costly and complicated. If we identify any additional material weaknesses in our internal control over financial reporting,
if we are unable to comply with the requirements of Regulation S-K in a timely manner, if we are unable to assert that our internal
control&nbsp;over financial reporting is effective, or when required in the future, if our independent registered public accounting
firm is unable to express an unqualified opinion as to the effectiveness of our internal control&nbsp;over financial reporting,
investors may lose confidence in our financial reports and the market price of our shares of Common Stock could be adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We may not be able to adequately
protect our intellectual property rights, and our competitors may be able to offer similar products and services, which would harm
our competitive position. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">Our success depends
in part upon our intellectual property rights. We rely primarily on trademark, copyright, trade secret laws, confidentiality procedures,
license agreements and contractual provisions to establish and protect our proprietary rights over our products, procedures and
services. Other persons could copy or otherwise obtain and use our intellectual properties without authorization, or create intellectual
properties similar to ours independently. We may also pursue the registration of our domain names, trademarks, and service marks
in other jurisdictions, including the United States. However, the intellectual property laws in China are not considered as strong
as comparable laws in the United States or the European Union. We cannot assure you that we will be able to protect our proprietary
rights. Further, our competitors may be able to independently develop similar intellectual property, duplicate our products and
services or design around any intellectual property rights we hold. Further, our intellectual property rights may be subject to
termination or expirations. The loss of intellectual property protections or the inability to timely regain intellectual property
protections could harm our business and ability to compete.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>


<!-- Field: Page; Sequence: 14; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->10<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We may be subject to intellectual
property infringement claims, which may be expensive to defend and may disrupt our business and operations. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">We cannot be certain
that our operations or any aspects of our business do not or will not infringe upon or otherwise violate trademarks, patents, copyrights,
know-how or other intellectual property rights held by third parties. We have not been in the past, but may be from time to time
in the future, subject to legal proceedings and claims relating to the intellectual property rights of others. There may be third-party
intellectual property that is infringed by our products, services or other aspects of our business. There could also be existing
patents or other intellectual property rights of which we are not aware that our products may inadvertently infringe. We cannot
assure you that holders of the relevant intellectual property rights purportedly relating to some aspect of our technology platform
or business, if any such holders exist, would not seek to enforce such intellectual property rights against us in China, the United
States or any other jurisdictions. In addition, we strive to closely monitor the products offered on our internet platform, and
also require suppliers and third-party merchants to indemnify us for any losses we suffer or any costs that we incur in relation
to the products we source from such suppliers or the products offered by such third-party merchants on our internet platform. However,
we cannot be certain that these measures would be effective in completely preventing the infringement of trademarks, patents, copyrights,
know-how or other intellectual property rights held by third parties. Further, the application and interpretation of China&rsquo;s
intellectual property right laws and the procedures and standards for granting trademarks, patents, copyrights, know-how or other
intellectual property rights in China are still evolving and are uncertain, and we cannot assure you that PRC courts or regulatory
authorities would agree with our analysis. If we are found to have violated the intellectual property rights of others, we may
be subject to liability for our infringement activities or may be prohibited from using such intellectual property, and we may
incur licensing fees or be forced to develop alternatives of our own. In addition, we may incur significant expenses, and may be
forced to divert management&rsquo;s time and other resources from our business and operations to defend against these third-party
infringement claims, regardless of their merits. Successful infringement or licensing claims made against us may result in significant
monetary liabilities and may materially disrupt our business and operations by restricting or prohibiting our use of the intellectual
property in question.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We may need additional capital, and
financing may not be available on terms acceptable to us, or at all. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">We believe our current
cash and cash equivalents and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs for the
next 12 months. We may, however, require additional cash resources due to changed business conditions or other future developments,
including any marketing initiatives or investments we may decide to pursue. If these resources are insufficient to satisfy our
cash requirements, we may seek to obtain a credit facility or sell additional equity or debt securities. The sale of additional
equity securities could result in dilution of our existing shareholders. The incurrence of indebtedness would result in increased
debt obligations and could result in operating and financing covenants that would restrict our operations. In addition, it is uncertain
whether financing will be available in amounts or on terms acceptable to us, if at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We have limited insurance coverage
which could expose us to significant costs and business disruption. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">We maintain certain
insurance policies to safeguard against risks and unexpected events. We have purchased cargo transportation insurance covering
our inventory in transit. However, as the insurance industry in China is still in an early stage of development, insurance companies
in China currently offer limited business-related insurance products. We do not maintain business interruption insurance or product
liability insurance, nor do we maintain key-man life insurance. We cannot assure you that our insurance coverage is sufficient
to prevent us from any loss or that we will be able to successfully claim our losses under our current insurance policy on a timely
basis, or at all. If we incur any loss that is not covered by our insurance policies, or the compensated amount is significantly
less than our actual loss, our business, financial condition and results of operations could be materially and adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We face risks related to natural
disasters, health epidemics and other outbreaks, which could significantly disrupt our operations. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.25pt">Our business could
be adversely affected by natural disasters or the outbreak of avian influenza, severe acute respiratory syndrome, or SARS, the
influenza A (H1N1), H7N9 or other epidemics. Any of such occurrences could cause severe disruption to our daily operations, and
may even require a temporary closure of our facilities. Such closures may disrupt our business operations and adversely affect
our results of operations. Our operation could also be disrupted if our suppliers, customers or business partners were affected
by such natural disasters or health epidemics.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>


<!-- Field: Page; Sequence: 15; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->11<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Risks Related to Doing Business in China</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>A slowdown of the Chinese economy or
adverse changes in economic and political policies of the PRC government could negatively impact China&rsquo;s overall economic
growth, which could materially adversely affect our business.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">After the Business Combination,
we will be a holding company and all of the combined company&rsquo;s operations will be entirely conducted in the PRC. Although
the PRC economy has grown in recent years, the pace of growth has slowed, and even that rate of growth may not continue. The annual
rate of growth in the PRC declined from 6.9% in 2015 to 6.7% in 2016, 6.8% in 2017 and 6.6% in 2018. According to a recent State
Information of China forecast, China&rsquo;s economic growth rate in 2019 will slow to 6%-6.5%, its lowest since 1990. A slowdown
in overall economic growth, an economic downturn or recession or other adverse economic developments in the PRC may materially
reduce the demand for the company&rsquo;s products and may have a materially adverse effect on its business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">China&rsquo;s economy
differs from the economies of most other countries in many respects, including the amount of government involvement in the economy,
the general level of economic development, growth rates and government control of foreign exchange and the allocation of resources.
While the PRC economy has grown significantly over the past few decades, this growth has remained uneven across different periods,
regions and economic sectors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">The PRC government also
exercises significant control over China&rsquo;s economic growth by allocating resources, controlling the payment of foreign currency-denominated
obligations, setting monetary policy and providing preferential treatment to particular industries or companies. Any actions and
policies adopted by the PRC government could negatively impact the Chinese economy or the economy of the region the combined company
serves, which could materially adversely affect the combined company&rsquo;s business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Substantial uncertainties and restrictions
with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant
impact upon the business the combined company may be able to conduct in the PRC and accordingly on the results of its operations
and financial condition.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">The combined company&rsquo;s
business operations may be adversely affected by the current and future political environment in the PRC. The Chinese government
exerts substantial influence and control over the manner in which the combined company must conduct its business activities. The
combined company&rsquo;s ability to operate in China may be adversely affected by changes in Chinese laws and regulations. Under
the current government leadership, the government of the PRC has been pursuing economic reform policies that encourage private
economic activities and greater economic decentralization. However, the government of the PRC may not continue to pursue these
policies, or may significantly alter these policies from time to time without notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">There are substantial
uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws
and regulations governing the combined company&rsquo;s business, or the enforcement and performance of the combined company&rsquo;s
arrangements with borrowers in the event of the imposition of statutory liens, death, bankruptcy or criminal proceedings. Only
after 1979 did the Chinese government begin to promulgate a comprehensive system of laws that regulate economic affairs in general,
deal with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade, as
well as encourage foreign investment in China. Although the influence of the law has been increasing, China has not developed a
fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities
in China. Also, because these laws and regulations are relatively new, and because of the limited volume of published cases and
their lack of force as precedents, interpretation and enforcement of these laws and regulations involve significant uncertainties.
New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. In addition, there
have been constant changes and amendments of laws and regulations over the past 40 years in order to keep up with the rapidly changing
society and economy in China. Because government agencies and courts provide interpretations of laws and regulations and decide
contractual disputes and issues, their inexperience in adjudicating new business and new polices or regulations in certain less
developed areas causes uncertainty and may affect the combined company&rsquo;s business. Consequently, neither Huaxin nor Oranco
can predict the future direction of Chinese legislative activities with respect to either businesses with foreign investment or
the effectiveness on enforcement of laws and regulations in China. The uncertainties, including new laws and regulations and changes
of existing laws, as well as judicial interpretation by inexperienced officials in the agencies and courts in certain areas, may
cause possible problems to foreign investors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Both Huaxin and Oranco&rsquo;s businesses
are subject to extensive regulation and supervision by state, provincial and local government authorities, which may interfere
with the way the combined company conducts its business and may negatively impact its financial results.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Both Huaxin and Oranco
are subject to extensive and complex state, provincial and local laws, rules and regulations with regard to their loan operations,
capital structure, maximum interest rates, allowance for loan losses, among other things, as set out in &ldquo;Business &mdash;
Government Regulations.&rdquo; These laws, rules and regulations are issued by different central government ministries and departments,
provincial and local governments and are enforced by different local authorities. As a result of the complexity, uncertainties
and constant changes in these laws, rules and regulation, including changes in interpretation and implementation of such, both
Huaxin and Oranco&rsquo;s business activities and growth may be adversely affected if they do not respond to the changes in a timely
manner or are found to be in violation of the applicable laws, regulations and policies as a result of a different position from
theirs taken by the competent authority in the interpretation of such applicable laws, regulations and policies. If Huaxin and
Oranco are found to be not in compliance with these laws and regulations, they may be subject to sanctions by regulatory authorities,
monetary penalties and/or reputation damage, which could have a material adverse effect on the combined company&rsquo;s business
operations and profitability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>


<!-- Field: Page; Sequence: 16; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->12<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>You may experience difficulties in effecting
service of legal process, enforcing foreign judgments or bringing original actions against us or our management, in China, based
upon United States laws, including the U.S. federal securities laws, or other foreign laws.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">We are a company incorporated
in Nevada. After the Business Combination, substantially all of our operations will be conducted in China, and substantially all
of our assets will be located in China. All of our current and proposed directors and officers reside in China, and substantially
all of the assets of those persons are located outside of the United States. As a result, Zhonglun W&amp;D Law Firm, our counsel
as to PRC law, has advised us that it may be difficult for a shareholder to effect service of process within the United States
upon these persons, or to enforce judgments against us which are obtained in United States courts, including judgments predicated
upon the civil liability provisions of the securities laws of the United States or any state in the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Zhonglun W&amp;D Law
Firm has further advised us that the recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures
Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law
based either on treaties between China and the country where the judgment is made or on principles of reciprocity between jurisdictions.
China does not have any treaties or other form of reciprocity with the United States providing for the reciprocal recognition and
enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a
foreign judgment against us or our directors or officers if they decide that the judgment violates the basic principles of PRC
laws, national sovereignty, security or public interest. As a result, it is uncertain whether and on what basis a PRC court would
enforce a judgment rendered by a court in the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Zhonglun W&amp;D Law
Firm has also advised us that in the event shareholders originate an action against a company without domicile in China for disputes
related to contracts or other property interests, the PRC courts may accept a cause of action if (a) the disputed contract is concluded
or performed in the PRC or the disputed subject matter is located in the PRC, (b) the company (as defendant) has properties that
can be seized within the PRC, (c) the company has a representative organization within the PRC, or (d) the parties chose to submit
to the jurisdiction of the PRC courts in the contract on the condition that such submission does not violate the requirements of
jurisdiction under the PRC Civil Procedures Law. The action may be initiated by the shareholder by filing a complaint with the
PRC courts. The PRC courts would determine whether to accept the complaint in accordance with the PRC Civil Procedures Law. The
shareholder may participate in the action by itself or entrust any other person or PRC legal counsel to participate on behalf of
such shareholder. Foreign citizens and companies will have the same rights as PRC citizens and companies in such an action unless
such foreign country restricts the rights of PRC citizens and companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Dividends payable to our foreign investors
and gains on the sale of our shares of Common Stock by our foreign investors may become subject to tax by the PRC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Under the Enterprise
Income Tax Law and its implementation regulations issued by the State Council of the PRC, a 10% PRC withholding tax is applicable
to dividends payable to investors that are non-resident enterprises, which do not have an establishment or place of business in
the PRC or which have such establishment or place of business but the dividends are not effectively connected with such establishment
or place of business, to the extent such dividends are derived from sources within the PRC. Similarly, any gain realized on the
transfer of shares by such investors is also subject to PRC tax at a current rate of 10%, subject to any reduction or exemption
set forth in relevant tax treaties, if such gain is regarded as income derived from sources within the PRC. If we are deemed a
PRC resident enterprise, dividends paid on our shares, and any gain realized from the transfer of our shares, would be treated
as income derived from sources within the PRC and would as a result be subject to PRC taxation. Furthermore, if we are deemed a
PRC resident enterprise, dividends payable to individual investors who are non-PRC residents and any gain realized on the transfer
shares by such investors may be subject to PRC tax at a current rate of 20%, subject to any reduction or exemption set forth in
applicable tax treaties. It is unclear whether we or any of our subsidiaries established outside of China are considered a PRC
resident enterprise, holders of shares would be able to claim the benefit of income tax treaties or agreements entered into between
China and other countries or areas. If dividends payable to our non-PRC investors, or gains from the transfer of our shares by
such investors are subject to PRC tax, the value of your investment in our shares may decline significantly.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Our global income may be subject to
PRC taxes under the PRC Enterprise Income Tax Law, which could have a material adverse effect on our results of operations.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Under the PRC Enterprise
Income Tax Law, or the New EIT Law, and its amendment and implementation rules, which became effective in January 2008, an enterprise
established outside of the PRC with a &ldquo;de facto management body&rdquo; located within the PRC is considered a PRC resident
enterprise and will be subject to the enterprise income tax at the rate of 25% on its global income. The implementation rules define
the term &ldquo;de facto management bodies&rdquo; as &ldquo;establishments that carry out substantial and overall management and
control over the manufacturing and business operations, personnel and human resources, finance and treasury, and Business Combination
and disposition of properties and other assets of an enterprise.&rdquo; On April 22, 2009, the State Administration of Taxation
(the &ldquo;SAT&rdquo;), issued a circular, or SAT Circular 82, which provides certain specific criteria for determining whether
the &ldquo;de facto management body&rdquo; of a PRC-controlled enterprise that is incorporated offshore is located in China. Although
the SAT Circular 82 only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled
by PRC individuals or foreigners, the determining criteria set forth in the SAT Circular 82 may reflect the SAT&rsquo;s general
position on how the &ldquo;de facto management body&rdquo; text should be applied in determining the resident status of all offshore
enterprises for the purpose of PRC tax, regardless of whether they are controlled by PRC enterprises or individuals. Although we
do not believe that our legal entities organized outside of the PRC constitute PRC resident enterprises, it is possible that the
PRC tax authorities could reach a different conclusion. In such case, we may be considered a PRC resident enterprise and may therefore
be subject to the 25% enterprise income tax on our global income, which could significantly increase our tax burden and materially
and adversely affect our cash flow and profitability. In addition to the uncertainty regarding how the new PRC resident enterprise
classification for tax purposes may apply, it is also possible that the rules may change in the future, possibly with retroactive
effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>


<!-- Field: Page; Sequence: 17; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->13<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>We and our shareholders face uncertainties
with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">On February 3, 2015,
the State Administration of Taxation issued an Announcement on Several Issues Concerning Enterprise Income Tax on Income Arising
from Indirect Transfers of Property by Non-PRC Resident Enterprises, or Circular 7, with the same effective date. Under Announcement
7, an &ldquo;indirect transfer&rdquo; refers to a transaction where a non-resident enterprise transfers its equity interest and
other similar interest in an offshore holding company, which directly or indirectly holds Chinese taxable assets (the assets of
an &ldquo;establishment or place&rdquo; situated in China; real property situated in China and equity interest in Chinese resident
enterprises) and any indirect transfer without reasonable commercial purposes are subject to the PRC taxation. In addition, Announcement
7 specifies the conditions under which an indirect transfer is deemed to lack a reasonable commercial purpose which include: (1)
75% or more of the value of the offshore holding company&rsquo;s equity is derived from Chinese taxable assets, (2) anytime in
the year prior to the occurrence of the indirect transfer of Chinese taxable assets, 90% or more of the total assets (excluding
cash) of the offshore holding company are direct or indirect investment in China, or 90% or more of the revenue of the offshore
holding company was sourced from China; (3) the functions performed and risks assumed by the offshore holding company(ies), although
incorporated in an offshore jurisdiction to conform to the corporate law requirements there, are insufficient to substantiate their
corporate existence and (4) the foreign income tax payable in respect of the indirect transfer is lower than the Chinese tax which
would otherwise be payable in respect of the direct transfer if such transfer were treated as a direct transfer. As a result, gains
derived from such indirect transfer will be subject to PRC enterprise income tax, currently at a rate of 10%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Announcement 7 grants
a safe harbor under certain qualifying circumstances, including transfers in the public securities market and certain intragroup
restricting transactions, however, there is uncertainty as to the implementation of Announcement 7. For example, Announcement 7
requires the buyer to withhold the applicable taxes without specifying how to obtain the information necessary to calculate taxes
and when the applicable tax shall be submitted. Announcement 7 may be determined by the tax authorities to be applicable to our
offshore restructuring transactions or sale of the shares of our offshore subsidiaries where non-resident enterprises, being the
transferors, were involved. Though Announcement 7 does not impose a mandatory obligation of filing the report of taxable events,
the transferring party shall be subject to PRC withholding tax if the certain tax filing conditions are met. Non-filing may result
in an administrative penalty varying from 50% to 300% of unpaid taxes. As a result, we and our non-resident enterprises in such
transactions may become at risk of being subject to taxation under Announcement 7, and may be required to expend valuable resources
to comply with Announcement 7 or to establish that we and our non-resident enterprises should not be taxed under Announcement 7,
for any restructuring or disposal of shares of our offshore subsidiaries, which may have a material adverse effect on our financial
condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Enhanced scrutiny over acquisition transactions
by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue in the future.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">The PRC tax authorities
have enhanced their scrutiny over the direct or indirect transfer of certain taxable assets, including, in particular, equity interests
in a PRC resident enterprise, by a non-resident enterprise by promulgating and implementing SAT Circular 59 and Circular 698, which
became effective in January 2008, and a Circular 7 in replacement of some of the existing rules in Circular 698, which became effective
in February 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Under Circular 698,
where a non-resident enterprise conducts an &ldquo;indirect transfer&rdquo; by transferring the equity interests of a PRC &ldquo;resident
enterprise&rdquo; indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise,
being the transferor, may be subject to PRC enterprise income tax, if the indirect transfer is considered to be an abusive use
of company structure without reasonable commercial purposes. As a result, gains derived from such indirect transfer may be subject
to PRC tax at a rate of up to 10%. Circular 698 also provides that, where a non-PRC resident enterprise transfers its equity interests
in a PRC resident enterprise to its related parties at a price lower than the fair market value, the relevant tax authority has
the power to make a reasonable adjustment to the taxable income of the transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">In February 2015, the
SAT issued Circular 7 to replace the rules relating to indirect transfers in Circular 698. Circular 7 has introduced a new tax
regime that is significantly different from that under Circular 698. Circular 7 extends its tax jurisdiction to not only indirect
transfers set forth under Circular 698 but also transactions involving transfer of other taxable assets, through the offshore transfer
of a foreign intermediate holding company. In addition, Circular 7 provides clearer criteria than Circular 698 on how to assess
reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity
through a public securities market. Circular 7 also brings challenges to both the foreign transferor and transferee (or other person
who is obligated to pay for the transfer) of the taxable assets. Where a non-resident enterprise conducts an &ldquo;indirect transfer&rdquo;
by transferring the taxable assets indirectly by disposing of the equity interests of an overseas holding company, the non-resident
enterprise being the transferor, or the transferee, or the PRC entity which directly owned the taxable assets may report to the
relevant tax authority such indirect transfer. Using a &ldquo;substance over form&rdquo; principle, the PRC tax authority may disregard
the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of
reducing, avoiding or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise
income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable
taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>


<!-- Field: Page; Sequence: 18; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->14<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">On October&nbsp;17,
2017, the SAT issued a Notice Concerning Withholding Income Tax of Non-Resident Enterprise, or SAT Notice No.&nbsp;37, which abolishes
Circular&nbsp;698 and&nbsp;certain provisions of Circular 7. SAT Notice No.&nbsp;37 further reduces the burden of the withholding
obligator, such as revocation of contract filing requirements and tax liquidation procedures, strengthens the cooperation of tax
authorities in different places, and clarifies the calculation of tax payable and mechanism of foreign exchange.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">We face uncertainties
on the reporting and consequences on future private equity financing transactions, share exchange or other transactions involving
the transfer of shares in our company by investors that are non-PRC resident enterprises. The PRC tax authorities may pursue such
non-resident enterprises with respect to a filing or the transferees with respect to withholding obligation, and request our PRC
subsidiaries to assist in the filing. As a result, we and non-resident enterprises in such transactions may become at risk of being
subject to filing obligations or being taxed, under Circular 59 or Circular 7 and SAT Notice No.&nbsp;37, and may be required to
expend valuable resources to comply with Circular 59, Circular 7 and SAT Notice No.&nbsp;37 or to establish that we and our non-resident
enterprises should not be taxed under these circulars, which may have a material adverse effect on our financial condition and
results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">The PRC tax authorities
have the discretion under SAT Circular 59, Circular 7 and SAT Notice No.&nbsp;37 to make adjustments to the taxable capital gains
based on the difference between the fair value of the taxable assets transferred and the cost of investment. Although we currently
have no plans to pursue any acquisitions in China or elsewhere in the world, we may pursue acquisitions in the future that may
involve complex corporate structures. If we are considered a non-resident enterprise under the PRC Enterprise Income Tax Law and
if the PRC tax authorities make adjustments to the taxable income of the transactions under SAT Circular 59 or and SAT Notice No.&nbsp;37
and Circular 7, our income tax costs associated with such potential acquisitions will be increased, which may have an adverse effect
on our financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Restrictions on currency exchange may
limit our ability to utilize our revenue effectively.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Substantially all of
our revenue is denominated in Renminbi. The Renminbi is currently convertible under the &ldquo;current account,&rdquo; which includes
dividends, trade and service-related foreign exchange transactions, but not under the &ldquo;capital account,&rdquo; which includes
foreign direct investment and loans. Currently, our PRC subsidiaries, which are wholly-foreign owned enterprises, may purchase
foreign currency for settlement of &ldquo;current account transactions,&rdquo; including payment of dividends to us, without the
approval of SAFE by complying with certain procedural requirements. However, the relevant PRC governmental authorities may limit
or eliminate our ability to purchase foreign currencies in the future for current account transactions. Since a significant amount
of our future revenue will be denominated in Renminbi, any existing and future restrictions on currency exchange may limit our
ability to utilize revenue generated in Renminbi to fund our business activities outside of the PRC or pay dividends in foreign
currencies to our shareholders. Foreign exchange transactions under the capital account remain subject to limitations and require
approvals from, or registration with, SAFE or banks and other relevant PRC governmental authorities. This could affect our ability
to obtain foreign currency through debt or equity financing for all of our PRC subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Fluctuations in the foreign currency
exchange rate between U.S. Dollars and Renminbi could adversely affect our financial condition.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">The value of the RMB
against the U.S. dollar and other currencies may fluctuate. Exchange rates are affected by, among other things, changes in political
and economic conditions and the foreign exchange policy adopted by the PRC government. On July 21, 2005, the PRC government changed
its policy of pegging the value of the RMB to the U.S. dollar. Under this policy, the RMB is permitted to fluctuate within a narrow
and managed band against a basket of foreign currencies. Following the removal of the U.S. dollar peg, the RMB appreciated more
than 20% against the U.S. dollar over three years. From July 2008 until June 2010, however, the RMB traded stably within a narrow
range against the U.S. dollar. On June 20, 2010, the PBOC announced that the PRC government would reform the RMB exchange rate
regime and increase the flexibility of the exchange rate. Since June 2010, the RMB has appreciated more than 10% against the U.S.
dollar. In April 2012, the PRC government announced it would allow greater RMB exchange rate fluctuation. On August 11, 12 and
13, 2015, the PRC government successively set the central parity rate for the RMB more than 3% lower in the aggregate than that
of August 10, 2015 and announced that it will begin taking into account previous day&rsquo;s trading in setting the central parity
rate. In 2015, the yuan experienced a 4.88% drop in value, and on January 4, 2016 the PRC government set the U.S. dollar-Chinese
yuan currency pair to a reference rate of 6.5%, the lowest rate in 4.5 years, on January 6, 2017, the reference rate was 0.9% up-regulated
by the PRC government. However, it is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange
rate between the RMB and the U.S. dollar in the future. As significant international pressure remains on the PRC government to
adopt a more flexible currency policy, greater fluctuation of the RMB against the U.S. dollar could result.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>


<!-- Field: Page; Sequence: 19; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->15<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Our revenues and costs
are mostly denominated in the RMB, and a significant portion of our financial assets are also denominated in the RMB. Any significant
fluctuations in the exchange rate between the RMB and the U.S. dollar may materially adversely affect our cash flows, revenues,
earnings and financial position, and the amount of and any dividends we may pay on our shares in U.S. dollars. Fluctuations in
the exchange rate between the RMB and the U.S. dollar could also result in foreign currency translation losses for financial reporting
purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>If any dividend is declared in the future
and paid in a foreign currency, you may be taxed on a larger amount in U.S. dollars than the U.S. dollar amount that you will actually
ultimately receive.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">If you are a U.S. holder
of our shares of Common Stock, you will be taxed on the U.S. dollar value of your dividends, if any, at the time you receive them,
even if you actually receive a smaller amount of U.S. dollars when the payment is in fact converted into U.S. dollars. Specifically,
if a dividend is declared and paid in a foreign currency such as the RMB, the amount of the dividend distribution that you must
include in your income as a U.S. holder will be the U.S. dollar value of the payments made in the foreign currency, determined
at the spot rate of the foreign currency to the U.S. dollar on the date the dividend distribution is includible in your income,
regardless of whether the payment is in fact converted into U.S. dollars. Thus, if the value of the foreign currency decreases
before you actually convert the currency into U.S. dollars, you will be taxed on a larger amount in U.S. dollars than the U.S.
dollar amount that you will actually ultimately receive.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Future inflation in China may inhibit
economic activity and adversely affect the combined company&rsquo;s operations.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">The Chinese economy
has experienced periods of rapid expansion in recent years which can lead to high rates of inflation or deflation. This has caused
the PRC government to, from time to time, enact various corrective measures designed to restrict the availability of credit or
regulate growth and contain inflation. High inflation may in the future cause the PRC government to once again impose controls
on credit and/or prices, or to take other action, which could inhibit economic activity in China. Any action on the part of the
PRC government that seeks to control credit and/or prices may adversely affect the combined company&rsquo;s business operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>PRC laws and regulations have established
more complex procedures for certain acquisitions of Chinese companies by foreign investors, which could make it more difficult
for the combined company to pursue growth through acquisitions in China.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Further to the Regulations
on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the New M&amp;A Rules, the Anti-monopoly Law of the
PRC, the Rules of Ministry of Commerce on Implementation of Security Review System of Mergers and Acquisitions of Domestic Enterprises
by Foreign Investors promulgated by MOFCOM or the MOFCOM Security Review Rules, was issued in August 2011, which established additional
procedures and requirements that are expected to make merger and acquisition activities in China by foreign investors more time-consuming
and complex, including requirements in some instances that MOFCOM be notified in advance of any change of control transaction in
which a foreign investor takes control of a PRC enterprise, or that the approval from MOFCOM be obtained in circumstances where
overseas companies established or controlled by PRC enterprises or residents acquire affiliated domestic companies. PRC laws and
regulations also require certain merger and acquisition transactions to be subject to merger control review and or security review.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">The MOFCOM Security
Review Rules, effective from September 1, 2011, which implement the Notice of the General Office of the State Council on Establishing
the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors promulgated on February 3,
2011, further provide that, when deciding whether a specific merger or acquisition of a domestic enterprise by foreign investors
is subject to the security review by MOFCOM, the principle of substance over form should be applied and foreign investors are prohibited
from bypassing the security review requirement by structuring transactions through proxies, trusts, indirect investments, leases,
loans, control through agreements control or offshore transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Further, if the business
of any target company that the combined company seek to acquire falls into the scope of security review, the combined company may
not be able to successfully acquire such company either by equity or asset acquisition, capital contribution or through any contractual
agreements. The combined company may grow its business in part by acquiring other companies operating in its industry. Complying
with the requirements of the relevant regulations to complete such transactions could be time consuming, and any required approval
processes, including approval from MOFCOM, may delay or inhibit its ability to complete such transactions, which could affect its
ability to maintain or expand its market share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">In addition, SAFE promulgated
the Circular on the Settlement of Foreign Currency Capital of Foreign-invested Enterprises, or Circular 19, on June 1, 2015. Under
Circular 19, registered capital of a foreign-invested company settled in RMB converted from foreign currencies may only be used
within the business scope approved by the applicable governmental authority and the equity investments in the PRC made by the foreign-invested
company shall be subject to the relevant laws and regulations about the foreign-invested company&rsquo;s reinvestment in the PRC.
In addition, foreign-invested companies cannot use such capital to make the investments on securities, and cannot use such capital
to issue the entrusted RMB loans (except approved in its business scope), repay the RMB loans between the enterprises and the ones
which have been transferred to the third party. Circular 19 may significantly limit our ability to effectively use the proceeds
from future financing activities as the Chinese subsidiaries may not convert the funds received from us in foreign currencies into
RMB, which may adversely affect their liquidity and our ability to fund and expand our business in the PRC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>


<!-- Field: Page; Sequence: 20; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->16<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">SAFE issued the Circular
on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts (&ldquo;Circular 16&rdquo;),
on June 9, 2016, which became effective simultaneously. Pursuant to Circular 16, enterprises registered in the PRC may also convert
their foreign debts from foreign currency to RMB on self-discretionary basis. Circular 16 provides an integrated standard for conversion
of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on self-discretionary
basis which applies to all enterprises registered in the PRC. Circular 16 reiterates the principle that RMB converted from foreign
currency-denominated capital of a company may not be directly or indirectly used for purpose beyond its business scope or prohibited
by PRC Laws or regulations, while such converted RMB shall not be provide as loans to its non-affiliated entities. As Circular
16 is newly issued and SAFE has not provided detailed guidelines with respect to its interpretation or implementation, it is uncertain
how these rules will be interpreted and implemented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Failure to comply with the United States
Foreign Corrupt Practices Act and Chinese anti-corruption laws could subject us to penalties and other adverse consequences.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">As our shares are listed
on OTC Pink Market, we are subject to the United States Foreign Corrupt Practices Act, which generally prohibits United States
companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining
business. Non-U.S. companies, including some that may compete with us, may not be subject to these prohibitions. In addition, in
2012, the central government of the PRC commenced a far-reaching campaign against corruption. That ongoing campaign involves aggressive
enforcement of existing Chinese anti-corruption laws. Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices
may occur from time-to-time in the PRC. Our employees or other agents may engage in such conduct for which we might be held responsible.
If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties and other consequences
that may have a material adverse effect on our business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>SEC administrative proceedings against
the China affiliates of multi-national accounting firms, and/or any related adverse regulatory development in the PRC, may result
in our financial statements being determined to not be in compliance with the requirements of the Exchange Act of 1934, as amended,
or the Exchange Act.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">In December 2012, the
SEC brought administrative proceedings against five major accounting firms in China alleging that they had refused to produce audit
work papers and other documents related to certain other China-based companies under investigation by the SEC. On January 22, 2014,
an initial administrative law decision was issued, censuring these accounting firms and suspending four of these firms from practicing
before the SEC for a period of six months. The decision is neither final nor legally effective unless and until reviewed and approved
by the SEC. On February 12, 2014, four of these PRC-based accounting firms appealed to the SEC against this decision. In February
2015, each of the four PRC-based accounting firms agreed to a censure and to pay a fine to the SEC to settle the dispute and avoid
suspension of their ability to practice before the SEC. The settlement requires the firms to follow detailed procedures to seek
to provide the SEC with access to Chinese firms&rsquo; audit documents via the Chinese Securities Regulatory Commission. If the
firms do not follow these procedures, the SEC could restart the administrative proceedings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">In the event that the
SEC restarts the administrative proceedings or initiates new proceedings against other firms, depending upon the final outcome,
listed companies in the United States with major PRC operations may find it difficult or impossible to retain auditors in respect
of their operations in the PRC, which could result in financial statements being determined to not be in compliance with the requirements
of the Exchange Act, including possible delisting. Moreover, any negative news about the proceedings against these audit firms
may cause investor uncertainty regarding China-based, United States-listed companies and the market price of our shares may be
adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">If our independent registered
public accounting firm was denied, even temporarily, the ability to practice before the SEC and we were unable to timely find another
registered public accounting firm to audit and issue an opinion on our financial statements, our financial statements could be
determined not to be in compliance with the requirements of the Exchange Act. Such a determination could ultimately lead to our
deregistration from the SEC, which would substantially reduce or effectively terminate the trading of our shares in the United
States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>If our management following our Business
Combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with
such laws, which could lead to various regulatory issues.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Following our initial
Acquisition, our management will likely resign from their positions as officers or directors of the company and the management
of the target business at the time of the Acquisition will remain in place. Management of the target business may not be familiar
with United States securities laws. If new management is unfamiliar with these laws, they may have to expend time and resources
becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues, which
may adversely affect our operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>


<!-- Field: Page; Sequence: 21; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->17<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>If we become directly subject to the
recent scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources
to investigate and resolve the matter which could harm our business operations and our reputation and could result in a loss of
your investment in our shares, especially if such matter cannot be addressed and resolved favorably.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">U.S. public companies
that have substantially all of their operations in China have been the subject of intense scrutiny, criticism and negative publicity
by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity
has centered around financial and accounting irregularities, a lack of effective internal controls over financial accounting, inadequate
corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny,
criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese companies has sharply decreased in value
and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement
actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide
scrutiny, criticism and negative publicity will have on our company and our business. If we become the subject of any unfavorable
allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate
such allegations and/or defend the Company. This situation may be a major distraction to our management. If such allegations are
not proven to be groundless, our company and business operations will be severely hampered and your investment in our stock could
be rendered worthless.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>The disclosures in our reports and other
filings with the SEC and our other public pronouncements are not subject to the scrutiny of any regulatory bodies in the PRC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Our reports and other
filings with the SEC are subject to SEC review in accordance with the rules and regulations promulgated by the SEC under the Securities
Act and the Exchange Act. Our SEC filings and other disclosure and public pronouncements are not subject to the review or scrutiny
of any PRC regulatory authority. For example, the disclosure in our SEC reports and other filings are not subject to the review
by CSRC, a PRC regulator that is tasked with oversight of the capital markets in China. Accordingly, you should review our SEC
reports, filings and our other public pronouncements with the understanding that no local regulator has done any review of our
company, our SEC reports, other filings or any of our other public pronouncements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>


<!-- Field: Page; Sequence: 22; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->18<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_005"></A>CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>This prospectus contains forward looking
statements that involve risks and uncertainties, principally in the sections entitled &ldquo;Description of Business,&rdquo; &ldquo;Risk
Factors,&rdquo; and &ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations.&rdquo;
All statements other than statements of historical fact contained in this prospectus, including statements regarding future events,
our future financial performance, business strategy and plans and objectives of management for future operations, are forward-looking
statements. We have attempted to identify forward-looking statements by terminology including &ldquo;anticipates,&rdquo; &ldquo;believes,&rdquo;
&ldquo;can,&rdquo; &ldquo;continue,&rdquo; &ldquo;could,&rdquo; &ldquo;estimates,&rdquo; &ldquo;expects,&rdquo; &ldquo;intends,&rdquo;
&ldquo;may,&rdquo; &ldquo;plans,&rdquo; &ldquo;potential,&rdquo; &ldquo;predicts,&rdquo; &ldquo;should,&rdquo; or &ldquo;will&rdquo;
or the negative of these terms or other comparable terminology. Although we do not make forward looking statements unless we believe
we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are only predictions and involve
known and unknown risks, uncertainties and other factors, including the risks outlined under &ldquo;Risk Factors&rdquo; or elsewhere
in this prospectus, which may cause our or our industry&rsquo;s actual results, levels of activity, performance or achievements
expressed or implied by these forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment.
New risks emerge from time to time and it is not possible for us to predict all risk factors, nor can we address the impact of
all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ
materially from those contained in any forward-looking statements. All forward-looking statements included in this document are
based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>You should not place undue reliance
on any forward-looking statement, each of which applies only as of the date of this prospectus. Before you invest in our securities,
you should be aware that the occurrence of the events described in the section entitled &ldquo;Risk Factors&rdquo; and elsewhere
in this prospectus could negatively affect our business, operating results, financial condition and stock price. Except as required
by law, we undertake no obligation to update or revise publicly any of the forward-looking statements after the date of this prospectus
to conform our statements to actual results or changed expectations.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"></P>


<!-- Field: Page; Sequence: 23; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->19<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><B><A NAME="a_006"></A>USE OF PROCEEDS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white; text-align: justify">This prospectus relates to shares of
our Common Stock that may be offered and sold from time to time by the selling stockholders named herein. We will not receive any
proceeds from the sale of shares by the selling stockholders in this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-style: normal"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><B><A NAME="a_007"></A>DETERMINATION
OF OFFERING PRICE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white; text-align: justify">The selling stockholders may sell these
shares in the over-the-counter market or otherwise, at market prices prevailing at the time of sale, at prices related to the prevailing
market price, or at negotiated prices.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_008"></A>DESCRIPTION
OF SECURITIES TO BE REGISTERED</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Introduction</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the discussion that follows, we have summarized selected
provisions of our articles of incorporation relating to our capital stock. This summary is not complete. This discussion is subject
to the relevant provisions of Nevada law and is qualified in its entirety by reference to our articles of incorporation and our
bylaws. You should read our articles of incorporation and our bylaws as currently in effect for provisions that may be important
to you.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Authorized Capital Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our authorized share capital consists of 500,000,000 shares
of Common Stock. As of July 3, 2019, there were 419,487,480 shares of Common Stock issued and outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As dictated by our articles of incorporation,
all shares of Common Stock have equal rights and privileges with respect to (i) one non-cumulative vote for each share held of
record on all matters submitted to a vote of the stockholders&#894; (ii) to participate equally and to receive any and all such
dividends as may be declared by the Board of Directors out of funds legally available therefor&#894; and (iii) to participate pro
rata in any distribution of assets available for distribution upon liquidation of the Company. Stockholders of the Company have
no pre-emptive rights to acquire additional shares of Common Stock or any other securities. The Common Stock is not subject to
redemption and carries no subscription or conversion rights. All outstanding shares of Common Stock are fully paid and non-assessable.
The articles of incorporation may only be amended by a majority vote of the stockholders holding at least a majority of each class
of stock outstanding and entitled to vote. A quorum of outstanding shares for voting on an amendment to the articles of incorporation
shall not be met unless 51% or more of the issued and outstanding shares are present at a properly called and noticed meeting of
the Stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the event of any merger or consolidation
with or into another company in connection with which shares of our Common Stock are converted into or exchangeable for shares
of stock, other securities or property (including cash) a general or special shareholder&rsquo;s meeting should be called for such
purpose, wherein all shareholders would be entitled to vote in person or by proxy. In the notice of such a shareholder&rsquo;s
meeting and proxy statement, the Company will provide shareholders complete disclosure documentation concerning a potential acquisition
of merger candidate, including financial information about the target and all material terms of the acquisition or merger transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of July 3, 2019, there were 419,487,480
shares of Common Stock issued and outstanding.</P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>


<!-- Field: Page; Sequence: 24; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->20<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_009"></A>MARKET
PRICE OF AND DIVIDENDS ON THE COMPANY&rsquo;S COMMON STOCK AND RELATED STOCKHOLDER MATTERS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Common Stock trades in the OTC Pink
marketplace under the symbol &ldquo;ORNC&rdquo;. The OTC Pink marketplace is a quotation service that displays real-time quotes,
last-sale prices, and volume information in over-the-counter (&ldquo;OTC&rdquo;) equity securities. An OTC Pink equity security
generally includes any equity that is not listed or traded on a national securities exchange.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Price Range of Common Stock</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table shows, for the periods
indicated, the high and low bid prices per share of our Common Stock as reported by the OTC Pink quotation service. These bid prices
represent prices quoted by broker-dealers on the OTC Pink quotation service. The quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commissions, and may not represent actual transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid">Fiscal Year 2019</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">High Bid</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Low Bid</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left">First Quarter</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">0.69</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">0.61</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Second Quarter</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.69</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.69</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Third Quarter</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.69</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.69</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid">Fiscal Year 2018</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">High Bid</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Low Bid</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left">First Quarter</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">0.4</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">0.2</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Second Quarter</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.61</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.45</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Third Quarter</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.55</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.18</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Fourth Quarter</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.61</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.475</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid">Fiscal Year 2017</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">High Bid</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Low Bid</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left">First Quarter</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">0.21</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">0.21</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Second Quarter</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.21</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.21</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Third Quarter</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.21</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Fourth Quarter</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.25</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.25</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Stockholders of Record</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of July 3, 2019 there were approximately
63 stockholders of record of our Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Preferred Stock</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company does not have any preferred
stock, authorized or issued.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Warrants</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There are currently no outstanding warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Options</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There are currently no outstanding options.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Dividends</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has not declared any cash dividends
with respect to its Common Stock and does not intend to declared dividends in the foreseeable future. The future dividend policy
of the Company cannot be ascertained with any certainty, and until the Company completes any acquisition, reorganization or merger,
as to which no assurance may be given, no such policy will be formulated. There are no material restrictions limiting, or that
are likely to limit, the Company&rsquo;s ability to pay dividends on its Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Securities authorized for issuance under equity compensation
plans</U></B><U>.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">None; not applicable&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Purchase of Equity Securities By
the Issuer and Affiliated Purchasers.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">None.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Transfer Agent and Registrar</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Issuer Direct Corporation (formerly known
as &ldquo;Interwest Transfer Company, Inc.&rdquo;) has been appointed as our transfer agent and registrar for our Common Stock.
Its mailing address is 1981 Murray Holladay Road, Suite 100 Salt Lake City, UT 84117 and their phone number is 801-272-9294.</P>




<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


<!-- Field: Page; Sequence: 25; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->21<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>




<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_010"></A>DIVIDEND POLICY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We plan to retain any earnings for the
foreseeable future for our operations. We have never paid any dividends on our Common Stock and do not anticipate paying any cash
dividends in the foreseeable future. Any future determination to pay cash dividends will be at the discretion of our Board of Directors
and will depend on our financial condition, operating results, capital requirements and such other factors as our Board of Directors
deems relevant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_010a"></A>SELLING STOCKHOLDERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are registering for the resale shares
of our Common Stock held by the selling stockholders identified below. We are registering the shares to permit the selling stockholders
and their pledges, donees, transferees and other successors-in-interest that receive their shares from a selling stockholder as
a gift, partnership distribution or other non-sale related transfer after the date of this prospectus to resell the shares when
and as they deem appropriate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table presents information
as of the date of this prospectus and sets forth:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the name of the selling stockholders;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the number of shares of our Common Stock that may be offered for resale for the account of the selling stockholder under this prospectus;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the number and percentage of shares of our Common Stock that the selling stockholder beneficially owned prior to the offering for resale of the shares under this prospectus; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the number and percentage of shares of our Common Stock to be beneficially owned by the selling stockholder after the offering of the resale shares (assuming all of the offered resale shares are sold by the selling stockholders).</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The 73,898,080 shares of our Common Stock
registered for public resale pursuant to this prospectus and listed under the column &ldquo;Shares of Common Stock Included in
Prospectus&rdquo; on the table set forth below consist of 73,898,080 shares that were issued in connection with the Share Exchange
and held by holders of &ldquo;restricted&rdquo; shares under applicable law, in each case as described in the footnotes to the
table below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Any or all of the securities listed below
may be retained by any of the selling stockholders, and therefore, no accurate forecast can be made as to the number of securities
that will be held by the selling stockholders upon termination of this offering. The selling stockholders are not making any representation
that any shares covered by this prospectus will be offered for sale. We believe that, based on information provided to us by each
of the selling stockholders, the selling stockholders listed in the table have sole voting and investment powers with respect to
the securities indicated. As indicated below, certain selling stockholders are broker-dealers or affiliates of broker-dealers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid">Name of Selling Stockholders</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Shares of</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Common</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Stock</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Included In</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Prospectus</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Shares</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Beneficially</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Owned Prior</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>To Offering (1)</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Percentage</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>of Shares</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Before</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Offering (1)</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Shares</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Beneficially</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Owned After</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Offering (2)</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Percentage of</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Shares After</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Offering (2)</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; font: 10pt Times New Roman, Times, Serif; text-align: left">Stephen Zhu</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">15,261,560</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">15,261,560</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">3.9</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">0</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">0</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Zhen Huang</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">15,261,560</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">15,261,560</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3.6</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Chan Man Kuen</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">11,245,360</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">11,245,360</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2.9</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Lam Fung</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">11,245,360</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">11,245,360</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2.7</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Lam Man Hung</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">11,245,360</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">11,245,360</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2.8</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Wong Ying</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">9,638,880</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">9,638,880</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">2.5</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">0</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">0</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">Total</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">73,898,080</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">73,898,080</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">18.4</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">*</TD><TD STYLE="text-align: justify">Represents less than 1% of total outstanding Common Stock.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">(1)</TD><TD STYLE="text-align: justify">Beneficial ownership is determined in accordance with Rule
13d-3 of the Exchange Act. In computing the number of shares beneficially owned by a person and the percentage ownership of that
person, securities that are currently convertible or exercisable into shares of our Common Stock, or convertible or exercisable
into shares of our Common Stock within 60 days of the date hereof are deemed outstanding. Such shares, however, are not deemed
outstanding for the purpose of computing the percentage ownership of any other person. Except as indicated in the footnotes to
the following table, each stockholder named in the table has sole voting and investment power with respect to the shares set forth
opposite such stockholder&rsquo;s name. The percentage of beneficial ownership is based on 419,487,480 shares of Common Stock
outstanding as of the date of this prospectus.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">(2)</TD><TD STYLE="text-align: justify">Assumes that all securities registered will be sold.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>


<!-- Field: Page; Sequence: 26; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->22<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_011"></A>PLAN OF DISTRIBUTION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The selling stockholders and any of their
respective pledgees, donees, assignees and other successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These
sales may be at fixed or negotiated prices. The selling stockholders may use any one or more of the following methods when selling
shares:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ordinary brokerage transactions and transactions in which the broker-dealer solicits the purchaser;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">facilitate the transaction;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">purchases by a broker-dealer as principal and resale by the broker-dealer for its account;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">an exchange distribution in accordance with the rules of the applicable exchange;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">privately-negotiated transactions;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">through the writing of options on the shares;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a combination of any such methods of sale; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">any other method permitted pursuant to applicable law.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The selling stockholders may also sell
shares under Rule 144 of the Securities Act of 1933, as amended (the &ldquo;Securities Act&rdquo;), if available, rather than under
this prospectus. The selling stockholders shall have the sole and absolute discretion not to accept any purchase offer or make
any sale of shares if it deems the purchase price to be unsatisfactory at any particular time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The selling stockholders or their respective
pledgees, donees, transferees or other successors in interest, may also sell the shares directly to market makers acting as principals
and/or broker-dealers acting as agents for themselves or their customers. Such broker-dealers may receive compensation in the form
of discounts, concessions or commissions from the selling stockholders and/or the purchasers of shares for whom such broker-dealers
may act as agents or to whom they sell as principal or both, which compensation as to a particular broker-dealer might be in excess
of customary commissions. Market makers and block purchasers purchasing the shares will do so for their own account and at their
own risk. It is possible that a selling stockholder will attempt to sell shares of Common Stock in block transactions to market
makers or other purchasers at a price per share which may be below the then existing market price. We cannot assure that all or
any of the shares offered in this prospectus will be issued to, or sold by, the selling stockholders. The selling stockholders
and any brokers, dealers or agents, upon effecting the sale of any of the shares offered in this prospectus, may be deemed to be
&ldquo;underwriters&rdquo; as that term is defined under the Securities Act, the Exchange Act and the rules and regulations of
such acts. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares
purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are required to pay all fees and expenses
incident to the registration of the shares, including fees and disbursements of counsel to the selling stockholders, but excluding
brokerage commissions or underwriter discounts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The selling stockholders, alternatively,
may sell all or any part of the shares offered in this prospectus through an underwriter. The selling stockholders have not entered
into any agreement with a prospective underwriter and there is no assurance that any such agreement will be entered into.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The selling stockholders may pledge their
shares to their brokers under the margin provisions of customer agreements. If a selling stockholder defaults on a margin loan,
the broker may, from time to time, offer and sell the pledged shares. The selling stockholders and any other persons participating
in the sale or distribution of the shares will be subject to applicable provisions of the Exchange Act, and the rules and regulations
under such act, including, without limitation, Regulation M. These provisions may restrict certain activities of, and limit the
timing of purchases and sales of any of the shares by, the selling stockholders or any other such person. In the event that any
of the selling stockholders are deemed an affiliated purchaser or distribution participant within the meaning of Regulation M,
then the selling stockholders will not be permitted to engage in short sales of Common Stock. Furthermore, under Regulation M,
persons engaged in a distribution of securities are prohibited from simultaneously engaging in market making and certain other
activities with respect to such securities for a specified period of time prior to the commencement of such distributions, subject
to specified exceptions or exemptions. In addition, if a short sale is deemed to be a stabilizing activity, then the selling stockholders
will not be permitted to engage in a short sale of our Common Stock. All of these limitations may affect the marketability of the
shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If a selling stockholder notifies us that
it has a material arrangement with a broker-dealer for the resale of the Common Stock, then we would be required to amend the registration
statement of which this prospectus is a part, and file a prospectus supplement to describe the agreements between the selling stockholder
and the broker-dealer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<!-- Field: Page; Sequence: 27; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->23<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_012"></A>REGULATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>PRC Laws and Regulations on Alcohol
Wholesale</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Huaxin is in the alcohol wholesale business,
including Fenjiu liquor wholesale and imported wine wholesale, in China. Huaxin is subject to various existing and probable governmental
regulations on its alcohol wholesale business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the Regulations on Administration
of Liquor of Shanxi Province which came into effect on January 1, 2000, entities or individuals who engage in liquor wholesale
in Shanxi Province shall apply for Liquor Wholesale License. Huaxin has obtained the Liquor Wholesale License and such license
will expire on December 31, 2021. Jinqiang has also obtained the Liquor Wholesale License and such license will expire on December
31, 2019. Also, Huaxin and Jinqiang are required to obtain the Food Operation License pursuant to the Administrative Measures for
Food Operation Licensing which came into effect on November 17, 2017. Huaxin has obtained Food Operation License and such license
will expire on August 31, 2022. Jinqiang has obtained Food Operation License and such license will expire on December 22, 2021.
Nevertheless, Huaxin and Jinqiang may be subject to penalties by PRC regulatory authorities if the Liquor Wholesale License and
Food Operation License is not timely renewed after expiration.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Currently, license for liquor wholesale
is no longer required in nationwide level, but it is still required in some particular Provinces, such as Shanxi Province and Shanghai.
In addition to Shanxi Province, the Company also sell liquor to other Provinces, namely Fujian, Ningxia, Gansu, Xinjiang, Beijing,
Shanghai and Hebei Province. Liquor wholesale business of the Company is operated by its subsidiaries, Huaxin and Fenyang Jinqiang
Wine Co., Ltd. (&ldquo;Jinqiang&rdquo;), both of which were established in Shanxi Province and have obtained wholesale licenses
in Shanxi Province. According to our telephone consultation with the competent authorities in Beijing, Shanghai, Ningxia, Gansu
and Hebei, no wholesale license is required for Huaxin or Jinqiang in such Provinces since Huaxin and Jinqiang were established
in Shanxi Province and have already obtained wholesale licenses in Shanxi Province. In conclusion, no further wholesale license
is required in other Provinces where the Company operates its business, unless the Company newly establish operating entity in
such Provinces and license is still required for liquor wholesale business in such Provinces.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Regarding the imported wine business, pursuant
to the Foreign Trade Law of the People&rsquo;s Republic of China (Revised in 2016), a foreign trade operator engaged in import
and export of goods shall register with competent local regulatory authorities in Shanxi Province that in charge of foreign trades;
and pursuant to the Administrative Provisions of the Customs of the People&rsquo;s Republic of China on the Registration of Customs
Declaration Entities, consignors and consignees of imported and exported goods shall go through customs declaration entity registration
formalities with their local Customs in accordance with the applicable provisions. Huaxin has completed the registration for a
record as a foreign trade operator and has obtained Certificate of the Customs of the People&rsquo;s Republic of China on the Registration
of Customs Declaration Entities. The registration for a record as a foreign trade operator has no time limit; while the validity
period for Certificate of the Customs of the PRC on the Registration of Customs Declaration Entities is two years and such certificate
can be renewed before the expiration date. Nevertheless, Huaxin may be subject to penalties by PRC regulatory authorities if Huaxin
fails to go through the modification formalities in the event of a change to any of its details registered with the competent governmental
authorities including its name, nature, domicile and legal representative.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>PRC Laws and Regulations on Environmental
Protection</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white; color: #2E2E2E">The
Ministry of Ecology and Environment is responsible for the uniform supervision and control of environmental protection in the PRC.
It formulates national environmental quality and discharge standards and monitors the PRC&rsquo;s environmental system. Ecology
and Environment bureaus at the county level and above are responsible for environmental protection within their areas of jurisdiction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white; color: #2E2E2E">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white; color: #2E2E2E">Pursuant
to the Law on Environmental Impact Evaluation of the PRC promulgated on October 28, 2002 and effective from September 1, 2003,
manufacturers must prepare and file an environmental impact report setting forth the impact that the proposed construction project
may have on the environment and the measures to prevent or mitigate the impact for approval by the relevant PRC government authority
prior to commencement of construction of the relevant project. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white; color: #2E2E2E">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white; color: #2E2E2E">Pursuant
to the Environmental Protection Law of the PRC, or the Environmental Protection Law, promulgated on and effective from December
26, 1989, the environmental protection department of the State Council is in charge of promulgating national standards for environmental
protection. The Environmental Protection Law requires any facility that produces pollutants or other hazards to incorporate environmental
protection measures in its operations and establish an environmental protection responsibility system. Any entity that discharges
pollution must obtain the Pollution Discharging License from the relevant environmental protection authority. Remedial measures
for breaches of the Environmental Protection Law include a warning, payment of damages or imposition of a fine. Criminal liability
may be imposed for a material violation of environmental laws and regulations that causes loss of property, personal injuries or
death.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white; color: #2E2E2E">Huanxin
and its subsidiaries are not manufacturing, assembling or processing companies, thus are not subject to the PRC laws and regulations
on environmental protection.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white; color: #2E2E2E">&nbsp;</P>


<!-- Field: Page; Sequence: 28; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->24<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>PRC Laws and Regulations on Intellectual
Property Rights</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Regulations on Trademarks</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Trademark Law of the PRC was adopted
at the 24th&nbsp;meeting of the SCNPC on August&nbsp;23, 1982. Three amendments were made on February&nbsp;22, 1993, October&nbsp;27,
2001 and August&nbsp;30, 2013. The last amendment was implemented on May&nbsp;1, 2014. The Regulations on the Implementation of
the Trademark Law of the PRC were promulgated by the State Council of the People&rsquo;s Republic of China on August&nbsp;3, 2002,
which took effect on September&nbsp;15, 2002. It was revised on April&nbsp;29, 2014 and became effective as of May&nbsp;1, 2014.
According to the Trademark Law and the implementing regulations, a trademark which has been approved and registered by the trademark
office is a registered trademark, including a trademark of goods, services, collective trademark and certification trademark. The
trademark registrant shall enjoy the exclusive right to use the trademark and shall be protected by law. The trademark law also
specifies the scope of registered trademarks, procedures for registration of trademarks and the rights and obligations of trademark
owners. We are currently holding 5 registered trademarks in China and enjoy the corresponding rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Regulations on Patents</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Patent Law of the PRC,
or the Patent Law, promulgated by the SCNPC on March 12, 1984, as latest amended on December 27, 2008, and effective from October
1, 2009 and the Implementation Rules of the Patent Law of the PRC, promulgated by the State Council on June 15, 2001 and latest
amended on January 9, 2010, there are three types of patent in the PRC: invention patent, utility model patent and design patent.
The protection period is 20 years for invention patent and 10 years for utility model patent and design patent, commencing from
their respective application dates. Any individual or entity that utilizes a patent or conducts any other activity in infringement
of a patent without prior authorization of the patentee shall pay compensation to the patentee and is subject to a fine imposed
by relevant administrative authorities and, if constituting a crime, shall be held criminally liable in accordance with the law.
In the event that a patent is owned by two or more co-owners without an agreement regarding the distribution of revenue generated
from the exploitation of any co-owner of the patent, such revenue shall be distributed among all the co-owners.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Existing patents can become narrowed, invalid
or unenforceable due to a variety of grounds, including lack of novelty, creativity, and deficiencies in patent application. In
China, a patent must have novelty, creativity and practical applicability. Under the Patent Law, novelty means that before a patent
application is filed, no identical invention or utility model has been publicly disclosed in any publication in China or overseas
or has been publicly used or made known to the public by any other means, whether in or outside of China, nor has any other person
filed with the patent authority an application that describes an identical invention or utility model and is recorded in patent
application documents or patent documents published after the filing date. Creativity means that, compared with existing technology,
an invention has prominent substantial features and represents notable progress, and a utility model has substantial features and
represents any progress. Practical applicability means an invention or utility model can be manufactured or used and may produce
positive results. Patents in China are filed with the State Intellectual Property Office, or SIPO. Normally, the SIPO publishes
an application for an invention patent within 18 months after the filing date, which may be shortened at the request of applicant.
The applicant must apply to the SIPO for a substantive examination within 3 years from the date of application.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of the date of this prospectus, we had
obtained two patents for liquor-making devices that can change proofs of various liquors, both of which were registered in 2015.
Our issued PRC patents will expire in 2025.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Regulations on Domain Names</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Ministry of
Industry and Information Technology of the PRC, or the MIIT, promulgated the&nbsp;Measures on Administration of Internet Domain
Names, or the Domain Name Measures, on August&nbsp;24, 2017, which took effect on November&nbsp;1, 2017 and replaced the&nbsp;Administrative
Measures on China Internet Domain Name promulgated by the MIIT on November&nbsp;5, 2004. According to the Domain Name Measures,
the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a first-to-file
principle. Applicants for registration of domain names shall provide true, accurate and complete information of their identities
to domain name registration service institutions. The applicant will become the holder of such domain names upon completion of
the registration procedure.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As of the date
of this prospectus, we do not have any domain name used for providing non-commercial internet-based information services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<!-- Field: Page; Sequence: 29; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->25<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>PRC Laws and Regulations on Foreign
Exchange</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>General Administration of Foreign Exchange</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The principal regulation governing foreign
currency exchange in the PRC is the&nbsp;Administrative Regulations of the PRC on Foreign Exchange&nbsp;(the &ldquo;Foreign Exchange
Regulations&rdquo;), which were promulgated on January&nbsp;29, 1996, became effective on April&nbsp;1, 1996 and were last amended
on August&nbsp;5, 2008. Under these rules, Renminbi is generally freely convertible for payments of current account items, such
as trade- and service-related foreign exchange transactions and dividend payments, but not freely convertible for capital account
items, such as capital transfer, direct investment, investment in securities, derivative products or loans unless prior approval
by competent authorities for the administration of foreign exchange is obtained. Under the Foreign Exchange Regulations, foreign-invested
enterprises in the PRC may purchase foreign exchange without the approval of SAFE to pay dividends by providing certain evidentiary
documents, including board resolutions, tax certificates, or for trade- and services-related foreign exchange transactions, by
providing commercial documents evidencing such transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Circular No. 37 and Circular No. 13</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Circular 37 was released by SAFE on July&nbsp;4,
2014 and abolished Circular 75 which had been in effect since November&nbsp;1, 2005. Pursuant to Circular 37, a PRC resident should
apply to SAFE for foreign exchange registration of overseas investments before it makes any capital contribution to a special purpose
vehicle, or SPV, using his or her legitimate domestic or offshore assets or interests. SPVs are offshore enterprises directly established
or indirectly controlled by domestic residents for the purpose of investment and financing by utilizing domestic or offshore assets
or interests they legally hold. Following any significant change in a registered offshore SPV, such as capital increase, reduction,
equity transfer or swap, consolidation or division involving domestic resident individuals, the domestic individuals shall amend
the registration with SAFE. Where an SPV intends to repatriate funds raised after completion of offshore financing to the PRC,
it shall&nbsp;comply with relevant PRC regulations on foreign investment and foreign debt management. A foreign-invested enterprise
established through return investment shall complete relevant foreign exchange registration formalities in accordance with the
prevailing foreign exchange administration regulations on foreign direct investment and truthfully disclose information on the
actual controller of its shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If any shareholder who is a PRC resident
(as determined by the Circular No. 37) holds any interest in an offshore SPV and fails to fulfil the required foreign exchange
registration with the local SAFE branches, the PRC subsidiaries of that offshore SPV may be prohibited from distributing their
profits and dividends to their offshore parent company or from carrying out other subsequent cross-border foreign exchange activities.
The offshore SPV may also be restricted in its ability to contribute additional capital to its PRC subsidiaries. Where a domestic
resident fails to complete relevant foreign exchange registration as required, fails to truthfully disclose information on the
actual controller of the enterprise involved in the return investment or otherwise makes false statements, the foreign exchange
control authority may order them to take remedial actions, issue a warning, and impose a fine of less than RMB 300,000 on an institution
or less than RMB 50,000 on an individual.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Circular 13 was issued by SAFE on February&nbsp;13,
2015, and became effective on June&nbsp;1, 2015. Pursuant to Circular 13, a domestic resident who makes a capital contribution
to an SPV using his or her legitimate domestic or offshore assets or interests is no longer required to apply to SAFE for foreign
exchange registration of his or her overseas investments. Instead, he or she shall register with a bank in the place where the
assets or interests of the domestic enterprise in which he or she has interests are located if the domestic resident individually
seeks to make a capital contribution to the SPV using his or her legitimate domestic assets or interests; or he or she shall register
with a local bank at his or her permanent residence if the domestic resident individually seeks to make a capital contribution
to the SPV using his or her legitimate offshore assets or interests.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0pt 0; text-align: justify">As of the date of this prospectus, all of our beneficial shareholders have completed registrations in
accordance with Circular 37.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Circular 19 and Circular 16</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Circular 19 was promulgated by SAFE on
March&nbsp;30, 2015, and became effective on June&nbsp;1, 2015. According to Circular 19, the foreign exchange capital in the capital
account of foreign-invested enterprises, meaning the monetary contribution confirmed by the foreign exchange authorities or the
monetary contribution registered for account entry through banks, shall be granted the benefits of Discretional Foreign Exchange
Settlement (&ldquo;Discretional Foreign Exchange Settlement&rdquo;). With Discretional Foreign Exchange Settlement, foreign capital
in the capital account of a foreign-invested enterprise for which the rights and interests of monetary contribution have been confirmed
by the local foreign exchange bureau, or for which book-entry registration of monetary contribution has been completed by the bank,
can be settled at the bank based on the actual operational needs of the foreign-invested enterprise. The allowed Discretional Foreign
Exchange Settlement&nbsp;percentage of the foreign capital of a foreign-invested enterprise has been temporarily set to be 100%.
The Renminbi converted from the foreign capital will be kept in a designated account and if a foreign-invested enterprise needs
to make any further payment from such account, it will still need to provide supporting documents and to complete the review process
with its bank.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Furthermore, Circular 19 stipulates that
foreign-invested enterprises shall make bona fide use of their capital for their own needs within their business scopes. The capital
of a foreign-invested enterprise and the Renminbi it obtained from foreign exchange settlement shall not be used for the following
purposes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="width: 91%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">directly or indirectly used for expenses beyond its business scope or prohibited by relevant laws or regulations;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="width: 91%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">directly or indirectly used for investment in securities unless otherwise provided by relevant laws or regulations;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<!-- Field: Page; Sequence: 30; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->26<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="width: 91%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">directly or indirectly used for entrusted loan in Renminbi (unless within its permitted scope of business), repayment of inter-company loans (including advances by a third party) or repayment of bank loans in Renminbi that have been sub-lent to a third party; or</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="width: 91%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">directly or indirectly used for expenses related to the purchase of real estate that is not for self-use (except for foreign-invested real estate enterprises).</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Circular 16 was issued by SAFE on June&nbsp;9,
2016. Pursuant to Circular 16, enterprises registered in the PRC may also convert their foreign debts from foreign currency to
Renminbi on a self-discretionary basis. Circular 16 provides an integrated standard for conversion of foreign exchange capital
items (including but not limited to foreign currency capital and foreign debts) on a self-discretionary basis applicable to all
enterprises registered in the PRC. Circular 16 reiterates the principle that an enterprise&rsquo;s Renminbi capital converted from
foreign currency-denominated capital may not be directly or indirectly used for purposes beyond its business scope or purposes
prohibited by PRC laws or regulations, and such converted Renminbi capital shall not be provided as loans to non-affiliated entities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our PRC subsidiaries' distributions to
their offshore parents are required to comply with the requirements as described above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>PRC Laws and Regulations on Taxation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Enterprise Income Tax</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The&nbsp;Enterprise Income Tax Law of the
People&rsquo;s Republic of China&nbsp;(the &ldquo;EIT Law&rdquo;) was promulgated by the Standing Committee of the National People&rsquo;s
Congress on March&nbsp;16, 2007 and became effective on January&nbsp;1, 2008, and was later amended on February&nbsp;24, 2017.
The&nbsp;Implementation Rules of the EIT Law&nbsp;(the &ldquo;Implementation Rules&rdquo;) were promulgated by the State Council
on December&nbsp;6, 2007 and became effective on January&nbsp;1, 2008. According to the EIT Law and the Implementation Rules, enterprises
are divided into resident enterprises and non-resident enterprises. Resident enterprises shall pay enterprise income tax on their
incomes obtained in and outside the PRC at the rate of 25%. Non-resident enterprises setting up institutions in the PRC shall pay
enterprise income tax on the incomes obtained by such institutions in and outside the PRC at the rate of 25%. Non-resident enterprises
with no institutions in the PRC, and non-resident enterprises whose incomes having no substantial connection with their institutions
in the PRC, shall pay enterprise income tax on their incomes obtained in the PRC at a reduced rate of 10%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The&nbsp;Arrangement between the PRC and
Hong Kong Special Administrative Region for the Avoidance of Double Taxation the Prevention of Fiscal Evasion with respect to Taxes
on Income&nbsp;(the &ldquo;Arrangement&rdquo;) was promulgated by the State Administration of Taxation (&ldquo;SAT&rdquo;) on August&nbsp;21,
2006 and came into effect on December&nbsp;8, 2006. According to the Arrangement, a company incorporated in Hong Kong will be subject
to withholding tax at the lower rate of 5% on dividends it receives from a company incorporated in the PRC if it holds a 25% interest
or more in the PRC company. The&nbsp;Notice on the Understanding and Identification of the Beneficial Owners in the Tax Treaty&nbsp;(the
&ldquo;Notice&rdquo;) was promulgated by SAT and became effective on October&nbsp;27, 2009. According to the Notice, a beneficial
ownership analysis will be used based on a substance-over-form principle to determine whether or not to grant tax treaty benefits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In April&nbsp;2009, the Ministry of Finance,
or MOF, and SAT jointly issued the Notice on Issues Concerning Process of Enterprise Income Tax in Enterprise Restructuring Business,
or Circular&nbsp;59. In December&nbsp;2009, SAT issued the Notice on Strengthening Administration of Enterprise Income Tax for
Share Transfers by Non-PRC Resident Enterprises, or Circular&nbsp;698. Both Circular&nbsp;59 and Circular&nbsp;698 became effective
retroactively as of January&nbsp;2008. In February&nbsp;2011, SAT issued the Notice on Several Issues Regarding the Income Tax
of Non-PRC Resident Enterprises, or SAT Circular&nbsp;24, effective April&nbsp;2011. By promulgating and implementing these circulars,
the PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer of equity interests in a PRC resident
enterprise by a non-resident enterprise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under Circular 698, where a non-resident
enterprise conducts an &ldquo;indirect transfer&rdquo; by transferring the equity interests of a PRC &ldquo;resident enterprise&rdquo;
indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise, being the transferor,
may be subject to PRC enterprise income tax, if the indirect transfer is considered to be an abusive use of company structure without
reasonable commercial purposes. As a result, gains derived from such indirect transfer may be subject to PRC tax at a rate of up
to 10%. Circular 698 also provides that, where a non-PRC resident enterprise transfers its equity interests in a PRC resident enterprise
to its related parties at a price lower than the fair market value, the relevant tax authority has the power to make a reasonable
adjustment to the taxable income of the transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In February 2015, the SAT issued Circular
7 to replace the rules relating to indirect transfers in Circular 698. Circular 7 has introduced a new tax regime that is significantly
different from that under Circular 698. Circular 7 extends its tax jurisdiction to not only indirect transfers set forth under
Circular 698 but also transactions involving transfer of other taxable assets, through the offshore transfer of a foreign intermediate
holding company. In addition, Circular 7 provides clearer criteria than Circular 698 on how to assess reasonable commercial purposes
and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities
market. Circular 7 also brings challenges to both the foreign transferor and transferee (or other person who is obligated to pay
for the transfer) of the taxable assets. Where a non-resident enterprise conducts an &ldquo;indirect transfer&rdquo; by transferring
the taxable assets indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise
being the transferor, or the transferee, or the PRC entity which directly owned the taxable assets may report to the relevant tax
authority such indirect transfer. Using a &ldquo;substance over form&rdquo; principle, the PRC tax authority may disregard the
existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing,
avoiding or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax,
and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently
at a rate of 10% for the transfer of equity interests in a PRC resident enterprise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


<!-- Field: Page; Sequence: 31; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->27<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October&nbsp;17, 2017, the SAT issued
a Notice Concerning Withholding Income Tax of Non-Resident Enterprise, or SAT Notice No.&nbsp;37, which abolishes Circular&nbsp;698
and&nbsp;certain provisions of Circular 7. SAT Notice No.&nbsp;37 reduces the burden of the withholding obligator, such as revocation
of contract filing requirements and tax liquidation procedures, strengthens the cooperation of tax authorities in different places,
and clarifies the calculation of tax payable and mechanism of foreign exchange.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Value-added Tax</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Provisional Regulations
on Value-added Tax of the PRC, or the VAT Regulations, which were promulgated by the State Council on December 13, 1993, took effect
on January 1, 1994, and were amended on November 10, 2008, February 6, 2016, and November 19, 2017, respectively, and the Rules
for the Implementation of the Provisional Regulations on Value-added Tax of the PRC, which were promulgated by the MOF on December
25, 1993, and were amended on December 15, 2008, and October 28, 2011, respectively, entities and individuals that sell goods or
labor services of processing, repair or replacement, sell services, intangible assets, or immovables, or import goods within the
territory of the People&rsquo;s Republic of China are taxpayers of value-added tax.&nbsp;The VAT rate is 17% for taxpayers selling
goods, labor services, or tangible movable property leasing services or importing goods, except otherwise specified; 11% for taxpayers
selling services of transportation, postal, basic telecommunications, construction and lease of immovable, selling immovable, transferring
land use rights, selling and importing other specified goods including fertilizers; 6% for taxpayers selling services or intangible
assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the Notice on the Adjustment
to the Value-added Tax Rates issued by the SAT and the MOF on April 4, 2018, where taxpayers make VAT taxable sales or import goods,
the applicable tax rates shall be adjusted from 17% to 16% and from 11% to 10%, respectively. Subsequently, the Notice on Policies
for Deepening Reform of Value-added Tax was issued by the SAT, the MOF and the General Administration of Customs on March 30, 2019
and took effective on April 1, 2019, which further adjusted the applicable tax rate for taxpayers making VAT taxable sales or importing
goods. The applicable tax rates shall be adjusted from 16% to 13% and from 10% to 9%, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Dividend Withholding Tax</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Enterprise Income Tax Law provides
that since January&nbsp;1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident
investors that do not have an establishment or place of business in the PRC, or that have such establishment or place of business
but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends
are derived from sources within the PRC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>PRC Laws and Regulations on Employment
and Social Welfare</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Labor Law of the PRC</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Labor Law of the PRC, which
was promulgated by the Standing Committee of the NPC on July&nbsp;5, 1994 with an effective date of January&nbsp;1, 1995 and was
last amended on August&nbsp;27, 2009 and the Labor Contract Law of the PRC, which was promulgated on June&nbsp;29, 2007, became
effective on January&nbsp;1, 2008 and was last amended on December&nbsp;28, 2012, with the amendments coming into effect on July
1, 2013, enterprises and institutions shall ensure the safety and hygiene of a workplace, strictly comply with applicable rules
and standards on workplace safety and hygiene in China, and educate employees on such rules and standards. Furthermore, employers
and employees shall enter into written employment contracts to establish their employment relationships. Employers are required
to inform their employees about their job responsibilities, working conditions, occupational hazards, remuneration and other matters
with which the employees may be concerned. Employers shall pay remuneration to employees on time and in full accordance with the
commitments set forth in their employment contracts and with the relevant PRC laws and regulations. Huaxin and its subsidiary company
have entered into written employment contracts with all the employees and performed their obligations under the relevant PRC laws
and regulations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Social Insurance and Housing Fund</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the&nbsp;Social Insurance Law
of the PRC, which was promulgated by the Standing Committee of the NPC on October&nbsp;28, 2010 and became effective on July&nbsp;1,
2011, employers in the PRC shall provide their employees with welfare schemes covering basic pension insurance, basic medical insurance,
unemployment insurance, maternity insurance, and occupational injury insurance. Huaxin has not deposited the social insurance fees
in full for all the employees in compliance with the relevant regulations. Huaxin may be ordered by the social security premium
collection agency to make or supplement contributions within a stipulated period, and shall be subject to a late payment fine computed
from the due date at the rate of 0.05% per day; where payment is not made within the stipulated period, the relevant administrative
authorities shall impose a fine ranging from one to three times the amount of the amount in arrears. Huaxin&rsquo;s subsidiaries
have deposited the social insurance fees as required by relevant regulations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In accordance with the&nbsp;Regulations
on Management of Housing Provident Fund, which were promulgated by the State Council on April&nbsp;3, 1999 and last amended on
March&nbsp;24, 2002, employers must register at the designated administrative centers and open bank accounts for depositing employees&rsquo;
housing funds. Employers and employees are also required to pay and deposit housing funds, with an amount no less than 5% of the
monthly average salary of the employee in the preceding year in full and on time. Huaxin and its subsidiaries have not registered
at the designated administrative centers and opened bank accounts for depositing employees&rsquo; housing funds. They also have
not deposited employees&rsquo; housing funds. Huaxin and its subsidiaries may be ordered by the housing provident fund management
center to complete the registration formalities, open bank accounts, make the payment and deposit within a prescribed time limit.
Failing to register or open bank accounts at the expiration of the time limit could result in fines of not less than 10,000 yuan
nor more than 50,000 yuan. And an application may be made to a people&rsquo;s court for compulsory enforcement if payment and deposit
has not been made after the expiration of the time limit.</P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>


<!-- Field: Page; Sequence: 32; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->28<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_013"></A>INDUSTRY OVERVIEW</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Chinese Fenjiu Liquor Market</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that the long-term demand for
Chinese hard liquor, especially Fenjiu liquor, will continue to grow in China. The overall business environment has been optimistic,
due to the continuous economic growth evidenced by the significant growth of Chinese nominal gross domestic product (&ldquo;GDP&rdquo;).
This has led to an ever-increasing growth in China&rsquo;s per capita expenditures on food, tobacco, and alcoholic beverages, indicating
increased consumers&rsquo; disposable income and willingness to spend money on alcoholic beverages in general. According to the
National Bureau of Statistics of China, the sales volumes of Chinese liquor in China has remained relatively flat between 2012
and 2016. Given the increasing purchasing power and improving living standards, the sales volume of Chinese liquor increased from
11,267.0 million liters in 2012 to 13,057.1 million liters in 2016, with a compound annual growth rate (&ldquo;CAGR&rdquo;) of
3.8%. Overall, we believe consumers are increasingly interested in drinking better quality liquor. We expect that with the Chinese
consumers&rsquo; increasing purchasing power the consumption of Chinese liquor will shift to higher quality products and therefore
the Chinese liquor market is expected to experience growth in the near future. According to the China Insights Consultancy (&ldquo;CIC&rdquo;)
report, there are approximately 1,578 Chinese liquor producers in China with annual revenue above RMB 20 million in 2016. These
producers are mainly located in the southwest, northeast and central China. Given the Chinese government&rsquo;s implementation
of policies designed to control and limit spending on &ldquo;the three public consumptions&rdquo;, namely overseas travel, receptions,
and official cars, the high-end Chinese liquor market in China has undergone extensive restructuring since 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Chinese government officials had a long
history of using high-end liquors at reception events. However, in 2012, the Chinese governments implemented policies designed
to control and limit spending on &ldquo;the three public consumptions&rdquo;, namely overseas travel, receptions, and use of government
vehicles. Ripples of this anti-corruption campaign are felt beyond the high-end liquor industry, in sectors that heavily rely on
China&rsquo;s gifting culture and the lavish lifestyle of the privileged for growth. This extensive restructuring of Chinese liquor
market caused by the anti-corruption campaign from Chinese government lasted for several years. As a result, the overall spending
on high-end liquor market in China was limited and the sales volumes of Chinese high-end liquor has remained relatively flat until
2016. Nowadays, the structure of Chinese liquor market is stable again and has a steady growth supported by constant economic growth
in China. Chinese consumers are expected to spend more on purchasing high-end liquors led by their increasing purchasing power.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Fenjiu Group and its subsidiaries are the
sole suppliers of Fenjiu liquor in China. Fenjiu liquor has a relatively long history and is one of the world-famous Chinese liquor
brands. Due to the Chinese government&rsquo;s implementation of policies meant to control and limit spending on &ldquo;the three
public consumptions&rdquo;, sales revenue in the Fenjiu liquor market have followed a downward trend since 2012. However, with
increasing per capita incomes and rising demand for mid-to-high-range products, the Fenjiu liquor market started to rebound in
2015, the market has expanded in terms of sales revenue to reach RMB5,117.9 million in 2016. Shanxi Province is the main market
of Fenjiu liquor. Approximately 55% of Fenjiu liquor sales revenue was achieved in Shanxi in 2016. It is expected that the sales
revenue of Fenjiu liquor will reach a further RMB10,532.0 million in China by 2022, increasing at a CAGR of 12.8% between 2016
and 2022.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the CIC report, at the end
of 2016, the total number of Fenjiu liquor distributors reached 987 in China. The Fenjiu liquor distribution market is highly competitive
with no single distributor occupying a major share of the market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There are relatively high entry barriers
for new competitors in the Fenjiu liquor distribution market. First, it is important for new entrants to get an authorization from
Fenjiu Group, which is the sole provider of Fenjiu liquor products in China, to distribute Fenjiu Group&rsquo;s products. Fenjiu
Group started placing stricter requirements on its distributors, including, for example, new sales target, proven experience in
the industry, past cooperation with Fenjiu Group. Thus, it has become increasingly difficult for new players to enter the market.
Fenjiu liquor enjoys widespread popularity in and around Shanxi Province, with markets in other parts of China being significantly
smaller. It is therefore important for new entrants to have a pre-existing distribution network in certain regions of China in
order to be successful. It remains risky for new entrants to enter into new areas where Fenjiu liquor is not yet fully established
and where the distribution market is already saturated. Distributors range from mom-and-pop stores in Shanxi Province to larger
companies with years of experience in the Fenjiu liquor industry, each competing for a fair share of the market. Intense competition
arises between distributors within the same region, selling the same or different Fenjiu brands. Fenjiu liquor includes a variety
of products, differing in terms of ABV, vintage, recipe, etc. Although there are no dominant varieties in the market, some are
preferred by end consumers more than others. However, almost all of these popular varieties have already been taken up by exclusive
distributors. Thus, new entrants might find it difficult to source popular products directly from Fenjiu Group or will be left
to source them from existing distributors, which entails lower profit margins.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Chinese Wine Market</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the International Organization
of Vine and Wine, or OIV, the per capita wine consumption in China is much lower than the US average level between 2012 and 2016.
After the reduction of &ldquo;three public consumptions&rdquo; in 2013, China&rsquo;s per capita consumption showed a further decrease.
However, the consumption pattern has changed and the wine consumption has grown into a mass consumption accompanied by a decrease
in wine price. Compared with the world average consumption, China&rsquo;s per capita wine consumption has been around one-third
of the world&rsquo;s average since 2010. The relatively low per capita wine consumption in China indicates great growth potential
for China&rsquo;s wine market in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


<!-- Field: Page; Sequence: 33; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->29<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the CIC report, Chinese consumers
should, between 2017 and 2022, develop the habit of drinking wine rather than other alcoholic beverages, wine consumption is considered
a healthier option. In addition, the development of O2O platforms selling wine will most certainly facilitate the purchase of wine
in China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There are three market drivers for China&rsquo;s
wine market. Firstly, China&rsquo;s per capita disposable income has been increasing rapidly mainly due to increasing wages. Rising
disposable income translates into increasing purchasing power for Chinese people; it also means that Chinese people tend to focus
more on their quality of life. As wine is considered in China as a premium product with some beneficial health effect, we believe
that increasing purchasing power will stimulate the further growth of wine consumption. In addition, the characteristics associated
with drinking wine, such as beautification and antioxidation, play an important role in contributing to its consumption, especially
for female customers. Secondly, China&rsquo;s urbanization rate has been improving greatly during the past decades and the Chinese
government sets up the goal that the urbanization rate of China is set to reach 60% by 2020. With the further improvement of the
urbanization rate in China, the retail sales market is experiencing a rapid growth in urban regions in China. Thirdly, there are
favorable national and international policies for imported wine. According to bilateral trade agreements signed by the PRC government
with New Zealand, Chile and Australia, imported goods from the three countries will benefit from low tariff rates, effective from
2019. According to those agreements, by 2019, these tariffs will be totally eliminated. This favorable policy should reduce the
wine retailing price and hence contribute to a growth in sales.</P>




<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>


<!-- Field: Page; Sequence: 34; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->30<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>




<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a_013a"></A><B>DESCRIPTION OF BUSINESS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Company Background</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Oranco is engaged in alcohol wholesale
in China through its operating subsidiary, Fenyang Huaxin Wine Industry Development Co., Ltd. (&ldquo;Huaxin&rdquo;), a People&rsquo;s
Republic of China company located in Shanxi Province, that is 100% held by Fujian Jin&rsquo;ou Trading Co., Ltd. We maintain our
principal executive offices at One Liberty Plaza, Suite 2310 PMB# 21, New York, NY 10006, United States. Our telephone number is
(646) 759-3614.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;<IMG SRC="img003.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We run a growing alcohol wholesale business
guided by a core purpose: to promote premium alcoholic beverages to China&rsquo;s population. We currently focus our business on
the sale of Chinese Fenjiu liquor and imported wines. We aim to achieve this purpose by catering to the ever-evolving customer
tastes in alcohols through our creative marketing strategies and innovative product designs that target different age groups of
China&rsquo;s population. To that end, we have hired marketing talents who have decades of experience in effective alcohol brand
building. As a result, we believe we have managed to respond to the demand for Chinese Fenjiu liquor and imported wines in the
Chinese marketplace.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The popularity behind Chinese Fenjiu liquor
is its unique combination of light alcohol fragrance and its soft and subtle sweetness. This combination has been one of the predominant
taste preference amongst Chinese drinkers. Our Chinese Fenjiu liquor is a 53-proof clear spirit with a long lasting clean aftertaste.
Our strategic partner, Shanxi Xinghuacun Fenjiu Group Alcohol Industry Development Zone Sales Co., Ltd. (&ldquo;Fenjiu Group&rdquo;),
produces our Chinese Fenjiu product. Its brewing process is guided by the principle of &ldquo;clean&rdquo; and &ldquo;pure&rdquo;,
and such standard is achieved by double fermentation and double distillation process in order to increase the yield of ethanol
and expel any unfavorable flavors. The fermented grains, usually sorghum and barley, will be distilled; the distilled grains will
be fermented once more; then the re-fermented grains will be distilled again.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Competition among different types of Chinese
hard liquor is largely dependent on the brand recognition that was built upon decades of customer goodwill and unique marketing
strategies. Fenjiu liquor is highly recognized amongst Chinese consumers. It has long been a common liquor choice for traditional
Chinese festivities, thus enjoying a deep cultural recognition amongst Chinese drinkers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that Fenjiu liquor presents
great business opportunities for us to utilize creative product designs and marketing strategies to attract Chinese consumers.
Collaborating with the Fenjiu Group, the sole producer of Fenjiu liquor in China, we have been focusing on product design to convey
a modern feel to our Fenjiu products while maintaining Fenjiu liquor&rsquo;s historical elegance. We believe our designer packaging,
symbolized by its bright coloring and prominently fat-bellied jars, stands out from our competitors&rsquo;. With creative designs
and stylized names, our registered trademarks, such as Dagangjiu (translated as &ldquo;Big Jar Liquor&rdquo;), are effective in
capturing the attention of Chinese customers, young and old.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


<!-- Field: Page; Sequence: 35; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->31<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Established in 2017, we believe our imported
wine distribution business has high growth potential as evidenced from the market prices of the imported wines from Spain and New
Zealand, the two countries where we import most of our wine products from, in the current Chinese market. A great majority of competitive
players have priced their 750mL bottles of wine imported from Spain and New Zealand well above RMB 200. This price falls within
the premium range in the general Chinese wine market. Within the general Chinese wine market, the premium range enjoyed the highest
year-on-year growth compared to other price tiers of wine in 2017. This pricing trend for premium wines is applicable to imported
wine from Spain and New Zealand, which we believe will benefit our growth in 2019. Accordingly, our strategy is to continue pricing
our imported wine products within the premium range levels to generate higher margins. Though marketing and branding are still
integral parts of the wine business in China, wine sales are highly driven by the origin of the wines. Since Spain and New Zealand
are considered prime origins for wine productions, our wine products will continue grab the attention of Chinese drinkers, ensuring
the sustainable growth of our imported wine business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have strategically organized our wholesale
and marketing channels. We sell directly to our six major distributors who then retail our products to over 300 storefronts and
outlets. Even though we do not retail our products online, we believe the internet is a great way to market our products. Aside
from promoting our products through traditional TV platforms, we have established our reputation on existing major Chinese e-commerce
platforms such as Taobao.com and further enhanced our business goodwill through our marketing on online-to-offline (&ldquo;O2O&rdquo;),
business-to-business (&ldquo;B2B&rdquo;) and business-to-consumer (&ldquo;B2C&rdquo;) platforms. We promote our Fenjiu liquors
and imported wine through WeChat and other social media apps to strengthen our marketing efforts and to educate the general public
on Chinese liquor tasting and history of Chinese Fenjiu liquors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that effective marketing strategies
and creative product designs are two major contributing factors to our success. To improve and maintain the effectiveness of our
marketing strategies, we have established integrated and collaborative processes to drive coordinated operations across our marketing
efforts and sales. Our marketing strategies enable us to promote multiple sales concepts across two major alcohol categories, effectively
attracting different age and cultural groups of the Chinese population. Our marketing plans are tailored to meet the evolving taste
and demands of the Chinese customers. As a result, we believe that the Company&rsquo;s innovative and highly-customized designs
draw considerable public attention, which in turns is a contributing factor to the volume of our sales. We believe it is essential
to improve the overall business sustainability through focusing on marketing strategies and creative product designs to support
our success.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the nine months ended March 31, 2019,
we generated revenue of approximately 91.4% from Fenjiu liquor wholesale and approximately 8.6% from imported wine wholesale. For
the nine months ended March 31, 2018, we generated revenue of approximately 85.3% from Fenjiu liquor wholesale and approximately
14.7% from imported wine wholesale. For the year ended June 30, 2018, we generated revenue of approximately 84.9% from Fenjiu liquor
wholesale and approximately 15.1% from imported wine wholesale. For the year ended June 30, 2017, we generated revenue of approximately
89.9% from Fenjiu liquor wholesale and approximately 10.1% from imported wine wholesale. We have not experienced any seasonality
in our business.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Business Strategy</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Increasing our market share&thinsp;-&thinsp;</I></B>We
expect that consumers&rsquo; increasing awareness of our brand will lead to increased demand of our products. We intend to continue
focusing on developing Chinese Fenjiu liquor and imported wine wholesale markets. Through creating new designs, expanding our marketing
efforts, developing closer relationships with dealers, and building stable relationships with our major suppliers, we expect to
expand our product lines and improve our brand awareness and customer loyalty to meet market demands and improve our sales performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Expansion of our sources of supply,
productivity and sales network&thinsp;-&thinsp;</I></B>To meet the increasing demand for imported wine and Chinese Fenjiu liquor,
we will continue cooperating with major suppliers to ensure both the quantity and quality of our Chinese Fenjiu liquor and imported
wine inventory. In addition to our present sales network, we expect to increase our investment in training our employees, updating
our website and improving our client information managing system. Our goal is to build a high performance sales network with a
very personal approach to our business partners.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Competitive Strengths </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Although we operate in a highly competitive
industry, we believe that the following factors provide us with the competitive advantages in the marketplace that could differentiate
us from our potential competitors:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Our Company has a high brand recognition
in the Chinese Fenjiu liquor market </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Fenjiu liquor is sold under the &ldquo;Dagangjiu&rdquo;
brand and is one of the Chinese Fenjiu liquor market&rsquo;s most popular brands. We have leveraged our business relationship with
Fenjiu Group and relied on Fenjiu Group&rsquo;s international fame to become one of the leading brands in international alcohol
festivals. We believe that our brand&rsquo;s strong recognition reinforces our existing customer goodwill in Shanxi province and
beyond, providing us with a competitive advantage.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>


<!-- Field: Page; Sequence: 36; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->32<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>



<P STYLE="margin: 0"></P>
<P STYLE="margin: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Our Marketing Team&rsquo;s Extensive
Experience and Superior Reputation in our Industry </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that our competitors&rsquo;
marketing team cannot match our marketing experts&rsquo; extensive industry experience and their superior reputation. To some degree,
our commercial campaigns are well accepted by consumer trends and resonate with potential liquor distribution partners.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Additionally, we believe our marketing
expertise and design proficiency required to successfully attract new customers combined with our ability to generate a range of
business concepts and capability to customize each sales opportunity according to customers&rsquo; need are advantages when competing
in the Chinese Fenjiu market. Our expertise also allows us to successfully manage the numerous regional and cultural complexities
involved in operating a traditional liquor business in China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>A Flexible Business Model </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our current business model is flexible.
It can be adjusted to different products we sell and producers we sign cooperative agreements with. While operating a mix of marketing
campaigns and business concepts under our own registered trademarks &ldquo;Dagangjiu&rdquo; and &ldquo;Dagang Jiufang&rdquo;, we
entrust our liquor inventory to reputed large-scale producers. Currently, we are in a strategic partnership with Fenjiu Group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our current business strategy emphasizes
on the marketing, packaging and distribution of Fenjiu liquor and imported wines. However, should we decide to change our business
strategy catering to other popular liquor products such as Luzhou-flavor liquor and Maotai-flavor liquor, we can quickly adjust
our marketing strategy and product packaging to meet customers&rsquo; evolving needs and preferences. Since our brand is well recognized
and our current business model is based on flexible dealership, we can adjust our strategic partnerships to address new product
preferences while maintaining our accumulated goodwill. This approach enables us to update marketing concepts and product mix at
any time and allows us to be flexible in our marketing approach.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This flexible business model has contributed
to the resilience of our business performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Service-driven and Cohesive Management Team </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our talented and dedicated senior management
team has guided our organization through its expansion and, we believe, positioned us for continued growth. Additionally, our management
team possesses extensive experience across a broad range of disciplines, including Chinese liquor marketing, sales, E-Commerce,
finance, franchising and business management. Our management team embraces our core purpose to &ldquo;promote premium alcoholic
beverages to the Chinese population of all ages&rdquo;. They are the promotors of our passionate and customer-oriented business
culture, which is shared by our employees throughout our company. We believe our management team is service-driven and cohesive,
focusing on the Company&rsquo;s long-term business growth.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Principal Products</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the nine months ended March 31, 2019,
we generated revenue of approximately 91.4% from Fenjiu liquor wholesale and approximately 8.6% from imported wine wholesale. For
the nine months ended March 31, 2018, we generated revenue of approximately 85.3% from Fenjiu liquor wholesale and approximately
14.7% from imported wine wholesale. For the year ended June 30, 2018, we generated revenue of approximately 84.9% from Fenjiu liquor
wholesale and approximately 15.1% from imported wine wholesale. For the year ended June 30, 2017, we generated revenue of approximately
89.9% from Fenjiu liquor wholesale and approximately 10.1% from imported wine wholesale. We have not experienced any seasonality
in our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Fenjiu Liquor Wholesale</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For our Fenjiu liquor wholesale business,
we secure our strategic partnerships with dealers based on our market survey data, market positioning data, sales channels data,
sales capabilities data and sales potential evaluation. We further evaluate dealers according to their geographical and administrative
areas and categorize them into provincial, municipal and county agents. We establish cooperative relationships and strategic sales
partnerships amongst dealers at different levels to further facilitate the sales of our products. We sale our Fenjiu liquor products
directly to these dealers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For our Fenjiu liquor wholesale business,
we pay special attention to dealers with direct business access to retail stores and outlets. We sell our Fenjiu products with
simple and bulk packaging to these dealers. The idea is to achieve larger profit margins through removing high-end designs and
packaging, thus ensuring a relatively low price of our Fenjiu liquor products. Through this approach, we believe we can reach a
greater number of Chinese customers who are attracted by the cost-effectiveness of our simple and bulk packaging products. We sell
our simple and bulk packaging products to our targeted dealers who then directly resell these products to local retail stores and
outlets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Revenue generated from our Fenjiu liquor
wholesale business accounted for 91.4% and 85.3%, respectively, of the total revenue derived from our general business in the nine
months ended March 31, 2019 and 2018. Revenue generated from our Fenjiu liquor wholesale business accounted for 89.9% and 84.9%,
respectively, of the total revenue derived from our general business in fiscal year 2017 and 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I></I></P>

<!-- Field: Page; Sequence: 37; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->33<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Imported Wine Wholesale</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For our imported wine wholesale business,
we secure our strategic partnerships with dealers based on our market survey data, market positioning data, sales channels data,
sales capabilities data and sales potential evaluation. We further evaluate dealers according to their geographical and administrative
areas and categorize them into provincial, municipal and county agents. We establish cooperative relationships and strategic sales
partnerships amongst dealers at different levels to further facilitate the sales of our products. We wholesale our imported wines
directly to these dealers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Revenue generated from our imported wine
wholesale business accounted for 91.4% and 85.3%, respectively, of the total revenue derived from our general business in the nine
months ended March 31, 2019 and 2018. Revenue generated from our imported wine wholesale business accounted for 10.1% and 15.1%,
respectively, of the total revenue derived from our general business in fiscal year 2017 and 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Competition</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There is intense competition in the Chinese
liquor market. As a result, customers face a tremendous number of choices when deciding which brand or product to choose from.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of March 31, 2019, Fenjiu Group has
nearly 1,000 multi-layered distributors that often serve as Fenjiu brand co-builders. Although the Fenjiu Group is now widely known
as the only producer of Fenjiu throughout the market, intense competition in the wholesale market remains since Fenjiu liquor distributors
will continue working to co-build and enhance their respective brand image alongside Fenjiu Group to capture market shares from
their competitors.&nbsp;Distributors range from mom-and-pop stores in Shanxi Province to larger companies with years of experience
in the Fenjiu liquor industry, each competing for a fair share of the market. Competition can be even more intense amongst the
distributors within the same region.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Chinese wine market is also very competitive.
Our competitors such as wine producers, distributors or retailers conduct various marketing activities and pricing strategies in
an effort to keep their market shares, which directly impact our sales, revenues, and profitability. We follow the market trend
closely and adjust our own advertising, promotion, pricing and sourcing strategies accordingly. In addition, competitors in the
Chinese wine market compete against us for regaining highly qualified marketing personnel and staff members.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In response to the intense competition
in the Chinese liquor and wine markets, we have implemented a number of initiatives designed to expand our revenues. Our revenue
enhancement initiatives include expanding our marketing efforts, developing new products, and working with start-up companies and
bulk-sale customers directly to decrease our marketing costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Customers</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our customers are downstream distributors.
We rely upon several of our large customers from whom we generate substantial revenue each year. The composition of our largest
customers has changed from year to year. For the nine months ended March 31, 2019, six of our customers, Fuqing Jing Hong Trading
Co., Ltd., Beijing Huaxin Rongfa Trading Co., Ltd., Shanxi Moneng Trading Co., Ltd., Fuzhou Jiuyitang Trading Co., Ltd., New Venus
Trade (Fujian) Group Co., Ltd., and Shanghai Baiwang Trading Co., Ltd., accounted for approximately 13.6%, 12.3%, 12.2%, 10.7%,
10.6%, and 10.2% of Huaxin&rsquo;s revenue, respectively. For the year ended June 30, 2018, five of our customers, Beijing Huaxin
Rongfa Trading Co., Ltd., Fuqing Jing Hong Trading Co., Ltd., Shanghai Baiwang Trading Co., Ltd., New Venus Trade (Fujian) Group
Co., Ltd. and Shanxi Moneng Trading Co., Ltd. represented approximately 16.3%, 16.2%, 11.5%, 11.2% and 10.6% of Huaxin&rsquo;s
revenue, respectively. For the year ended June 30, 2017, four of our customers, Fuqing Jing Hong Trading Co., Ltd., Beijing Huaxin
Rongfa Trading Co., Ltd., New Venus Trade (Fujian) Group Co., Ltd. and Shanghai Baiwang Trading Co., Ltd. represented approximately
27%, 30%, 11% and 15% of Huaxin&rsquo;s revenue, respectively. Huaxin currently engages its major customers with purchase agreements
negotiated on an arm&rsquo;s length basis. These purchase agreements customarily cover a one-year period and contain material subsections
such as targeted customers&rsquo; selling goals, representation and warranties of the customers, rights and responsibility of the
customers, pricing adjustment, logistics and shipping, payment methods, downstream management and dispute resolutions. While we
believe that one or more of our major customers could account for a significant portion of our sales for at least the year 2020,
we anticipate that our customer&rsquo;s base will continue to expand and that in the future we will be less dependent on major
customers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Suppliers</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We primarily rely upon a few main suppliers
from whom we purchase our inventory each year. For the nine months ended March 31, 2019, three of our suppliers, Fenyang Xinxin
Xiangrong Trading Co., Ltd., Shanxi Xinghuacun Liquor Group Wine Industry Development Zone Sales Co., Ltd. (also known as the &ldquo;Fenjiu
Group&rdquo;), and Fenyang Xinghua Haokoufu Wine Industry Flagship Store, accounted for approximately 56%, 22% and 10% of our total
supply purchases. For the year ended June 30, 2018, five of our suppliers, Shanxi Xinghuacun Liquor Group Wine Industry Development
Zone Sales Co., Ltd., Fuzhou Tongshunda Trading Co., Ltd., Fenyang Xinghua Haokoufu Wine Industry Flagship Store, Shanxi Yuanquan
Drinking Co., Ltd. and Shanxi Xinjin Merchants Wine Group Co., Ltd., accounted for 41%, 17%, 10%, 8% and 8% of our total supply
purchases. For the year ended June 30, 2017, five of our suppliers, Shanxi Yuanquan Drinking Co., Ltd., Shanxi Wanli Wine Industry
Sales Co., Ltd., Fuyang City Xinghua Haokoufu Wine Industry Flagship Store, Shanxi Xinjin Merchants Wine Group Co., Ltd. and Fuzhou
Tongshunda Trading Co., Ltd. represented for 45%, 21%, 13%, 11% and 8% of the total supply purchases. All supplier contracts with
large suppliers were entered from year to year on an arm&rsquo;s length basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<!-- Field: Page; Sequence: 38; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->34<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In general, we enter into procurement agreements
in the ordinary course of business with our suppliers, pursuant to a form of supply order typically on a &ldquo;deal by deal&rdquo;
basis. However, we have a strategic partnership with Fenjiu Group. Most recently, we entered into a partnership agreement with
Fenjiu Group on June 30, 2017, pursuant to which Fenjiu Group has agreed to supply us with $4,379,850 worth of Fenjiu liquor during
a three-year period from June 30, 2017 to June 29, 2020. We agreed to buy $4,379,850 worth of Fenjiu liquor using our best effort
pursuant to this strategic partnership agreement, he underwriter has no obligation or commitment to purchase any securities. If
the contract is renewed, the two parties must agree on the terms of contract cooperation for the next year before June 29 of each
year and sign a cooperation contract for the next year. The foregoing description of the strategic agreement and the terms and
conditions of such agreement is qualified in their entirety by the complete text of the strategic agreement, which is filed as
hereto as Exhibit 10.2 (the &ldquo;Partnership Agreement&rdquo;) to this Form S-1 and is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Intellectual Property</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Protection of our intellectual property
is a strategic priority for our business. We rely on a combination of patent, copyright, trademark and trade secret laws, as well
as confidentiality agreements, to establish and protect our proprietary rights. We do not rely on third-party licenses of intellectual
property for use in our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of the date of this prospectus, we had
obtained two patents for liquor-making devices that can change proofs of various liquors, both of which were registered in 2015.
Our issued PRC patents will expire in 2025. As of the date of this prospectus, we had registered 10 trademarks and had submitted
11 additional trademark applications. Our registered PRC trademarks will expire between 2024 and 2028 but can be renewed before
the trademarks&rsquo; respective expiration date. As of the date of this prospectus, we do not have any registered domain names.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition to the foregoing protections,
we generally control access to and use of our proprietary and other confidential information through the use of internal and external
controls, such as the use of confidentiality agreement with our employees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Research and Development</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are engaged, through our subsidiaries,
in alcohol wholesale in China and currently focus on the sale of Chinese Fenjiu liquor and imported wines. In order to better guarantee
the authenticity and origin of our premium products, on August 20, 2018 we entered into a contract with Guangzhou Silicon Technology
Co., Ltd. to have Guangzhou Silicon Technology Co., Ltd. develop an anti-counterfeiting laser recognition proprietary system (the
&ldquo;System&rdquo;) for us. Using blockchain technology, the System is expected to encrypt our premium products&rsquo; brewing
information, transaction information, identification number and certificate information, producing unique labels that can then
be attached to our liquor and wine bottles. Since blockchain ledgers are impermeable, and manipulation of existing ledgers is impractical,
the authenticity and provenance of our premium products will be better protected. The adoption of the System is also expected to
build greater goodwill and trust in our brand in the long term. We believe that by implementing the System, in a not so distant
future, our customers will be able to base their transactions on the information encrypted on the labels, thus ensuring the authenticity
and privacy of their purchases. We are currently in the internal testing stages of developing the System and cannot be certain
how the use of the System will benefit or materially affect our business operations in the future.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Except for the aforementioned System, we
do not have any other research and development effort in the past three years.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Employees</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of the date of this prospectus, we had
60 employees throughout our operations in 4 offices and 3 warehouses. None of our employees are covered by a collective bargaining
agreement. We have not experienced any work stoppages. The following table sets forth the number of our employees by function as
of the same date:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1.5pt solid">Functional Area</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of Employees</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-indent: -10pt; padding-left: 10pt">Management</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">13</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Financial Department</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Marketing Department</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Sales Department</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Inventory Department</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt; padding-bottom: 1.5pt">Driver</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">1</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-bottom: 4pt; text-indent: -10pt; padding-left: 10pt">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">60</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<!-- Field: Page; Sequence: 39; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->35<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of July 3, 2019, all of our employees
were located in&nbsp;Fenyang City<I>,&nbsp;</I>Shanxi Province, China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As required by PRC laws and regulations,
we participate in various employee social security plans that are organized by municipal and provincial governments, including
housing, pension, medical insurance and unemployment insurance programs. We are required under Chinese law to make contributions
to employee benefit plans at specified percentages of the salaries, bonuses and certain allowances of our employees, up to a maximum
amount specified by the local government from time to time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that we maintain a good working
relationship with our employees, and we have not experienced any labor disputes.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Legal Proceedings</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Currently there are no legal proceedings
pending or threatened against the Company. However, from time to time, we may become involved in various lawsuits and legal proceedings
which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these
or other matters may arise.</P>




<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<!-- Field: Page; Sequence: 40; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->36<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_014"></A>DESCRIPTION OF PROPERTY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our headquarters are located at Building
22, Baihui Shoufu, Xinghuacun Town, Fenyang City, Shanxi Province, China, where we own the property with an aggregate floor area
of approximately 1561.6 square meters. This includes Huaxin&rsquo;s sales and marketing office, communication and business development
office and our management and operations facilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Huaxin currently leases from Fenyang Baihui
Real Estate Co., Ltd. on an arm&rsquo;s length basis, approximately 50 square meters of office space at No.2, 1<SUP>st</SUP>&nbsp;Floor,
Block A4, Baihui Shoufu, Xinghuacun Town, Fenyang City, Shanxi Province, China under a lease that expires on September 6, 2019
and can be renewed subject to mutual agreements by both parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Huaxin also currently leases from Taiyuan
Xiangyu Enterprise Management Consulting Co. Ltd. on an arm&rsquo;s length basis, approximately 100 square meters of office space
at No.5, Unit 1, Building 2, No. 343, Fenyang Road, Xiaodian District, Taiyuan City, Shanxi Province, China under a lease that
expires on November 9, 2019 and can be renewed subject to mutual agreements by both parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Huaxin also currently leasse from Shanxi
Zhanpeng Metal Products Co., Ltd. on an arm&rsquo;s length basis, approximately 1,000 square meters of office space at No. 2, South
Hero Road, Fenyang City, Shanxi Province, China under a lease that expires on March 9, 2021 and can be renewed subject to mutual
agreements by both parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Huaxin also currently leases from Ms. Jiangmei
Guo on an arm&rsquo;s length basis, approximately 140 square meters of office space at No. 1011, Unit 2, Unit 1, Wenxingyuan, Xiaodian
District, Fenyang City, Shanxi Province, China under a lease that expires on December 8, 2019 and can be renewed subject to mutual
agreements by both parties.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Huaxin also currently leases from Mr. Genshan
Zhao on an arm&rsquo;s length basis, approximately 60 square meters of office space at Room 915, Wufeng International, No. 11 Zhenxing
Street, High-Tech Zone, Taiyuan City, Shanxi Province, China under a lease that expires on September 30, 2019 and can be renewed
subject to mutual agreements by both parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Huaxin also currently leases from Mr. Jianhong
Zhang on an arm&rsquo;s length basis, approximately 50 square meters of office space at Room 903, 9th Floor, Wufeng International
Building, High-tech Development Zone, Taiyuan City, Shanxi Province, China under a lease that expires on September 20, 2019 and
can be renewed subject to mutual agreements by both parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, Huaxin currently leases from
Fenyang City Jiudu Xinhua Liquor Trading Center Co., Ltd. on an arm&rsquo;s length basis, approximately 1,200 square meters of
warehouse space at South District if Shudao Avenue, High-Speed Exit, Xinghua Village, Fenyang City, Shanxi Province, China under
a lease that expires on January 11, 2020 and can be renewed subject to mutual agreements by both parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that our current facilities
are adequate and suitable for our operations.</P>




<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


<!-- Field: Page; Sequence: 41; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->37<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_015"></A>MANAGEMENT&rsquo;S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION<BR>
AND RESULTS OF OPERATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>The following discussion and analysis
of the results of operations and financial condition for the fiscal years ended June 30, 2018 and 2017 and for the nine months
ended March 31, 2019 and 2018 should be read in conjunction with our financial statements and the notes to those financial statements
that are included elsewhere in this Report. Our discussion includes forward-looking statements based upon current expectations
that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing
of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors.
See &ldquo;Cautionary Note Regarding Forward-looking Statements&rdquo; on page 19.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Business Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We run a growing alcohol wholesale business
guided by a core purpose: to promote premium alcoholic beverages to China&rsquo;s population. We currently focus our business on
the sale of Chinese Fenjiu liquor and imported wines. We aim to achieve this purpose by catering to the ever-evolving customer
tastes in alcohols through our creative marketing strategies and innovative product designs that target different age groups of
China&rsquo;s population. To that end, we have hired marketing talents who have decades of experience in effective alcohol brand
building. As a result, we believe we have managed to respond to the demand for Chinese Fenjiu liquor and imported wines in the
Chinese marketplace.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that Fenjiu liquor presents
great business opportunities for us to utilize creative product designs and marketing strategies to attract Chinese consumers.
Collaborating with Fenjiu Group, the sole producer of Fenjiu liquor in China, we have been focusing on product design to convey
a modern feel to our Fenjiu products while maintaining Fenjiu liquor&rsquo;s historical elegance. We believe our designer packaging,
symbolized by its bright coloring and prominently fat-bellied jars, stands out from those of our competitors. With creative designs
and stylized names, our registered trademarks, such as Dagangjiu (translated as &ldquo;Big Jar Liquor&rdquo;), are effective in
capturing the attention of Chinese consumers, young and old.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Established in 2017, we believe our imported
wine distribution business has high growth potential as evidenced from the market prices of the imported wines from Spain and New
Zealand, the two countries where we import most of our wine products from, in the current Chinese market. A great majority of our
competitors have priced their 750mL bottles of wine imported from Spain and New Zealand well above RMB 200. This price falls within
the premium range in the general Chinese wine market. Within the general Chinese wine market, the premium range enjoyed the highest
year-on-year growth compared to other price tiers of wine in 2018. This pricing trend for premium wines is applicable to imported
wines from Spain and New Zealand, which we believe will benefit our growth in 2019. Accordingly, our strategy is to continue pricing
our imported wine products within the premium range levels to generate higher margins. Though marketing and branding are still
integral parts of the wine business in China, wine sales are highly driven by the origin of the wines. Since Spain and New Zealand
are considered prime origins for wine productions, we believe that our imported wine products will continue to attract the attention
of Chinese consumers and promote the sustainable growth of our imported wine business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Oranco, Inc., or the Company, was incorporated
under the laws of the State of Nevada, on June 16, 1977. From 1977 until 1981 the Company was dormant and undertook no activities.
Beginning in 1982 the Company explored the option of entering into a joint venture to develop a mercury mining property at Mercury
Mountain, Nevada. As a part of these activities the Company, through the sale of its Common Stock, raised funds to engage the services
of an independent mining engineer to prepare a report on the feasibility of the project. By late 1983 it had been determined that
the project did not warrant any further investment. From that time until 1997 the Company&rsquo;s activities concentrated on maintaining
its corporate existence and looking for other opportunities for the Company. In May of 1997 new management was appointed, a shareholders&rsquo;
meeting was held, amendments to the Company&rsquo;s articles of incorporation were approved, and additional effort was made by
new management to make the Company a viable merger candidate. These efforts included engaging the services of a certified Public
Accounting firm to audit the Company&rsquo;s financial statements, obtaining an opinion of counsel as to the tradability of the
Company&rsquo;s outstanding shares, preparation of the information required by Rule 15c2-11, and applying to the OTC Bulletin Board
for trading on the medium.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">By September of 1999, no viable acquisitions
or merger candidates had been located for the Company and management became aware that the Company would be required to register
its shares under the Securities Exchange Act of 1934 in order to maintain its stock on the OTC Bulletin Board. Management determined
that the Company needed new management which might be better positioned to find a suitable acquisition or merger candidate and
which would be in a position of funding the upcoming expenses of the Company. On September 1, 1999 management of the Company resigned
and Claudio Gianascio was appointed as sole director and officer. On November 9, 1999 the Company sold 700,000 of its shares of
Common Stock to Mr. Gianascio for $.05 per share, netting a total of $35,000. On November 18, 1999 the Company filed a registration
statement on Form 10SB which became effective sixty days thereafter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company had an initial authorized capital
of $25,000 consisting of 100,000 shares of $.25 par value Common Stock. On June 10, 1997 the shareholders approved an amendment
to the articles of incorporation of the Company changing the authorized capital to 100,000,000 shares at a par value of $.001 and
providing for a 10 to 1 share forward split of the outstanding shares. The Articles of Amendment were filed with the State of Nevada
on August 6, 1998.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<!-- Field: Page; Sequence: 42; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->38<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the summer of 2000, the Company completed
a private placement of 2,500,000 units for which it received $250,000. Each unit consisted of one share of Common Stock; one &ldquo;a&rdquo;
warrant giving the holder thereof the right to purchase, upon a minimum of 60 days prior notice of exercise, one share of Common
Stock at $.10 per share within two years of the date of issuance; and one &ldquo;b&rdquo; warrant giving the holder thereof the
right to purchase, upon a minimum of 60 days prior notice of exercise, one share of Common Stock at $.25 per share within two years
of the date of issuance. Both &ldquo;a&rdquo; &amp; &ldquo;b&rdquo; warrants expired without exercise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 26, 2017, Million Success Business
Limited, a British Virgin Islands corporation (&ldquo;Buyer&rdquo;) entered into a Share Purchase Agreement (&ldquo;Purchase Agreement&rdquo;)
with the then largest shareholder of the Company, Mr. Claudio Gianascio, who owned 90.4% of the total outstanding shares of the
Company (&ldquo;Seller&rdquo;). Pursuant to the terms of the Purchase Agreement, the Seller sold to the Buyer all of his shares&nbsp;of
Common Stock of the Company, par value $0.001 per share (the &ldquo;Common Stock&rdquo;), or 38,121,530 shares of the Common Stock
for $340,000 (such transaction, the &ldquo;Share Purchase&rdquo;). The Share Purchase closed on December 29, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At the closing of the Share Purchase, there
was a change in our Board and executive officers. Mr. Claudio Gianascio, sole director, President, Treasurer and Secretary of the
Company appointed Mr. Peng Yang to serve as sole director, President, Treasurer and Secretary of the Company, with such appointment
effective on January 5, 2018, being ten days from the date the Information Statement on Schedule 14F-1 (the &ldquo;Schedule 14F-1&rdquo;)
reporting the change in control as a result of the Share Purchase was mailed to all the stockholders of the Company. Mr. Gianascio
resigned from all his positions with the Company effective on January 5, 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 29, 2018, Oranco, Inc. completed
and closed a share exchange (the &ldquo;Share Exchange&rdquo;) under a Share Exchange Agreement (the &ldquo;Share Exchange Agreement&rdquo;),
entered into by and among by and among (i) Oranco, Inc.(&ldquo;ORNC&rdquo;); (ii) Reliant Galaxy International Limited, a British
Virgin Islands company with limited liability ( &ldquo;Reliant&rdquo;); (ii) and the shareholders of Reliant (&ldquo;Sellers&rdquo;)
pursuant to which Reliant became a wholly owned subsidiary of ours. Pursuant to the Share Exchange Agreement, ORNC acquired from
the Sellers all of the issued and outstanding equity interests of Reliant in exchange for 349,296,000 newly-issued shares of Common
Stock of the Company to Sellers, of which 28,000,000 were issued at the closing date of June 29, 2018, and the remaining 321,296,000
shares shall be issued at the completion of the increase of the Company&rsquo;s authorized shares (the &ldquo;Common Stock&rdquo;).
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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 1, 2018, Fenyang Huaxin Spirit
Development Co. Ltd., a subsidiary of the Company, acquired 20% equity interest in Guangzhou Silicon Technology Co., Ltd. a company
established in the People&rsquo;s Republic of China. The acquisition of 20% equity interest in Guangzhou Silicon Technology Co.,
Ltd. was accounted for as an interest in an associate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As disclosed in the <A HREF="http://www.sec.gov/Archives/edgar/data/1098996/000121390018014156/f8k082018_orancoinc.htm">Form 8-K</A> filed with
the Securities and Exchange Commission on October 19, 2018, the Company entered into a business agreement with Guangzhou Silicon
Technology Co., Ltd. on August 20, 2018 to have Guangzhou Silicon Technology Co., Ltd. develop an anti-counterfeiting laser recognition
proprietary system using blockchain technology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>For the
nine months ended March 31, 2019 compared with the nine months ended March 31, 2018</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Results of Operations </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Nine Months Ended</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March 31,</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Variance</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(unaudited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(unaudited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: justify">Revenue</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">96,037,641</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">83,258,237</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">12,779,404</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">15.3</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Cost of sales</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">24,395,247</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">23,002,777</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,392,470</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6.1</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: justify">Gross profit</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">71,642,394</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">60,255,460</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">11,386,934</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">18.9</TD><TD STYLE="font-weight: bold; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Selling and distribution expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,020,324</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,338,043</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(317,719</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9.5</TD><TD STYLE="text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Administrative expenses</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,159,429</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,686,062</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,473,367</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">67.1</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify">Income from operations</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">62,462,641</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">53,231,355</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">9,231,286</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">17.3</TD><TD STYLE="font-weight: bold; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Other income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">90,807</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">131,447</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(40,640</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(30.9</TD><TD STYLE="text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Interest and other financial charges</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">41,238</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,768,720</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,727,482</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(97.7</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Income before income taxes</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">62,512,210</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">51,594,082</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">10,918,128</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">21.2</TD><TD STYLE="font-weight: bold; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Income taxes</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">16,024,012</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">12,623,911</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,400,101</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">26.9</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: justify; padding-bottom: 1.5pt">Net income</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">46,488,198</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">38,970,171</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">7,518,027</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">19.3</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<!-- Field: Page; Sequence: 43; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->39<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Revenue</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Nine Months Ended March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Variance</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(unaudited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(unaudited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; text-align: left">Sales of Fenjiu liquor products</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">87,738,861</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">91.4</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">71,044,181</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">85.3</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">16,694,680</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">23.5</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Sales of imported wine products</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">8,298,780</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">8.6</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">12,214,056</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">14.7</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,915,276</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">(32.1</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Total Amount</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">96,037,641</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">100.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">83,258,237</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">100.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">12,779,404</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">15.3</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the nine months ended March 31, 2019
and 2018, revenue generated from our Fenjiu liquor wholesale business was RMB87,738,861 and RMB71,044,181, respectively, which
represented an increase of RMB16,694,680 or 23.5%. The increase of revenue generated from our Fenjiu liquor wholesale business
was mainly due to the increased sales volume of our Fenjiu liquor products. Our brand identity has contributed to the success of
our Fenjiu liquor wholesale business. Our brand positively affected our sales.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the nine months ended March 31, 2019
and 2018, revenue generated from our imported wine wholesale business was RMB8,298,780 and RMB12,214,056, respectively, which represented
a decrease of RMB3,915,276 or 32.1%. The Company adopted a strategy to focus on selling products with relatively higher profit
margins and to reduce selling products with relatively lower profit margins. This accounts for the reduction in this revenue stream.
The weightings on these products were different for the nine months ended March 31, 2019 and 2018. The overall sales was decreased.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Cost of Sales</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Nine Months Ended March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Variance</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(unaudited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(unaudited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; text-align: left">Sales of Fenjiu liquor products</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">22,157,376</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">90.8</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">19,242,361</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">83.7</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">2,915,015</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">15.1</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Sales of imported wine products</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,237,871</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">9.2</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,760,416</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">16.3</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,522,545</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">(40.5</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Total Amount</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">24,395,247</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">100.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">23,002,777</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">100.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,392,470</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">6.1</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the nine months ended March 31, 2019
and 2018, cost of sales from our Fenjiu liquor wholesale business was RMB22,157,376 and RMB19,242,361, respectively, which represented
an increase of RMB2,915,015 or 15.1%. The increase of cost of sales was mainly due to the increased sales volume.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the nine months ended March 31, 2019
and 2018, cost of sales from our imported wine wholesale business was RMB2,237,871 and RMB3,760,416, respectively, which represented
a decrease of RMB1,522,545 or 40.5%. The Company adopted a strategy to focus on selling products with relatively higher profit
margins and to reduce selling products with relatively lower profit margins. This accounts for the reduction in this revenue stream.
The weightings on these products were different for the nine months ended March 31, 2019 and 2018. The overall cost of sales was
decreased.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Gross Profit</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Nine Months Ended&nbsp;<BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Variance</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(unaudited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(unaudited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; text-align: left">Sales of Fenjiu liquor products</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">65,581,485</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">91.5</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">51,801,820</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">86.0</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">13,779,665</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">26.6</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Sales of imported wine products</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,060,909</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">8.5</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">8,453,640</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">14.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(2,392,731</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">(28.3</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Total Amount</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">71,642,394</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">100.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">60,255,460</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">100.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">11,386,934</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">18.9</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Gross profit from our Fenjiu liquor wholesale
business increased by RMB13,779,665 or 26.6% for the nine months ended March 31, 2019, as compared to the same period of 2018.
The Company increased sales volume of our products primarily due to the contribution of our brand identity. The overall gross profit
contribution percentage of Fenjiu liquor wholesale business was so stable that 74.7% was recorded for the nine months ended March
31, 2019, as comparted to 72.9% for the same period of 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Gross profit from our imported wine wholesale
business decreased by RMB2,392,731 or 28.3% for the nine months ended March 31, 2019, as compared to the same period of 2018. The
gross profit contribution percentage of imported wine wholesale business was 73.0% for the nine months ended March 31, 2019, as
compared to 69.2%. for the same period of 2018. The increase represents that the Company adopted its strategy to focus on selling
products with relatively higher profit margins and to reduce selling products with relatively lower profit margins.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<!-- Field: Page; Sequence: 44; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->40<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Selling and Distribution Expenses</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the nine months ended March 31, 2019,
our selling and distribution expenses were RMB3,020,324, representing a decrease of RMB317,719, or 9.5%, as compared to the same
period of 2018. The decrease was primarily due to freight expense and packaging cost during the nine months ended March 31, 2019,
as compared to the same period of 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Administrative Expense</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the nine months ended March 31, 2019,
our administrative expenses were RMB6,159,429, representing an increase of RMB2,473,367 or 67.1%, as compared to the same period
of 2018. The increase was primarily due to salaries, foreign exchange differences and professional fees for share exchange of Reliant
Galaxy International Limited.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Other Income</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the nine months ended March 31, 2019,
our other income was RMB90,807, representing a decrease of RMB40,640 or 30.9%, as compared to the same period of 2018. The decrease
was primarily due to the decreased write-back of other receivables.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Interest and Other Financial Charges</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the nine months ended March 31, 2019,
our interest and other financial charges were RMB41,238 as compared to interest and other financial charges of RMB1,768,720 in
the same period of 2018. The decrease in interest and other financial charges was primarily due to decreased bank borrowings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Income Taxes</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the nine months ended March 31, 2019
and 2018, our income taxes increased by RMB3,400,101 or 26.9% to RMB16,024,012 for the nine months ended March 31, 2019 from RMB12,623,911
for the nine months ended March 31, 2018. The increase in the income taxes was primarily due to increased taxable income and higher
tax disallowable expenses for the period indicated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Liquidity and Capital Resources</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Operating Activities</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Operating activities generated RMB28,889,057
and RMB44,657,519 of cash in the nine months of 2019 and 2018, respectively. The decrease of RMB15,768,462 in 2019 was primarily
a result of change in net operating assets in 2019 when compared with 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Activity from trade receivables included
a net decrease of RMB33,352,881 compared to a net decrease of RMB1,228,086 for the nine months ended 31 March 2019 and 2018, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Activity from deposits, prepayments and
other receivables included a net increase of RMB11,945,528 compared to a net increase of RMB17,736,741 for the nine months ended
31 March 2019 and 2018, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Activity from receipts in advance, accruals
and other payables included a net increase of RMB743,376 compared to a net decrease of RMB8,114,271 for the nine months ended 31
March 2019 and 2018, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Activity from current tax liabilities included
a net increase of RMB2,598,923 compared to a net decrease of RMB2,148,514 for the nine months ended 31 March 2019 and 2018, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Investing Activities</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Investing activities used RMB250,000 and
RMB407,687 for the nine months ended 31 March 2019 and 2018, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cash of RMB250,000 used for investing activities
in 2019 was primarily related to the acquisition of the interest in an associate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cash of RMB407,687 used for investing activities
in 2018 was primarily related to the payments for acquisition of property, plant, and equipment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Financing Activities</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Financing activities provided RMB2,250,000
for the nine months ended 31 March 2019 and used RMB27,000,000 for the first nine months ended 31 March 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Cash of RMB2,250,000 provided in 2019 were primarily related
to net proceeds of bank borrowings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Cash of RMB27,000,000 used in 2018 were primarily related to
net repayment of bank borrowings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<!-- Field: Page; Sequence: 45; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->41<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>For the year ended June 30, 2018 compared with the year
ended June 30, 2017</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Results of Operations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Years Ended June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Variance</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2018</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(audited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2017</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(audited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%">Revenue</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">101,759,660</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">91,144,666</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">10,614,994</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">11.6</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">Cost of sales</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">27,800,667</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">24,065,113</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,735,554</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">15.5</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Gross profit</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">73,958,993</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">67,079,553</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">6,879,440</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">10.3</TD><TD STYLE="font-weight: bold; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Selling and distribution expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,477,457</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,521,950</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,955,507</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">117.2</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Administrative expenses</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,109,937</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,505,952</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,603,985</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">29.1</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Income from operations</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">61,371,599</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">59,051,651</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">2,319,948</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">3.9</TD><TD STYLE="font-weight: bold; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Other income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">155,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">227,552</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">71,852</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-31.6</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Interest and other financial charges</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,759,325</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,431,027</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,671,702</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-48.7</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: justify">Income before income taxes</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">59,767,974</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">55,848,176</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">3,919,798</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">7.0</TD><TD STYLE="font-weight: bold; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Income taxes</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">15,095,681</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">14,121,343</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">974,338</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6.9</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Net income</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">44,672,293</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">41,726,833</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">2,945,460</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">7.1</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Revenue</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year Ended June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Variance</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2018</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(audited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2017</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(audited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; text-align: justify">Sales of Fenjiu liquor products</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">86,358,407</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">84.9</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">81,973,982</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">89.9</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">4,384,425</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">5.3</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Sales of imported wine products</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">15,401,253</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">15.1</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">9,170,684</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">10.1</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">6,230,369</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">67.9</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Total Amount</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">101,759,660</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">100.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">91,144,666</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">100.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">10,614,994</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">11.6</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended June 30, 2018 and 2017,
revenue generated from our Fenjiu liquor wholesale business was RMB86,358,407 and RMB81,973,982, respectively, which represented
an increase of RMB4,384,425 or 5.3%. The increase in revenue generated from our Fenjiu liquor wholesale business was mainly due
to the increased sales volume of our Fenjiu liquor products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the years ended June 30, 2018 and 2017,
revenue generated from our imported wine wholesale business was RMB15,401,253 and RMB9,170,684, respectively, which represented
an increase of RMB6,230,369 or 67.9%. The increase in revenue generated from our imported wine wholesale business was mainly due
to the increased sales volume of our imported wine products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Cost of Sales</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Years Ended June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Variance</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2018</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(audited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2017</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(audited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; text-align: justify">Sales of Fenjiu liquor products</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">23,250,121</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">83.6</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">21,645,410</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">89.9</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,604,711</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">7.4</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Sales of imported wine products</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">4,550,546</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">16.4</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">2,419,703</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">10.1</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">2,130,843</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">88.1</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Total Amount</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">27,800,667</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">100.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">24,065,113</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">100.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,735,554</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">15.5</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the years ended June 30, 2018 and 2017,
the cost of sales from our Fenjiu liquor wholesale business was RMB23,250,121 and RMB21,645,410, respectively, which represented
an increase of RMB1,604,711 or 7.4%. The increase of cost of sales from our Fenjiu liquor wholesale business was mainly due to
the increased sales volume of our Fenjiu liquor products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the years ended June 30, 2018 and 2017,
the cost of sales from our imported wine wholesale business was RMB4,550,546 and RMB2,419,703, respectively, which represented
an increase of RMB2,130,843 or 88.1%. The increase of cost of sales from our imported wine wholesale business was mainly due to
the increased sales volume of our imported wine products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<!-- Field: Page; Sequence: 46; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->42<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Gross Profit</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Years Ended June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Variance</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2018</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(audited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2017</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(audited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; text-align: justify">Sales of Fenjiu liquor products</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">63,108,286</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">85.3</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">60,328,572</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">89.9</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">2,779,714</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">4.6</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Sales of imported wine products</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">10,850,707</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">14.7</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">6,750,981</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">10.1</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">4,099,726</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">60.7</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Total Amount</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">73,958,993</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">100.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">67,079,553</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">100.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,879,440</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">10.3</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Gross profit from our Fenjiu liquor wholesale
business increased by RMB2,779,714 or 4.6% for the year ended June 30, 2018, as compared to the same period of 2017. The Company
adopted its strategy to sell products with fairly stable profit margins that gross profit contribution percentage was 73.1% for
the year ended June 30, 2018, as compared to 73.6% for the same period of 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Gross profit from our imported wine wholesale
business increased by RMB4,099,726 or 60.7% for the year ended June 30, 2018, as compared to the same period of 2017. The gross
profit contribution percentage was 70.5% for the year ended June 30, 2018, as compared to 73.6% for the same period of 2017. The
decrease in gross profit contribution percentage represented different product mix.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Selling and Distribution Expenses</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended June 30, 2018, our selling
and distribution expenses were RMB5,477,457, representing an increase of RMB2,955,507, or 117.2%, as compared to the same period
of 2017. The increase was primarily due to increased advertising expenses, packaging expenses and salaries during the year ended
June 30, 2018, as compared to the same period of 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Administrative Expense</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended June 30, 2018, our administrative
expenses were RMB7,109,937, representing an increase of RMB1,603,985 or 29.1%, as compared to the same period of 2017. The increase
was primarily due to professional fees in connection with share exchange with Reliant Galaxy International Limited.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Other Income</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended June 30, 2018, our other
income was RMB155,700, representing a decrease of RMB71,852 or 31.6%, as compared to the same period of 2017. The decrease was
primarily due to the decreased interest income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Interest and Other Financial Charges</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended June 30, 2018, our interest
and other financial charges were RMB 1,759,325 as compared to interest and other financial charges of RMB3,420,272 in the same
period of 2017. The decrease in interest and other financial charges was primarily due to repayment of bank borrowings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Income Taxes</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the years ended June 30, 2018 and 2017,
the Company&rsquo;s income taxes increased by RMB974,338 or 6.9% to RMB15,095,681 for the year ended June 30, 2018 from RMB14,121,343
for the year ended June 30, 2017. The increase in the Company&rsquo;s income taxes was primarily due to increased taxable income
of the Company for the year indicated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Liquidity and Capital Resources</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A summary of our changes in cash flows
for the years ended June 30, 2018, 2017 and 2016 is provided below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">As of<BR> June 30</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">As of <BR> June 30</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">As of<BR> June 30</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2016</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(audited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(audited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(audited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">Net cash flows provided by (used in):</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">Cash generated from operating activities</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">47,292,147</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">18,910,609</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(33,525,505</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Cash used in investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,408</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(30,893</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(143,781</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Cash used in financing activities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(27,400,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(12,700,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">32,950,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Net increase (decrease) in cash and restricted cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,897,555</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,179,716</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(719,286</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Cash and cash equivalents, beginning of the year</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,607,407</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">427,691</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,146,977</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Cash and restricted cash, end of period</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">26,504,962</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">6,607,407</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">427,691</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<!-- Field: Page; Sequence: 47; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->43<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We use our operating cash flows to meet
our cash requirements and liquidity needs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Operating Activities</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash flows provided by or used in operating
activities consist of net loss adjusted for non-cash expenses such as depreciation and amortization, bad debt expense, amortizations
of debt issuance costs and beneficial conversion features, stock-based compensation, and accrued interest expense. Our operating
assets and liabilities primarily consist of balances related to inventory purchases and accounts receivables. Operating assets
and liabilities that arise from the inventory purchases and accounts receivables may fluctuate significantly from time to time
depending on our inventory purchases and market behaviors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cash flows generated from operating activities
were RMB 47.29 million as of June 30, 2018, RMB 18.91 million as of June 30, 2017, and negative RMB 33.53 million as of June 30,
2016. There has been an increase in cash flow of RMB 28.38 million from 2017 to 2018. There has been a significant increase in
cash flow of RMB 52.44 million from 2016 to 2017. The primary reason for the increases in cash flows was increases in net income&mdash;there
has been increases in net income of RMB 44.67 million in 2018, RMB 41.63 million in 2017 and RMB 9.59 million in 2016. There were
many factors contributing to our increases in net income, however increased sales, increased gross margins, and increased ability
to turn our inventory into cash are the primary factors that contributed to our increase in net income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Investing Activities</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash generated from investing activities
was RMB 5,408 as of June 30, 2018. Net cash used in investing activities was (RMB 30,893) as of June 30, 2017 and (RMB 143,781)
as of June 30, 2016. For fiscal year 2018, the Company invested (RMB 401,305) in purchasing office spaces. The Company purchased
computers and equipment of (RMB 30,893) in 2017 and (RMB 143,781) in 2016 for operational purposes. Net cash by investing activities
was RMB 406,713 in 2018, consisted primarily of cash received in connection with the share exchange with Reliant Galaxy International
Limited. No net cash generated from investing activities in 2017 and 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Financing Activities</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash for investing activities in the
fiscal year 2018 and 2017 consists of acquiring Jinqiang. We spent (RMB 0.4 million) in 2018 and (RMB 2.1 million) in 2017 on acquiring
Jingqiang&rsquo;s shares, and we eventually gained 100% control of Jinqiang on May 7, 2018. We were able to generate significant
cash flows from our sales, which lowered our need for external financing. We were able to pay back bank loans of (RMB 27 million)
in 2018 and (RMB 10.65 million) in 2017. We had financing activities of RMB 32.95 million that contributed to our net cash flows
as of June 30, 2016.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Liquidity</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our net income was RMB 44.67 million as
of June 30, 2018, RMB 41.63 million as of June 30, 2017 and RMB 9.59 million as of June 30, 2016. Our cash flow from business operations
was RMB 47.29 million as of June 30, 2018, RMB 18.91 million as of June 30, 2017 and negative RMB 33.53 million as of June 30,
2018. Management believes that our increased sales caused the decreases in net loss and increases in cash flows.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Management is of the opinion that we have
funds available to continue developing our products and capturing more market shares. Based on the Company&rsquo;s current revenues
and cash flows, management believes that we will be able to fund our development efforts through cash flow or external financing
for the fiscal year 2019. However, there can be no assurances that the Company will be successful in developing new products or
capturing larger market shares and the Company may need additional share capital issued over the next 12 months.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_016"></A>CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">None.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<!-- Field: Page; Sequence: 48; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->44<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_017"></A>DIRECTORS AND EXECUTIVE OFFICERS</B></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our directors and executive officers are listed below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 24%; border-bottom: Black 1.5pt solid">
<DIV STYLE="padding: 0in">

        <P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Name</P>
</DIV></TD>
    <TD STYLE="width: 2%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 10%; border-bottom: Black 1.5pt solid">
        <P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Age</P></TD>
    <TD STYLE="width: 2%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 50%; border-bottom: Black 1.5pt solid">
        <P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Position</P></TD>
    <TD STYLE="width: 2%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 10%; border-bottom: Black 1.5pt solid">
        <P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Since</P></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD>Peng Yang</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">26</TD>
    <TD>&nbsp;</TD>
    <TD>Chief Executive Officer, Director, President and Secretary</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">01/05/2018</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>Sze Lok (Patrick) Wong</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">46</TD>
    <TD>&nbsp;</TD>
    <TD>Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">12/03/2018</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">A brief description of the background and business experience
of our directors and executive officers for the past five years is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Mr. Peng Yang</B>, age 26, has international
business and management experience from his positions working with Huaxin, a company engaged in wine trading and Reliant Investment
(Group) Limited, an investment company. He has served as the general manager assistant and overseas affairs manager of Huaxin since
2015 and as limited director of Reliant Investment (Group) Limited since 2016. Mr. Yang is a leading member of our management team
who has experience in alcohol marketing. Mr. Yang holds a Bachelor&rsquo;s degree of Engineering, with honors, from the University
of Auckland in New Zealand in 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Mr. Sze Lok (Patrick) Wong, </B>age
46, has served as the CFO of Amax International Holdings Limited from October 2012 to present. From January 2007 to July 2012,
Mr. Wang served as the Senior Manager of Crowe CPA Group. From January 2006 to December 2006, Mr. Wang served as the Head of Internal
Audit Department of Intac International Company. Mr. Wang is a fellow of Institute of Chartered Accountants in England &amp; Wales
and is a Certified Information Systems Auditor of Information Systems Audit and Control Association. He received his Bachelor of
Accountancy with honors from Hong Kong Polytechnic University. He received his Master of Management from Macquarie Graduate School
of Management.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Term of Office</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our directors are appointed for a one-year
term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our
bylaws. Our officers are appointed by our Board of Directors and hold office until removed by the Board of Directors.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Family Relationships</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal">There
are no family relationships among our directors or executive officers.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Involvement in Certain Legal Proceedings</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the best of our knowledge, none of our
directors or executive officers has, during the past ten years:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24pt"></TD><TD STYLE="width: 24pt">&#9679;</TD><TD STYLE="text-align: justify">been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding
traffic violations and other minor offenses);</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24pt"></TD><TD STYLE="width: 24pt">&#9679;</TD><TD STYLE="text-align: justify">had any bankruptcy petition filed by or against the business or property of the person, or of any
partnership, corporation or business association of which he was a general partner or executive officer, either at the time of
the bankruptcy filing or within two years prior to that time;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24pt"></TD><TD STYLE="width: 24pt">&#9679;</TD><TD STYLE="text-align: justify">been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated,
of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending
or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings
and loan, or insurance activities, or to be associated with persons engaged in any such activity;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24pt"></TD><TD STYLE="width: 24pt">&#9679;</TD><TD STYLE="text-align: justify">been found by a court of competent jurisdiction in a civil action or by the Commission or the Commodity
Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed,
suspended, or vacated;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24pt"></TD><TD STYLE="width: 24pt">&#9679;</TD><TD STYLE="text-align: justify">been the subject of, or a party to, any federal or state judicial or administrative order, judgment,
decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private
litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation
respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order
of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition
order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24pt"></TD><TD STYLE="width: 24pt">&#9679;</TD><TD STYLE="text-align: justify">been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended
or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as
defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that
has disciplinary authority over its members or persons associated with a member.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt"></P>

<!-- Field: Page; Sequence: 49; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->45<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Except as set forth in our discussion below
in &ldquo;Certain Relationships and Related Transactions,&rdquo; none of our directors or executive officers has been involved
in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed
pursuant to the rules and regulations of the&nbsp;Commission.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Code of Ethics</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal">The Company
has adopted a code of ethics that applies to the Company&rsquo;s principal executive officer, principal financial officer, principal
accounting officer or controller which was attached as Exhibit 99.1 to the March 29, 2004 10KSB for the period ended 12/31/2003.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Corporate Governance</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The business and affairs of the company
are managed under the direction of our Board. In addition to the contact information in this annual report, each stockholder will
be given specific information on how he/she can direct communications to the officers and directors of the corporation at our annual
stockholders meetings. All communications from stockholders are relayed to the members of the Board of Directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Board Committees</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We do not have any independent directors
on our Board of Directors. Our Board of Directors currently has one director, Mr. Peng Yang, who is also our Chief Executive Officer
and is therefore not independent. Our Board of Directors does not have any committees, as companies whose securities are quoted
on the OTC Pink are not required to have board committees. However, if, at such time in the future, we appoint independent directors
to our Board of Directors, we expect to form the appropriate board committees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal">We currently
do not have a standing audit, nominating or compensation committee. Our Board of Directors handles functions that would otherwise
be handled by each such committee. We believe that there is not a need for a nominating committee at this time because our Board
of Directors consists of solely one director who is not independent.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Board Leadership Structure and Role
in Risk Oversight</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Board of Directors is primarily responsible
for overseeing our risk management processes. The Board receives and reviews periodic reports from management, auditors, legal
counsel, and others, as considered appropriate regarding our company&rsquo;s assessment of risks. The Board focuses on the most
significant risks facing our company and our company&rsquo;s general risk management strategy, and also ensures that risks undertaken
by our company are consistent with the Board&rsquo;s appetite for risk. While the Board oversees our company&rsquo;s risk management,
management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective
approach for addressing the risks facing our company and that our Board leadership structure supports this approach.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


<!-- Field: Page; Sequence: 50; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->46<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_018"></A>EXECUTIVE COMPENSATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No current or prior officer or director
has received any remuneration or compensation from the Company in the past three fiscal years, nor has any member of the Company&rsquo;s
management been granted any option or stock appreciation right. Accordingly, no tables relating to such items have been included
within this Item. Besides Sze Lok (Patrick) Wong, none of our employees is subject to a written employment agreement. None of our
officer has received a cash salary since our founding. The Company has no agreement or understanding, express or implied, with
any director, officer or principal stockholder, or their affiliates or associates, regarding compensation in the form of salary,
bonuses, stocks, options, warrants or any other form of remuneration, for services performed on behalf of the Company. Nor are
there compensatory plans or arrangements, including payments to any officer in relation to resignation, retirement, or other termination
of employment, or any change in control of the Company, or a change in the officer&rsquo;s responsibilities following a change
in control of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


<!-- Field: Page; Sequence: 51; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->47<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_019"></A>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth information
with respect to the beneficial ownership of our Common Stock as of July 3, 2019, 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.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Name and address of beneficial owner</B></P></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount and nature of beneficial ownership</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Percent of<BR> class&nbsp;<SUP>(1)</SUP></B></FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Peng Yang (2)<BR> One Liberty Plaza, Suite 2310 PMB# 21, New York, NY 10006</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">322,079,450</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">76.78</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Sze Lok (Patrick) Wong</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">One Liberty Plaza, Suite 2310 PMB# 21, New York, NY 10006</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-style: italic; text-align: left">All directors and executive officers as a group (2 persons)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">322,079,450</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">76.78</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify"><P STYLE="margin: 0pt 0">Percentage is calculated based on 419,487,480 shares of Common Stock issued and outstanding as of July
3, 2019.</P>


</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes 53,121,530
shares of Common Stock held of record by Million Success Business Limited, an entity controlled by Peng Yang, our CEO. </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


<!-- Field: Page; Sequence: 52; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->48<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_020"></A>CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Transactions with Related Persons</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company had the following related party balances as of June
30, 2018 and 2017:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>June 30,<BR> 2018</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Audited) </B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>June 30,<BR> 2017</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Audited) </B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Revenue generated from related party</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">14,359,832</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">25,110,022</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Interest income from director</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">214,046</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Trade receivables from related party</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">15,000,875</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>July 1,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2016</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Settlement</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Repayment</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">New Loans</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR> 2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; text-align: left">Amount due to director</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(13,395,233</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(13,395,233</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Amount due from director</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">16,642,476</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(178,277</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(4,650,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">11,814,199</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Net amount due from/(to) director</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">3,247,243</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(178,277</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(4,650,000</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(1,581,034</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">)</TD></TR>
</TABLE>


<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>July 1,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2017</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Settlement</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Repayment</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">New Loans</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR> 2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; text-align: left">Amount due to director</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(13,395,233</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(95,976,484</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(109,371,717</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Amount due from director</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">11,814,199</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,326,150</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">13,140,349</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Net amount due to director</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(1,581,034</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(94,650,334</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">96,231,368</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR> 2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR> 2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; padding-bottom: 1.5pt">Revenue</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">14,359,832</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">25,110,022</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">14,359,832</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">25,110,022</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of March 31, 2019, the Company had an amount of RMB 96,676,656 due to Mr. Peng Yang, our director and
CEO.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of June 30, 2018, the Company had an
amount of RMB 13,140,349 due from Mr. Peng Yang, our director, and an amount of RMB 109,371,717 due to Mr. Peng Yang. During the
year ending June 30, 2017, the Company had an amount of RMB 11,814,199 due from Mr. Peng Yang and an amount of RMB 13,395,233 due
to Mr. Peng Yang. The Company&rsquo;s loan due to Mr. Peng Yang does not bear interest and are due on demand. These amounts due
to and due from Mr Peng Yang are eligible to net off against each other.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of June 30, 2018, the Company recognized
an amount of RMB 14,359,832 as revenue generated from trade transactions with Fuqing Jing Hong Trading Co., Ltd, the director of
which is a family member of Mr. Yang, a former director of the Company, who resigned on June 28, 2018. During the year ending June
30, 2017, the Company recognized an amount of RMB 25,110,022 as revenue generated from trade transactions with Fuqing Jing Hong
Trading Co., Ltd. Management is of the opinion that these related party transactions were conducted in the normal course of business
of the Company with standard sales terms and conditions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ending June 30, 2017, the
Company was owed an amount of RMB 15,000,875 as trade receivables from Fuqing Jing Hong Trading Co. The Company does not have any
trade receivable that can be recognized as related transactions as of June 30, 2018. Management is of the opinion that these related
party transactions were conducted in the normal course of business of the Group with standard sales terms and conditions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We currently have a policy in place for
dealing with related party matters.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Director Independence</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal">Our Common
Stock is listed on the OTC Market Inc. OTC Pinks inter-dealer quotation systems, which does not have director independence requirements.
</FONT></P>




<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


<!-- Field: Page; Sequence: 53; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->49<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_021"></A>LEGAL PROCEEDINGS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">From time to time, we may become involved
in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties
and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware
of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition
or operating results.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_022"></A>LEGAL MATTERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The validity of the shares of Common Stock
offered hereby will be passed upon for us Hunter Taubman Fischer &amp; Li LLC as counsel to the Company. Certain legal matters
as to PRC law will be passed upon for us by Zhonglun W&amp;D Law Firm.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_023"></A>EXPERTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The consolidated financial statements for
each of the years ended June 30, 2018 and 2017, as set forth in this prospectus and elsewhere in the registration statement have
been so included in reliance on the report of PKF Littlejohn LLP, an independent registered public accounting firm, given on their
authority as experts in accounting and auditing. The current address of PKF Littlejohn LLP is located in 1 Westferry Circus, Canary
Wharf, London, E14 4HD.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a_026"></A>INTERESTS OF NAMED EXPERTS AND COUNSEL</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No expert or counsel named in this prospectus
as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being
registered or upon other legal matters in connection with the registration or offering of the Common Stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant.
Nor was any such person connected with the registrant as a promoter, voting trustee, director, officer, or employee.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_024"></A>WHERE YOU CAN FIND MORE INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We filed with the SEC a registration statement
under the Securities Act for the Common Stock in this offering. This prospectus does not contain all of the information in the
registration statement and the exhibits and schedule that were filed with the registration statement. For further information with
respect to us and our Common Stock, we refer you to the registration statement and the exhibits that were filed with the registration
statement. Statements contained in this prospectus about the contents of any contract or any other document that is filed as an
exhibit to the registration statement are not necessarily complete, and we refer you to the full text of the contract or other
document filed as an exhibit to the registration statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We file annual, quarterly, and current
reports and other information with the SEC. Our filings with the SEC are available to the public on the SEC&rsquo;s website at
<I>www.sec.gov</I>. The information we file with the SEC or contained on, or linked to through, our corporate website or any other
website that we may maintain is not part of this prospectus or the registration statement of which this prospectus is a part. You
may also read and copy, at the SEC&rsquo;s prescribed rates, any document we file with the SEC, including the registration statement
(and its exhibits) of which this prospectus is a part, at the SEC&rsquo;s Public Reference Room located at 100 F Street, N.E.,
Washington, D.C. 20549. You can call the SEC at 1-800-SEC-0330 to obtain information on the operation of the Public Reference Room.</P>




<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


<!-- Field: Page; Sequence: 54; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->50<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="a_025"></A>ORANCO,
INC.<BR>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="width: 90%; padding-bottom: 1.5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></TD>
    <TD STYLE="width: 10%; border-bottom: Black 1.5pt solid">
        <P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Page</B></P></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt; text-align: justify"><B>Consolidated Financial Statements  &ndash; Nine Months
    Ended March 31, 2019</B></TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt; text-align: justify"><A HREF="#fq_001">Condensed Consolidated Balance Sheets at March 31, 2019 (unaudited)</A></TD>
    <TD STYLE="text-align: center">F-3</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt; text-align: justify"><A HREF="#fq_002">Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Nine Months Ended March 31, 2019 and 2018 (unaudited)</A></TD>
    <TD STYLE="text-align: center">F-4</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt; text-align: justify"><A HREF="#fq_003"> Consolidated Statements of Changes In Stockholders&rsquo; Equity for the Nine Months Ended March 31, 2019 and 2018 (unaudited)</A></TD>
    <TD STYLE="text-align: center">F-5</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt; text-align: justify"><A HREF="#fq_004">Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2019 and 2018 (unaudited)</A></TD>
    <TD STYLE="text-align: center">F-6</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#fq_005">Notes to Unaudited Condensed Consolidated Financial Statements</A></TD>
    <TD STYLE="text-align: center">F-7 - F-21</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>

<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; width: 90%"><B>Consolidated
    Financial Statements &ndash; Year Ended June 30, 2018 and 2017</B></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-top: 0; padding-right: 0; padding-left: 0; text-align: center; width: 10%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-top: 0; padding-right: 0; padding-left: 0; text-align: justify; text-indent: 0">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-top: 0; padding-right: 0; padding-left: 0; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><A HREF="#Fin_001"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Report
    of Independent Registered Public Accounting Firm</FONT></A></TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; padding: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-23
    </FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; padding: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><A HREF="#Fin_002"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated
    Statements of Balance Sheets as of June 30, 2018 and 2017</FONT></A></TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; padding: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-24</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; padding: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><A HREF="#f_003"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated
    Statements of Operations for the Years Ended June 30, 2018 and 2017</FONT></A></TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; padding: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-25</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; padding: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><A HREF="#f_004"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated
    Statements of Shareholders&rsquo;
    Equity as of June 30, 2018 and 2017</FONT></A></TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; padding: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-26</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; padding: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><A HREF="#f_005"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated
    Statements of Cash Flows for the Years Ended June 30, 2018 and 2017</FONT></A></TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; padding: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-27</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; padding: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><A HREF="#f_006"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes to Consolidated Financial Statements</FONT></A></TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; padding: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-28
    - F-45</FONT></TD></TR>
</TABLE>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<!-- Field: Page; Sequence: 55; Options: NewSection; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->1<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="margin: 0; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONSOLIDATED
FINANCIAL STATEMENTS</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NINE
MONTHS ENDED MARCH&nbsp;31, 2019</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 56; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="fq_001"></A>ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONSOLIDATED
BALANCE SHEETS&nbsp;(Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center"><B>(unaudited)</B></TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>March 31,<BR> 2019</B></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June&nbsp;30,<BR> 2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>ASSETS:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 76%; text-align: left; text-indent: -10pt; padding-left: 10pt">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">57,394,020</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">26,504,962</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Trade receivables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67,286,738</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,933,857</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt">Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,671,629</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,346,549</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Deposits, prepayments and other receivables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,304,062</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,249,590</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 10pt">Prepaid land lease</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">109,680</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">109,680</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">153,766,129</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">101,144,638</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Non-current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Investment in&nbsp;an associate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Property, plant and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,132,158</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,296,146</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 10pt">Prepaid land lease</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,827,160</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,909,420</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">8,959,318</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">8,205,566</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 10pt">Total assets</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">162,725,447</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">109,350,204</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">LIABILITIES AND SHAREHOLDERS&rsquo; EQUITY</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Current liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Trade payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">144,093</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44,636</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Receipts in advance, accruals and other payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,633,402</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,140,025</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Amount due to Director</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,894,851</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">96,231,368</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Current tax liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,527,130</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,928,207</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 10pt">Bank borrowings</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,250,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">26,449,476</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">104,344,236</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Non-current liability</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Amount due to director</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">84,781,805</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Shareholders&rsquo; equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt">Number of authorized shares with par value US$0.001</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Number of issued and outstanding shares</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">98,191,480</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">98,191,480</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 10pt">Number of fully paid shares to be issued</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">321,296,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">321,296,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt">Share capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">638,708</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">638,708</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Fully paid shares to be issued</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,126,520</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,126,520</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 10pt">Retained earnings</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">48,728,938</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,240,740</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Equity attributable to equity holders of the Company</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">51,494,166</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,005,968</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 10pt">Non-controlling interest</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 10pt">Total shareholders&rsquo; equity</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">51,494,166</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,005,968</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 10pt">Total liabilities and shareholders&rsquo; equity</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">162,725,447</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">109,350,204</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying notes are an integral part of the  financial statements.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 57; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="fq_002"></A>ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">(unaudited)<BR> Three months ended<BR> March&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">(unaudited)<BR> Nine months ended<BR> March&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>2019</B></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>2018</B></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>2019</B></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>2018</B></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; padding-bottom: 1.5pt">Revenue</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">32,654,876</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">26,085,393</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">96,037,641</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">83,258,237</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Cost of sales</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,801,480</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,914,306</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,395,247</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,002,777</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Selling and distribution expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">884,727</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,010,459</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,020,324</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,338,043</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Administrative expenses</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,338,458</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">769,741</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,159,429</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,686,062</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,024,665</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,694,506</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,575,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,026,882</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32,471</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,289</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">90,807</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">131,447</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Interest and other financial charges</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,198</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">9,395</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">41,238</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,768,720</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Income before income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,655,484</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,392,781</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">62,512,210</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">51,594,082</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Income taxes</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,432,298</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,775,792</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">16,024,012</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">12,623,911</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Net Income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,223,186</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,616,989</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">46,488,198</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38,970,171</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Attributable to:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Equity holders of the Company</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,223,186</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,205,233</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">46,488,198</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">37,862,781</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Former non-controlling interests</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">411,756</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,107,390</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,223,186</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,616,989</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">46,488,198</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38,970,171</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Earnings per share:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Basic and diluted earnings per share</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.04</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2.86</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.11</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">8.87</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying notes are an integral part of the financial statements.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 58; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="fq_003"></A>ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONSOLIDATED
STATEMENTS OF SHAREHOLDERS&rsquo; EQUITY (Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Share<BR>
    capital</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Shares to&nbsp;be<BR>
    issued&nbsp;(Note&nbsp;a)</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Additional<BR>
    paid-in<BR>
    capital</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Retained<BR>
    Earnings</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Attributable&nbsp;to<BR>
    the Company</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Non-controlling<BR>
    interests</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Total<BR> shareholders&rsquo;<BR> Equity</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 30%; padding-bottom: 1.5pt; text-indent: -8.2pt; padding-left: 8.2pt">Balance at December 31, 2017</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">27,775</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">(27,774</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left">)</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; text-align: right">77,910,983</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; text-align: right">77,910,984</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; text-align: right">3,578,390</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; text-align: right">81,489,374</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.2pt; padding-left: 8.2pt">Total comprehensive income for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,205,233</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,205,233</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">411,756</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,616,989</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -8.2pt; padding-left: 8.2pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt; text-indent: -8.2pt; padding-left: 8.2pt">Balance at March&nbsp;31, 2018</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">27,775</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(27,774</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">90,116,216</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">90,116,217</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,990,146</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">94,106,363</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -8.2pt; padding-left: 8.2pt">Balance at December 31, 2018</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">638,708</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,126,520</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32,505,752</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35,270,980</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35,270,980</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.2pt; padding-left: 8.2pt">Total comprehensive income for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,223,186</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,223,186</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,223,186</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt; text-indent: -8.2pt; padding-left: 8.2pt">Balance at March 31, 2019</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">638,708</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,126,520</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">48,728,938</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">51,494,166</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">51,494,166</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Share&nbsp;capital</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Shares to&nbsp;be<BR>
    issued&nbsp;(Note&nbsp;a)</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Additional<BR>
    paid-in<BR>
    capital</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Retained<BR>
    Earnings</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Attributable&nbsp;to<BR>
    the Company</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Non-controlling<BR>
    interests</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Total<BR> shareholders&rsquo;<BR> Equity</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 30%; padding-bottom: 1.5pt; text-indent: -8.2pt; padding-left: 8.2pt">Balance at June 30, 2017</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; text-align: right">27,775</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; text-align: right">(27,774</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; text-align: right">52,253,435</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; text-align: right">52,253,436</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; text-align: right">2,882,756</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; text-align: right">55,136,192</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.2pt; padding-left: 8.2pt">Total comprehensive income for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">37,862,781</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">37,862,781</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,107,390</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38,970,171</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -8.2pt; padding-left: 8.2pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt; text-indent: -8.2pt; padding-left: 8.2pt">Balance at March&nbsp;31, 2018</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">27,775</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(27,774</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">90,116,216</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">90,116,217</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,990,146</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">94,106,363</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -8.2pt; padding-left: 8.2pt">Balance at June 30, 2018</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">638,708</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,126,520</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,240,740</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,005,968</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,005,968</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.2pt; padding-left: 8.2pt">Total comprehensive income for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">46,488,198</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">46,488,198</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">46,488,198</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt; text-indent: -8.2pt; padding-left: 8.2pt">Balance at March 31, 2019</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">638,708</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,126,520</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">48,728,938</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">51,494,166</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">51,494,166</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying notes are an integral part of the  financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 59; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="fq_004"></A>ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">(unaudited)<BR> Nine&nbsp;months ended<BR> March&nbsp;31,<BR> 2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">(unaudited)<BR> Nine&nbsp;months ended<BR> March&nbsp;31,<BR> 2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Operating activities</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 80%; text-align: left">Net income</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">46,488,198</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">38,970,171</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Adjustments to reconcile net income to cash generated from operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">246,248</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">255,635</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Changes in working capital:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt">Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(325,080</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,238</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Trade receivables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(33,352,881</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,228,086</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Deposits, prepayments and other receivables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,945,528</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,736,741</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Trade payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">99,457</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">410,493</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Receipts in advance, accruals and other payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">743,376</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,114,271</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Current tax liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,598,923</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,148,514</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt">Amount due to Director</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">445,288</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,240,888</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Cash generated from operating activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,889,057</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44,657,519</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Acquisition of interest in an associate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(250,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Payments for acquisition of property, plant and equipment</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(407,687</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Cash used in investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(250,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(407,687</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Repayment of bank borrowings</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(27,000,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Proceeds of bank borrowings</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,250,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Cash used in financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,250,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(27,000,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Increase in cash and cash equivalents</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">30,889,057</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">17,249,832</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Cash and cash equivalents, beginning of the period</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">26,504,962</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">6,607,407</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Cash and cash equivalents, end of the period</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">57,394,019</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">23,857,239</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Supplemental disclosure of cash flows information</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Cash paid during the year for interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(34,040</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,768,720</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Cash paid during the year for income taxes</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(13,427,680</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(10,475,397</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying notes are an integral part of the financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 60; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->6<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="fq_005"></A>ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SUMMARY
    OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Description
    of Business</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oranco,
Inc. (the &ldquo;Company&rdquo;) was incorporated under the laws of the State of Nevada on June 16, 1977. The Company has been
in the business of the development of mineral deposits. During 1983 all activities were abandoned, and the Company had remained
inactive until June 29, 2018 when it acquired the business of Reliant Galaxy International Limited (&ldquo;Reliant&rdquo;). The
Company and its subsidiaries (the &ldquo;Group&rdquo;) are principally engaged in the trading of spirits in the People&rsquo;s
Republic of China (the &ldquo;PRC&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
disclosed in the <A HREF="http://www.sec.gov/Archives/edgar/data/1098996/000121390018014156/f8k082018_orancoinc.htm">Form 8-K</A> filed with the Securities and Exchange Commission on October 19, 2018, the Company entered into a business
agreement with Guangzhou Silicon Technology Co., Ltd. on August 20, 2018 to have Guangzhou Silicon Technology Co., Ltd. develop
an anti-counterfeiting laser recognition proprietary system using blockchain technology.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Details
of the subsidiaries are set out in note 20 to the consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    basis of consolidation and presentation</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Consolidated Financial Statements include the Financial Statements of Oranco, Inc. and the Financial Statements of its wholly-owned
subsidiaries.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subsidiaries
are all entities over which the Group has control. The Group controls an entity when the Group is exposed to or has rights to
variable returns from its involvement with the investee and has the ability to affect those returns through its power over the
investee. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated
from the date that control ceases.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying financial statements have been prepared in accordance with the U.S. generally accepted accounting principles or GAAP.
The Company operates in one reportable segment and solely within the PRC. Accordingly, no segment or geographic information has
been presented.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-controlling
interests are shown as a component of shareholders&rsquo; equity on the consolidated balance sheet and the share of the net income
attributable to non-controlling interests is shown as a component of net income in the consolidated statements of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Business
Combinations</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
acquisition of other subsidiaries that meet the criteria for business combinations is accounted for using the acquisition method
of accounting. The consideration transferred for the acquisition is the fair values of the assets transferred, the liabilities
incurred to the former owners of the acquiree and the equity interests issued by the Group.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially
at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquiree at the non-controlling
interest&rsquo;s proportionate share of the recognized amounts of the acquiree&rsquo;s identifiable net assets. Acquisition-related
costs are expensed as incurred.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
contingent consideration to be transferred by the Group are recognized at fair value at the acquisition date. Subsequent changes
to the fair value of the contingent consideration that is deemed to be an asset or liability is recognized, either in the Statement
of Operations or as a change to other comprehensive income. Contingent consideration that is classified as equity is not remeasured,
and its subsequent settlement is accounted for within equity. Goodwill is initially measured as the excess of the aggregate of
the consideration transferred and the fair value of non-controlling interest over the identifiable net assets acquired and liabilities
assumed.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 61; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->7<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS &ndash; CONTINUED (Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SUMMARY
    OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES &ndash; CONTINUED</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
    instruments</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
instruments of the Group primarily consist of cash and cash equivalents, trade receivables, deposits, prepayments and other receivables,
prepaid land lease, trade payables, receipts in advance, accruals and other payables, and bank borrowings. The carrying values
of the Group&rsquo;s financial instruments approximate their fair values, principally because of the short-term maturity of these
instruments or their terms.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group has no derivative financial instruments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash
    and cash equivalents</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash
and cash equivalents consist of cash on hand and highly liquid investments which are unrestricted as to withdrawal or use, and
which have maturities of three months or less when purchased.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(e)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
    recognition</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group&rsquo;s revenues are derived from sales of products recorded net of value added tax (&ldquo;VAT&rdquo;). Revenue is recognized
when all of the following conditions are met: persuasive evidence of an arrangement exists, delivery of the products has occurred
or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. These criteria are
related to each of the following major revenue generating activities described below.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 0.5in; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.25in; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
    from the sale of goods is recognized when the significant risks and rewards of ownership have been transferred to the buyer,
    provided that the Group maintains neither managerial involvement to the degree usually associated with ownership nor effective
    control over the goods sold. This is usually taken as the time when the goods are delivered and the customers have accepted
    the goods.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 0.5in; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.25in; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    Company adopted ASU 2014-09, Revenue from Contracts with Customers, on July 1, 2018. The Company recognizes revenue when (or
    as) services are transferred to clients. Revenue is recognized based on the amount of consideration that management expects
    to receive in exchange for these services in accordance with the client. To determine the amount and timing of revenue recognition,
    the Company must (1) identify the contract with the client, (2) identify the performance obligations in the contracts, (3)
    determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5)
    recognize revenue when (or as) the Company satisfies a performance obligation.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 0.5in; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.25in; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">interest
    income is recognized on an accrual basis using the effective interest method.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(f)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Trade
    receivables and allowance for doubtful accounts</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Trade
receivables are stated at the amount the Group expects to collect. The Group maintains allowances for doubtful accounts for estimated
losses. Management considers the following factors when determining the collectability of specific accounts: historical experience,
creditworthiness of the clients, aging of the receivables and other specific circumstances related to the accounts. Allowance
for doubtful accounts is made and recorded into general and administrative expenses based on the aging of trade receivables and
on any specifically identified receivables that may become uncollectible. Trade receivables which are deemed to be uncollectible
are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered
remote. The Company takes a write off of the account balances when the Company can demonstrate all means of collection on the
outstanding balances have been exhausted. There is no allowance for doubtful accounts in these consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(g)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inventories</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inventories
are stated at the lower of cost or net realizable value. Cost is determined using the weighted average method. The components
of inventories include raw materials, processing cost of finished goods and purchase cost of products. The Group routinely evaluate
the net realizable value of the inventories in light of current market conditions and market trends and record a write-down against
the cost of inventories should the net realizable value falls below the cost.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 62; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->8<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS &ndash; CONTINUED (Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SUMMARY
    OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES &ndash; CONTINUED</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(h)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property,
    plant and equipment and depreciation</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property,
plant and equipment are carried at cost less accumulated depreciation and any recorded impairment. Depreciation is calculated
on a straight-line basis over the following estimated useful lives:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: white; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 6%; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 36%; border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Category</B></FONT></TD>
    <TD STYLE="width: 1%; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 31%; border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Estimated
    useful life</B></FONT></TD>
    <TD STYLE="width: 1%; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 25%; border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Estimated
    residual values</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="background-color: white; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="background-color: #CCEEFF; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Building</FONT></TD>
    <TD STYLE="background-color: #CCEEFF; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="background-color: #CCEEFF; padding-right: 0.8pt; text-align: center; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">20
    years</FONT></TD>
    <TD STYLE="background-color: #CCEEFF; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="background-color: #CCEEFF; padding-right: 0.8pt; text-align: center; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0-10%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Computer
    and office equipment</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; text-align: center; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3
    years</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; text-align: center; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0-10%</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Repairs
and maintenance are expensed as incurred and asset improvements are capitalized. Consideration is given at each balance sheet
date to determine whether there is any indication of impairment of the carrying amounts of the property, plant and equipment.
The indication could be an unfavorable development of a business or severe economic slowdown as well as reorganization of the
operation. In assessing value in use, the estimated future cash flows are discounted to their present value, based on the time
value of money and the risks specific to the country where the assets are located.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">VAT
    and VAT refund</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">VAT
on sales is charged at 17% on revenue from product sales and is subsequently paid to the PRC tax authorities after netting input
VAT on purchases. The excess of output VAT over input VAT is recognized in other payables, and the excess of input VAT over output
VAT is recognized in other receivables in the consolidated balance sheets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(j)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operating
    leases</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Leases
where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases.
Payments made under operating leases are charged to the consolidated statements of operations on a straight-line basis over the
lease periods.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(k)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign
    currency translation</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Substantially
all of the Group&rsquo;s operations are conducted in China and as a result, the functional and reporting currency of the Group
is the Chinese Renminbi.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Monetary
assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional
currencies at the prevailing rates of exchange at the balance sheet date. Transactions in currencies other than the functional
currency are converted into the functional currency at the applicable rates of exchange prevailing at the transaction dates. Transaction
gains and losses are recognized in the consolidated statements of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
translating the financial statements of the Company&rsquo;s subsidiaries outside the PRC into the reporting currency, assets and
liabilities are translated from the subsidiaries&rsquo; functional currencies to the reporting currency at the exchange rate at
the balance sheet date. Equity amounts are translated at historical exchange rates; revenues, expenses, and other gains and losses
are translated using the average rate for the period. Translation adjustments are reported as cumulative translation adjustments
and are shown as a separate component of other comprehensive income/(loss) in the consolidated statements of operations. During
2018 and 2017, such translation adjustments were not material.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 63; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->9<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS &ndash; CONTINUED (Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SUMMARY
    OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES &ndash; CONTINUED</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(l)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Income
    taxes</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Income
taxes are provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.
The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not
to be sustained upon audit of the related tax authority. An uncertain income tax position will not be recognized if it has less
than a 50% likelihood of being sustained. Changes in recognition or measurement are reflected in the period in which the change
in judgment occurs. The Group records interest and penalties related to unrecognized tax benefits (if any) in interest expenses
and general and administrative expenses, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 22, 2017, the United States enacted TCJA which instituted fundamental changes to the taxation of multinational corporations,
including a reduction the U.S. corporate income tax rate to 21% beginning in 2018. The TCJA also requires a one-time transition
tax on the mandatory deemed repatriation of the cumulative earnings of the Company&rsquo;s foreign subsidiary as of December&nbsp;31,
2017. To determine the amount of this transition tax, the Company must determine the amount of earnings generated since inception
by the relevant foreign subsidiary, as well as the amount of non-U.S. income taxes paid on such earnings, in addition to potentially
other factors. The Company acquired the foreign operations on 29 June 2018, hence the Company does not have any qualifying earnings
or profits from its foreign subsidiary under the transition tax calculation thus no transition tax is payable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(m)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair
    value measurement</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group
considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants
would use when pricing the asset or liability.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group&rsquo;s financial instruments include cash and cash equivalents, term deposits, trade and other receivables, and trade and
other payables. The Group considers the carrying amounts approximate fair value because of the short maturity of these financial
instruments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(n)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Business
    combinations</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
a business combination achieved in stages, the Group remeasures its previously held equity interest in the acquire immediately
before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in earnings.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(o)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Transactions
    between entities under common control</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
accounting for a transfer of assets or exchange of shares between entities under common control of the Group, the carrying amounts
of the assets and liabilities transferred shall remain unchanged subsequent to the transaction, and no gain or loss shall be recorded
in the Group&rsquo;s consolidated statements of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(p)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Commitments
    and contingencies</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the normal course of business, the Group is subject to loss contingencies, such as legal proceedings and claims arising out of
its business, that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, and
non-income tax matters. An accrual for a loss contingency is recognized when it is probable that a liability has been incurred
and the amount of loss can be reasonably estimated. If a potential material loss contingency is not probable but is reasonably
possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the
range of possible loss if determinable and material, is disclosed.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 64; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->10<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS &ndash; CONTINUED (Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SUMMARY
    OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES &ndash; CONTINUED</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(q)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Adoption
    of new accounting standards</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 1, 2018, we adopted ASU No. 2014-09, &ldquo;Revenue from Contracts with Customers&rdquo; and the related amendments using
the modified retrospective method. The adoption of ASC 606 had no impact on total reported revenues, costs and net income.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
January 2017, the FASB issued ASU No. 2017-01, &ldquo;Business Combinations: Clarifying the Definition of a Business&rdquo; (&ldquo;ASU
2017-01&rdquo;). ASU 2017-01 clarifies the definition of a business for determining whether transactions should be accounted for
as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for annual periods and interim periods within
those annual periods beginning after December 15, 2017, and early adoption is permitted. The Company adopted this standard on
July 1, 2018 and will apply the standard to any future business combinations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
adoption of the standard in the consolidated financial statements for the financial year ended June 30, 2019 will have no significant
impact to the provision for income taxes and will have no impact to the net cash used in, or generated by, operating, investing,
or financing activities in the Group&rsquo;s consolidated statements of cash flows. &nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(r)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recently
    issued accounting pronouncements not yet adopted</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
August 2016, FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments. The standard provides new
authoritative guidance addressing eight specific cash flow issues with the objective of reducing the existing diversity in practice
in how certain transactions are presented and classified in the statement of cash flows. The standard is effective for the Group
in the first quarter of the fiscal year 2019. The Company does not expect the adoption of this standard to have a significant
impact on its consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
February 2016, FASB issued ASU No. 2016-02, Leases. The standard increases transparency and comparability among organizations
by requiring companies to recognize leased assets and related liabilities on the balance sheet and disclose key information about
leasing arrangements. This standard is effective for the Group in the first quarter of the fiscal year 2020. The Group is evaluating
the impact the adoption of this standard will have on its consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group is finalizing the impact of the standard on its consolidated financial statements and disclosures, as well as changes to
its systems, processes, and internal controls. The Company&rsquo;s preliminary assessments are subject to change.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 65; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->11<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS &ndash; CONTINUED (Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 18pt; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">REVENUE
    AND OTHER INCOME</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
represents the invoiced spirits products sold to the external customers less discounts, returns, and surcharges.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">(unaudited)<BR> Nine&nbsp;months<BR> ended<BR> March&nbsp;31,<BR> 2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">(unaudited)<BR> Nine&nbsp;months<BR> ended<BR> March&nbsp;31,<BR> 2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%">Revenue</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">96,037,641</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">83,258,237</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Other income</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">90,807</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">131,447</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">96,128,448</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">83,389,684</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
revenue is derived in China.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
concentration analysis of the revenue is as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">(unaudited)<BR> Nine&nbsp;months<BR> ended<BR> March&nbsp;31,<BR> 2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">(unaudited)<BR> Nine&nbsp;months<BR> ended<BR> March&nbsp;31,<BR> 2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Customer A</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">13</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">19</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Customer B</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Customer C</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Customer D</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Customer E</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Customer F</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">Others</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">32</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">21</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">100</TD><TD STYLE="padding-bottom: 4pt; text-align: left">%</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">100</TD><TD STYLE="padding-bottom: 4pt; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
analysis of other income is as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">(unaudited)<BR> Nine&nbsp;months<BR> ended&nbsp;<BR> March&nbsp;31,<BR> 2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">(unaudited)<BR> Nine&nbsp;months<BR> ended<BR> March&nbsp;31,<BR> 2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Bank interest income</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">58,336</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">42,658</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Written back of other payables</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">77,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">58,336</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">120,158</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 66; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->12<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">ORANCO, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
&ndash; CONTINUED (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(Chinese Renminbi)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SELLING
AND DISTRIBUTION EXPENSES</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The following expenses are included
in the selling and distribution expenses:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(unaudited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Nine months ended</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2019</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(unaudited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Nine months ended</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2018</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif">Freight</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">16,209</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">36,303</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Packaging cost</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">147,716</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">931,652</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">163,925</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">967,955</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">PROPERTY,
PLANT AND EQUIPMENT, NET</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Property, plant and equipment,
net, consist of the following:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2019</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><B>June&nbsp;30,<BR>
    2018</B></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left">Computer and office equipment</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">268,550</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">268,550</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Building</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,754,625</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,754,625</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">4,023,175</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">4,023,175</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Less: accumulated depreciation</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(891,017</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(727,029</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 4pt">Property, plant and equipment, net,</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">3,132,158</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">3,296,146</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">PREPAID
LAND LEASE, NET</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Prepaid land lease, net, consists
of the following:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2019</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><B>June&nbsp;30,<BR>
    2018</B></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left">Prepaid land lease</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">5,412,120</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">5,412,120</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Less: accumulated amortization</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(475,280</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(393,020</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 4pt">Prepaid land lease, net</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">4,936,840</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">5,019,000</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The carrying amounts of the
prepaid land lease are analyzed as:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2019</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><B>June
    30,<BR> 2018</B></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: justify">Current assets</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">109,680</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">109,680</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Non-current assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">4,827,160</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">4,909,420</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">4,936,840</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">5,019,000</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Prepaid land lease represents
the cost of the rights of the use of the land in respect of leasehold land in the People&rsquo;s Republic of China, on which the
Group&rsquo;s buildings are situated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The lease term is 70 years,
ending in 2082.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center">&nbsp;</P>


<!-- Field: Page; Sequence: 67; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->13<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">ORANCO, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
&ndash; CONTINUED (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(Chinese Renminbi)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">6.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">INVENTORIES</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Inventories consist of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2019</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><B>June&nbsp;30,<BR>
    2018</B></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left">Raw materials</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">3,702,029</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">4,451,541</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Finished goods</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3,785,667</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,622,873</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Packaging material</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">183,933</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">272,135</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">7,671,629</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">7,346,549</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">TRADE
RECEIVABLES</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2019</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><B>June&nbsp;30,<BR>
    2018</B></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Trade receivables</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">67,286,738</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">33,933,857</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">67,286,738</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">33,933,857</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">No allowance for doubtful debts
has been made for both years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Group normally allows credit
terms to well-established customers ranging from 30 to 150 days. The Group seeks to maintain strict control over its trade receivables.
Overdue trade receivables are reviewed regularly by the Board of Directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">DEPOSITS,
PREPAYMENTS AND OTHER RECEIVABLES</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2019</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><B>June
    30,<BR> 2018</B></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left">Prepaid expenses</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">20,706,252</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">23,571,363</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">Deposits</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">9,000,000</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Other receivables</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">597,810</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">678,227</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">21,304,062</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">33,249,590</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


<!-- Field: Page; Sequence: 68; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->14<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">ORANCO, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
&ndash; CONTINUED (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(Chinese Renminbi)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">9.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CASH
AND CASH EQUIVALENTS</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2019</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><B>June
    30,<BR> 2018</B></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left">Cash on hand</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">199,553</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">394,082</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Cash held in banks</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">57,194,467</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">26,110,880</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">57,394,020</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">26,504,962</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Cash held in banks earns interest
at floating rates based on daily bank deposit rates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">TRADE
PAYABLES</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2019</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><B>June
    30,<BR> 2018</B></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Trade payables</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">144,093</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">44,636</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">144,093</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">44,636</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">For the larger suppliers, the
Group makes payment in advance for the inventories. For the smaller suppliers, the Group obtains credit terms ranging from 30 to
90 days.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">A concentration analysis of
the suppliers based on the purchases made during the six-month periods is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(unaudited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Nine months ended</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2019</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(unaudited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Nine months ended</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2018</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left">Supplier A</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">56</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">40</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Supplier B</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">22</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">16</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Supplier C</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">10</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">10</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Supplier D</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">9</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Supplier E</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">9</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Supplier F</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">8</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Others</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">5</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">8</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">100</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">100</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


<!-- Field: Page; Sequence: 69; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->15<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">ORANCO, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
&ndash; CONTINUED (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(Chinese Renminbi)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">11.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">RECEIPTS
IN ADVANCE, ACCRUALS AND OTHER PAYABLES</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Receipts in advance, accruals
and other payables consist of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2019</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><B>June
    30,<BR> 2018</B></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left">Accrued payroll and bonus</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">2,064,024</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">2,560,883</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Other payables</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">887,706</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">734,122</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Other tax payables</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,174,043</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">623,868</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Receipt in advance</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">2,507,629</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,221,152</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">6,633,402</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">5,140,025</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">AMOUNT
DUE TO A DIRECTOR</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2019</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><B>June
    30,<BR> 2018</B></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Amount due to a director</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">96,676,656</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">96,231,368</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">96,676,656</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">96,231,368</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2019</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><B>June&nbsp;30,<BR>
    2018</B></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">Classified as:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left">Non-current liabilities</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">84,781,805</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Current liabilities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">11,894,851</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">96,231,368</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">96,676,656</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">96,231,368</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The amount due to a director
is interest-free, unsecured and not repayable on demand.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Renminbi 94,051,934 of the amount
due to a director relates to Reliant&rsquo;s acquisition of Sure Rich Investment (Group) Limited. The amount is due to the seller
of Sure Rich Investment (Group) Limited, who is also a director of Reliant and the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">13.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">BANK
BORROWINGS</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2019</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR> 2018</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Secured - at amortized cost</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Loans from bank &ndash; Note (i)</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">2,250,000</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2, 250,000</FONT></TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">Classified as:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Current liabilities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2, 250,000</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2, 250,000</FONT></TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">Note:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD>
    <TD STYLE="width: 94%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Loan from the bank is bearing a fixed interest rate ranging from 5.44% per annum.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


<!-- Field: Page; Sequence: 70; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->16<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">ORANCO, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
&ndash; CONTINUED (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(Chinese Renminbi)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">14.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SHARE
CAPITAL AND CAPITAL MANAGEMENT</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"><B>&nbsp;</B></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="10" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><B>Issued
    and fully paid</B></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="10" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><B>Shares
    to be issued</B></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid">Company</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Number of shares</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>value</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>US$</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>value</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Number of shares</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>value</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>US$</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>value</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RMB</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-indent: -8.25pt; padding-left: 8.25pt">At June 30, 2018</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">98,191,480</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">98,191</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">638,708</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">321,296,000</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">321,296</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">2,126,520</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -8.25pt; padding-left: 8.25pt">Common stock conversion</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -8.25pt; padding-left: 8.25pt">Conversion of amount due to a director</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -8.25pt; padding-left: 8.25pt">Shares issued for cash</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -8.25pt; padding-left: 8.25pt">Shares issued as consideration for business acquisition</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -8.25pt; padding-left: 8.25pt">Shares to be issued as consideration for business acquisition</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; text-indent: -8.25pt; padding-left: 8.25pt">Reverse merger</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-indent: -8.25pt; padding-left: 8.25pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-indent: -8.25pt; padding-left: 8.25pt">At March 31, 2019</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">98,191,480</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">98,191</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">638,708</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">321,296,000</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">321,296</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2,126,520</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Each share has a nominal value
of US$0.001 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The shares to be issued as consideration
for business acquisition are the 321,296,000 new shares at $0.001 per share as part of the consideration of the acquisition of
Reliant Galaxy International Limited. The aggregated nominal value of the shares is US$321,296.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>


<!-- Field: Page; Sequence: 71; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->17<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">ORANCO, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
&ndash; CONTINUED (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(Chinese Renminbi)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">15.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">INCOME
TAXES</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company is subject to taxes
in the USA. The Company has had no taxable income under Federal or State tax laws. The Company has loss carryforwards totaling
$359,065 that may be offset against future federal income taxes. If not used, the carryforwards will expire 20 years after they
are incurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company&rsquo;s subsidiary
in the BVI is not subject to taxation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company&rsquo;s Hong Kong
subsidiary is subject to taxes in Hong Kong. The Hong Kong subsidiary has had no taxable income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company&rsquo;s PRC subsidiaries
are subject to taxes in China. The applicable PRC statutory income tax rate is 25% according to the Enterprise Income Tax Law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">A reconciliation of the income
tax expenses in China is set out below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(unaudited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Nine months ended</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2019</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(unaudited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Nine months ended</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2018</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: bold 10pt Times New Roman, Times, Serif; text-align: left">Profit before income tax</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">62,512,210</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">51,594,082</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">Taxation at the applicable tax rate of 25%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">15,768,870</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">12,898,521</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Tax effect on non-taxable income</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(285,732</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">Tax effects of expense that are not deductible</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">540,874</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">15,469</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">(Over)/under-provision in respect of previous year</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(290,079</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 4pt">Income taxes</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">16,024,012</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">12,623,911</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">16.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONTRIBUTION
PLAN IN THE PRC</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">As stipulated by the PRC state
regulations, the subsidiaries in the PRC participate in the state-run defined contribution retirement scheme. All employees are
entitled to an annual pension payment equal to a fixed proportion of the average basic salary of the geographical area of their
last employment at their retirement date. The PRC subsidiaries are required to make contributions to the local social security
bureau at 29.4% to 37.4% of the previous year&rsquo;s average basic salary amount of the geographical area where the employees
are under employment with the PRC subsidiaries. The Group has no obligation for the payment of pension benefits beyond the annual
contributions as set out above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">According to the relevant rules
and regulations of the PRC, the PRC subsidiaries and their employees are each required to make contributions to an accommodation
fund at 9% of the salaries and wages of the employees which are administered by the Public Accumulation Funds Administration Centre.
There is no further obligation for the Group except for such contributions to the accommodation fund. The Group had no significant
obligation apart from the contributions as stated above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<!-- Field: Page; Sequence: 72; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->18<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">ORANCO, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
&ndash; CONTINUED (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(Chinese Renminbi)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">17.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">OPERATING
LEASE ARRANGEMENT</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Group has total future minimum
lease payments under non-cancellable operating lease payable as follows:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(unaudited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Nine months ended</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2019</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><B>June
    30,<BR> 2018</B></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: justify">Within 1 year</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">454,331</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">134,294</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">After 1 year but within 2 years</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">75,985</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">18,000</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">After 2 years but within 3 years</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">9,000</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">After 3 years</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">530,316</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">161,294</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Group is the lessee of a
few office premises and staff residence held under operating leases. The leases typically run for an initial period of one to five
years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">18.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">RELATED
PARTY BALANCES AND TRANSACTIONS</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Group made sales to Fuqing
Jing Hong Trading Co., Ltd, the director of which was a family member of the CEO Mr. Yang Peng. The family resigned from Fuqing
Jing Hong Trading Co., Ltd on June 28, 2018, hence Fuqing Jing Hong ceased to be a related party on June 28, 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(unaudited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Nine months ended</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2019</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(unaudited)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Nine months ended</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March&nbsp;31,</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2018</B></P></TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Revenue</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">14,394,218</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">14,394,218</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Management is of the opinion
that these related party transactions were conducted in the normal course of business of the Group with standard sales terms and
conditions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">19.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONTINGENT
LIABILITIES</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">At the end of each reporting
period, neither the Group nor the Company had any significant contingent liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


<!-- Field: Page; Sequence: 73; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->19<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">ORANCO, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
&ndash; CONTINUED (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(Chinese Renminbi)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">20.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">DETAILS
OF SUBSIDIARIES</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid"><B>Company name</B></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><B>Place and date
    of incorporation</B></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><B>Capital</B></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><B>Attributable
    Equity<BR> interest</B></TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><B>Principal activities</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 20%; font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Reliant Galaxy International Limited</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 19%; font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Established in British Virgin Islands on January 3, 2017</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 19%; font: 10pt Times New Roman, Times, Serif; text-align: left">Registered and<BR> paid-in capital of<BR> RMB 69,100</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 17%; font: 10pt Times New Roman, Times, Serif; text-align: right; vertical-align: top">100</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">%</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 19%; font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Investment holding</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Sure Rich Investment</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Established in</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">Share capital</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right; vertical-align: top">100</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Investment holding</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">(Group) Limited</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Hong Kong<BR> On February 1, 2007</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">RMB 1</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Fujian Jinou Trading Co., Ltd.</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Established in the PRC<BR> on July 5, 2004</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Registered and<BR> paid-in capital of US$<BR> 1,650,000</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right; vertical-align: top">100</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Investment holding and Trading of spirit</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Fenyang Huaxin Spirit Development Co., Ltd.</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Established in the PRC<BR> on November 7, 2013</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Registered and<BR> Paid-in capital of RMB<BR> 1,000,000<BR> Note (i)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right; vertical-align: top">100</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Trading of spirit</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Fenyang Jinqiang Spirit Co., Ltd.</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Established in the PRC<BR> on November 7, 2013</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Registered and<BR> Paid-in capital of RMB<BR> 5,000,000</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right; vertical-align: top">100</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Trading of spirit</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Beijing Huaxin Tianchuang Enterprise Management Consulting Co., Ltd.</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Established in the PRC<BR> on April 14, 2018</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Registered and<BR> issued capital of<BR> RMB1,000,000</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">51</FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Note</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top"><P STYLE="margin-top: 0; margin-bottom: 0">%</P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0">(i)</P></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">Dormant</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt -0.25in; text-align: justify; text-indent: 0.5in"><B>Notes:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
subsidiary was registered with payable share capital and the Company committed to pay up its share of the issued capital in the
amount of RMB 510,000 on March 31, 2038, which is 20 years from the date of incorporation permitted by the Regulation of the People&rsquo;s
Republic of China on Company Registration. The amount due to the subsidiary is interest-free and unsecured.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;&nbsp;&nbsp;</P>


<!-- Field: Page; Sequence: 74; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->20<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">ORANCO, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
&ndash; CONTINUED (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(Chinese Renminbi)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">21.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">DETAILS
OF AN ASSOCAITE</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt; background-color: white; text-align: left; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Company
    name</B></FONT></TD>
    <TD STYLE="text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Place
    and date of incorporation</B></FONT></TD>
    <TD STYLE="text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Capital</B></FONT></TD>
    <TD STYLE="text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Attributable
    Equity</B></FONT><B><BR>
    <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">interest &nbsp;</FONT></B></TD>
    <TD STYLE="text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Principal
    activities</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: white">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="width: 29%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Guangzhou Silicon Technology Co., Ltd</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 18%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Established in the PRC</FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">on September 8, 2015</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 18%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Registered and</FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">issued capital of</FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">RMB5,000,000</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 13%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp; 20 Note % (i)</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 18%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Development, sale and provision of software solutions</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt -0.25in; text-align: justify; text-indent: 0.5in"><B>Notes:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 1, 2018, Fenyang Huaxin Spirit Development Co., Ltd acquired shares of 20% of the associate Guangzhou Silicon Technology
Co., Ltd which then became an associate of the Company. The associate&rsquo;s results were not material to the Group in the period
to March 31, 2019.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 20pt">&nbsp;&nbsp;&nbsp;</P>

<!-- Field: Page; Sequence: 75; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->21<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>


<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">&nbsp;</P>

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONSOLIDATED
FINANCIAL STATEMENTS</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">YEAR
ENDED JUNE 30, 2018</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


<!-- Field: Page; Sequence: 76; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->22<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="f_001"></A><A NAME="Fin_001"></A>REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
the Board of Directors and Shareholders of Oranco, Inc.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Opinion
on the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have audited the accompanying consolidated balance sheets of Oranco, Inc. (the &ldquo;Company&rdquo;) as of June 30, 2018 and 2017,
and the related consolidated statements of operations, shareholders&rsquo; equity and cash flows for each of the two years in
the period ended June 30, 2018 and the related notes (collectively referred to as the &ldquo;consolidated financial statements&rdquo;).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the
Company as of June 30, 2018 and 2017, and the results of its operations and its cash flows for each of the two years in the periods
ended June 30, 2018, in conformity with accounting principles generally accepted in the United States of America.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Basis
for Opinion</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
consolidated financial statements are the responsibility of the Company&rsquo;s management. Our responsibility is to express an
opinion on the Company&rsquo;s consolidated financial statements based on our audits. We are a public accounting firm registered
with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to
the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but
not for the purpose of expressing an opinion on the effectiveness of the Company&rsquo;s internal control over financial reporting.
Accordingly, we express no such opinion.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements. We believe that our audits provide a reasonable basis for our opinion.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 60%"></TD><TD STYLE="text-align: justify; width: 40%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
                            PKF Littlejohn LLP</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have served as the Company&rsquo;s auditor since March 7, 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">PKF
Littlejohn LLP</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">London,
UK</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">September
28, 2018</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 77; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->23<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="f_002"></A><A NAME="Fin_002"></A>ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONSOLIDATED
BALANCE SHEETS&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi<FONT STYLE="text-transform: uppercase">)</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June 30,</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2018</B></FONT></P></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June 30,</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2017</B></FONT></P></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; padding-left: 10pt; text-indent: -10pt">ASSETS:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; padding-left: 10pt; text-indent: -10pt">Current assets</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left; padding-left: 10pt; text-indent: -10pt">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">26,504,962</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">6,607,407</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,346,549</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,597,710</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Trade receivables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,933,857</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">47,517,200</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Deposits, prepayments and other receivables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,249,590</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,590,026</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">Prepaid land lease</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">109,680</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">109,680</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">101,144,638</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">82,422,023</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 10pt; text-indent: -10pt">Non-current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Property, plant and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,296,146</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,120,166</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">Prepaid land lease</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,909,420</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,019,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">8,205,566</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">8,139,266</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">Total assets</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">109,350,204</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">90,561,289</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>LIABILITIES
AND SHAREHOLDERS&rsquo; EQUITY</B></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 10pt; text-indent: -10pt">Current liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Trade payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44,636</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">118,115</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Receipts in advance, accruals and other payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,140,025</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,098,669</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Amount due to Director</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">96,231,368</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,581,034</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Current tax liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,928,207</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,627,279</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">Bank borrowings</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">27,000,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">104,344,236</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">35,425,097</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 10pt; text-indent: -10pt">Shareholders&rsquo; equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">Number of authorized shares with par value US$0.001 </TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">100,000,000</FONT></P></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">100,000,000</FONT></P></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">Number of issued and outstanding shares</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">98,191,480</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4,269,950</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">Number of fully paid shares to be issued</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">321,296,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">Share capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">638,708</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27,775</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Fully paid shares to be issued</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,126,520</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(27,774</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">Retained earnings</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,240,740</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">52,253,435</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-left: 10pt; text-indent: -10pt">Equity attributable to equity holders of the Company</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">5,005,968</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">52,253,436</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">Non-controlling interest</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,882,756</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">Total shareholders&rsquo; equity</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">5,005,968</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">55,136,192</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">Total liabilities and shareholders&rsquo; equity</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">109,350,204</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">90,561,289</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying notes are an integral part of the consolidated financial statements.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


<!-- Field: Page; Sequence: 78; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->24<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="f_003"></A>ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify; margin-left: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONSOLIDATED
STATEMENTS OF OPERATIONS&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: justify; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi<FONT STYLE="text-transform: uppercase">)</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: justify; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Year ended<BR>
 June 30,</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2018</B></FONT></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Year ended<BR>
 June 30,</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2017</B></FONT></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; padding-bottom: 1.5pt">Revenue</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">101,759,660</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">91,144,666</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">101,759,660</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">91,144,666</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Cost of sales</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27,800,667</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,065,113</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Selling and distribution expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,477,457</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,521,950</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Administrative expenses</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,109,937</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,516,707</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">40,388,061</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">32,103,770</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Other income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">155,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">227,552</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Interest and other financial charges</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,759,325</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,420,272</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Income before income taxes</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">59,767,974</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">55,848,176</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Income taxes</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">15,095,681</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">14,121,343</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Net Income</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">44,672,293</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">41,726,833</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Attributable to:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Equity holders of the Company</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">43,313,447</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34,091,734</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Former non-controlling interests</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,358,846</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,635,099</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">44,672,293</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">41,726,833</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold">Earnings per share:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Basic and diluted earnings per share</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1.54</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7.98</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying notes are an integral part of the consolidated financial statements.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"></P>

<!-- Field: Page; Sequence: 79; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->25<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="f_004"></A><A NAME="Fin_003"></A>
ORANCO, INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONSOLIDATED
STATEMENTS OF SHAREHOLDERS&rsquo; EQUITY</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi<FONT STYLE="text-transform: uppercase">)</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -534.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Share capital</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Shares to be issued (Note a)</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Additional paid-in capital</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Retained Earnings/ (loss)</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Attributable to the Company</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Non-controlling interests</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total <BR>
shareholders&rsquo; Equity</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 30%; font-weight: bold; padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">Balance at June 30, 2016</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">27,775</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">(27,774</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left">)</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">6,009,858</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">6,009,859</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">9,449,500</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">15,459,359</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Total comprehensive income for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34,091,734</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34,091,734</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,635,099</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">41,726,833</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">Acquisition of additional interest in subsidiary</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">12,151,843</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">12,151,843</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(14,201,843</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(2,050,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 4pt; padding-left: 10pt; text-indent: -10pt">Balance at June 30, 2017</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">27,775</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(27,774</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">52,253,435</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">52,253,436</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">2,882,756</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">55,136,192</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Total comprehensive income for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">43,313,447</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">43,313,447</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,358,846</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44,672,293</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Acquisition of additional interest in subsidiary</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,841,602</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,841,602</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,241,602</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(400,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Conversion of loans to common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">246,671</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">246,671</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">246,671</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Conversion of amount due to director to common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">97,570</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">176,986</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">274,556</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">274,556</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Shares issued for cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">84,561</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">591,925</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">676,486</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">676,486</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Shares issued as consideration for business acquisition</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">182,131</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(182,131</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Fully paid shares to be issued as consideration for business acquisition</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,126,520</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,126,520</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">Reverse merger</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(741,137</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(94,859,093</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(95,600,230</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(95,600,230</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-bottom: 4pt; padding-left: 10pt; text-indent: -10pt">Balance at June 30, 2018</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">638,708</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">2,126,520</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">2,240,740</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">5,005,968</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">5,005,968</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
a: </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Under the Share Exchange Agreement
dated June 29, 2018, 321,296,000 shares of Oranco, Inc. shall be issued to the sellers of Reliant Galaxy International Limited
at the completion of the increase of the Company&rsquo;s authorized common stock. The increase of the Company&rsquo;s authorized
common stock to 500,000,000 is yet to be completed. More details are discussed in note 21.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying notes are an integral part of the consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -21.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


<!-- Field: Page; Sequence: 80; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->26<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="f_005"></A><A NAME="Fin_004"></A><A NAME="Fin_005"></A>ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONSOLIDATED
STATEMENTS OF CASH FLOWS</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi<FONT STYLE="text-transform: uppercase">)</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Year ended</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Year ended</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">June 30,</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">June 30,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">Operating activities</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Net income</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">44,672,293</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">41,726,833</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-style: italic; text-align: left">Adjustments to reconcile net income to cash generated from operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">335,005</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">342,042</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-style: italic; text-align: left">Changes in working capital:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt">Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,251,161</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,371,289</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Trade receivables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,583,343</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(26,672,612</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Deposits, prepayments and other receivables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,659,564</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,138,826</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Trade payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(73,479</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,185,541</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Receipts in advance, accruals and other payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">305,431</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,988,885</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Current tax liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,928</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,093,158</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt">Amount due to Director</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">577,029</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,828,077</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Cash generated from operating activities</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">47,292,147</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">18,910,609</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Acquisition of additional interest in subsidiary</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(400,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,050,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Cash acquired on merger</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">406,713</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Payments for acquisition of property, plant and equipment</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(401,305</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(30,893</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Cash used in investing activities</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">(394,592</TD><TD STYLE="font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">(2,080,893</TD><TD STYLE="font-weight: bold; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Repayment of bank borrowings</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(27,000,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(10,650,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Cash used in financing activities</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">(27,000,000</TD><TD STYLE="font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">(10,650,000</TD><TD STYLE="font-weight: bold; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Increase in cash and cash equivalents</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">19,897,555</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">6,179,716</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Cash and cash equivalents, beginning of the year</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">6,607,407</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">427,691</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Cash and cash equivalents, end of the year</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">26,504,962</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">6,607,407</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Supplemental disclosure of cash flows information</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Cash paid during the year for interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,759,325</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,420,272</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Cash paid during the year for income taxes</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(14,509,505</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(12,028,185</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
non-cash transactions have been disclosed in note 22.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying notes are an integral part of the consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 81; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->27<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="f_006"></A>ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi<FONT STYLE="text-transform: uppercase">)</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SUMMARY OF BUSINESS
    AND SIGNIFICANT ACCOUNTING POLICIES</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 48px; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Description of Business</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company was incorporated under the laws of the State of Nevada on June 16, 1977. The Company has been in the business of the development
of mineral deposits. During 1983 all activities were abandoned, and the Company had remained inactive until June 29, 2018 when
it acquired the business of Reliant Galaxy International Limited (&ldquo;Reliant&rdquo;). The Company and its subsidiaries (the
&ldquo;Group&rdquo;) are principally engaged in the trading of spirits in the People&rsquo;s Republic of China (the &ldquo;PRC&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Details
of the subsidiaries are set out in note 20 to the consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 48px; text-align: justify; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD>
    <TD STYLE="text-align: justify; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The basis of consolidation and presentation</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">The Consolidated Financial Statements
include the Financial Statements of Oranco, Inc. and the Financial Statements of its wholly-owned subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">Subsidiaries are all entities over
which the Group has control. The Group controls an entity when the Group is exposed to or has rights to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee. Subsidiaries are
fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control
ceases.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">The accompanying financial statements
have been prepared in accordance with the U.S. generally accepted accounting principles or GAAP. The Company operates in one reportable
segment and solely within the PRC. Accordingly, no segment or geographic information has been presented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0pt 0 0pt 1in; text-align: justify">Non-controlling interests are shown as a component of shareholders&rsquo; equity on the consolidated
balance sheet and the share of the net income attributable to non-controlling interests is shown as a component of net income
in the consolidated statements of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


<!-- Field: Page; Sequence: 82; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->28<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi<FONT STYLE="text-transform: uppercase">)</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SUMMARY
OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES &ndash; CONTINUED</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Basis
of consolidation and presentation &ndash; continued</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Business
Combinations</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">The acquisition of other subsidiaries
that meet the criteria for business combinations is accounted for using the acquisition method of accounting. The consideration
transferred for the acquisition is the fair values of the assets transferred, the liabilities incurred to the former owners of
the acquiree and the equity interests issued by the Group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">The consideration transferred includes
the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition
date. The Group recognizes any non-controlling interest in the acquiree at the non-controlling interest&rsquo;s proportionate share
of the recognized amounts of the acquiree&rsquo;s identifiable net assets. Acquisition-related costs are expensed as incurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">Any contingent consideration to
be transferred by the Group are recognized at fair value at the acquisition date. Subsequent changes to the fair value of the
contingent consideration that is deemed to be an asset or liability is recognized, either in the Statement of Operations or as
a change to other comprehensive income. Contingent consideration that is classified as equity is not remeasured, and its subsequent
settlement is accounted for within equity. Goodwill is initially measured as the excess of the aggregate of the consideration
transferred and the fair value of non-controlling interest over the identifiable net assets acquired and liabilities assumed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial instruments</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
instruments of the Group primarily consist of cash and cash equivalents, trade receivables, deposits, prepayments and other receivables,
prepaid land lease, trade payables, receipts in advance, accruals and other payables, and bank borrowings. The carrying values
of the Group&rsquo;s financial instruments approximate their fair values, principally because of the short-term maturity of these instruments
or their terms.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group has no derivative financial instruments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash and cash equivalents</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash
and cash equivalents consist of cash on hand and highly liquid investments which are unrestricted as to withdrawal or use, and
which have maturities of three months or less when purchased.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 83; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->29<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi<FONT STYLE="text-transform: uppercase">)</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; width: 0.5in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES &ndash; CONTINUED</FONT></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; width: 48px; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; width: 48px; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(e)</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue recognition</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group&rsquo;s revenues are derived from sales of products recorded net of value added tax (&ldquo;VAT&rdquo;). Revenue is recognized
when all of the following conditions are met: persuasive evidence of an arrangement exists, delivery of the products has occurred
or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. These criteria are
related to each of the following major revenue generating activities described below.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
<TD STYLE="width: 70.9pt; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"></TD><TD STYLE="width: 35.45pt; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD><TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
                                         from the sale of goods is recognized when the significant risks and rewards of ownership
                                         have been transferred to the buyer, provided that the Group maintains neither managerial
                                         involvement to the degree usually associated with ownership nor effective control over
                                         the goods sold. This is usually taken as the time when the goods are delivered and the
                                         customers have accepted the goods.</FONT></TD></TR>                                                                                            <TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0">&nbsp;</TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
<TD STYLE="width: 70.9pt; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"></TD><TD STYLE="width: 35.45pt; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii)</FONT></TD><TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Interest
                                         income is recognized on an accrual basis using the effective interest method.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(f)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Trade receivables
    and allowance for doubtful accounts</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">Trade receivables
are stated at the amount the Group expects to collect. The Group maintains allowances for doubtful accounts for estimated losses.
Management considers the following factors when determining the collectability of specific accounts: historical experience, creditworthiness
of the clients, aging of the receivables and other specific circumstances related to the accounts. Allowance for doubtful accounts
is made and recorded into general and administrative expenses based on the aging of trade receivables and on any specifically
identified receivables that may become uncollectible. Trade receivables which are deemed to be uncollectible are charged off against
the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company
takes a write off of the account balances when the Company can demonstrate all means of collection on the outstanding balances
have been exhausted. There is no allowance for doubtful accounts in these consolidated financial statements.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(g)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inventories</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inventories
are stated at the lower of cost or net realizable value. Cost is determined using the weighted average method. The components
of inventories include raw materials, processing cost of finished goods and purchase cost of products. The Group routinely evaluate
the net realizable value of the inventories in light of current market conditions and market trends and record a write-down against
the cost of inventories should the net realizable value falls below the cost.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 84; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->30<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SUMMARY OF BUSINESS
    AND SIGNIFICANT ACCOUNTING POLICIES &ndash; CONTINUED</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(h)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property, plant
    and equipment and depreciation</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property,
plant and equipment are carried at cost less accumulated depreciation and any recorded impairment. Depreciation is calculated
on a straight-line basis over the following estimated useful lives:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 1in; background-color: White">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: justify">Category</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 30%; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Estimated useful life</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 29%; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Estimated residual values</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>Building</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">20 years</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0-10%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Computer and office equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">3 years</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0-10%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">Repairs and maintenance
are expensed as incurred and asset improvements are capitalized. Consideration is given at each balance sheet date to determine
whether there is any indication of impairment of the carrying amounts of the property, plant and equipment. The indication could
be an unfavorable development of a business or severe economic slowdown as well as reorganization of the operation. In assessing
value in use, the estimated future cash flows are discounted to their present value, based on the time value of money and the
risks specific to the country where the assets are located.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">VAT and VAT refund</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">VAT
on sales is charged at 17% on revenue from product sales and is subsequently paid to the PRC tax authorities after netting input
VAT on purchases. The excess of output VAT over input VAT is recognized in other payables, and the excess of input VAT over output
VAT is recognized in other receivables in the consolidated balance sheets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(j)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operating leases</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Leases
where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases.
Payments made under operating leases are charged to the consolidated statements of operations on a straight-line basis over the
lease periods.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(k)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign currency
    translation</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Substantially
all of the Group&rsquo;s operations are conducted in China and as a result, the functional and reporting currency of the Group
is the Chinese Renminbi.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Monetary
assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional
currencies at the prevailing rates of exchange at the balance sheet date. Transactions in currencies other than the functional
currency are converted into the functional currency at the applicable rates of exchange prevailing at the transaction dates. Transaction
gains and losses are recognized in the consolidated statements of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 85; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->31<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SUMMARY OF BUSINESS
    AND SIGNIFICANT ACCOUNTING POLICIES &ndash; CONTINUED</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(k)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign currency
    translation - continued</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">In translating the
financial statements of the Company&rsquo;s subsidiaries outside the PRC into the reporting currency, assets and liabilities are
translated from the subsidiaries&rsquo; functional currencies to the reporting currency at the exchange rate at the balance sheet
date. Equity amounts are translated at historical exchange rates; revenues, expenses, and other gains and losses are translated
using the average rate for the period. Translation adjustments are reported as cumulative translation adjustments and are shown
as a separate component of other comprehensive income/(loss) in the consolidated statements of operations. During 2018 and 2017,
such translation adjustments were not material.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(l)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Income taxes</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">Income taxes are provided
for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities. The impact
of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not
to be sustained upon audit of the related tax authority. An uncertain income tax position will not be recognized if it has less
than a 50% likelihood of being sustained. Changes in recognition or measurement are reflected in the period in which the change
in judgment occurs. The Group records interest and penalties related to unrecognized tax benefits (if any) in interest expenses
and general and administrative expenses, respectively.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 22, 2017, the United States enacted TCJA which instituted fundamental changes to the taxation of multinational corporations,
including a reduction the U.S. corporate income tax rate to 21% beginning in 2018. The TCJA also requires a one-time transition
tax on the mandatory deemed repatriation of the cumulative earnings of the Company&rsquo;s foreign subsidiary as of December 31,
2017. To determine the amount of this transition tax, the Company must determine the amount of earnings generated since inception
by the relevant foreign subsidiary, as well as the amount of non-U.S. income taxes paid on such earnings, in addition to potentially
other factors. The Company acquired the foreign operations on 29 June 2018, hence the Company does not have any qualifying earnings
or profits from its foreign subsidiary under the transition tax calculation thus no transition tax is payable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(m)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair value measurement</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group
considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants
would use when pricing the asset or liability.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


<!-- Field: Page; Sequence: 86; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->32<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SUMMARY OF BUSINESS
    AND SIGNIFICANT ACCOUNTING POLICIES &ndash; CONTINUED</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(m)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair value measurement-continued</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">The Group&rsquo;s
financial instruments include cash and cash equivalents, term deposits, trade and other receivables, and trade and other payables.
The Group considers the carrying amounts approximate fair value because of the short maturity of these financial instruments.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(n)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Business combinations</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
a business combination achieved in stages, the Group remeasures its previously held equity interest in the acquire immediately
before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in earnings.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(o)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Transactions between
    entities under common control</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
accounting for a transfer of assets or exchange of shares between entities under common control of the Group, the carrying amounts
of the assets and liabilities transferred shall remain unchanged subsequent to the transaction, and no gain or loss shall be recorded
in the Group&rsquo;s consolidated statements of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(p)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Commitments and
    contingencies</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the normal course of business, the Group is subject to loss contingencies, such as legal proceedings and claims arising out of
its business, that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, and
non-income tax matters. An accrual for a loss contingency is recognized when it is probable that a liability has been incurred
and the amount of loss can be reasonably estimated. If a potential material loss contingency is not probable but is reasonably
possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the
range of possible loss if determinable and material, is disclosed.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 87; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->33<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SUMMARY OF BUSINESS
    AND SIGNIFICANT ACCOUNTING POLICIES &ndash; CONTINUED</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(q)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recently issued
    accounting pronouncements not yet adopted</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
January 2017, the FASB issued ASU No. 2017-01, &ldquo;Business Combinations: Clarifying the Definition of a Business&rdquo; (&ldquo;ASU
2017-01&rdquo;). ASU 2017-01 clarifies the definition of a business for determining whether transactions should be accounted for
as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for annual periods and interim periods within
those annual periods beginning after December 15, 2017, and early adoption is permitted. The Company will adopt this standard
on July 1, 2018 and will apply the standard to any future business combinations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">In August 2016, FASB issued ASU
No. 2016-15, Classification of Certain Cash Receipts and Cash Payments. The standard provides new authoritative guidance addressing
eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain transactions are
presented and classified in the statement of cash flows. The standard is effective for the Group in the first quarter of the fiscal
year 2019. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial
statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">In February 2016, FASB issued
ASU No. 2016-02, Leases. The standard increases transparency and comparability among organizations by requiring companies to recognize
leased assets and related liabilities on the balance sheet and disclose key information about leasing arrangements. This standard
is effective for the Group in the first quarter of the fiscal year 2020. The Group is evaluating the impact the adoption of this
standard will have on its consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
May 2014, FASB issued ASU, 2014-09, Revenue from Contracts with Customers. The standard is a comprehensive new revenue recognition
model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount
that reflects the consideration expected to be received in exchange for those goods or services. In August 2015, FASB issued ASU
2015-14, Revenue from Contracts with Customers, to defer the effective date of ASU 2014-09 by one year to annual reporting periods
beginning after December 15, 2017, but permits entities to adopt the original effective date if they choose. Based on the Group&rsquo;s
preliminary assessment, it does not expect the adoption of the standard to result in material changes in revenue. Further, deferred
costs to obtain contracts, which will be recognized in sales and marketing expense in future periods, are not expected to be material.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
adoption of the standard in the consolidated financial statements for the financial year ended June 30, 2019 will have no significant
impact to the provision for income taxes and will have no impact to the net cash used in, or generated by, operating, investing,
or financing activities in the Group&rsquo;s consolidated statements of cash flows.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group is finalizing the impact of the standard on its consolidated financial statements and disclosures, as well as changes to
its systems, processes, and internal controls. The Company&rsquo;s preliminary assessments are subject to change.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 88; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->34<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">REVENUE AND OTHER
    INCOME</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
represents the invoiced spirits products sold to the external customers less discounts, returns, and surcharges.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June 30, </B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2018 </B></FONT></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR>
 2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD>Revenue</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">101,759,660</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">91,144,666</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Other income</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">155,700</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">227,552</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">101,915,360</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">91,372,218</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
revenue is derived in China.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
concentration analysis of the revenue is as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June 30, </B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2018 </B></FONT></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR>
 2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Customer A</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">16</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">30</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Customer B</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Customer C</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Customer D</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Customer E</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Customer F</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">Others</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">25</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">9</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">100</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">%</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">100</TD><TD STYLE="padding-bottom: 4pt; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
analysis of other income is as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June
30,</B></FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2018 </B></FONT></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR>
 2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Sundry income</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">25</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Bank interest income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">78,200</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,481</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Interest from a director</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">214,046</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Written back of other payables</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">77,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">155,700</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">227,552</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 89; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->35<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SELLING AND DISTRIBUTION
    EXPENSES</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following expenses are included in the selling and distribution expenses:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June 30, </B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2018 </B></FONT></P></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR>
 2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD>Freight</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">40,623</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">114,539</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Packaging cost</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,090,553</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">846,298</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">1,131,176</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">960,837</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">PROPERTY, PLANT
    AND EQUIPMENT, NET</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property,
plant and equipment, net, consist of the following:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30, 2018</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR>
 2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Computer and office equipment</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">268,550</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">221,868</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">Building</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,754,625</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,400,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">4,023,175</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">3,621,868</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Less: accumulated depreciation</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(727,029</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(501,702</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 4pt">Property, plant and equipment, net,</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">3,296,146</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">3,120,166</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">PREPAID LAND LEASE,
    NET</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prepaid
land lease, net, consists of the following:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30, 2018</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR>
 2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Prepaid land lease</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">5,412,120</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">5,412,120</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Less: accumulated amortization</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(393,020</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(283,340</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 4pt">Prepaid land lease, net</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">5,019,000</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">5,128,780</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
carrying amounts of the prepaid land lease are analyzed as:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30, 2018</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR>
 2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: justify">Current assets</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">109,680</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">109,680</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Non-current assets</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,909,420</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,019,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">5,019,000</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">5,128,780</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 3in">&nbsp;</P>


<!-- Field: Page; Sequence: 90; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->36<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">PREPAID LAND LEASE,
    NET - CONTINUED</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Prepaid land lease represents
the cost of the rights of the use of the land in respect of leasehold land in the People&rsquo;s Republic of China, on which the
Group&rsquo;s buildings are situated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The lease term is 70 years,
ending in 2082.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">6.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">INVENTORIES</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inventories
consist of the following:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR>
 2018</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June&nbsp;30,<BR>
 2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Raw materials</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">4,451,541</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">5,924,514</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Finished goods</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,622,873</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,203,370</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Packaging material</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">272,135</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">469,826</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">7,346,549</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">8,597,710</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">TRADE RECEIVABLES</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June&nbsp;30,<BR>
 2018</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June&nbsp;30,<BR>
 2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Trade receivables</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; border-bottom: Black 1.5pt solid; text-align: right">33,933,857</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; border-bottom: Black 1.5pt solid; text-align: right">47,517,200</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">33,933,857</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">47,517,200</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group normally allows credit terms to well-established customers ranging from 30 to 150 days. The Group seeks to maintain strict
control over its trade receivables. Overdue trade receivables are reviewed regularly by the Board of Directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">DEPOSITS, PREPAYMENTS
    AND OTHER RECEIVABLES</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR>
 2018</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR>
 2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Prepaid expenses</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">23,571,363</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">17,808,559</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>Deposits</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">330,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Other receivables</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">678,227</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,451,467</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">33,249,590</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">19,590,026</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<!-- Field: Page; Sequence: 91; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->37<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">9.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CASH AND CASH EQUIVALENTS</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR>
 2018</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR>
 2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Cash on hand</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">394,082</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">183,119</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Cash held in banks</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">26,110,880</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,424,288</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">26,504,962</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">6,607,407</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash
held in banks earns interest at floating rates based on daily bank deposit rates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">TRADE PAYABLES</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR>
 2018</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR>
 2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Trade payables</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; border-bottom: Black 1.5pt solid; text-align: right">44,636</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; border-bottom: Black 1.5pt solid; text-align: right">118,115</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">44,636</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">118,115</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the larger suppliers, the Group makes payment in advance for the inventories. For the smaller suppliers, the Group obtains credit
terms ranging from 30 to 90 days.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
concentration analysis of the suppliers based on the purchases made during the year is as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June
30,<BR>
2018 </B></FONT></P></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR>
 2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Supplier A</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">41</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Supplier B</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Supplier C</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Supplier D</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Supplier E</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Supplier F</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">Others</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">11</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">100</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">%</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">100</TD><TD STYLE="padding-bottom: 4pt; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 92; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->38<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 0px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></TD>
    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">11.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">RECEIPTS IN ADVANCE,
    ACCRUALS AND OTHER PAYABLES</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Receipts
in advance, accruals and other payables consist of the following:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="font-weight: bold; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">June 30,<BR>
 2018</TD><TD STYLE="font-weight: bold; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">June 30,<BR>
 2017</TD><TD STYLE="font-weight: bold; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0">Accrued expenses</TD><TD STYLE="width: 1%; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="width: 8%; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">2,288,475</TD><TD STYLE="width: 1%; text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="width: 1%; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="width: 8%; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">1,853,366</TD><TD STYLE="width: 1%; text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0">Accrued payroll and bonus</TD><TD STYLE="font-weight: bold; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">272,408</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">181,334</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0">Other payables</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">734,122</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">626,167</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0">Other tax payables</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">623,868</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">377,257</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">Receipt in advance</TD><TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; border-bottom: Black 1.5pt solid; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">1,221,152</TD><TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; border-bottom: Black 1.5pt solid; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">1,060,545</TD><TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-top: 0; padding-right: 0; border-bottom: Black 4pt double; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 4pt double">5,140,025</TD><TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-top: 0; padding-right: 0; border-bottom: Black 4pt double; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 4pt double">4,098,669</TD><TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">AMOUNT
DUE TO A DIRECTOR</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR>
 2018</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR>
 2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Amount due to a director</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; border-bottom: Black 1.5pt solid; text-align: right">96,231,368</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; border-bottom: Black 1.5pt solid; text-align: right">1,581,034</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">96,231,368</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">1,581,034</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
amount due to a director is interest-free, unsecured and repayable on demand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">Renminbi 94,051,934
of the amount due to a director relates to Reliant&rsquo;s acquisition of Sure Rich Investment (Group) Limited. The amount is
due to the seller of Sure Rich Investment (Group) Limited, who is also a director of Reliant and the Company.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; font-size: 10pt; width: 0.5in; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">13.</FONT></TD>
    <TD STYLE="text-align: justify; font-size: 10pt; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">BANK BORROWINGS</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">June 30,<BR>
 2018</TD><TD STYLE="font-weight: bold; text-align: center; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">June 30,<BR>
 2017</TD><TD STYLE="font-weight: bold; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">Secured - at amortized cost</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">Loans from financial institution &ndash; Note (i)</TD><TD STYLE="width: 1%; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; padding-top: 0; padding-right: 0; border-bottom: Black 1.5pt solid; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="width: 8%; text-align: right; padding-top: 0; padding-right: 0; border-bottom: Black 1.5pt solid; padding-left: 0; text-indent: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD><TD STYLE="width: 1%; text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="width: 1%; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; padding-top: 0; padding-right: 0; border-bottom: Black 1.5pt solid; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="width: 8%; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">27,000,000</TD><TD STYLE="width: 1%; text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; border-bottom: Black 4pt double; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; border-bottom: Black 4pt double; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; border-bottom: Black 4pt double; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 4pt double">27,000,000</TD><TD STYLE="text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0">Classified as:</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">Current liabilities</TD><TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; border-bottom: Black 1.5pt solid; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; border-bottom: Black 1.5pt solid; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; border-bottom: Black 1.5pt solid; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">27,000,000</TD><TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; border-bottom: Black 4pt double; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; border-bottom: Black 4pt double; padding-left: 0; text-indent: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD><TD STYLE="text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; border-bottom: Black 4pt double; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 4pt double">27,000,000</TD><TD STYLE="text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Note:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
<TD STYLE="width: 0.5in; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"></TD><TD STYLE="width: 0.5in; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD><TD STYLE="text-align: justify; padding: 0; font: 10pt Times New Roman, Times, Serif; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Loans
                                         from the financial institution are bearing a fixed interest rate ranging from 10% to 10.5%
                                         per annum.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 93; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->39<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; font-size: 10pt; width: 0.5in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">14.</FONT></TD>
    <TD STYLE="padding: 0; font-size: 10pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SHARE CAPITAL AND CAPITAL MANAGEMENT</FONT></TD>
    </TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 0 0 1.5pt 10pt; text-align: center; text-indent: -10pt"><B>&nbsp;</B></TD><TD STYLE="padding: 0 0 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD COLSPAN="10" STYLE="padding-top: 0; padding-right: 0; border-bottom: Black 1.5pt solid; padding-left: 0; text-align: center"><B>Issued and fully paid</B></TD><TD STYLE="padding: 0 0 1.5pt; text-align: center"><B>&nbsp;</B></TD><TD STYLE="padding: 0 0 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD COLSPAN="10" STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-align: center; border-bottom: Black 1.5pt solid"><B>Shares to be issued</B></TD><TD STYLE="padding: 0 0 1.5pt; text-align: center"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; padding: 0 0 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; padding-top: 0; padding-right: 0; padding-left: 0; text-align: center; border-bottom: Black 1.5pt solid"><B>Additional
    paid in capital</B></TD><TD STYLE="padding: 0 0 1.5pt; text-align: center"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="font-weight: bold; padding-left: 10pt; padding-top: 0; padding-right: 0; text-align: left; text-indent: -10pt; border-bottom: Black 1.5pt solid"><B>Company</B></TD><TD STYLE="font-weight: bold; padding: 0 0 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: center; padding: 0 0 1.5pt"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: center; padding-top: 0; padding-right: 0; padding-left: 0; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;Number
                                         of shares </B></FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding: 0 0 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding: 0 0 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding: 0 0 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; padding-top: 0; padding-right: 0; padding-left: 0; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>value</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>US$</B></P></TD><TD STYLE="text-align: center; padding: 0 0 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding: 0 0 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding: 0 0 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; padding-top: 0; padding-right: 0; padding-left: 0; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>value</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>RMB</B></P></TD><TD STYLE="text-align: center; padding: 0 0 1.5pt"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; padding: 0 0 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="font-weight: bold; text-align: center; padding: 0 0 1.5pt"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; text-align: center; padding-top: 0; padding-right: 0; padding-left: 0; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Number
                                         of shares</B></FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding: 0 0 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding: 0 0 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding: 0 0 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; padding-top: 0; padding-right: 0; padding-left: 0; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>value</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>US$</B></P></TD><TD STYLE="text-align: center; padding: 0 0 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding: 0 0 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding: 0 0 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; padding-top: 0; padding-right: 0; padding-left: 0; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>value</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>RMB</B></P></TD><TD STYLE="text-align: center; padding: 0 0 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding: 0 0 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding: 0 0 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; padding-top: 0; padding-right: 0; padding-left: 0; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>value</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>US$</B></P></TD><TD STYLE="text-align: center; padding: 0 0 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding: 0 0 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding: 0 0 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; padding-top: 0; padding-right: 0; padding-left: 0; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>value</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>RMB</B></P></TD><TD STYLE="text-align: center; padding: 0 0 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding: 0 0 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding: 0 0 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; padding-top: 0; padding-right: 0; padding-left: 0; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>Total</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>RMB</B></P></TD><TD STYLE="text-align: center; padding: 0 0 1.5pt"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="padding: 0 0 1.5pt 10pt; text-indent: -10pt"><B>At
June 30, 2017 and June 30, 2016</B></TD><TD STYLE="width: 1%; font-weight: bold; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="width: 8%; font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">4,269,950</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="width: 8%; font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">4,270</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="width: 8%; font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">27,775</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="width: 8%; font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">-</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="width: 8%; font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">-</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="width: 8%; font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">-</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="width: 8%; font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">(4,269</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left; padding: 0 0 1.5pt; text-indent: 0">)</TD><TD STYLE="width: 1%; font-weight: bold; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="width: 8%; font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">(27,774</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left; padding: 0 0 1.5pt; text-indent: 0">)</TD><TD STYLE="width: 1%; font-weight: bold; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="width: 8%; font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">1</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 10pt; padding-top: 0; padding-right: 0; text-indent: -10pt">Common stock conversion</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">37,921,530</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">37,922</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">246,671</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">246,671</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 10pt; padding-top: 0; padding-right: 0; text-indent: -10pt">Conversion of amount
    due to a director</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">15,000,000</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">15,000</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">97,570</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">27,209</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">176,986</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">274,556</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 10pt; padding-top: 0; padding-right: 0; text-indent: -10pt">Shares issued for cash</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">13,000,000</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">13,000</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">84,561</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">91,000</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">591,925</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">676,486</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 10pt; padding-top: 0; padding-right: 0; text-indent: -10pt">Shares issued as consideration for business acquisition</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">28,000,000</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">28,000</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">182,131</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">182,131</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 10pt; padding-top: 0; padding-right: 0; text-indent: -10pt">Shares to be issued as consideration for business acquisition</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">321,296,000</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">321,296</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">2,126,520</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">-</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">2,126,520</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding: 0 0 1.5pt 10pt; text-indent: -10pt">Reverse merger</TD><TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">-</TD><TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">-</TD><TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">-</TD><TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">-</TD><TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">-</TD><TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">-</TD><TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">(113,940</TD><TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">)</TD><TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">(741,137</TD><TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">)</TD><TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid">(741,137</TD><TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-left: 10pt; padding-top: 0; padding-right: 0; text-indent: -10pt">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="font-weight: bold; padding: 0 0 4pt 10pt; text-indent: -10pt">At June 30, 2018</TD><TD STYLE="font-weight: bold; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 4pt double">98,191,480</TD><TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 4pt double">98,191</TD><TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 4pt double">638,708</TD><TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 4pt double">321,296,000</TD><TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 4pt double">321,296</TD><TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 4pt double">2,126,520</TD><TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 4pt double">-</TD><TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 4pt double">-</TD><TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 4pt double">2,765,228</TD><TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
share has a nominal value of US$0.001 per share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT>The shares to be issued as consideration for business acquisition are the
321,296,000 new shares at $0.001 per share as part of the consideration of the acquisition of Reliant Galaxy International Limited.
The aggregated nominal value of the shares is US$321,296.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 94; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->40<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">15.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">INCOME TAXES</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company is subject to taxes
in the USA. The Company has had no taxable income under Federal or State tax laws. The Company has loss carryforwards totaling
$359,065 that may be offset against future federal income taxes. If not used, the carryforwards will expire 20 years after they
are incurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company&rsquo;s subsidiary
in the BVI is not subject to taxation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s Hong Kong subsidiary is subject to taxes in Hong Kong. The Hong Kong subsidiary has had no taxable income.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">The Company&rsquo;s PRC subsidiaries
are subject to taxes in China. The applicable PRC statutory income tax rate is 25% according to the Enterprise Income Tax Law.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">A reconciliation of the income
tax expenses in China is set out below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; border-bottom: Black 1.5pt solid; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>June
30,<BR>
2018 </B></P></TD><TD STYLE="text-align: center; padding: 0 0 1.5pt">&nbsp;</TD><TD STYLE="text-align: center; padding: 0 0 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid; padding-top: 0; padding-right: 0; padding-left: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>June
30,<BR>
 2017 </B></P></TD><TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0">Profit before income tax</TD><TD STYLE="width: 1%; font-weight: bold; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="width: 8%; font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">59,767,974</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="width: 8%; font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">55,848,176</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: justify; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0">Taxation at the applicable
    tax rate of 25%</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">14,941,994</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">13,962,044</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0">Tax effect on non-taxable income</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">(42,182</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">)</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">(53,512</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0; padding-left: 0; padding-top: 0; padding-right: 0">Tax effects of expense
    that are not deductible</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">808,014</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">190,229</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding: 0 0 1.5pt; text-indent: 0">(Over)/under-provision in respect of previous year</TD><TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">(612,145</TD><TD STYLE="padding: 0 0 1.5pt; text-align: left; text-indent: 0">)</TD><TD STYLE="padding: 0 0 1.5pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">22,582</TD><TD STYLE="padding: 0 0 1.5pt; text-align: left; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; padding: 0 0 4pt; text-indent: 0">Income taxes</TD><TD STYLE="font-weight: bold; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">15,095,681</TD><TD STYLE="padding: 0 0 4pt; font-weight: bold; text-align: left; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">14,121,343</TD><TD STYLE="padding: 0 0 4pt; font-weight: bold; text-align: left; text-indent: 0">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">16.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONTRIBUTION PLAN IN THE PRC</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">As stipulated by the PRC state
regulations, the subsidiaries in the PRC participate in the state-run defined contribution retirement scheme. All employees are
entitled to an annual pension payment equal to a fixed proportion of the average basic salary of the geographical area of their
last employment at their retirement date. The PRC subsidiaries are required to make contributions to the local social security
bureau at 29.4% to 37.4% of the previous year&rsquo;s average basic salary amount of the geographical area where the employees
are under employment with the PRC subsidiaries. The Group has no obligation for the payment of pension benefits beyond the annual
contributions as set out above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">According to the relevant rules
and regulations of the PRC, the PRC subsidiaries and their employees are each required to make contributions to an accommodation
fund at 9% of the salaries and wages of the employees which are administered by the Public Accumulation Funds Administration Centre.
There is no further obligation for the Group except for such contributions to the accommodation fund. The Group had no significant
obligation apart from the contributions as stated above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"></P>

<!-- Field: Page; Sequence: 95; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->41<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">&nbsp;&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">17.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">OPERATING LEASE
    ARRANGEMENT</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group has total future minimum lease payments under non-cancellable operating lease payable as follows:&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June
30,<BR>
2018 </B></FONT></P></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June
30,<BR>
2017 </B></FONT></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: justify">Within 1 year</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">134,294</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">115,211</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">After 1 year but within 2 years</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">After 2 years but within 3 years</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">After 3 years</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">161,294</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">115,211</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group is the lessee of a few office premises and staff residence held under operating leases. The leases typically run for an
initial period of one to five years.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">18.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">RELATED PARTY BALANCES
    AND TRANSACTIONS</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group had the following transactions with related parties during the financial periods:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June
30,<BR>
2018 </B></FONT></P></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June
30,<BR>
2017 </B></FONT></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Revenue generated from related party</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">14,359,832</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">25,110,022</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Interest income from director</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">214,046</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 4pt">Trade receivables from related party</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">15,000,875</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>July 1,</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2016</B></FONT></P></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Settlement</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Repayment</B></FONT></P></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">New Loans</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR>
 2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Amount due to director</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">(13,395,233</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">(13,395,233</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Amount due from director</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">16,642,476</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(178,277</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(4,650,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">11,814,199</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Net amount due from/(to) director</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">3,247,243</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(178,277</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(4,650,000</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(1,581,034</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>July 1,</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2017</B></FONT></P></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Settlement</B></FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Repayment</B></FONT></P></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>New Loans</B></FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June 30,<BR>
 2018</B></FONT></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left">Amount due to director</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,395,233</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(95,976,484</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(109,371,717</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Amount due from director</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">11,814,199</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,326,150</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">13,140,349</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Net amount due to director</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(1,581,034</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(94,650,334</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">96,231,368</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>

<!-- Field: Page; Sequence: 96; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->42<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">18.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">RELATED PARTY BALANCES
    AND TRANSACTIONS - CONTINUED</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group made sales to Fuqing Jing Hong Trading Co., Ltd, the director of which was a family member of the CEO Mr. Yang Peng. The
family resigned from Fuqing Jing Hong Trading Co., Ltd on June 28, 2018, hence Fuqing Jing Hong ceased to be a related party on
June 28, 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June
30,<BR>
2018 </B></FONT></P></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June
30,<BR>
2017 </B></FONT></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD>&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">Revenue</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">14,359,832</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">25,110,022</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">14,359,832</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">25,110,022</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management
is of the opinion that these related party transactions were conducted in the normal course of business of the Group with standard
sales terms and conditions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">19.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONTINGENT LIABILITIES</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
the end of each reporting period, neither the Group nor the Company had any significant contingent liabilities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"></P>

<!-- Field: Page; Sequence: 97; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->43<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; font-size: 10pt; width: 0.5in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">20.</FONT></TD>
    <TD STYLE="padding: 0; font-size: 10pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">DETAILS OF SUBSIDIARIES</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid; vertical-align: bottom">Company name</TD><TD STYLE="font-weight: bold; text-align: center; padding: 0 0 1.5pt; text-indent: 0; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid; vertical-align: bottom">Place and date of incorporation</TD><TD STYLE="font-weight: bold; text-align: center; padding: 0 0 1.5pt; text-indent: 0; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid; vertical-align: bottom">Capital</TD><TD STYLE="text-align: center; padding: 0 0 1.5pt; text-indent: 0; vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid; vertical-align: bottom"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>Attributable</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>Equity interest</B></P></TD><TD STYLE="text-align: center; padding: 0 0 1.5pt; text-indent: 0; vertical-align: bottom">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding: 0 0 1.5pt; text-indent: 0; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; border-bottom: Black 1.5pt solid; vertical-align: bottom">Principal activities</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.5in; background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; vertical-align: top">Reliant Galaxy International<BR>
Limited</TD><TD STYLE="width: 1%; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 17%; text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; vertical-align: top">Established in<BR>
British Virgin Islands<BR>
on January 3, 2017</TD><TD STYLE="width: 1%; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 17%; text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; vertical-align: top">Registered and<BR>
paid-in capital of<BR>
RMB 69,100</TD><TD STYLE="width: 1%; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="width: 15%; text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; vertical-align: top">100</TD><TD STYLE="width: 1%; text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; vertical-align: top">%</TD><TD STYLE="width: 1%; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 17%; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">Investment<BR>
holding</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; vertical-align: top">Sure Rich Investment</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; vertical-align: top">Established in</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">Share capital</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">100</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">%</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">Investment</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; vertical-align: top">(Group) Limited</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">Hong Kong <BR>
On February 1, 2007</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">RMB 1</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">holding</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; vertical-align: top">Fujian Jinou Trading Co., Ltd.</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; vertical-align: top">Established in the PRC<BR>
on July 5, 2004</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; vertical-align: top">Registered and<BR>
paid-in capital of US$<BR>
1,650,000</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; vertical-align: top">100</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; vertical-align: top">%</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">Investment<BR>
holding</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; vertical-align: top">Fenyang Huaxin Spirit Development Co., Ltd.</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; vertical-align: top">Established in the PRC <BR>on November 7, 2013 <BR>&nbsp; <BR></TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; vertical-align: top">Registered and <BR>Paid-in capital of RMB <BR>1,000,000 <BR>Note (i)</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; vertical-align: top">100</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; vertical-align: top">%</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">Trading of spirit</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; vertical-align: top">Fenyang Jinqiang Spirit Co., Ltd.</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; vertical-align: top">Established in the <BR>PRC <BR>on November 7, 2013</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; vertical-align: top">Registered and <BR>Paid-in capital of RMB <BR>5,000,000</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">100&nbsp;</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Note</P></TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; vertical-align: top">%<BR>
(i)</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">Trading of spirit</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; vertical-align: top">Beijing Huaxin Tianchuang Enterprise Management Consulting Co., Ltd.</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; vertical-align: top">Established in the <BR>PRC <BR>on April 14, 2018</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; vertical-align: top">Registered and <BR>issued capital of <BR>RMB1,000,000</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD><TD STYLE="text-align: right; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">51</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Note</P></TD><TD STYLE="text-align: left; padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0; vertical-align: top">%<BR>
(ii)</TD><TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-left: 0; padding-top: 0; padding-right: 0; text-indent: 0; text-align: left; vertical-align: top">Dormant</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Notes:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD>
    <TD STYLE="text-align: justify; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On May 7, 2018, Sure Rich Investment (Group) Limited acquired the remaining 8% of the 92% owned subsidiary Fenyang Jinqiang Spirit Co., Ltd, which then became a direct wholly-owned subsidiary of the Company.</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii)</FONT></TD>
    <TD STYLE="text-align: justify; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
subsidiary was registered with payable share capital and the Company committed to pay up its share of the issued capital in the
amount of RMB 510,000 on March 31, 2038, which is 20 years from the date of incorporation permitted by the Regulation of the People&rsquo;s
Republic of China on Company Registration. The amount due to the subsidiary is interest-free and unsecured.</FONT></TD></TR>
</TABLE>





<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT>&nbsp;</P>

<!-- Field: Page; Sequence: 98; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->44<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ORANCO,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">(</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
Renminbi)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">21.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">REVERSE MERGER</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 29, 2018, Oranco, Inc. acquired 100% of the issued capital of Reliant in a share for share exchange with the shareholders
of Reliant at that time. Due to the relative size of the companies, the shareholders of Reliant became the majority shareholders
in the consolidated group.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the share for share exchange, Oranco shall issue an aggregated 349,296,000 new shares of common stock, with par value of $0.001
per share, of which 28,000,000 were issued at the closing date of June 29, 2018, and the remaining 321,296,000 shares shall be
issued at the completion of the increase of the Company&rsquo;s authorized shares. The 321,296,000 shares are classified as fully
paid-up shares to be issued as of June 30, 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
the date of acquisition, Oranco, Inc. was a shell company with minimal assets and operations. The transaction has been treated
as a group reconstruction and has been accounted for using the reverse merger accounting method. Accordingly, the consolidated
financial statements have been treated as being a continuation of the consolidated financial statements of Reliant, with Oranco,
Inc. being treated as the acquired entity for accounting purposed. Accordingly, the financial information for the current period
and comparatives reflects the consolidated operations of Reliant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">

    <TD STYLE="width: 48px; text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">22.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTE TO THE CONSOLIDATED
    STAETMENT OF CASH FLOWS</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Disclosure
of non-cash transactions:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 35.45pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
<TD STYLE="width: 0.5in; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"></TD><TD STYLE="width: 0.25in; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Renminbi
                                         94,051,934 of the amount due to a director relates to Reliant&rsquo;s acquisition of
                                         Sure Rich Investment (Group) Limited being the consideration of Sure Rich Investment
                                         (Group) Limited payable by Reliant. The amount is due to the seller of Sure Rich Investment
                                         (Group) Limited, who is also a director of Reliant and the Company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
<TD STYLE="width: 0.5in; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"></TD><TD STYLE="width: 0.25in; font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">b.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding: 0; text-indent: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Group acquired liabilities of Renminbi 757,296 as part of the reverse merger.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 20pt"><B>&nbsp;</B></P>


<!-- Field: Page; Sequence: 99; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->45<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT"><DIV STYLE="font-size: 1pt; border-top: Black 2pt solid; border-bottom: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>73,898,080 Shares of Common Stock</B></P>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Oranco, Inc.</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><IMG SRC="img_004.jpg" ALT=""></P>



<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROSPECTUS</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>, 2019</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">You should rely only on the information contained in this document.
We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal
to sell these securities. The information in this document may only be accurate on the date of this document.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Additional risks and uncertainties not presently known or that
are currently deemed immaterial may also impair our business operations. The risks and uncertainties described in this document
and other risks and uncertainties which we may face in the future will have a greater impact on those who purchase our common stock.
These purchasers will purchase our common stock at the market price or at a privately negotiated price and will run the risk of
losing their entire investment.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; border-bottom: Black 2pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


<!-- Field: Page; Sequence: 100 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PART II. INFORMATION NOT REQUIRED IN
PROSPECTUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth an itemization of all estimated
expenses, all of which we will pay, in connection with the issuance and distribution of the securities being registered:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1.5pt solid">Nature of Expense</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-align: left">SEC registration fee</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">7,166</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Legal fees and expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">172,651</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Accounting fees and expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">12,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Printing and related expenses</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">$</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">10,000</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.25in; padding-bottom: 4pt">TOTAL</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 4pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 4pt double">201,817</TD><TD STYLE="text-align: left; padding-bottom: 4pt">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Neither our articles of incorporation nor
Bylaws prevent us from indemnifying our officers, directors and agents to the extent permitted under the Nevada Revised Statute
(&ldquo;NRS&rdquo;). NRS Section 78.7502 provides that a corporation shall indemnify any director, officer, employee or agent of
a corporation against expenses, including attorneys&rsquo; fees, actually and reasonably incurred by him in connection with any
the defense to the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise
in defense of any action, suit or proceeding referred to Section 78.7502(1) or 78.7502(2), or in defense of any claim, issue or
matter therein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NRS 78.7502(1) provides that a corporation
may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation,
by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, against expenses, including attorneys&rsquo; fees, judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with the action, suit or proceeding if he: (a) is not liable pursuant to NRS 78.138;
or (b) acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation,
and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NRS Section 78.7502(2) provides that a
corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including
amounts paid in settlement and attorneys&rsquo; fees actually and reasonably incurred by him in connection with the defense or
settlement of the action or suit if he: (a) is not liable pursuant to NRS 78.138; or (b) acted in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the corporation. Indemnification may not be made for any
claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all
appeals there from, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the
extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application
that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses
as the court deems proper.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NRS Section 78.747 provides that except
as otherwise provided by specific statute, no director or officer of a corporation is individually liable for a debt or liability
of the corporation, unless the director or officer acts as the alter ego of the corporation. The court as a matter of law must
determine the question of whether a director or officer acts as the alter ego of a corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions,
we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities
Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities
being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed hereby
in the Securities Act and we will be governed by the final adjudication of such issue.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>ITEM 15. RECENT SALES OF UNREGISTERED
SECURITIES.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">None.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<!-- Field: Page; Sequence: 101; Options: NewSection; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">II-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->1<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>ITEM 16. EXHIBITS</B></P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="background-color: white">
    <TD STYLE="white-space: nowrap; vertical-align: top; border-bottom: Black 1.5pt solid; width: 10%"><FONT STYLE="font-size: 10pt"><B>Exhibit <BR>
Number</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 1.5pt; width: 2%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center; border-bottom: Black 1.5pt solid; width: 88%"><FONT STYLE="font-size: 10pt"><B>Description</B></FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; vertical-align: top"><FONT STYLE="font-size: 10pt">2.1*</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"><A HREF="http://www.sec.gov/Archives/edgar/data/1098996/000121390018008858/f8k062918ex2-1_orancoinc.htm"><FONT STYLE="font-size: 10pt">Share Exchange Agreement, dated as of June 29, 2018, by and among the Registrant, Reliant and the shareholders of Reliant (incorporated by reference to our Form 8-K exhibit 2.1 filed with the SEC on July 6, 2018)</FONT></A></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; vertical-align: top"><FONT STYLE="font-size: 10pt">3.1*</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"><A HREF="http://www.sec.gov/Archives/edgar/data/1098996/000109690699000024/0001096906-99-000024.txt"><FONT STYLE="font-size: 10pt">Initial articles of incorporation (incorporated by reference to our Form 10-K exhibit 3.1 filed with the SEC on November 18, 1999)</FONT></A></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; vertical-align: top"><FONT STYLE="font-size: 10pt">3.2*</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"><A HREF="http://www.sec.gov/Archives/edgar/data/1098996/000109690699000024/0001096906-99-000024.txt"><FONT STYLE="font-size: 10pt">Articles of Amendment to the articles of incorporation (incorporated by reference to our Form 10-K exhibit 3.2 filed with the SEC on November 18, 1999)</FONT></A></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; vertical-align: top"><FONT STYLE="font-size: 10pt">3.3*</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"><A HREF="http://www.sec.gov/Archives/edgar/data/1098996/000109690699000024/0001096906-99-000024.txt"><FONT STYLE="font-size: 10pt">By-Laws (incorporated by reference to our Form 10-K exhibit 3.2 filed with the SEC on November 18, 1999)</FONT></A></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; vertical-align: top"><FONT STYLE="font-size: 10pt">5.1&dagger;</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"><A HREF="fs12019ex5-1_orancoinc.htm"><FONT STYLE="font-size: 10pt">Opinion of Hunter Taubman Fischer &amp; Li LLC</FONT></A></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; vertical-align: top"><FONT STYLE="font-size: 10pt">10.1*</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"><A HREF="http://www.sec.gov/Archives/edgar/data/1098996/000121390018017072/f8k120318ex10-1_orancoinc.htm"><FONT STYLE="font-size: 10pt">Employment Agreement between the Company and Sze Lok (Patrick) Wong, dated December 3, 2018 (incorporated by reference to our Form 8-K exhibit 10.1 filed with the SEC on December 07, 2018)</FONT></A></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; vertical-align: top"><FONT STYLE="font-size: 10pt">10.2*</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"><A HREF="http://www.sec.gov/Archives/edgar/data/1098996/000121390018012591/f8k073118a1ex10-1_oranco.htm"><FONT STYLE="font-size: 10pt">Partnership Agreement, dated as of June 30, 2017, by and between the Registrant and Shanxi Xinghuacun Liquor Group Spirit Development Zone Sales Co., Ltd. (incorporated by reference to our Form 8-K exhibit 10.1 filed with the SEC on September 14, 2018)</FONT></A></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; vertical-align: top"><FONT STYLE="font-size: 10pt">21.1&dagger;</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"><A HREF="fs12019ex21-1_orancoinc.htm"><FONT STYLE="font-size: 10pt">List of Subsidiaries</FONT></A></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; vertical-align: top"><FONT STYLE="font-size: 10pt">23.1&dagger;</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"><A HREF="fs12019ex23-1_orancoinc.htm"><FONT STYLE="font-size: 10pt">Consent of PKF Littlejohn LLP, Independent Registered Public Accounting Firm</FONT></A></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; vertical-align: top"><FONT STYLE="font-size: 10pt">23.2</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"><A HREF="fs12019ex5-1_orancoinc.htm"><FONT STYLE="font-size: 10pt">Consent of Hunter Taubman Fischer &amp; Li LLC (included in Exhibit 5.1)</FONT></A></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; vertical-align: top"><FONT STYLE="font-size: 10pt">99.1*</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"><A HREF="http://www.sec.gov/Archives/edgar/data/1098996/000121390018000246/sc13d0118millionex1_oranco.htm"><FONT STYLE="font-size: 10pt">Share Purchase Agreement, Dated December 26, 2017 between Million Success Business Limited and Claudio Gianascio (incorporated by reference to our SC 13D exhibit 99.1 filed with the SEC on January 8, 2018)</FONT></A></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; vertical-align: top"><FONT STYLE="font-size: 10pt">99.2*</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"><A HREF="http://www.sec.gov/Archives/edgar/data/1098996/000109690604000148/oranco10ksb2003ex99-1.txt"><FONT STYLE="font-size: 10pt">Code of Ethics (incorporated by reference to our Form 10KSB exhibit 99.1 filed with the SEC on March 29, 2004) </FONT></A></TD></TR>
</TABLE>


<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.25in">*</TD><TD>Previously filed.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.25in">&dagger;</TD><TD>Filed herewith.</TD></TR></TABLE>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>ITEM 17. UNDERTAKINGS</B></P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The undersigned
registrant hereby undertakes:</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">(i)
To include any prospectus required by section 10(a)(3) of the Securities Act;</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">(ii)
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed with the&nbsp;SEC pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering
price set forth in the &ldquo;Calculation of Registration Fee&rdquo; table in the effective registration statement; and</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">(2)
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at
the termination of the offering.</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">(4)
That, for the purpose of determining liability under the Securities Act to any purchaser:</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">(i)
If the registrant is relying on Rule 430B:</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">(A)
Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as
of the date the filed prospectus was deemed part of and included in the registration statement; and</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">(B)
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of
the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any
person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date;
or&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"></P>

<!-- Field: Page; Sequence: 102; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">II-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">(ii)
If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating
to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A,
shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in
a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that
was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately
prior to such date of first use.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">(5)
That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution
of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant
pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if
the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant
will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to
Rule 424;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred
to by the undersigned registrant;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the undersigned registrant; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.</P>




<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


<!-- Field: Page; Sequence: 103; Value: 1 -->
    <DIV STYLE="margin-top: 10pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">II-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized. In the City of New York, New York on July 3, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></TD>
    <TD COLSPAN="2"><B>ORANCO, INC.</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 60%">&nbsp;</TD>
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="width: 36%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid"><I>/s/ Peng Yang</I></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Peng Yang</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Chief Executive Officer</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>(Principal Executive Officer)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Date: July 3, 2019</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 60%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></TD>
    <TD STYLE="width: 4%">By:</TD>
    <TD STYLE="width: 36%; border-bottom: Black 1.5pt solid"><I>/s/ Sze Lok (Patrick) Wong</I></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Sze Lok (Patrick) Wong</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Chief Financial Officer</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>(Principal Accounting and Financial Officer)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following persons in the capacities and on the dates indicated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; width: 25%; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 51%; border-bottom: Black 1.5pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Title</P></TD>
    <TD STYLE="vertical-align: top; width: 2%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 20%; border-bottom: Black 1.5pt solid; text-align: center">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Date</P></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 10pt"><I>/s/ Peng Yang</I></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-bottom: 1.5pt"><FONT STYLE="font-size: 10pt">Chief Executive Officer, Director, President and Secretary</FONT></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt">July 3, 2019</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Peng Yang</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">(Principal Executive Officer)</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 10pt"><I>/s/ Sze Lok (Patrick) Wong</I></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 1.5pt"><FONT STYLE="font-size: 10pt">Chief Financial Officer</FONT></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt">July 3, 2019</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Sze Lok (Patrick) Wong</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">(Principal Accounting and Financial
    Officer)</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">II-4</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT"><DIV STYLE="font-size: 1pt; border-top: Black 1.5pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="margin: 0"></P>
</BODY>
</HTML>
[{"type": "S-1", "sequence": "1", "filename": "fs12019_orancoinc.htm", "description": "REGISTRATION STATEMENT", "secsgml_size_bytes": 1373187}]
{"company-data": {"conformed-name": "ORANCO INC", "cik": "0001098996", "assigned-sic": "2080", "irs-number": "870574491", "state-of-incorporation": "NV", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-232548", "film-number": "19942219"}, "business-address": {"street1": "ONE LIBERTY PLAZA", "street2": "SUITE 2310 PMB# 21", "city": "NEW YORK", "state": "NY", "zip": "10006", "phone": "646-759-3614"}, "mail-address": {"street1": "ONE LIBERTY PLAZA", "street2": "SUITE 2310 PMB# 21", "city": "NEW YORK", "state": "NY", "zip": "10006"}}
As filed with the U.S. Securities and Exchange Commission on
July 3, 2019
Registration No. 333-[●]
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ORANCO, INC.
(Exact name of registrant as specified in
its charter)
Nevada
5180
87-0574491
(State or other jurisdiction of
incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification Number)
One Liberty Plaza, Suite 2310 PMB# 21
New York, NY 10006
Tel: (646) 759-3614
(Address, including zip code, and telephone
number, including area code, of registrant's principal executive offices)
One Liberty Plaza, Suite 2310 PMB# 21
New York, NY 10006
Tel: (646) 759-3614
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
Copies to:
Ying Li, Esq.
Hunter, Taubman, Fischer & Li LLC
1450 Broadway
,
26th Floor,
New York, NY 10018
(212) 530-2231
(212) 202-6380 (fax)
Approximate date of commencement of proposed sale to the
public
: As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form
are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following
box: ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated
filer," "accelerated filer" and "smaller reporting company" in Rule 12b2 of the Exchange Act.
Large accelerated filer ☐
Accelerated filer ☐
Non-accelerated filer
☒
Smaller reporting company ☒
Emerging growth company ☒
If an emerging growth company that prepares its financial statements
in accordance with U.S. GAAP, 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 7(a)(2)(B) of the Securities Act.
☐
CALCULATION OF REGISTRATION FEE
Title of each class of securities
to be registered
Amount of shares to
be
registered
(1)
Proposed
maximum
offering
price per
share
(1)
Proposed
maximum
aggregate
offering
price
(1)
Amount of
registration
fee
Common stock, par value $0.001 per share, offered by certain selling stockholders
73,898,080
$
0.80
$
59,118,464
$
7,166
(1)
Estimated pursuant to Rule 457(a) under the Securities Act of 1933 solely for the purpose of calculating the amount of the registration fee.
The Registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment
which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant
to said Section 8(a), may determine.
The information in this
preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION ON JULY 3, 2019
ORANCO, INC.
73,898,080 shares of Common Stock
This prospectus relates to the sale of
up to a total of 73,898,080 shares of common stock, par value $0.001 per share ('Common Stock") of Oranco, Inc., a
Nevada corporation, that may be sold from time to time by the selling stockholders named in this prospectus and their successors
and assigns. The shares of Common Stock subject to this prospectus include 73,898,080 shares of Common Stock issued in connection
with the June 29, 2018 share exchange transaction with Wong Ying, Lam Man Hung, Lam Fung, Chan Man Kuen, Zheng Huang, and Stephen
Zhu. Please see "Management's Discussion and Analysis of Financial Condition and Results of Operations, Business Overview"
on page 38  for more information. The shares of Common Stock offered for resale hereby were issued to the applicable selling
stockholders in private placements or other exempt transactions completed prior to the filing of the registration statement of
which this prospectus is a part.
The selling stockholders may sell all or
a portion of their shares of Common Stock through public or private transactions at prevailing market prices or at privately negotiated
prices. Information regarding the selling stockholders and the times and manner in which they may offer and sell the shares under
this prospectus is provided under "Selling Stockholders" and "Plan of Distribution" in this prospectus.
We have agreed to pay all the costs and expenses of this registration.
Our Common Stock is listed for quotation
on the Over-the-Counter Pink Open Market, or OTC Pink, under the symbol "ORNC". There is very limited trading in our
Common Stock. On July 1, 2019, the most recent day that our Common Stock traded, the last reported price per share of our Common
Stock was $0.69. You are urged to obtain current market quotations of our Common Stock before purchasing any of the shares being
offered for sale pursuant to this prospectus.
INVESTING IN OUR COMMON STOCK INVOLVES
A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 6 TO READ ABOUT FACTORS YOU SHOULD CONSIDER BEFORE INVESTING
IN SHARES OF OUR COMMON STOCK. NEITHER THE SECURITIES AND EXCHANGE COMMITTEE NOR ANY STATE SECURITIES COMMISSION HAS APPROVED
OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this prospectus is          , 2019
TABLE OF CONTENTS
PROSPECTUS SUMMARY
1
THE OFFERING
4
SELECTED FINANCIAL DATA
5
RISK FACTORS
6
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
19
USE OF PROCEEDS
20
DETERMINATION OF OFFERING PRICE
20
DESCRIPTION OF SECURITIES TO BE REGISTERED
20
MARKET PRICE OF AND DIVIDENDS ON THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
21
DIVIDEND POLICY
22
SELLING STOCKHOLDERS
22
PLAN OF DISTRIBUTION
23
REGULATIONS
24
INDUSTRY OVERVIEW
29
DESCRIPTION OF BUSINESS
31
DESCRIPTION OF PROPERTY
37
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
38
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
44
DIRECTORS AND EXECUTIVE OFFICERS
45
EXECUTIVE COMPENSATION
47
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
48
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
49
LEGAL PROCEEDINGS
50
LEGAL MATTERS
50
EXPERTS
50
INTERESTS OF NAMED EXPERTS AND COUNSEL
50
WHERE YOU CAN FIND MORE INFORMATION
50
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
F-1
This prospectus is part of a registration
statement we filed with the SEC. You should rely only on the information provided in this prospectus and incorporated by reference
in this prospectus. We have not authorized anyone to provide you with information different from that contained in or incorporated
by reference into this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any
securities other than the common stock offered by this prospectus. This prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any common stock in any circumstances in which such offer or solicitation is unlawful. The selling stockholders
are offering to sell, and seeking offers to buy, shares of Common Stock only in jurisdictions where offers and sales are permitted.
Neither the delivery of this prospectus
nor any sale made in connection with this prospectus shall, under any circumstances, create any implication that there has been
no change in our affairs since the date of this prospectus or that the information contained by reference to this prospectus is
correct as of any time after its date. The information in this prospectus is accurate only as of the date of this prospectus, regardless
of the time of delivery of this prospectus or of any sale of Common Stock. The rules of the SEC may require us to update this prospectus
in the future.
i
PROSPECTUS SUMMARY
This summary highlights selected information
contained elsewhere in this prospectus. This summary does not contain all the information that you should consider before investing
in the Common Stock. You should carefully read the entire prospectus, including "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements, before
making an investment decision.
In this prospectus, unless otherwise noted
or as the context otherwise requires,
"Oranco",
the
"Company," "ORNC," "we,"
"us,"
and
"our"
refer to the combined business of (i) Oranco, Inc. ("ORNC"), a corporation
formed under the laws of Nevada, (ii) Reliant Galaxy International Limited ("Reliant"), a corporation formed under
the laws of British Virgin Islands, (iii) Sure Rich Investment (Group) Limited ("Sure Rich"), a wholly-owned subsidiary
of ORNC formed under the laws of Hong Kong, (iv) Fujian Jin'ou Trading Co, Ltd. ("Jin'ou"), a wholly-owned
subsidiary of ORNC formed under the laws of the People's Republic of China (the "PRC"), (v) Fenyang Huaxin Wine
Industry Development Co., Ltd. ("Huaxin"), a wholly-owned subsidiary of Jin'ou formed under the laws of the PRC,
(vi) Fenyang Jinqiang Wine Co., Ltd. ("Jinqiang"), a wholly-owned subsidiary of Huaxin formed under the laws of the
PRC, and (vii) Beijing Huaxin Tianchuang Enterprise Management Consulting Co., Ltd. ("Tianchuang"), a 51%-owned subsidiary
of Huaxin and a corporation formed under the laws of the PRC.
For the sake of clarity, this prospectus
follows English naming convention of the first name followed by the last name, regardless of whether an individual's name
is Chinese or English. For example, the name of our Chief Executive Officer will be presented as "Peng Yang," even
though, in Chinese, Mr. Yang's name is presented as "Yang Peng."
We have relied on statistics provided by
a variety of publicly-available sources regarding China's expectations of growth. We did not, directly or indirectly, sponsor
or participate in the publication of such materials, and these materials are not incorporated in this prospectus other than to
the extent specifically cited in this prospectus. We have sought to provide current information in this prospectus and believe
that the statistics provided in this prospectus remain up-to-date and reliable, and these materials are not incorporated in this
prospectus other than to the extent specifically cited in this prospectus.
Overview
We are engaged in alcohol wholesale in
China through our operating subsidiary, Fenyang Huanxin Wine Industry Development Co., Ltd. ("Huaxin"), which is 100%
held by Fujian Jin'ou Trading Co., Ltd. ("Jin'ou"). We maintain our principal executive offices at One
Liberty Plaza, Suite 2310 PMB# 21, New York, NY 10006, United States. Our telephone number is (646) 759-3614.
1
Our Business
We run
a growing alcohol wholesale business guided by a core purpose: to promote premium alcoholic beverages to China's population.
We currently focus our business on the sale of Chinese Fenjiu liquor and imported wines. We aim to achieve this purpose by catering
to the ever-evolving customer tastes in alcohols through our creative marketing strategies and innovative product designs that
target different age groups of China's population. To that end, we have hired marketing talents who have decades of experience
in effective alcohol brand building. As a result, we believe we have managed to respond to the demand for Chinese Fenjiu liquor
and imported wines in the Chinese marketplace.
We believe that Fenjiu liquor presents
great business opportunities for us to utilize creative product designs and marketing strategies to attract Chinese consumers.
Collaborating with Fenjiu Group, the sole producer of Fenjiu liquor in China, we have been focusing on product design to convey
a modern feel to our Fenjiu products while maintaining Fenjiu liquor's historical elegance. We believe our designer packaging,
symbolized by its bright coloring and prominently fat-bellied jars, stands out from those of our competitors. With creative designs
and stylized names, our registered trademarks, such as Dagangjiu (translated as "Big Jar Liquor"), are effective in
capturing the attention of Chinese consumers, young and old.
Established in October 2016, we believe
our imported wine distribution business has high growth potential as evidenced from the market prices of the imported wines from
Spain and New Zealand, the two countries where we import most of our wine products from, in the current Chinese market. A great
majority of our competitors have priced their 750mL bottles of wine imported from Spain and New Zealand well above RMB 200. This
price falls within the premium range in the general Chinese wine market. Within the general Chinese wine market, the premium range
enjoyed the highest year-on-year growth compared to other price tiers of wine in 2018. This pricing trend for premium wines is
applicable to imported wines from Spain and New Zealand, which we believe will benefit our growth in 2019. Accordingly, our strategy
is to continue pricing our imported wine products within the premium range levels to generate higher margins. Though marketing
and branding are still integral parts of the wine business in China, wine sales are highly driven by the origin of the wines. Since
Spain and New Zealand are considered prime origins for wine productions, we believe that our imported wine products will continue
to attract the attention of Chinese consumers and promote the sustainable growth of our imported wine business.
We believe that effective marketing strategies
and creative product designs are two major contributing factors to our success. To improve and maintain the effectiveness of our
marketing strategies, we have established integrated and collaborative processes to drive coordinated operations across our marketing
efforts and sales. Our marketing strategies enable us to promote multiple sales concepts across two major alcohol categories, effectively
attracting different age and cultural groups of the Chinese population. Our marketing plans are tailored to meet the evolving taste
and demands of Chinese consumers. As a result, we believe that the Company's innovative and highly-customized designs draw
considerable public attention, which in turns is a contributing factor to the volume of our sales.
For the nine months ended March 31, 2019,
we generated revenue of approximately 91.4% from Fenjiu liquor wholesale and approximately 8.6% from imported wine wholesale. For
the nine months ended March 31, 2018, we generated revenue of approximately 85.3% from Fenjiu liquor wholesale and approximately
14.7% from imported wine wholesale. For the year ended June 30, 2018, we generated revenue of approximately 84.9% from Fenjiu liquor
wholesale and approximately 15.1% from imported wine wholesale. For the year ended June 30, 2017, we generated revenue of approximately
89.9% from Fenjiu liquor wholesale and approximately 10.1% from imported wine wholesale. We have not experienced any seasonality
in our business.
Business Strategy
Increasing our market share -
We
expect that consumers' increasing awareness of our brand will lead to increased demand of our products. We intend to continue
focusing on developing Chinese Fenjiu liquor and imported wine wholesale markets. Through creating new designs, expanding our marketing
efforts, developing closer relationships with dealers, and building stable relationships with our major suppliers, we expect to
expand our product lines and improve our brand awareness and customer loyalty to meet market demands and improve our sales performance.
Expansion of our sources of supply,
productivity and sales network -
To meet the increasing demand for imported wine and Chinese Fenjiu liquor,
we will continue cooperating with major suppliers to ensure both the quantity and quality of our Chinese Fenjiu liquor and imported
wine inventory. In addition to our present sales network, we expect to increase our investment in training our employees, updating
our website and improving our client information managing system. Our goal is to build a high performance sales network with a
very personal approach to our business partners.
Competitive
Strengths
Although we operate in a highly competitive
industry, we believe that the following factors provide us with the competitive advantages in the marketplace that could differentiate
us from our potential competitors:
●
Our Company has a high brand recognition in the Chinese Fenjiu liquor market.
Our
Fenjiu liquor is sold under the "Dagangjiu" brand and is one of the Chinese Fenjiu liquor market's most popular
brands. We have relied on the international fame of Fenjiu Group, our inventory manufacturer, to become one of the leading brands
in international alcohol festivals. We believe that our brand's strong recognition reinforces our existing customer goodwill
in Shanxi province and beyond.
2
●
Our marketing team's extensive experience and reputation in our industry.
We
believe that our marketing team's industry experience and reputation is unmatched in the industry. We believe our commercial
campaigns are well accepted by consumers and resonate with potential liquor distribution partners. To some degree, we believe our
commercial campaigns influence consumer trends in the Chinese Fenjiu liquor markets.
●
A Flexible Business Model.
We have a flexible business
model that
enables us to quickly adjust our marketing strategy and product packaging to meet customers' evolving needs
and preferences. Since our brand is well recognized and our current business model is based on flexible dealership relationship,
we can adjust our strategic partnerships to address new product preferences while maintaining our accumulated goodwill.
●
Service-driven and Cohesive Management
Team.
Our senior management team has guided our organization through its expansion and, we believe, positioned us for continued
growth. Each member of our Huanxin management team has an average of 20 years of expertise. Additionally, our management team possesses
extensive experience across a broad range of disciplines such as alcohol marketing, business negotiation, and financing, which
are essential qualities to help us achieve our goal to "promote premium alcoholic beverages to the Chinese population of
all ages."
3
THE OFFERING
Common Stock outstanding before the offering
419,487,480 shares
Common Stock offered by selling stockholders
73,898,080 shares of Common Stock held by the selling stockholders.
Common Stock to be outstanding after the offering
419,487,480 shares.
OTC Pink Symbol
ORNC. No active market for our Common Stock presently exists.
Use of proceeds
This prospectus relates to shares of our Common Stock that may be offered and sold from time to time by the selling stockholders named herein. We will not receive any proceeds from the sale of the Common Stock offered hereby.
4
SELECTED FINANCIAL DATA
The following table sets forth selected
historical statements of operations for the nine months ended March 31, 2019 (unaudited), the year ended June 30, 2018 and the
year ended June 30, 2017, and balance sheets data as of March 31, 2019 (unaudited), June 30, 2018 and June 30, 2017, which have
been derived from our audited financial statements for those periods. Our historical results are not necessarily indicative of
the results that may be expected in the future. You should read this data together with our consolidated financial statements and
related notes as well as "Management's Discussion and Analysis of Financial Condition and Results of Operations,"
appearing elsewhere in the prospectus.
Years Ended
Nine months ended
June 30,
March 31,
Consolidated Statement of Operations Data
2018
2017
2019
2018
(audited)
(audited)
(unaudited)
(unaudited)
RMB
RMB
RMB
RMB
Revenues
101,759,660
91,144,666
96,037,641
83,258,237
Cost of sales
27,800,667
24,065,113
24,395,247
23,002,777
Selling and distribution expenses
5,477,457
2,521,950
3,020,324
3,338,043
Administrative expenses
7,109,937
5,516,707
6,159,429
3,686,062
Other income
155,700
227,552
90,807
131,447
Interest and other financial charges
1,759,325
3,420,272
41,238
1,768,720
Income tax expense
15,095,681
14,121,343
16,024,012
12,623,911
Net income
$
44,672,293
$
41,726,833
$
46,488,198
$
38,970,171
Earnings per share
– Basic and diluted earnings per share
$
1.54
$
7.98
$
0.11
$
8.87
As of June 30,
As of March 31,
Consolidated Balance Sheet Data
2018
2017
2019
(audited)
RMB
(audited)
RMB
(unaudited)
RMB
Cash and cash equivalents
$
26,504,962
$
6,607,407
$
57,394,020
Total Assets
$
109,350,204
$
90,561,289
$
162,725,447
Total Shareholders' Equity
$
5,005,968
$
55,136,192
$
51,494,166
Total Liabilities and Shareholders' Equity
$
109,350,204
$
90,561,289
$
162,725,447
5
RISK FACTORS
An investment in our Common Stock involves
a high degree of risk. You should carefully consider the risks described below, together with all of the other information included
in this prospectus, before making an investment decision. If any of the following risks actually occurs, our business, financial
condition or results of operations could suffer. In that case, the trading price of our shares of Common Stock could decline, and
you may lose all or part of your investment. You should read the section entitled "Cautionary Note Regarding Forward Looking
Statements" below for a discussion of what types of statements are forward-looking statements, as well as the significance
of such statements in the context of this prospectus.
Risks Related to Our Business
Our Company is heavily dependent
on its strategic partnership with Fenjiu Group, which is the sole producer of Chinese Fenjiu liquor in China. Any disruptions in
our relationship with Fenjiu Group may have an adverse effect on our profitability and operating results.
Our business model
focuses on the sale and distribution of Chinese Fenjiu liquor. Revenue generated from our Fenjiu liquor wholesale business accounted
for 91.4% and 85.3%, respectively, of the total revenue derived from our general business in the nine months ended March 31, 2019
and 2018. Revenue generated from our Fenjiu liquor wholesale business accounted for 89.9% and 84.9%, respectively, of the total
revenue derived from our general business in fiscal year 2017 and 2018. We rely on Fenjiu Group to provide and deliver our Fenjiu
product inventory on a continuous basis. We could suffer significant losses in the event of the loss of our strategic partnership
with Fenjiu Group due to our inability to renew our partnership agreement, disruption of Fenjiu Group's distribution network,
damage to Fenjiu Group's reputation or other occurrences that are beyond our control.
Any harm to the reputation of our Fenjiu liquor producer,
Fenjiu Group, may materially and adversely affect our business and results of operations.
The success of our
business depends heavily upon the reputation of Fenjiu Group since a large majority of our revenue comes from our Fenjiu liquor
wholesale business. We believe that the recognition and reputation of Fenjiu Group among our customers, distributors, and dealers
have contributed significantly to the growth and success of our business. Maintaining and enhancing the recognition and reputation
of Fenjiu Group are critical to our business and market position. Any harm to the reputation of Fenjiu Group may materially and
adversely affect our business and results of operations.
We face intense competition, and
if we fail to compete effectively, we may lose market share and customers.
The Chinese alcohol
distribution and retail markets that we are in are highly competitive. We face competition from long-established traditional Chinese
alcohol distributors and retailers as well as new companies which rely on modern technology such as E-commerce platforms. China's
alcohol industry is growing and changing rapidly. Our current or future competitors may have longer operating histories, greater
brand recognition, better supplier relationships, larger customer bases, more cost-effective fulfillment capabilities or greater
financial, technical or marketing resources than we do. Competitors may leverage their brand recognition, experience and resources
to compete with us in a variety of ways, including investing more heavily in research and development and making acquisitions for
the expansion of their products and services. Some of our competitors may be able to secure more favorable terms from suppliers,
devote greater resources to marketing and promotional campaigns, adopt more aggressive pricing or inventory policies and devote
substantially more resources to their website and system development than us. Increased competition may reduce our profitability,
market share, customer base and brand recognition. There can be no assurance that we will be able to compete successfully against
current or future competitors, and such competitive pressures may have a material and adverse effect on our business, financial
condition and results of operations.
Our limited operating history makes
it difficult to evaluate our business and prospects.
We commenced our
Fenjiu liquor distribution business in 2014 and our imported wine distribution business in October 2016. Thus, we have a limited
operating history. Since our inception, we have experienced consistent growth in our business. Our total net revenues increased
by 11.6% from RMB 91,144,666 in 2017 to RMB 101,759,660 in 2018. We incurred a net income of RMB 41,726,833 in 2017 and achieved
net income of RMB 44,672,293 in 2018. However, our historical growth rate may not be indicative of our future performance. We cannot
assure you that we will be able to achieve similar results or grow at the same rate as we did in the past. Growth may slow and
net revenues or net income may decline for a number of possible reasons, some of which are beyond our control, including decreasing
consumer spending, increasing competition, slowing growth of our overall market, fulfillment bottlenecks, emergence of alternative
business models, changes in government policies or general economic conditions. It is difficult to evaluate our prospects, as we
may not have sufficient experience in addressing the risks to which companies operating in rapidly evolving markets may be exposed.
You should consider our prospects in light of the risks and uncertainties that fast-growing companies with a limited operating
history may encounter.
6
If we are unable to manage our growth
or execute our strategies effectively, our business and prospects may be materially and adversely affected.
Business expansion
has placed, and continues to place, significant strain on our management and resources. To accommodate our growth, we anticipate
that we will need to implement a variety of new and upgraded operational management systems, procedures and controls, including
the improvement of our accounting and other internal management systems. We will also need to continue to expand, train, manage
and motivate our workforce and manage our relationships with our distributors, dealers and supplier. As we selectively increase
our product and service offerings, we will need to work with different groups of new distributors, dealers and other suppliers
efficiently and establish and maintain mutually beneficial relationships with our existing distributors, dealers and supplier.
All of these endeavors involve risks, and will require substantial management effort and significant additional expenditures. We
cannot assure you that we will be able to manage our growth or execute our strategies effectively, and any failure to do so may
have a material adverse effect on our business and prospects.
Our future expansion into new product
categories may expose us to new challenges and more risks.
Since our inception,
we primarily focused on the Chinese Fenjiu liquor market. However, we have started imported wine distribution in October 2016.
We plan to expand the product offerings to include selected categories of other alcohol products such as Luzhou-flavor liquor and
Maotai-flavor liquor. Expansion into new product categories involve new risks and challenges. Our lack of relevant customer data
relating to these products may make it more difficult for us to keep pace with the evolving customer demands and preferences.
We have limited experience
and operating history in our future product categories and related marketplace services such as sample tasting and custom bottle
making, which makes predicting our future results of operations more difficult than it otherwise would be. Therefore, our past
results of operations should not be taken as indicative of our future performance. If we cannot successfully address new challenges
and compete effectively, we may not be able to recover costs of our investments and eventually achieve profitability, and our future
results of operations and growth prospects may be materially and adversely affected.
If counterfeit products are sold
under our brand names and trademarks, our reputation and financial results could be materially and adversely affected.
Third-party merchants
and dealers are separately responsible for sourcing counterfeit products that are sold under our brand names and trademarks. Although
we have adopted measures to help consumers verify the authenticity of products sold on the general Chinese market and to remove
any counterfeit products found by us, these measures may not always be successful. Counterfeit products may be defective or inferior
in quality as compared to authentic products and may pose safety and health risks to our customers. If our customers are injured
by counterfeit products sold under our brand names and trademarks, we may be subject to lawsuits, severe administrative penalties
and criminal liability. We believe our brand and reputation are extremely important to our success and our competitive position.
The discovery of counterfeit products sold under our brand names and trademarks may severally damage our reputation and cause customers
to refrain from making future purchases from us, which would materially and adversely affect our business operations and financial
results.
If we are unable to offer premium
products and services at attractive prices to meet customer needs and preferences, our business, financial condition and results
of operations may be materially and adversely affected.
Our future growth
depends on our ability to continue attracting new customers and increasing the spending level of our existing customers. Constantly
changing consumer preferences have affected and will continue to affect the general Chinese alcohol market. We must stay abreast
of emerging lifestyle and consumer preferences and anticipate product and services trends that will appeal to existing and potential
customers. Our customers choose to purchase quality products or services from us due in part to the attractive prices and premium
services that we offer, and they may choose to shop elsewhere if we cannot match the prices, products or services offered by our
competitors. If our customers cannot find their desired products or services within our portfolio, they may lose interest in us
and stop buying our products or using our services, which in turn may materially and adversely affect our business, financial condition
and results of operations.
We rely on the Fenjiu liquor product
marketing and distribution for a substantial portion of our net revenues.
Since our inception,
we have been relying on Fenjiu liquor product marketing and distribution for a substantial portion of our net revenues. We expect
that this business segment to continue representing a substantial portion of our total net revenues in the near future. We have
increased our offerings to include other product categories in 2017, mainly through the imported wine marketing and distribution;
we also have plan to expand our product offerings in the future to include other popular Chinese liquors such as Luzhou-flavor
liquor and Maotai-flavor liquor. However, our sales of these new products may not increase to a level that would substantially
reduce our dependence on Fenjiu liquor product marketing and distribution business. Any event that results in a reduction in our
branded Fenjiu liquor products or short-term lodging and hospitality services could materially and adversely affect our ability
to maintain or increase our current level of net revenue and business prospects.
7
If we fail to manage and expand our
relationships with distributors, dealers or suppliers, or otherwise fail to source products or services at favorable terms, our
business and growth prospects may suffer.
We worked with approximately
111 distributors and they have over 1,000 sale point over the China in 2018 and 2017. In 2018, our major suppliers are 11 in Fenjiu
liquor and 2 for imported wines. In 2017, our major suppliers are 6 in Fenjiu liquor and 2 for imported wines. Maintaining strong
relationships with these distributors, dealers and suppliers is important to the growth of our business.
In particular, we
depend significantly on our ability to attract reputable liquor and wine suppliers to offer their products or services on commercially
attractive terms and to procure products from suppliers on favorable pricing terms. However, some of our agreements for imported
wines do not ensure the long-term availability of products or the continuation of particular pricing practices or payment terms
beyond the end of the contractual terms. Even if we maintain good relationships with our distributors, dealers and suppliers, they
may be unable to remain in business due to economic conditions, labor actions, regulatory or legal decisions, natural disasters
or other causes. In the event that we are not able to source products or services at favorable prices, our net revenues and gross
profit as a percentage of net revenues may be materially and adversely affected.
In addition, if our
suppliers cease to provide us with favorable payment terms, our requirements for working capital may increase and our operations
may be materially and adversely affected. We will also need to develop relationships with new suppliers to ensure that we have
access to a steady supply of products on favorable commercial terms or to offer sufficient products and services at acceptable
prices sought by our customers. Any negative developments in our relationships with distributors, dealers and suppliers could materially
and adversely affect our business and growth prospects. If we fail to attract new distributors or dealers to sell our products,
or new suppliers to sell their products to us due to any reason, our business and growth prospects may be materially and adversely
affected.
If we fail to manage our inventory
effectively, our results of operations, financial condition and liquidity may be materially and adversely affected.
Our business requires
us to manage a large volume of inventory effectively. We depend on our forecasts of demand for and popularity of our products to
make purchase decisions and to manage our inventory. Demand for products, however, can change significantly between the time inventory
or components are ordered and the date of sale. Demand may be affected by seasonality, new product launches, rapid changes in product
cycles and pricing, product defects, changes in consumer spending patterns, changes in consumer tastes with respect to our products
and other factors, and our customers may not order products in the quantities that we expect. It may be difficult to accurately
forecast demand, and determine appropriate product or component.
If we fail to manage
our inventory effectively or negotiate favorable credit terms with suppliers, we may be subject to a decline in inventory values,
and significant inventory write-downs or write-offs. In addition, if we are required to lower sale prices in order to reduce inventory
level or to pay higher prices to our suppliers in order to secure the right to return products to our suppliers, our profit margins
might be negatively affected. Any of the above may materially and adversely affect our results of operations and financial condition.
Our business depends on the continued
efforts of our management. If we lose their services or they are unable to work together effectively or efficiently, our business
may be severely disrupted.
Our business operations
depend on the continued services of our senior management, particularly the executive officers named in this prospectus. The management
team of Huaxin has been working together since the inception of Huaxin. If they cannot work together effectively or efficiently,
our business may be severely disrupted. If one or more of our executive officers were unable or unwilling to continue in their
present positions, we might not be able to replace them easily or at all. Our business, financial condition and results of operations
may be materially and adversely affected, and we may incur additional expenses to recruit, train and retain personnel. If any of
our executive officers joins a competitor or forms a competing business, we may lose customers, suppliers, know-how and key professionals
and staff members. Our executive officers have entered into employment agreements and confidentiality and non-competition agreements
with us. However, if any dispute arises between our officers and us, we may have to incur substantial costs and expenses in order
to enforce such agreements in China or we may be unable to enforce them at all.
If we are unable to recruit, train
and retain qualified personnel or sufficient workforce while controlling our labor costs, our business may be materially and adversely
affected.
We intend to hire
additional qualified employees to support our business operations and planned expansion in product categories. Our future success
depends, to a significant extent, on our ability to recruit, train and retain qualified personnel, particularly technical, fulfillment,
marketing and other operational personnel with experience in the online retail industry. Our experienced mid-level managers are
instrumental in implementing our business strategies, executing our business plans and supporting our business operations and growth.
The effective operation of our managerial and operating systems, customer service center and other back office functions also depends
on the hard work and quality performance of our management and employees. Since our industry is characterized by high demand and
intense competition for talent and labor, we can provide no assurance that we will be able to attract or retain qualified staff
or other highly skilled employees that we will need to achieve our strategic objectives. Labor costs in China have increased with
China's economic development, particularly in the large cities where our facilities locate. Rising inflation in China, which
has had a disproportionate impact on everyday essentials such as food, is also putting pressure on wages. In addition, as we are
still a young company, our ability to train and integrate new employees into our operations may also be limited and may not meet
the demand for our business growth on a timely fashion, or at all. If we are unable to attract, train and retain qualified personnel,
our business may be materially and adversely affected.
8
Any lack of requisite approvals,
licenses or permits applicable to our business or failure to comply with PRC laws and regulations may have a material and adverse
impact on our business, financial condition and results of operations.
Our business is subject
to governmental supervision and regulation by the relevant PRC governmental authorities, including the competent authorities of
Ministry of Commerce and the China Food and Drug Administration. Together, these government authorities promulgate and enforce
regulations that cover many aspects of the operation of retailing and distribution of food and nutritional supplements, including
entry into these industries, the scope of permissible business activities, licenses and permits for various business activities,
and foreign investment. We are required to hold a number of licenses and permits in connection with our business operation, including
the Liquor Wholesale License and Food Operation License. We have in the past held and currently hold all licenses and permits described
above.
As of the date of
this prospectus, we have not received any notice of warning or been subject to penalties or other disciplinary action from the
relevant governmental authorities regarding our conducting our business without the above mentioned approvals and permits. However,
we cannot assure you that we will not be subject to any penalties in the future. As the alcohol wholesale and retail industry is
still evolving in China, new laws and regulations may be adopted from time to time to require additional licenses and permits other
than those we currently have, and address new issues that arise from time to time. As a result, substantial uncertainties exist
regarding the interpretation and implementation of current and any future PRC laws and regulations applicable to our businesses.
If the PRC government considers that we were operating without the proper approvals, licenses or permits or promulgates new laws
and regulations that require additional approvals or licenses or imposes additional restrictions on the operation of any part of
our business, it has the power, among other things, to levy fines, confiscate our income, revoke our business licenses, and require
us to discontinue our relevant business or impose restrictions on the affected portion of our business. Any of these actions by
the PRC government may have a material and adverse effect on our results of operations.
Failure to make adequate contributions
to various employee benefits plans as required by PRC regulations may subject us to penalties.
Companies operating
in China are required to participate in various government-sponsored employee benefit plans, including certain social insurance,
housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages
of salaries, including bonuses and allowances, of employees up to a maximum amount specified by the local government from time
to time at locations where our employees are based. The requirement of employee benefit plans has not been implemented consistently
by the local governments in China given the different levels of economic development in different locations. Huaxin has deposited
social security premiums in full, and has opened a bank account and contributing housing provident funds as required. As for the
social security premiums, Huaxin may be subject to a late payment fine computed from the due date at the rate of 0.05% per day;
where payment is not made within the stipulated period, the relevant administrative authorities may impose a fine ranging from
one to three times the amount of the amount in arrears. As for the housing provident fund, if Huaxin fails to go through the formalities
to register or open the account within the prescribed time limit, a fine of not less than RMB10,000 nor more than RMB50,000 shall
be imposed. If Huaxin fails to make the payment and deposit within the prescribed time limit, an application may be made to the
people's court for compulsory enforcement.
Failure to renew our current leases
or locate desirable alternatives for our facilities could materially and adversely affect our business.
As of the date of
this prospectus, we leased an aggregate of approximately 2600 square meters of properties for our offices used for communication
and development, customer service and management and our operations in general. We may not be able to successfully extend or renew
such leases upon expiration of the current term on commercially reasonable terms or at all, and may therefore be forced to relocate
our affected operations. This could disrupt our operations and result in significant relocation expenses, which could adversely
affect our business, financial condition and results of operations. In addition, we compete with other businesses for premises
at certain locations or of desirable sizes. As a result, even though we could extend or renew our leases, rental payments may significantly
increase as a result of the high demand for the leased properties. In addition, we may not be able to locate desirable alternative
sites for our facilities as our business continues to grow and such failure in relocating our affected operations could affect
our business and operations.
We have identified material weaknesses
in our internal control over financial reporting. If our remediation of these material weaknesses is not effective, or if we experience
additional material weaknesses in the future, we may not be able to accurately or timely report our financial condition or results
of operations, which may adversely affect investor confidence in us and, as a result, the value of our shares of Common Stock.
In connection
with the audit of the consolidated financial statements as of and for the year ended June 30, 2018,  PKF Littlejohn LLP
identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or
combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a
material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
9
Based upon an evaluation
the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls
and procedures were not effective as of June 30, 2018 to ensure that information required to be disclosed by the Company in the
reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time
periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's
management, including the Company's CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
The principal basis for this conclusion is the lack of segregation of duties within our financial function and the lack of an operating
Audit Committee, as well as the Company's failure to engage sufficient resources in regards to our accounting and reporting
obligations.
We have initiated remediation efforts focused
on improving our internal control over financial reporting and to specifically address the control deficiencies that led to our
material weaknesses. These efforts include the following:
●
Requiring all of the accounting personnel in the accounting department to take a minimum of 24 CPE credits annually with a
focus on US GAAP and financial reporting standards. We also required the Chief Financial Officer to take a minimum of 40 CPE credits
annually with a focus on US GAAP and financial reporting standards.
●
Implementing an internal review process over financial reporting to continue to improve our ongoing review and supervision
of our internal control over financial reporting;
●
Implementing an ongoing initiative and training in the Company to ensure the importance of internal
controls and compliance with the established policies and procedures are fully understood throughout the organization, and we plan
to provide continuous U.S. GAAP knowledge training to relevant employees involved to ensure the performance of and the compliance
with those procedures and policies.
We cannot assure you
that the measures we have taken to date, and are continuing to implement, will be sufficient to remediate the material weaknesses
we have identified or avoid potential future material weaknesses. If the steps we take do not remediate the material weaknesses
in a timely manner, we will be unable to conclude that we maintain effective disclosure controls and procedures or effective internal
control over financial reporting. Additionally, these material weaknesses could result in a misstatement of our accounts or disclosures
that would result in a material misstatement of our annual or interim consolidated financial statements that would not be prevented
or detected.
As a public company,
we will be required to maintain adequate internal control over financial reporting and to report any material weaknesses in our
internal control over financial reporting. SEC Regulation S-K requires that we evaluate and determine the effectiveness of
our internal control over financial reporting and provide a management report on internal control over financial reporting.
Regulation S-K also requires that our management report on internal control over financial reporting be attested to by our independent
registered public accounting firm, to the extent we are no longer an emerging growth company. We do not expect our independent
registered public accounting firm to attest to our management report on internal control over financial reporting while we are
an emerging growth company.
We are in the process
of evaluating our internal control over financial reporting required to comply with this obligation, and this process will be time
consuming, costly and complicated. If we identify any additional material weaknesses in our internal control over financial reporting,
if we are unable to comply with the requirements of Regulation S-K in a timely manner, if we are unable to assert that our internal
control over financial reporting is effective, or when required in the future, if our independent registered public accounting
firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting,
investors may lose confidence in our financial reports and the market price of our shares of Common Stock could be adversely affected.
We may not be able to adequately
protect our intellectual property rights, and our competitors may be able to offer similar products and services, which would harm
our competitive position.
Our success depends
in part upon our intellectual property rights. We rely primarily on trademark, copyright, trade secret laws, confidentiality procedures,
license agreements and contractual provisions to establish and protect our proprietary rights over our products, procedures and
services. Other persons could copy or otherwise obtain and use our intellectual properties without authorization, or create intellectual
properties similar to ours independently. We may also pursue the registration of our domain names, trademarks, and service marks
in other jurisdictions, including the United States. However, the intellectual property laws in China are not considered as strong
as comparable laws in the United States or the European Union. We cannot assure you that we will be able to protect our proprietary
rights. Further, our competitors may be able to independently develop similar intellectual property, duplicate our products and
services or design around any intellectual property rights we hold. Further, our intellectual property rights may be subject to
termination or expirations. The loss of intellectual property protections or the inability to timely regain intellectual property
protections could harm our business and ability to compete.
10
We may be subject to intellectual
property infringement claims, which may be expensive to defend and may disrupt our business and operations.
We cannot be certain
that our operations or any aspects of our business do not or will not infringe upon or otherwise violate trademarks, patents, copyrights,
know-how or other intellectual property rights held by third parties. We have not been in the past, but may be from time to time
in the future, subject to legal proceedings and claims relating to the intellectual property rights of others. There may be third-party
intellectual property that is infringed by our products, services or other aspects of our business. There could also be existing
patents or other intellectual property rights of which we are not aware that our products may inadvertently infringe. We cannot
assure you that holders of the relevant intellectual property rights purportedly relating to some aspect of our technology platform
or business, if any such holders exist, would not seek to enforce such intellectual property rights against us in China, the United
States or any other jurisdictions. In addition, we strive to closely monitor the products offered on our internet platform, and
also require suppliers and third-party merchants to indemnify us for any losses we suffer or any costs that we incur in relation
to the products we source from such suppliers or the products offered by such third-party merchants on our internet platform. However,
we cannot be certain that these measures would be effective in completely preventing the infringement of trademarks, patents, copyrights,
know-how or other intellectual property rights held by third parties. Further, the application and interpretation of China's
intellectual property right laws and the procedures and standards for granting trademarks, patents, copyrights, know-how or other
intellectual property rights in China are still evolving and are uncertain, and we cannot assure you that PRC courts or regulatory
authorities would agree with our analysis. If we are found to have violated the intellectual property rights of others, we may
be subject to liability for our infringement activities or may be prohibited from using such intellectual property, and we may
incur licensing fees or be forced to develop alternatives of our own. In addition, we may incur significant expenses, and may be
forced to divert management's time and other resources from our business and operations to defend against these third-party
infringement claims, regardless of their merits. Successful infringement or licensing claims made against us may result in significant
monetary liabilities and may materially disrupt our business and operations by restricting or prohibiting our use of the intellectual
property in question.
We may need additional capital, and
financing may not be available on terms acceptable to us, or at all.
We believe our current
cash and cash equivalents and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs for the
next 12 months. We may, however, require additional cash resources due to changed business conditions or other future developments,
including any marketing initiatives or investments we may decide to pursue. If these resources are insufficient to satisfy our
cash requirements, we may seek to obtain a credit facility or sell additional equity or debt securities. The sale of additional
equity securities could result in dilution of our existing shareholders. The incurrence of indebtedness would result in increased
debt obligations and could result in operating and financing covenants that would restrict our operations. In addition, it is uncertain
whether financing will be available in amounts or on terms acceptable to us, if at all.
We have limited insurance coverage
which could expose us to significant costs and business disruption.
We maintain certain
insurance policies to safeguard against risks and unexpected events. We have purchased cargo transportation insurance covering
our inventory in transit. However, as the insurance industry in China is still in an early stage of development, insurance companies
in China currently offer limited business-related insurance products. We do not maintain business interruption insurance or product
liability insurance, nor do we maintain key-man life insurance. We cannot assure you that our insurance coverage is sufficient
to prevent us from any loss or that we will be able to successfully claim our losses under our current insurance policy on a timely
basis, or at all. If we incur any loss that is not covered by our insurance policies, or the compensated amount is significantly
less than our actual loss, our business, financial condition and results of operations could be materially and adversely affected.
We face risks related to natural
disasters, health epidemics and other outbreaks, which could significantly disrupt our operations.
Our business could
be adversely affected by natural disasters or the outbreak of avian influenza, severe acute respiratory syndrome, or SARS, the
influenza A (H1N1), H7N9 or other epidemics. Any of such occurrences could cause severe disruption to our daily operations, and
may even require a temporary closure of our facilities. Such closures may disrupt our business operations and adversely affect
our results of operations. Our operation could also be disrupted if our suppliers, customers or business partners were affected
by such natural disasters or health epidemics.
11
Risks Related to Doing Business in China
A slowdown of the Chinese economy or
adverse changes in economic and political policies of the PRC government could negatively impact China's overall economic
growth, which could materially adversely affect our business.
After the Business Combination,
we will be a holding company and all of the combined company's operations will be entirely conducted in the PRC. Although
the PRC economy has grown in recent years, the pace of growth has slowed, and even that rate of growth may not continue. The annual
rate of growth in the PRC declined from 6.9% in 2015 to 6.7% in 2016, 6.8% in 2017 and 6.6% in 2018. According to a recent State
Information of China forecast, China's economic growth rate in 2019 will slow to 6%-6.5%, its lowest since 1990. A slowdown
in overall economic growth, an economic downturn or recession or other adverse economic developments in the PRC may materially
reduce the demand for the company's products and may have a materially adverse effect on its business.
China's economy
differs from the economies of most other countries in many respects, including the amount of government involvement in the economy,
the general level of economic development, growth rates and government control of foreign exchange and the allocation of resources.
While the PRC economy has grown significantly over the past few decades, this growth has remained uneven across different periods,
regions and economic sectors.
The PRC government also
exercises significant control over China's economic growth by allocating resources, controlling the payment of foreign currency-denominated
obligations, setting monetary policy and providing preferential treatment to particular industries or companies. Any actions and
policies adopted by the PRC government could negatively impact the Chinese economy or the economy of the region the combined company
serves, which could materially adversely affect the combined company's business.
Substantial uncertainties and restrictions
with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant
impact upon the business the combined company may be able to conduct in the PRC and accordingly on the results of its operations
and financial condition.
The combined company's
business operations may be adversely affected by the current and future political environment in the PRC. The Chinese government
exerts substantial influence and control over the manner in which the combined company must conduct its business activities. The
combined company's ability to operate in China may be adversely affected by changes in Chinese laws and regulations. Under
the current government leadership, the government of the PRC has been pursuing economic reform policies that encourage private
economic activities and greater economic decentralization. However, the government of the PRC may not continue to pursue these
policies, or may significantly alter these policies from time to time without notice.
There are substantial
uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws
and regulations governing the combined company's business, or the enforcement and performance of the combined company's
arrangements with borrowers in the event of the imposition of statutory liens, death, bankruptcy or criminal proceedings. Only
after 1979 did the Chinese government begin to promulgate a comprehensive system of laws that regulate economic affairs in general,
deal with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade, as
well as encourage foreign investment in China. Although the influence of the law has been increasing, China has not developed a
fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities
in China. Also, because these laws and regulations are relatively new, and because of the limited volume of published cases and
their lack of force as precedents, interpretation and enforcement of these laws and regulations involve significant uncertainties.
New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. In addition, there
have been constant changes and amendments of laws and regulations over the past 40 years in order to keep up with the rapidly changing
society and economy in China. Because government agencies and courts provide interpretations of laws and regulations and decide
contractual disputes and issues, their inexperience in adjudicating new business and new polices or regulations in certain less
developed areas causes uncertainty and may affect the combined company's business. Consequently, neither Huaxin nor Oranco
can predict the future direction of Chinese legislative activities with respect to either businesses with foreign investment or
the effectiveness on enforcement of laws and regulations in China. The uncertainties, including new laws and regulations and changes
of existing laws, as well as judicial interpretation by inexperienced officials in the agencies and courts in certain areas, may
cause possible problems to foreign investors.
Both Huaxin and Oranco's businesses
are subject to extensive regulation and supervision by state, provincial and local government authorities, which may interfere
with the way the combined company conducts its business and may negatively impact its financial results.
Both Huaxin and Oranco
are subject to extensive and complex state, provincial and local laws, rules and regulations with regard to their loan operations,
capital structure, maximum interest rates, allowance for loan losses, among other things, as set out in "Business —
Government Regulations." These laws, rules and regulations are issued by different central government ministries and departments,
provincial and local governments and are enforced by different local authorities. As a result of the complexity, uncertainties
and constant changes in these laws, rules and regulation, including changes in interpretation and implementation of such, both
Huaxin and Oranco's business activities and growth may be adversely affected if they do not respond to the changes in a timely
manner or are found to be in violation of the applicable laws, regulations and policies as a result of a different position from
theirs taken by the competent authority in the interpretation of such applicable laws, regulations and policies. If Huaxin and
Oranco are found to be not in compliance with these laws and regulations, they may be subject to sanctions by regulatory authorities,
monetary penalties and/or reputation damage, which could have a material adverse effect on the combined company's business
operations and profitability.
12
You may experience difficulties in effecting
service of legal process, enforcing foreign judgments or bringing original actions against us or our management, in China, based
upon United States laws, including the U.S. federal securities laws, or other foreign laws.
We are a company incorporated
in Nevada. After the Business Combination, substantially all of our operations will be conducted in China, and substantially all
of our assets will be located in China. All of our current and proposed directors and officers reside in China, and substantially
all of the assets of those persons are located outside of the United States. As a result, Zhonglun W&D Law Firm, our counsel
as to PRC law, has advised us that it may be difficult for a shareholder to effect service of process within the United States
upon these persons, or to enforce judgments against us which are obtained in United States courts, including judgments predicated
upon the civil liability provisions of the securities laws of the United States or any state in the United States.
Zhonglun W&D Law
Firm has further advised us that the recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures
Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law
based either on treaties between China and the country where the judgment is made or on principles of reciprocity between jurisdictions.
China does not have any treaties or other form of reciprocity with the United States providing for the reciprocal recognition and
enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a
foreign judgment against us or our directors or officers if they decide that the judgment violates the basic principles of PRC
laws, national sovereignty, security or public interest. As a result, it is uncertain whether and on what basis a PRC court would
enforce a judgment rendered by a court in the United States.
Zhonglun W&D Law
Firm has also advised us that in the event shareholders originate an action against a company without domicile in China for disputes
related to contracts or other property interests, the PRC courts may accept a cause of action if (a) the disputed contract is concluded
or performed in the PRC or the disputed subject matter is located in the PRC, (b) the company (as defendant) has properties that
can be seized within the PRC, (c) the company has a representative organization within the PRC, or (d) the parties chose to submit
to the jurisdiction of the PRC courts in the contract on the condition that such submission does not violate the requirements of
jurisdiction under the PRC Civil Procedures Law. The action may be initiated by the shareholder by filing a complaint with the
PRC courts. The PRC courts would determine whether to accept the complaint in accordance with the PRC Civil Procedures Law. The
shareholder may participate in the action by itself or entrust any other person or PRC legal counsel to participate on behalf of
such shareholder. Foreign citizens and companies will have the same rights as PRC citizens and companies in such an action unless
such foreign country restricts the rights of PRC citizens and companies.
Dividends payable to our foreign investors
and gains on the sale of our shares of Common Stock by our foreign investors may become subject to tax by the PRC.
Under the Enterprise
Income Tax Law and its implementation regulations issued by the State Council of the PRC, a 10% PRC withholding tax is applicable
to dividends payable to investors that are non-resident enterprises, which do not have an establishment or place of business in
the PRC or which have such establishment or place of business but the dividends are not effectively connected with such establishment
or place of business, to the extent such dividends are derived from sources within the PRC. Similarly, any gain realized on the
transfer of shares by such investors is also subject to PRC tax at a current rate of 10%, subject to any reduction or exemption
set forth in relevant tax treaties, if such gain is regarded as income derived from sources within the PRC. If we are deemed a
PRC resident enterprise, dividends paid on our shares, and any gain realized from the transfer of our shares, would be treated
as income derived from sources within the PRC and would as a result be subject to PRC taxation. Furthermore, if we are deemed a
PRC resident enterprise, dividends payable to individual investors who are non-PRC residents and any gain realized on the transfer
shares by such investors may be subject to PRC tax at a current rate of 20%, subject to any reduction or exemption set forth in
applicable tax treaties. It is unclear whether we or any of our subsidiaries established outside of China are considered a PRC
resident enterprise, holders of shares would be able to claim the benefit of income tax treaties or agreements entered into between
China and other countries or areas. If dividends payable to our non-PRC investors, or gains from the transfer of our shares by
such investors are subject to PRC tax, the value of your investment in our shares may decline significantly.
Our global income may be subject to
PRC taxes under the PRC Enterprise Income Tax Law, which could have a material adverse effect on our results of operations.
Under the PRC Enterprise
Income Tax Law, or the New EIT Law, and its amendment and implementation rules, which became effective in January 2008, an enterprise
established outside of the PRC with a "de facto management body" located within the PRC is considered a PRC resident
enterprise and will be subject to the enterprise income tax at the rate of 25% on its global income. The implementation rules define
the term "de facto management bodies" as "establishments that carry out substantial and overall management and
control over the manufacturing and business operations, personnel and human resources, finance and treasury, and Business Combination
and disposition of properties and other assets of an enterprise." On April 22, 2009, the State Administration of Taxation
(the "SAT"), issued a circular, or SAT Circular 82, which provides certain specific criteria for determining whether
the "de facto management body" of a PRC-controlled enterprise that is incorporated offshore is located in China. Although
the SAT Circular 82 only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled
by PRC individuals or foreigners, the determining criteria set forth in the SAT Circular 82 may reflect the SAT's general
position on how the "de facto management body" text should be applied in determining the resident status of all offshore
enterprises for the purpose of PRC tax, regardless of whether they are controlled by PRC enterprises or individuals. Although we
do not believe that our legal entities organized outside of the PRC constitute PRC resident enterprises, it is possible that the
PRC tax authorities could reach a different conclusion. In such case, we may be considered a PRC resident enterprise and may therefore
be subject to the 25% enterprise income tax on our global income, which could significantly increase our tax burden and materially
and adversely affect our cash flow and profitability. In addition to the uncertainty regarding how the new PRC resident enterprise
classification for tax purposes may apply, it is also possible that the rules may change in the future, possibly with retroactive
effect.
13
We and our shareholders face uncertainties
with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.
On February 3, 2015,
the State Administration of Taxation issued an Announcement on Several Issues Concerning Enterprise Income Tax on Income Arising
from Indirect Transfers of Property by Non-PRC Resident Enterprises, or Circular 7, with the same effective date. Under Announcement
7, an "indirect transfer" refers to a transaction where a non-resident enterprise transfers its equity interest and
other similar interest in an offshore holding company, which directly or indirectly holds Chinese taxable assets (the assets of
an "establishment or place" situated in China; real property situated in China and equity interest in Chinese resident
enterprises) and any indirect transfer without reasonable commercial purposes are subject to the PRC taxation. In addition, Announcement
7 specifies the conditions under which an indirect transfer is deemed to lack a reasonable commercial purpose which include: (1)
75% or more of the value of the offshore holding company's equity is derived from Chinese taxable assets, (2) anytime in
the year prior to the occurrence of the indirect transfer of Chinese taxable assets, 90% or more of the total assets (excluding
cash) of the offshore holding company are direct or indirect investment in China, or 90% or more of the revenue of the offshore
holding company was sourced from China; (3) the functions performed and risks assumed by the offshore holding company(ies), although
incorporated in an offshore jurisdiction to conform to the corporate law requirements there, are insufficient to substantiate their
corporate existence and (4) the foreign income tax payable in respect of the indirect transfer is lower than the Chinese tax which
would otherwise be payable in respect of the direct transfer if such transfer were treated as a direct transfer. As a result, gains
derived from such indirect transfer will be subject to PRC enterprise income tax, currently at a rate of 10%.
Announcement 7 grants
a safe harbor under certain qualifying circumstances, including transfers in the public securities market and certain intragroup
restricting transactions, however, there is uncertainty as to the implementation of Announcement 7. For example, Announcement 7
requires the buyer to withhold the applicable taxes without specifying how to obtain the information necessary to calculate taxes
and when the applicable tax shall be submitted. Announcement 7 may be determined by the tax authorities to be applicable to our
offshore restructuring transactions or sale of the shares of our offshore subsidiaries where non-resident enterprises, being the
transferors, were involved. Though Announcement 7 does not impose a mandatory obligation of filing the report of taxable events,
the transferring party shall be subject to PRC withholding tax if the certain tax filing conditions are met. Non-filing may result
in an administrative penalty varying from 50% to 300% of unpaid taxes. As a result, we and our non-resident enterprises in such
transactions may become at risk of being subject to taxation under Announcement 7, and may be required to expend valuable resources
to comply with Announcement 7 or to establish that we and our non-resident enterprises should not be taxed under Announcement 7,
for any restructuring or disposal of shares of our offshore subsidiaries, which may have a material adverse effect on our financial
condition and results of operations.
Enhanced scrutiny over acquisition transactions
by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue in the future.
The PRC tax authorities
have enhanced their scrutiny over the direct or indirect transfer of certain taxable assets, including, in particular, equity interests
in a PRC resident enterprise, by a non-resident enterprise by promulgating and implementing SAT Circular 59 and Circular 698, which
became effective in January 2008, and a Circular 7 in replacement of some of the existing rules in Circular 698, which became effective
in February 2015.
Under Circular 698,
where a non-resident enterprise conducts an "indirect transfer" by transferring the equity interests of a PRC "resident
enterprise" indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise,
being the transferor, may be subject to PRC enterprise income tax, if the indirect transfer is considered to be an abusive use
of company structure without reasonable commercial purposes. As a result, gains derived from such indirect transfer may be subject
to PRC tax at a rate of up to 10%. Circular 698 also provides that, where a non-PRC resident enterprise transfers its equity interests
in a PRC resident enterprise to its related parties at a price lower than the fair market value, the relevant tax authority has
the power to make a reasonable adjustment to the taxable income of the transaction.
In February 2015, the
SAT issued Circular 7 to replace the rules relating to indirect transfers in Circular 698. Circular 7 has introduced a new tax
regime that is significantly different from that under Circular 698. Circular 7 extends its tax jurisdiction to not only indirect
transfers set forth under Circular 698 but also transactions involving transfer of other taxable assets, through the offshore transfer
of a foreign intermediate holding company. In addition, Circular 7 provides clearer criteria than Circular 698 on how to assess
reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity
through a public securities market. Circular 7 also brings challenges to both the foreign transferor and transferee (or other person
who is obligated to pay for the transfer) of the taxable assets. Where a non-resident enterprise conducts an "indirect transfer"
by transferring the taxable assets indirectly by disposing of the equity interests of an overseas holding company, the non-resident
enterprise being the transferor, or the transferee, or the PRC entity which directly owned the taxable assets may report to the
relevant tax authority such indirect transfer. Using a "substance over form" principle, the PRC tax authority may disregard
the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of
reducing, avoiding or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise
income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable
taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise.
14
On October 17,
2017, the SAT issued a Notice Concerning Withholding Income Tax of Non-Resident Enterprise, or SAT Notice No. 37, which abolishes
Circular 698 and certain provisions of Circular 7. SAT Notice No. 37 further reduces the burden of the withholding
obligator, such as revocation of contract filing requirements and tax liquidation procedures, strengthens the cooperation of tax
authorities in different places, and clarifies the calculation of tax payable and mechanism of foreign exchange.
We face uncertainties
on the reporting and consequences on future private equity financing transactions, share exchange or other transactions involving
the transfer of shares in our company by investors that are non-PRC resident enterprises. The PRC tax authorities may pursue such
non-resident enterprises with respect to a filing or the transferees with respect to withholding obligation, and request our PRC
subsidiaries to assist in the filing. As a result, we and non-resident enterprises in such transactions may become at risk of being
subject to filing obligations or being taxed, under Circular 59 or Circular 7 and SAT Notice No. 37, and may be required to
expend valuable resources to comply with Circular 59, Circular 7 and SAT Notice No. 37 or to establish that we and our non-resident
enterprises should not be taxed under these circulars, which may have a material adverse effect on our financial condition and
results of operations.
The PRC tax authorities
have the discretion under SAT Circular 59, Circular 7 and SAT Notice No. 37 to make adjustments to the taxable capital gains
based on the difference between the fair value of the taxable assets transferred and the cost of investment. Although we currently
have no plans to pursue any acquisitions in China or elsewhere in the world, we may pursue acquisitions in the future that may
involve complex corporate structures. If we are considered a non-resident enterprise under the PRC Enterprise Income Tax Law and
if the PRC tax authorities make adjustments to the taxable income of the transactions under SAT Circular 59 or and SAT Notice No. 37
and Circular 7, our income tax costs associated with such potential acquisitions will be increased, which may have an adverse effect
on our financial condition and results of operations.
Restrictions on currency exchange may
limit our ability to utilize our revenue effectively.
Substantially all of
our revenue is denominated in Renminbi. The Renminbi is currently convertible under the "current account," which includes
dividends, trade and service-related foreign exchange transactions, but not under the "capital account," which includes
foreign direct investment and loans. Currently, our PRC subsidiaries, which are wholly-foreign owned enterprises, may purchase
foreign currency for settlement of "current account transactions," including payment of dividends to us, without the
approval of SAFE by complying with certain procedural requirements. However, the relevant PRC governmental authorities may limit
or eliminate our ability to purchase foreign currencies in the future for current account transactions. Since a significant amount
of our future revenue will be denominated in Renminbi, any existing and future restrictions on currency exchange may limit our
ability to utilize revenue generated in Renminbi to fund our business activities outside of the PRC or pay dividends in foreign
currencies to our shareholders. Foreign exchange transactions under the capital account remain subject to limitations and require
approvals from, or registration with, SAFE or banks and other relevant PRC governmental authorities. This could affect our ability
to obtain foreign currency through debt or equity financing for all of our PRC subsidiaries.
Fluctuations in the foreign currency
exchange rate between U.S. Dollars and Renminbi could adversely affect our financial condition.
The value of the RMB
against the U.S. dollar and other currencies may fluctuate. Exchange rates are affected by, among other things, changes in political
and economic conditions and the foreign exchange policy adopted by the PRC government. On July 21, 2005, the PRC government changed
its policy of pegging the value of the RMB to the U.S. dollar. Under this policy, the RMB is permitted to fluctuate within a narrow
and managed band against a basket of foreign currencies. Following the removal of the U.S. dollar peg, the RMB appreciated more
than 20% against the U.S. dollar over three years. From July 2008 until June 2010, however, the RMB traded stably within a narrow
range against the U.S. dollar. On June 20, 2010, the PBOC announced that the PRC government would reform the RMB exchange rate
regime and increase the flexibility of the exchange rate. Since June 2010, the RMB has appreciated more than 10% against the U.S.
dollar. In April 2012, the PRC government announced it would allow greater RMB exchange rate fluctuation. On August 11, 12 and
13, 2015, the PRC government successively set the central parity rate for the RMB more than 3% lower in the aggregate than that
of August 10, 2015 and announced that it will begin taking into account previous day's trading in setting the central parity
rate. In 2015, the yuan experienced a 4.88% drop in value, and on January 4, 2016 the PRC government set the U.S. dollar-Chinese
yuan currency pair to a reference rate of 6.5%, the lowest rate in 4.5 years, on January 6, 2017, the reference rate was 0.9% up-regulated
by the PRC government. However, it is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange
rate between the RMB and the U.S. dollar in the future. As significant international pressure remains on the PRC government to
adopt a more flexible currency policy, greater fluctuation of the RMB against the U.S. dollar could result.
15
Our revenues and costs
are mostly denominated in the RMB, and a significant portion of our financial assets are also denominated in the RMB. Any significant
fluctuations in the exchange rate between the RMB and the U.S. dollar may materially adversely affect our cash flows, revenues,
earnings and financial position, and the amount of and any dividends we may pay on our shares in U.S. dollars. Fluctuations in
the exchange rate between the RMB and the U.S. dollar could also result in foreign currency translation losses for financial reporting
purposes.
If any dividend is declared in the future
and paid in a foreign currency, you may be taxed on a larger amount in U.S. dollars than the U.S. dollar amount that you will actually
ultimately receive.
If you are a U.S. holder
of our shares of Common Stock, you will be taxed on the U.S. dollar value of your dividends, if any, at the time you receive them,
even if you actually receive a smaller amount of U.S. dollars when the payment is in fact converted into U.S. dollars. Specifically,
if a dividend is declared and paid in a foreign currency such as the RMB, the amount of the dividend distribution that you must
include in your income as a U.S. holder will be the U.S. dollar value of the payments made in the foreign currency, determined
at the spot rate of the foreign currency to the U.S. dollar on the date the dividend distribution is includible in your income,
regardless of whether the payment is in fact converted into U.S. dollars. Thus, if the value of the foreign currency decreases
before you actually convert the currency into U.S. dollars, you will be taxed on a larger amount in U.S. dollars than the U.S.
dollar amount that you will actually ultimately receive.
Future inflation in China may inhibit
economic activity and adversely affect the combined company's operations.
The Chinese economy
has experienced periods of rapid expansion in recent years which can lead to high rates of inflation or deflation. This has caused
the PRC government to, from time to time, enact various corrective measures designed to restrict the availability of credit or
regulate growth and contain inflation. High inflation may in the future cause the PRC government to once again impose controls
on credit and/or prices, or to take other action, which could inhibit economic activity in China. Any action on the part of the
PRC government that seeks to control credit and/or prices may adversely affect the combined company's business operations.
PRC laws and regulations have established
more complex procedures for certain acquisitions of Chinese companies by foreign investors, which could make it more difficult
for the combined company to pursue growth through acquisitions in China.
Further to the Regulations
on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the New M&A Rules, the Anti-monopoly Law of the
PRC, the Rules of Ministry of Commerce on Implementation of Security Review System of Mergers and Acquisitions of Domestic Enterprises
by Foreign Investors promulgated by MOFCOM or the MOFCOM Security Review Rules, was issued in August 2011, which established additional
procedures and requirements that are expected to make merger and acquisition activities in China by foreign investors more time-consuming
and complex, including requirements in some instances that MOFCOM be notified in advance of any change of control transaction in
which a foreign investor takes control of a PRC enterprise, or that the approval from MOFCOM be obtained in circumstances where
overseas companies established or controlled by PRC enterprises or residents acquire affiliated domestic companies. PRC laws and
regulations also require certain merger and acquisition transactions to be subject to merger control review and or security review.
The MOFCOM Security
Review Rules, effective from September 1, 2011, which implement the Notice of the General Office of the State Council on Establishing
the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors promulgated on February 3,
2011, further provide that, when deciding whether a specific merger or acquisition of a domestic enterprise by foreign investors
is subject to the security review by MOFCOM, the principle of substance over form should be applied and foreign investors are prohibited
from bypassing the security review requirement by structuring transactions through proxies, trusts, indirect investments, leases,
loans, control through agreements control or offshore transactions.
Further, if the business
of any target company that the combined company seek to acquire falls into the scope of security review, the combined company may
not be able to successfully acquire such company either by equity or asset acquisition, capital contribution or through any contractual
agreements. The combined company may grow its business in part by acquiring other companies operating in its industry. Complying
with the requirements of the relevant regulations to complete such transactions could be time consuming, and any required approval
processes, including approval from MOFCOM, may delay or inhibit its ability to complete such transactions, which could affect its
ability to maintain or expand its market share.
In addition, SAFE promulgated
the Circular on the Settlement of Foreign Currency Capital of Foreign-invested Enterprises, or Circular 19, on June 1, 2015. Under
Circular 19, registered capital of a foreign-invested company settled in RMB converted from foreign currencies may only be used
within the business scope approved by the applicable governmental authority and the equity investments in the PRC made by the foreign-invested
company shall be subject to the relevant laws and regulations about the foreign-invested company's reinvestment in the PRC.
In addition, foreign-invested companies cannot use such capital to make the investments on securities, and cannot use such capital
to issue the entrusted RMB loans (except approved in its business scope), repay the RMB loans between the enterprises and the ones
which have been transferred to the third party. Circular 19 may significantly limit our ability to effectively use the proceeds
from future financing activities as the Chinese subsidiaries may not convert the funds received from us in foreign currencies into
RMB, which may adversely affect their liquidity and our ability to fund and expand our business in the PRC.
16
SAFE issued the Circular
on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts ("Circular 16"),
on June 9, 2016, which became effective simultaneously. Pursuant to Circular 16, enterprises registered in the PRC may also convert
their foreign debts from foreign currency to RMB on self-discretionary basis. Circular 16 provides an integrated standard for conversion
of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on self-discretionary
basis which applies to all enterprises registered in the PRC. Circular 16 reiterates the principle that RMB converted from foreign
currency-denominated capital of a company may not be directly or indirectly used for purpose beyond its business scope or prohibited
by PRC Laws or regulations, while such converted RMB shall not be provide as loans to its non-affiliated entities. As Circular
16 is newly issued and SAFE has not provided detailed guidelines with respect to its interpretation or implementation, it is uncertain
how these rules will be interpreted and implemented.
Failure to comply with the United States
Foreign Corrupt Practices Act and Chinese anti-corruption laws could subject us to penalties and other adverse consequences.
As our shares are listed
on OTC Pink Market, we are subject to the United States Foreign Corrupt Practices Act, which generally prohibits United States
companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining
business. Non-U.S. companies, including some that may compete with us, may not be subject to these prohibitions. In addition, in
2012, the central government of the PRC commenced a far-reaching campaign against corruption. That ongoing campaign involves aggressive
enforcement of existing Chinese anti-corruption laws. Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices
may occur from time-to-time in the PRC. Our employees or other agents may engage in such conduct for which we might be held responsible.
If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties and other consequences
that may have a material adverse effect on our business, financial condition and results of operations.
SEC administrative proceedings against
the China affiliates of multi-national accounting firms, and/or any related adverse regulatory development in the PRC, may result
in our financial statements being determined to not be in compliance with the requirements of the Exchange Act of 1934, as amended,
or the Exchange Act.
In December 2012, the
SEC brought administrative proceedings against five major accounting firms in China alleging that they had refused to produce audit
work papers and other documents related to certain other China-based companies under investigation by the SEC. On January 22, 2014,
an initial administrative law decision was issued, censuring these accounting firms and suspending four of these firms from practicing
before the SEC for a period of six months. The decision is neither final nor legally effective unless and until reviewed and approved
by the SEC. On February 12, 2014, four of these PRC-based accounting firms appealed to the SEC against this decision. In February
2015, each of the four PRC-based accounting firms agreed to a censure and to pay a fine to the SEC to settle the dispute and avoid
suspension of their ability to practice before the SEC. The settlement requires the firms to follow detailed procedures to seek
to provide the SEC with access to Chinese firms' audit documents via the Chinese Securities Regulatory Commission. If the
firms do not follow these procedures, the SEC could restart the administrative proceedings.
In the event that the
SEC restarts the administrative proceedings or initiates new proceedings against other firms, depending upon the final outcome,
listed companies in the United States with major PRC operations may find it difficult or impossible to retain auditors in respect
of their operations in the PRC, which could result in financial statements being determined to not be in compliance with the requirements
of the Exchange Act, including possible delisting. Moreover, any negative news about the proceedings against these audit firms
may cause investor uncertainty regarding China-based, United States-listed companies and the market price of our shares may be
adversely affected.
If our independent registered
public accounting firm was denied, even temporarily, the ability to practice before the SEC and we were unable to timely find another
registered public accounting firm to audit and issue an opinion on our financial statements, our financial statements could be
determined not to be in compliance with the requirements of the Exchange Act. Such a determination could ultimately lead to our
deregistration from the SEC, which would substantially reduce or effectively terminate the trading of our shares in the United
States.
If our management following our Business
Combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with
such laws, which could lead to various regulatory issues.
Following our initial
Acquisition, our management will likely resign from their positions as officers or directors of the company and the management
of the target business at the time of the Acquisition will remain in place. Management of the target business may not be familiar
with United States securities laws. If new management is unfamiliar with these laws, they may have to expend time and resources
becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues, which
may adversely affect our operations.
17
If we become directly subject to the
recent scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources
to investigate and resolve the matter which could harm our business operations and our reputation and could result in a loss of
your investment in our shares, especially if such matter cannot be addressed and resolved favorably.
U.S. public companies
that have substantially all of their operations in China have been the subject of intense scrutiny, criticism and negative publicity
by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity
has centered around financial and accounting irregularities, a lack of effective internal controls over financial accounting, inadequate
corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny,
criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese companies has sharply decreased in value
and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement
actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide
scrutiny, criticism and negative publicity will have on our company and our business. If we become the subject of any unfavorable
allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate
such allegations and/or defend the Company. This situation may be a major distraction to our management. If such allegations are
not proven to be groundless, our company and business operations will be severely hampered and your investment in our stock could
be rendered worthless.
The disclosures in our reports and other
filings with the SEC and our other public pronouncements are not subject to the scrutiny of any regulatory bodies in the PRC.
Our reports and other
filings with the SEC are subject to SEC review in accordance with the rules and regulations promulgated by the SEC under the Securities
Act and the Exchange Act. Our SEC filings and other disclosure and public pronouncements are not subject to the review or scrutiny
of any PRC regulatory authority. For example, the disclosure in our SEC reports and other filings are not subject to the review
by CSRC, a PRC regulator that is tasked with oversight of the capital markets in China. Accordingly, you should review our SEC
reports, filings and our other public pronouncements with the understanding that no local regulator has done any review of our
company, our SEC reports, other filings or any of our other public pronouncements.
18
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus contains forward looking
statements that involve risks and uncertainties, principally in the sections entitled "Description of Business," "Risk
Factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations."
All statements other than statements of historical fact contained in this prospectus, including statements regarding future events,
our future financial performance, business strategy and plans and objectives of management for future operations, are forward-looking
statements. We have attempted to identify forward-looking statements by terminology including "anticipates," "believes,"
"can," "continue," "could," "estimates," "expects," "intends,"
"may," "plans," "potential," "predicts," "should," or "will"
or the negative of these terms or other comparable terminology. Although we do not make forward looking statements unless we believe
we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are only predictions and involve
known and unknown risks, uncertainties and other factors, including the risks outlined under "Risk Factors" or elsewhere
in this prospectus, which may cause our or our industry's actual results, levels of activity, performance or achievements
expressed or implied by these forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment.
New risks emerge from time to time and it is not possible for us to predict all risk factors, nor can we address the impact of
all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ
materially from those contained in any forward-looking statements. All forward-looking statements included in this document are
based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements
You should not place undue reliance
on any forward-looking statement, each of which applies only as of the date of this prospectus. Before you invest in our securities,
you should be aware that the occurrence of the events described in the section entitled "Risk Factors" and elsewhere
in this prospectus could negatively affect our business, operating results, financial condition and stock price. Except as required
by law, we undertake no obligation to update or revise publicly any of the forward-looking statements after the date of this prospectus
to conform our statements to actual results or changed expectations.
19
USE OF PROCEEDS
This prospectus relates to shares of
our Common Stock that may be offered and sold from time to time by the selling stockholders named herein. We will not receive any
proceeds from the sale of shares by the selling stockholders in this offering.
DETERMINATION
OF OFFERING PRICE
The selling stockholders may sell these
shares in the over-the-counter market or otherwise, at market prices prevailing at the time of sale, at prices related to the prevailing
market price, or at negotiated prices.
DESCRIPTION
OF SECURITIES TO BE REGISTERED
Introduction
In the discussion that follows, we have summarized selected
provisions of our articles of incorporation relating to our capital stock. This summary is not complete. This discussion is subject
to the relevant provisions of Nevada law and is qualified in its entirety by reference to our articles of incorporation and our
bylaws. You should read our articles of incorporation and our bylaws as currently in effect for provisions that may be important
to you.
Authorized Capital Stock
Our authorized share capital consists of 500,000,000 shares
of Common Stock. As of July 3, 2019, there were 419,487,480 shares of Common Stock issued and outstanding.
Common Stock
As dictated by our articles of incorporation,
all shares of Common Stock have equal rights and privileges with respect to (i) one non-cumulative vote for each share held of
record on all matters submitted to a vote of the stockholders; (ii) to participate equally and to receive any and all such
dividends as may be declared by the Board of Directors out of funds legally available therefor; and (iii) to participate pro
rata in any distribution of assets available for distribution upon liquidation of the Company. Stockholders of the Company have
no pre-emptive rights to acquire additional shares of Common Stock or any other securities. The Common Stock is not subject to
redemption and carries no subscription or conversion rights. All outstanding shares of Common Stock are fully paid and non-assessable.
The articles of incorporation may only be amended by a majority vote of the stockholders holding at least a majority of each class
of stock outstanding and entitled to vote. A quorum of outstanding shares for voting on an amendment to the articles of incorporation
shall not be met unless 51% or more of the issued and outstanding shares are present at a properly called and noticed meeting of
the Stockholders.
In the event of any merger or consolidation
with or into another company in connection with which shares of our Common Stock are converted into or exchangeable for shares
of stock, other securities or property (including cash) a general or special shareholder's meeting should be called for such
purpose, wherein all shareholders would be entitled to vote in person or by proxy. In the notice of such a shareholder's
meeting and proxy statement, the Company will provide shareholders complete disclosure documentation concerning a potential acquisition
of merger candidate, including financial information about the target and all material terms of the acquisition or merger transaction.
As of July 3, 2019, there were 419,487,480
shares of Common Stock issued and outstanding.
20
MARKET
PRICE OF AND DIVIDENDS ON THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Our Common Stock trades in the OTC Pink
marketplace under the symbol "ORNC". The OTC Pink marketplace is a quotation service that displays real-time quotes,
last-sale prices, and volume information in over-the-counter ("OTC") equity securities. An OTC Pink equity security
generally includes any equity that is not listed or traded on a national securities exchange.
Price Range of Common Stock
The following table shows, for the periods
indicated, the high and low bid prices per share of our Common Stock as reported by the OTC Pink quotation service. These bid prices
represent prices quoted by broker-dealers on the OTC Pink quotation service. The quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commissions, and may not represent actual transactions.
Fiscal Year 2019
High Bid
Low Bid
First Quarter
$
0.69
$
0.61
Second Quarter
$
0.69
$
0.69
Third Quarter
$
0.69
$
0.69
Fiscal Year 2018
High Bid
Low Bid
First Quarter
$
0.4
$
0.2
Second Quarter
$
0.61
$
0.45
Third Quarter
$
0.55
$
0.18
Fourth Quarter
$
0.61
$
0.475
Fiscal Year 2017
High Bid
Low Bid
First Quarter
$
0.21
$
0.21
Second Quarter
$
0.21
$
0.21
Third Quarter
$
1
$
0.21
Fourth Quarter
$
0.25
$
0.25
Stockholders of Record
As of July 3, 2019 there were approximately
63 stockholders of record of our Common Stock.
Preferred Stock
The Company does not have any preferred
stock, authorized or issued.
Warrants
There are currently no outstanding warrants.
Options
There are currently no outstanding options.
Dividends
The Company has not declared any cash dividends
with respect to its Common Stock and does not intend to declared dividends in the foreseeable future. The future dividend policy
of the Company cannot be ascertained with any certainty, and until the Company completes any acquisition, reorganization or merger,
as to which no assurance may be given, no such policy will be formulated. There are no material restrictions limiting, or that
are likely to limit, the Company's ability to pay dividends on its Common Stock.
Securities authorized for issuance under equity compensation
plans
.
None; not applicable
Purchase of Equity Securities By
the Issuer and Affiliated Purchasers.
None.
Transfer Agent and Registrar
Issuer Direct Corporation (formerly known
as "Interwest Transfer Company, Inc.") has been appointed as our transfer agent and registrar for our Common Stock.
Its mailing address is 1981 Murray Holladay Road, Suite 100 Salt Lake City, UT 84117 and their phone number is 801-272-9294.
21
DIVIDEND POLICY
We plan to retain any earnings for the
foreseeable future for our operations. We have never paid any dividends on our Common Stock and do not anticipate paying any cash
dividends in the foreseeable future. Any future determination to pay cash dividends will be at the discretion of our Board of Directors
and will depend on our financial condition, operating results, capital requirements and such other factors as our Board of Directors
deems relevant.
SELLING STOCKHOLDERS
We are registering for the resale shares
of our Common Stock held by the selling stockholders identified below. We are registering the shares to permit the selling stockholders
and their pledges, donees, transferees and other successors-in-interest that receive their shares from a selling stockholder as
a gift, partnership distribution or other non-sale related transfer after the date of this prospectus to resell the shares when
and as they deem appropriate.
The following table presents information
as of the date of this prospectus and sets forth:
●
the name of the selling stockholders;
●
the number of shares of our Common Stock that may be offered for resale for the account of the selling stockholder under this prospectus;
●
the number and percentage of shares of our Common Stock that the selling stockholder beneficially owned prior to the offering for resale of the shares under this prospectus; and
●
the number and percentage of shares of our Common Stock to be beneficially owned by the selling stockholder after the offering of the resale shares (assuming all of the offered resale shares are sold by the selling stockholders).
The 73,898,080 shares of our Common Stock
registered for public resale pursuant to this prospectus and listed under the column "Shares of Common Stock Included in
Prospectus" on the table set forth below consist of 73,898,080 shares that were issued in connection with the Share Exchange
and held by holders of "restricted" shares under applicable law, in each case as described in the footnotes to the
table below.
Any or all of the securities listed below
may be retained by any of the selling stockholders, and therefore, no accurate forecast can be made as to the number of securities
that will be held by the selling stockholders upon termination of this offering. The selling stockholders are not making any representation
that any shares covered by this prospectus will be offered for sale. We believe that, based on information provided to us by each
of the selling stockholders, the selling stockholders listed in the table have sole voting and investment powers with respect to
the securities indicated. As indicated below, certain selling stockholders are broker-dealers or affiliates of broker-dealers.
Name of Selling Stockholders
Shares of
Common
Stock
Included In
Prospectus
Shares
Beneficially
Owned Prior
To Offering (1)
Percentage
of Shares
Before
Offering (1)
Shares
Beneficially
Owned After
Offering (2)
Percentage of
Shares After
Offering (2)
Stephen Zhu
15,261,560
15,261,560
3.9
%
0
0
%
Zhen Huang
15,261,560
15,261,560
3.6
%
0
0
%
Chan Man Kuen
11,245,360
11,245,360
2.9
%
0
0
%
Lam Fung
11,245,360
11,245,360
2.7
%
0
0
%
Lam Man Hung
11,245,360
11,245,360
2.8
%
0
0
%
Wong Ying
9,638,880
9,638,880
2.5
%
0
0
%
Total
73,898,080
73,898,080
18.4
%
0
0
%
*
Represents less than 1% of total outstanding Common Stock.
(1)
Beneficial ownership is determined in accordance with Rule
13d-3 of the Exchange Act. In computing the number of shares beneficially owned by a person and the percentage ownership of that
person, securities that are currently convertible or exercisable into shares of our Common Stock, or convertible or exercisable
into shares of our Common Stock within 60 days of the date hereof are deemed outstanding. Such shares, however, are not deemed
outstanding for the purpose of computing the percentage ownership of any other person. Except as indicated in the footnotes to
the following table, each stockholder named in the table has sole voting and investment power with respect to the shares set forth
opposite such stockholder's name. The percentage of beneficial ownership is based on 419,487,480 shares of Common Stock
outstanding as of the date of this prospectus.
(2)
Assumes that all securities registered will be sold.
22
PLAN OF DISTRIBUTION
The selling stockholders and any of their
respective pledgees, donees, assignees and other successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These
sales may be at fixed or negotiated prices. The selling stockholders may use any one or more of the following methods when selling
shares:
●
ordinary brokerage transactions and transactions in which the broker-dealer solicits the purchaser;
●
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal;
●
facilitate the transaction;
●
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
●
an exchange distribution in accordance with the rules of the applicable exchange;
●
privately-negotiated transactions;
●
broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;
●
through the writing of options on the shares;
●
a combination of any such methods of sale; and
●
any other method permitted pursuant to applicable law.
The selling stockholders may also sell
shares under Rule 144 of the Securities Act of 1933, as amended (the "Securities Act"), if available, rather than under
this prospectus. The selling stockholders shall have the sole and absolute discretion not to accept any purchase offer or make
any sale of shares if it deems the purchase price to be unsatisfactory at any particular time.
The selling stockholders or their respective
pledgees, donees, transferees or other successors in interest, may also sell the shares directly to market makers acting as principals
and/or broker-dealers acting as agents for themselves or their customers. Such broker-dealers may receive compensation in the form
of discounts, concessions or commissions from the selling stockholders and/or the purchasers of shares for whom such broker-dealers
may act as agents or to whom they sell as principal or both, which compensation as to a particular broker-dealer might be in excess
of customary commissions. Market makers and block purchasers purchasing the shares will do so for their own account and at their
own risk. It is possible that a selling stockholder will attempt to sell shares of Common Stock in block transactions to market
makers or other purchasers at a price per share which may be below the then existing market price. We cannot assure that all or
any of the shares offered in this prospectus will be issued to, or sold by, the selling stockholders. The selling stockholders
and any brokers, dealers or agents, upon effecting the sale of any of the shares offered in this prospectus, may be deemed to be
"underwriters" as that term is defined under the Securities Act, the Exchange Act and the rules and regulations of
such acts. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares
purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.
We are required to pay all fees and expenses
incident to the registration of the shares, including fees and disbursements of counsel to the selling stockholders, but excluding
brokerage commissions or underwriter discounts.
The selling stockholders, alternatively,
may sell all or any part of the shares offered in this prospectus through an underwriter. The selling stockholders have not entered
into any agreement with a prospective underwriter and there is no assurance that any such agreement will be entered into.
The selling stockholders may pledge their
shares to their brokers under the margin provisions of customer agreements. If a selling stockholder defaults on a margin loan,
the broker may, from time to time, offer and sell the pledged shares. The selling stockholders and any other persons participating
in the sale or distribution of the shares will be subject to applicable provisions of the Exchange Act, and the rules and regulations
under such act, including, without limitation, Regulation M. These provisions may restrict certain activities of, and limit the
timing of purchases and sales of any of the shares by, the selling stockholders or any other such person. In the event that any
of the selling stockholders are deemed an affiliated purchaser or distribution participant within the meaning of Regulation M,
then the selling stockholders will not be permitted to engage in short sales of Common Stock. Furthermore, under Regulation M,
persons engaged in a distribution of securities are prohibited from simultaneously engaging in market making and certain other
activities with respect to such securities for a specified period of time prior to the commencement of such distributions, subject
to specified exceptions or exemptions. In addition, if a short sale is deemed to be a stabilizing activity, then the selling stockholders
will not be permitted to engage in a short sale of our Common Stock. All of these limitations may affect the marketability of the
shares.
If a selling stockholder notifies us that
it has a material arrangement with a broker-dealer for the resale of the Common Stock, then we would be required to amend the registration
statement of which this prospectus is a part, and file a prospectus supplement to describe the agreements between the selling stockholder
and the broker-dealer.
23
REGULATIONS
PRC Laws and Regulations on Alcohol
Wholesale
Huaxin is in the alcohol wholesale business,
including Fenjiu liquor wholesale and imported wine wholesale, in China. Huaxin is subject to various existing and probable governmental
regulations on its alcohol wholesale business.
According to the Regulations on Administration
of Liquor of Shanxi Province which came into effect on January 1, 2000, entities or individuals who engage in liquor wholesale
in Shanxi Province shall apply for Liquor Wholesale License. Huaxin has obtained the Liquor Wholesale License and such license
will expire on December 31, 2021. Jinqiang has also obtained the Liquor Wholesale License and such license will expire on December
31, 2019. Also, Huaxin and Jinqiang are required to obtain the Food Operation License pursuant to the Administrative Measures for
Food Operation Licensing which came into effect on November 17, 2017. Huaxin has obtained Food Operation License and such license
will expire on August 31, 2022. Jinqiang has obtained Food Operation License and such license will expire on December 22, 2021.
Nevertheless, Huaxin and Jinqiang may be subject to penalties by PRC regulatory authorities if the Liquor Wholesale License and
Food Operation License is not timely renewed after expiration.
Currently, license for liquor wholesale
is no longer required in nationwide level, but it is still required in some particular Provinces, such as Shanxi Province and Shanghai.
In addition to Shanxi Province, the Company also sell liquor to other Provinces, namely Fujian, Ningxia, Gansu, Xinjiang, Beijing,
Shanghai and Hebei Province. Liquor wholesale business of the Company is operated by its subsidiaries, Huaxin and Fenyang Jinqiang
Wine Co., Ltd. ("Jinqiang"), both of which were established in Shanxi Province and have obtained wholesale licenses
in Shanxi Province. According to our telephone consultation with the competent authorities in Beijing, Shanghai, Ningxia, Gansu
and Hebei, no wholesale license is required for Huaxin or Jinqiang in such Provinces since Huaxin and Jinqiang were established
in Shanxi Province and have already obtained wholesale licenses in Shanxi Province. In conclusion, no further wholesale license
is required in other Provinces where the Company operates its business, unless the Company newly establish operating entity in
such Provinces and license is still required for liquor wholesale business in such Provinces.
Regarding the imported wine business, pursuant
to the Foreign Trade Law of the People's Republic of China (Revised in 2016), a foreign trade operator engaged in import
and export of goods shall register with competent local regulatory authorities in Shanxi Province that in charge of foreign trades;
and pursuant to the Administrative Provisions of the Customs of the People's Republic of China on the Registration of Customs
Declaration Entities, consignors and consignees of imported and exported goods shall go through customs declaration entity registration
formalities with their local Customs in accordance with the applicable provisions. Huaxin has completed the registration for a
record as a foreign trade operator and has obtained Certificate of the Customs of the People's Republic of China on the Registration
of Customs Declaration Entities. The registration for a record as a foreign trade operator has no time limit; while the validity
period for Certificate of the Customs of the PRC on the Registration of Customs Declaration Entities is two years and such certificate
can be renewed before the expiration date. Nevertheless, Huaxin may be subject to penalties by PRC regulatory authorities if Huaxin
fails to go through the modification formalities in the event of a change to any of its details registered with the competent governmental
authorities including its name, nature, domicile and legal representative.
PRC Laws and Regulations on Environmental
Protection
The
Ministry of Ecology and Environment is responsible for the uniform supervision and control of environmental protection in the PRC.
It formulates national environmental quality and discharge standards and monitors the PRC's environmental system. Ecology
and Environment bureaus at the county level and above are responsible for environmental protection within their areas of jurisdiction.
Pursuant
to the Law on Environmental Impact Evaluation of the PRC promulgated on October 28, 2002 and effective from September 1, 2003,
manufacturers must prepare and file an environmental impact report setting forth the impact that the proposed construction project
may have on the environment and the measures to prevent or mitigate the impact for approval by the relevant PRC government authority
prior to commencement of construction of the relevant project.
Pursuant
to the Environmental Protection Law of the PRC, or the Environmental Protection Law, promulgated on and effective from December
26, 1989, the environmental protection department of the State Council is in charge of promulgating national standards for environmental
protection. The Environmental Protection Law requires any facility that produces pollutants or other hazards to incorporate environmental
protection measures in its operations and establish an environmental protection responsibility system. Any entity that discharges
pollution must obtain the Pollution Discharging License from the relevant environmental protection authority. Remedial measures
for breaches of the Environmental Protection Law include a warning, payment of damages or imposition of a fine. Criminal liability
may be imposed for a material violation of environmental laws and regulations that causes loss of property, personal injuries or
death.
Huanxin
and its subsidiaries are not manufacturing, assembling or processing companies, thus are not subject to the PRC laws and regulations
on environmental protection.
24
PRC Laws and Regulations on Intellectual
Property Rights
Regulations on Trademarks
The Trademark Law of the PRC was adopted
at the 24th meeting of the SCNPC on August 23, 1982. Three amendments were made on February 22, 1993, October 27,
2001 and August 30, 2013. The last amendment was implemented on May 1, 2014. The Regulations on the Implementation of
the Trademark Law of the PRC were promulgated by the State Council of the People's Republic of China on August 3, 2002,
which took effect on September 15, 2002. It was revised on April 29, 2014 and became effective as of May 1, 2014.
According to the Trademark Law and the implementing regulations, a trademark which has been approved and registered by the trademark
office is a registered trademark, including a trademark of goods, services, collective trademark and certification trademark. The
trademark registrant shall enjoy the exclusive right to use the trademark and shall be protected by law. The trademark law also
specifies the scope of registered trademarks, procedures for registration of trademarks and the rights and obligations of trademark
owners. We are currently holding 5 registered trademarks in China and enjoy the corresponding rights.
Regulations on Patents
Pursuant to the Patent Law of the PRC,
or the Patent Law, promulgated by the SCNPC on March 12, 1984, as latest amended on December 27, 2008, and effective from October
1, 2009 and the Implementation Rules of the Patent Law of the PRC, promulgated by the State Council on June 15, 2001 and latest
amended on January 9, 2010, there are three types of patent in the PRC: invention patent, utility model patent and design patent.
The protection period is 20 years for invention patent and 10 years for utility model patent and design patent, commencing from
their respective application dates. Any individual or entity that utilizes a patent or conducts any other activity in infringement
of a patent without prior authorization of the patentee shall pay compensation to the patentee and is subject to a fine imposed
by relevant administrative authorities and, if constituting a crime, shall be held criminally liable in accordance with the law.
In the event that a patent is owned by two or more co-owners without an agreement regarding the distribution of revenue generated
from the exploitation of any co-owner of the patent, such revenue shall be distributed among all the co-owners.
Existing patents can become narrowed, invalid
or unenforceable due to a variety of grounds, including lack of novelty, creativity, and deficiencies in patent application. In
China, a patent must have novelty, creativity and practical applicability. Under the Patent Law, novelty means that before a patent
application is filed, no identical invention or utility model has been publicly disclosed in any publication in China or overseas
or has been publicly used or made known to the public by any other means, whether in or outside of China, nor has any other person
filed with the patent authority an application that describes an identical invention or utility model and is recorded in patent
application documents or patent documents published after the filing date. Creativity means that, compared with existing technology,
an invention has prominent substantial features and represents notable progress, and a utility model has substantial features and
represents any progress. Practical applicability means an invention or utility model can be manufactured or used and may produce
positive results. Patents in China are filed with the State Intellectual Property Office, or SIPO. Normally, the SIPO publishes
an application for an invention patent within 18 months after the filing date, which may be shortened at the request of applicant.
The applicant must apply to the SIPO for a substantive examination within 3 years from the date of application.
As of the date of this prospectus, we had
obtained two patents for liquor-making devices that can change proofs of various liquors, both of which were registered in 2015.
Our issued PRC patents will expire in 2025.
Regulations on Domain Names
The Ministry of
Industry and Information Technology of the PRC, or the MIIT, promulgated the Measures on Administration of Internet Domain
Names, or the Domain Name Measures, on August 24, 2017, which took effect on November 1, 2017 and replaced the Administrative
Measures on China Internet Domain Name promulgated by the MIIT on November 5, 2004. According to the Domain Name Measures,
the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a first-to-file
principle. Applicants for registration of domain names shall provide true, accurate and complete information of their identities
to domain name registration service institutions. The applicant will become the holder of such domain names upon completion of
the registration procedure.
As of the date
of this prospectus, we do not have any domain name used for providing non-commercial internet-based information services.
25
PRC Laws and Regulations on Foreign
Exchange
General Administration of Foreign Exchange
The principal regulation governing foreign
currency exchange in the PRC is the Administrative Regulations of the PRC on Foreign Exchange (the "Foreign Exchange
Regulations"), which were promulgated on January 29, 1996, became effective on April 1, 1996 and were last amended
on August 5, 2008. Under these rules, Renminbi is generally freely convertible for payments of current account items, such
as trade- and service-related foreign exchange transactions and dividend payments, but not freely convertible for capital account
items, such as capital transfer, direct investment, investment in securities, derivative products or loans unless prior approval
by competent authorities for the administration of foreign exchange is obtained. Under the Foreign Exchange Regulations, foreign-invested
enterprises in the PRC may purchase foreign exchange without the approval of SAFE to pay dividends by providing certain evidentiary
documents, including board resolutions, tax certificates, or for trade- and services-related foreign exchange transactions, by
providing commercial documents evidencing such transactions.
Circular No. 37 and Circular No. 13
Circular 37 was released by SAFE on July 4,
2014 and abolished Circular 75 which had been in effect since November 1, 2005. Pursuant to Circular 37, a PRC resident should
apply to SAFE for foreign exchange registration of overseas investments before it makes any capital contribution to a special purpose
vehicle, or SPV, using his or her legitimate domestic or offshore assets or interests. SPVs are offshore enterprises directly established
or indirectly controlled by domestic residents for the purpose of investment and financing by utilizing domestic or offshore assets
or interests they legally hold. Following any significant change in a registered offshore SPV, such as capital increase, reduction,
equity transfer or swap, consolidation or division involving domestic resident individuals, the domestic individuals shall amend
the registration with SAFE. Where an SPV intends to repatriate funds raised after completion of offshore financing to the PRC,
it shall comply with relevant PRC regulations on foreign investment and foreign debt management. A foreign-invested enterprise
established through return investment shall complete relevant foreign exchange registration formalities in accordance with the
prevailing foreign exchange administration regulations on foreign direct investment and truthfully disclose information on the
actual controller of its shareholders.
If any shareholder who is a PRC resident
(as determined by the Circular No. 37) holds any interest in an offshore SPV and fails to fulfil the required foreign exchange
registration with the local SAFE branches, the PRC subsidiaries of that offshore SPV may be prohibited from distributing their
profits and dividends to their offshore parent company or from carrying out other subsequent cross-border foreign exchange activities.
The offshore SPV may also be restricted in its ability to contribute additional capital to its PRC subsidiaries. Where a domestic
resident fails to complete relevant foreign exchange registration as required, fails to truthfully disclose information on the
actual controller of the enterprise involved in the return investment or otherwise makes false statements, the foreign exchange
control authority may order them to take remedial actions, issue a warning, and impose a fine of less than RMB 300,000 on an institution
or less than RMB 50,000 on an individual.
Circular 13 was issued by SAFE on February 13,
2015, and became effective on June 1, 2015. Pursuant to Circular 13, a domestic resident who makes a capital contribution
to an SPV using his or her legitimate domestic or offshore assets or interests is no longer required to apply to SAFE for foreign
exchange registration of his or her overseas investments. Instead, he or she shall register with a bank in the place where the
assets or interests of the domestic enterprise in which he or she has interests are located if the domestic resident individually
seeks to make a capital contribution to the SPV using his or her legitimate domestic assets or interests; or he or she shall register
with a local bank at his or her permanent residence if the domestic resident individually seeks to make a capital contribution
to the SPV using his or her legitimate offshore assets or interests.
As of the date of this prospectus, all of our beneficial shareholders have completed registrations in
accordance with Circular 37.
Circular 19 and Circular 16
Circular 19 was promulgated by SAFE on
March 30, 2015, and became effective on June 1, 2015. According to Circular 19, the foreign exchange capital in the capital
account of foreign-invested enterprises, meaning the monetary contribution confirmed by the foreign exchange authorities or the
monetary contribution registered for account entry through banks, shall be granted the benefits of Discretional Foreign Exchange
Settlement ("Discretional Foreign Exchange Settlement"). With Discretional Foreign Exchange Settlement, foreign capital
in the capital account of a foreign-invested enterprise for which the rights and interests of monetary contribution have been confirmed
by the local foreign exchange bureau, or for which book-entry registration of monetary contribution has been completed by the bank,
can be settled at the bank based on the actual operational needs of the foreign-invested enterprise. The allowed Discretional Foreign
Exchange Settlement percentage of the foreign capital of a foreign-invested enterprise has been temporarily set to be 100%.
The Renminbi converted from the foreign capital will be kept in a designated account and if a foreign-invested enterprise needs
to make any further payment from such account, it will still need to provide supporting documents and to complete the review process
with its bank.
Furthermore, Circular 19 stipulates that
foreign-invested enterprises shall make bona fide use of their capital for their own needs within their business scopes. The capital
of a foreign-invested enterprise and the Renminbi it obtained from foreign exchange settlement shall not be used for the following
purposes:
●
directly or indirectly used for expenses beyond its business scope or prohibited by relevant laws or regulations;
●
directly or indirectly used for investment in securities unless otherwise provided by relevant laws or regulations;
26
●
directly or indirectly used for entrusted loan in Renminbi (unless within its permitted scope of business), repayment of inter-company loans (including advances by a third party) or repayment of bank loans in Renminbi that have been sub-lent to a third party; or
●
directly or indirectly used for expenses related to the purchase of real estate that is not for self-use (except for foreign-invested real estate enterprises).
Circular 16 was issued by SAFE on June 9,
2016. Pursuant to Circular 16, enterprises registered in the PRC may also convert their foreign debts from foreign currency to
Renminbi on a self-discretionary basis. Circular 16 provides an integrated standard for conversion of foreign exchange capital
items (including but not limited to foreign currency capital and foreign debts) on a self-discretionary basis applicable to all
enterprises registered in the PRC. Circular 16 reiterates the principle that an enterprise's Renminbi capital converted from
foreign currency-denominated capital may not be directly or indirectly used for purposes beyond its business scope or purposes
prohibited by PRC laws or regulations, and such converted Renminbi capital shall not be provided as loans to non-affiliated entities.
Our PRC subsidiaries' distributions to
their offshore parents are required to comply with the requirements as described above.
PRC Laws and Regulations on Taxation
Enterprise Income Tax
The Enterprise Income Tax Law of the
People's Republic of China (the "EIT Law") was promulgated by the Standing Committee of the National People's
Congress on March 16, 2007 and became effective on January 1, 2008, and was later amended on February 24, 2017.
The Implementation Rules of the EIT Law (the "Implementation Rules") were promulgated by the State Council
on December 6, 2007 and became effective on January 1, 2008. According to the EIT Law and the Implementation Rules, enterprises
are divided into resident enterprises and non-resident enterprises. Resident enterprises shall pay enterprise income tax on their
incomes obtained in and outside the PRC at the rate of 25%. Non-resident enterprises setting up institutions in the PRC shall pay
enterprise income tax on the incomes obtained by such institutions in and outside the PRC at the rate of 25%. Non-resident enterprises
with no institutions in the PRC, and non-resident enterprises whose incomes having no substantial connection with their institutions
in the PRC, shall pay enterprise income tax on their incomes obtained in the PRC at a reduced rate of 10%.
The Arrangement between the PRC and
Hong Kong Special Administrative Region for the Avoidance of Double Taxation the Prevention of Fiscal Evasion with respect to Taxes
on Income (the "Arrangement") was promulgated by the State Administration of Taxation ("SAT") on August 21,
2006 and came into effect on December 8, 2006. According to the Arrangement, a company incorporated in Hong Kong will be subject
to withholding tax at the lower rate of 5% on dividends it receives from a company incorporated in the PRC if it holds a 25% interest
or more in the PRC company. The Notice on the Understanding and Identification of the Beneficial Owners in the Tax Treaty (the
"Notice") was promulgated by SAT and became effective on October 27, 2009. According to the Notice, a beneficial
ownership analysis will be used based on a substance-over-form principle to determine whether or not to grant tax treaty benefits.
In April 2009, the Ministry of Finance,
or MOF, and SAT jointly issued the Notice on Issues Concerning Process of Enterprise Income Tax in Enterprise Restructuring Business,
or Circular 59. In December 2009, SAT issued the Notice on Strengthening Administration of Enterprise Income Tax for
Share Transfers by Non-PRC Resident Enterprises, or Circular 698. Both Circular 59 and Circular 698 became effective
retroactively as of January 2008. In February 2011, SAT issued the Notice on Several Issues Regarding the Income Tax
of Non-PRC Resident Enterprises, or SAT Circular 24, effective April 2011. By promulgating and implementing these circulars,
the PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer of equity interests in a PRC resident
enterprise by a non-resident enterprise.
Under Circular 698, where a non-resident
enterprise conducts an "indirect transfer" by transferring the equity interests of a PRC "resident enterprise"
indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise, being the transferor,
may be subject to PRC enterprise income tax, if the indirect transfer is considered to be an abusive use of company structure without
reasonable commercial purposes. As a result, gains derived from such indirect transfer may be subject to PRC tax at a rate of up
to 10%. Circular 698 also provides that, where a non-PRC resident enterprise transfers its equity interests in a PRC resident enterprise
to its related parties at a price lower than the fair market value, the relevant tax authority has the power to make a reasonable
adjustment to the taxable income of the transaction.
In February 2015, the SAT issued Circular
7 to replace the rules relating to indirect transfers in Circular 698. Circular 7 has introduced a new tax regime that is significantly
different from that under Circular 698. Circular 7 extends its tax jurisdiction to not only indirect transfers set forth under
Circular 698 but also transactions involving transfer of other taxable assets, through the offshore transfer of a foreign intermediate
holding company. In addition, Circular 7 provides clearer criteria than Circular 698 on how to assess reasonable commercial purposes
and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities
market. Circular 7 also brings challenges to both the foreign transferor and transferee (or other person who is obligated to pay
for the transfer) of the taxable assets. Where a non-resident enterprise conducts an "indirect transfer" by transferring
the taxable assets indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise
being the transferor, or the transferee, or the PRC entity which directly owned the taxable assets may report to the relevant tax
authority such indirect transfer. Using a "substance over form" principle, the PRC tax authority may disregard the
existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing,
avoiding or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax,
and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently
at a rate of 10% for the transfer of equity interests in a PRC resident enterprise.
27
On October 17, 2017, the SAT issued
a Notice Concerning Withholding Income Tax of Non-Resident Enterprise, or SAT Notice No. 37, which abolishes Circular 698
and certain provisions of Circular 7. SAT Notice No. 37 reduces the burden of the withholding obligator, such as revocation
of contract filing requirements and tax liquidation procedures, strengthens the cooperation of tax authorities in different places,
and clarifies the calculation of tax payable and mechanism of foreign exchange.
Value-added Tax
Pursuant to the Provisional Regulations
on Value-added Tax of the PRC, or the VAT Regulations, which were promulgated by the State Council on December 13, 1993, took effect
on January 1, 1994, and were amended on November 10, 2008, February 6, 2016, and November 19, 2017, respectively, and the Rules
for the Implementation of the Provisional Regulations on Value-added Tax of the PRC, which were promulgated by the MOF on December
25, 1993, and were amended on December 15, 2008, and October 28, 2011, respectively, entities and individuals that sell goods or
labor services of processing, repair or replacement, sell services, intangible assets, or immovables, or import goods within the
territory of the People's Republic of China are taxpayers of value-added tax. The VAT rate is 17% for taxpayers selling
goods, labor services, or tangible movable property leasing services or importing goods, except otherwise specified; 11% for taxpayers
selling services of transportation, postal, basic telecommunications, construction and lease of immovable, selling immovable, transferring
land use rights, selling and importing other specified goods including fertilizers; 6% for taxpayers selling services or intangible
assets.
According to the Notice on the Adjustment
to the Value-added Tax Rates issued by the SAT and the MOF on April 4, 2018, where taxpayers make VAT taxable sales or import goods,
the applicable tax rates shall be adjusted from 17% to 16% and from 11% to 10%, respectively. Subsequently, the Notice on Policies
for Deepening Reform of Value-added Tax was issued by the SAT, the MOF and the General Administration of Customs on March 30, 2019
and took effective on April 1, 2019, which further adjusted the applicable tax rate for taxpayers making VAT taxable sales or importing
goods. The applicable tax rates shall be adjusted from 16% to 13% and from 10% to 9%, respectively.
Dividend Withholding Tax
The Enterprise Income Tax Law provides
that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident
investors that do not have an establishment or place of business in the PRC, or that have such establishment or place of business
but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends
are derived from sources within the PRC.
PRC Laws and Regulations on Employment
and Social Welfare
Labor Law of the PRC
Pursuant to the Labor Law of the PRC, which
was promulgated by the Standing Committee of the NPC on July 5, 1994 with an effective date of January 1, 1995 and was
last amended on August 27, 2009 and the Labor Contract Law of the PRC, which was promulgated on June 29, 2007, became
effective on January 1, 2008 and was last amended on December 28, 2012, with the amendments coming into effect on July
1, 2013, enterprises and institutions shall ensure the safety and hygiene of a workplace, strictly comply with applicable rules
and standards on workplace safety and hygiene in China, and educate employees on such rules and standards. Furthermore, employers
and employees shall enter into written employment contracts to establish their employment relationships. Employers are required
to inform their employees about their job responsibilities, working conditions, occupational hazards, remuneration and other matters
with which the employees may be concerned. Employers shall pay remuneration to employees on time and in full accordance with the
commitments set forth in their employment contracts and with the relevant PRC laws and regulations. Huaxin and its subsidiary company
have entered into written employment contracts with all the employees and performed their obligations under the relevant PRC laws
and regulations.
Social Insurance and Housing Fund
Pursuant to the Social Insurance Law
of the PRC, which was promulgated by the Standing Committee of the NPC on October 28, 2010 and became effective on July 1,
2011, employers in the PRC shall provide their employees with welfare schemes covering basic pension insurance, basic medical insurance,
unemployment insurance, maternity insurance, and occupational injury insurance. Huaxin has not deposited the social insurance fees
in full for all the employees in compliance with the relevant regulations. Huaxin may be ordered by the social security premium
collection agency to make or supplement contributions within a stipulated period, and shall be subject to a late payment fine computed
from the due date at the rate of 0.05% per day; where payment is not made within the stipulated period, the relevant administrative
authorities shall impose a fine ranging from one to three times the amount of the amount in arrears. Huaxin's subsidiaries
have deposited the social insurance fees as required by relevant regulations.
In accordance with the Regulations
on Management of Housing Provident Fund, which were promulgated by the State Council on April 3, 1999 and last amended on
March 24, 2002, employers must register at the designated administrative centers and open bank accounts for depositing employees'
housing funds. Employers and employees are also required to pay and deposit housing funds, with an amount no less than 5% of the
monthly average salary of the employee in the preceding year in full and on time. Huaxin and its subsidiaries have not registered
at the designated administrative centers and opened bank accounts for depositing employees' housing funds. They also have
not deposited employees' housing funds. Huaxin and its subsidiaries may be ordered by the housing provident fund management
center to complete the registration formalities, open bank accounts, make the payment and deposit within a prescribed time limit.
Failing to register or open bank accounts at the expiration of the time limit could result in fines of not less than 10,000 yuan
nor more than 50,000 yuan. And an application may be made to a people's court for compulsory enforcement if payment and deposit
has not been made after the expiration of the time limit.
28
INDUSTRY OVERVIEW
Chinese Fenjiu Liquor Market
We believe that the long-term demand for
Chinese hard liquor, especially Fenjiu liquor, will continue to grow in China. The overall business environment has been optimistic,
due to the continuous economic growth evidenced by the significant growth of Chinese nominal gross domestic product ("GDP").
This has led to an ever-increasing growth in China's per capita expenditures on food, tobacco, and alcoholic beverages, indicating
increased consumers' disposable income and willingness to spend money on alcoholic beverages in general. According to the
National Bureau of Statistics of China, the sales volumes of Chinese liquor in China has remained relatively flat between 2012
and 2016. Given the increasing purchasing power and improving living standards, the sales volume of Chinese liquor increased from
11,267.0 million liters in 2012 to 13,057.1 million liters in 2016, with a compound annual growth rate ("CAGR") of
3.8%. Overall, we believe consumers are increasingly interested in drinking better quality liquor. We expect that with the Chinese
consumers' increasing purchasing power the consumption of Chinese liquor will shift to higher quality products and therefore
the Chinese liquor market is expected to experience growth in the near future. According to the China Insights Consultancy ("CIC")
report, there are approximately 1,578 Chinese liquor producers in China with annual revenue above RMB 20 million in 2016. These
producers are mainly located in the southwest, northeast and central China. Given the Chinese government's implementation
of policies designed to control and limit spending on "the three public consumptions", namely overseas travel, receptions,
and official cars, the high-end Chinese liquor market in China has undergone extensive restructuring since 2012.
Chinese government officials had a long
history of using high-end liquors at reception events. However, in 2012, the Chinese governments implemented policies designed
to control and limit spending on "the three public consumptions", namely overseas travel, receptions, and use of government
vehicles. Ripples of this anti-corruption campaign are felt beyond the high-end liquor industry, in sectors that heavily rely on
China's gifting culture and the lavish lifestyle of the privileged for growth. This extensive restructuring of Chinese liquor
market caused by the anti-corruption campaign from Chinese government lasted for several years. As a result, the overall spending
on high-end liquor market in China was limited and the sales volumes of Chinese high-end liquor has remained relatively flat until
2016. Nowadays, the structure of Chinese liquor market is stable again and has a steady growth supported by constant economic growth
in China. Chinese consumers are expected to spend more on purchasing high-end liquors led by their increasing purchasing power.
Fenjiu Group and its subsidiaries are the
sole suppliers of Fenjiu liquor in China. Fenjiu liquor has a relatively long history and is one of the world-famous Chinese liquor
brands. Due to the Chinese government's implementation of policies meant to control and limit spending on "the three
public consumptions", sales revenue in the Fenjiu liquor market have followed a downward trend since 2012. However, with
increasing per capita incomes and rising demand for mid-to-high-range products, the Fenjiu liquor market started to rebound in
2015, the market has expanded in terms of sales revenue to reach RMB5,117.9 million in 2016. Shanxi Province is the main market
of Fenjiu liquor. Approximately 55% of Fenjiu liquor sales revenue was achieved in Shanxi in 2016. It is expected that the sales
revenue of Fenjiu liquor will reach a further RMB10,532.0 million in China by 2022, increasing at a CAGR of 12.8% between 2016
and 2022.
According to the CIC report, at the end
of 2016, the total number of Fenjiu liquor distributors reached 987 in China. The Fenjiu liquor distribution market is highly competitive
with no single distributor occupying a major share of the market.
There are relatively high entry barriers
for new competitors in the Fenjiu liquor distribution market. First, it is important for new entrants to get an authorization from
Fenjiu Group, which is the sole provider of Fenjiu liquor products in China, to distribute Fenjiu Group's products. Fenjiu
Group started placing stricter requirements on its distributors, including, for example, new sales target, proven experience in
the industry, past cooperation with Fenjiu Group. Thus, it has become increasingly difficult for new players to enter the market.
Fenjiu liquor enjoys widespread popularity in and around Shanxi Province, with markets in other parts of China being significantly
smaller. It is therefore important for new entrants to have a pre-existing distribution network in certain regions of China in
order to be successful. It remains risky for new entrants to enter into new areas where Fenjiu liquor is not yet fully established
and where the distribution market is already saturated. Distributors range from mom-and-pop stores in Shanxi Province to larger
companies with years of experience in the Fenjiu liquor industry, each competing for a fair share of the market. Intense competition
arises between distributors within the same region, selling the same or different Fenjiu brands. Fenjiu liquor includes a variety
of products, differing in terms of ABV, vintage, recipe, etc. Although there are no dominant varieties in the market, some are
preferred by end consumers more than others. However, almost all of these popular varieties have already been taken up by exclusive
distributors. Thus, new entrants might find it difficult to source popular products directly from Fenjiu Group or will be left
to source them from existing distributors, which entails lower profit margins.
Chinese Wine Market
According to the International Organization
of Vine and Wine, or OIV, the per capita wine consumption in China is much lower than the US average level between 2012 and 2016.
After the reduction of "three public consumptions" in 2013, China's per capita consumption showed a further decrease.
However, the consumption pattern has changed and the wine consumption has grown into a mass consumption accompanied by a decrease
in wine price. Compared with the world average consumption, China's per capita wine consumption has been around one-third
of the world's average since 2010. The relatively low per capita wine consumption in China indicates great growth potential
for China's wine market in the future.
29
According to the CIC report, Chinese consumers
should, between 2017 and 2022, develop the habit of drinking wine rather than other alcoholic beverages, wine consumption is considered
a healthier option. In addition, the development of O2O platforms selling wine will most certainly facilitate the purchase of wine
in China.
There are three market drivers for China's
wine market. Firstly, China's per capita disposable income has been increasing rapidly mainly due to increasing wages. Rising
disposable income translates into increasing purchasing power for Chinese people; it also means that Chinese people tend to focus
more on their quality of life. As wine is considered in China as a premium product with some beneficial health effect, we believe
that increasing purchasing power will stimulate the further growth of wine consumption. In addition, the characteristics associated
with drinking wine, such as beautification and antioxidation, play an important role in contributing to its consumption, especially
for female customers. Secondly, China's urbanization rate has been improving greatly during the past decades and the Chinese
government sets up the goal that the urbanization rate of China is set to reach 60% by 2020. With the further improvement of the
urbanization rate in China, the retail sales market is experiencing a rapid growth in urban regions in China. Thirdly, there are
favorable national and international policies for imported wine. According to bilateral trade agreements signed by the PRC government
with New Zealand, Chile and Australia, imported goods from the three countries will benefit from low tariff rates, effective from
2019. According to those agreements, by 2019, these tariffs will be totally eliminated. This favorable policy should reduce the
wine retailing price and hence contribute to a growth in sales.
30
DESCRIPTION OF BUSINESS
Company Background
Oranco 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. We maintain our
principal executive offices at One Liberty Plaza, Suite 2310 PMB# 21, New York, NY 10006, United States. Our telephone number is
(646) 759-3614.
We run a growing alcohol wholesale business
guided by a core purpose: to promote premium alcoholic beverages to China's population. We currently focus our business on
the sale of Chinese Fenjiu liquor and imported wines. We aim to achieve this purpose by catering to the ever-evolving customer
tastes in alcohols through our creative marketing strategies and innovative product designs that target different age groups of
China's population. To that end, we have hired marketing talents who have decades of experience in effective alcohol brand
building. As a result, we believe we have managed to respond to the demand for Chinese Fenjiu liquor and imported wines in the
Chinese marketplace.
The popularity behind Chinese Fenjiu liquor
is its unique combination of light alcohol fragrance and its soft and subtle sweetness. This combination has been one of the predominant
taste preference amongst Chinese drinkers. Our Chinese Fenjiu liquor is a 53-proof clear spirit with a long lasting clean aftertaste.
Our strategic partner, Shanxi Xinghuacun Fenjiu Group Alcohol Industry Development Zone Sales Co., Ltd. ("Fenjiu Group"),
produces our Chinese Fenjiu product. Its brewing process is guided by the principle of "clean" and "pure",
and such standard is achieved by double fermentation and double distillation process in order to increase the yield of ethanol
and expel any unfavorable flavors. The fermented grains, usually sorghum and barley, will be distilled; the distilled grains will
be fermented once more; then the re-fermented grains will be distilled again.
Competition among different types of Chinese
hard liquor is largely dependent on the brand recognition that was built upon decades of customer goodwill and unique marketing
strategies. Fenjiu liquor is highly recognized amongst Chinese consumers. It has long been a common liquor choice for traditional
Chinese festivities, thus enjoying a deep cultural recognition amongst Chinese drinkers.
We believe that Fenjiu liquor presents
great business opportunities for us to utilize creative product designs and marketing strategies to attract Chinese consumers.
Collaborating with the Fenjiu Group, the sole producer of Fenjiu liquor in China, we have been focusing on product design to convey
a modern feel to our Fenjiu products while maintaining Fenjiu liquor's historical elegance. We believe our designer packaging,
symbolized by its bright coloring and prominently fat-bellied jars, stands out from our competitors'. With creative designs
and stylized names, our registered trademarks, such as Dagangjiu (translated as "Big Jar Liquor"), are effective in
capturing the attention of Chinese customers, young and old.
31
Established in 2017, we believe our imported
wine distribution business has high growth potential as evidenced from the market prices of the imported wines from Spain and New
Zealand, the two countries where we import most of our wine products from, in the current Chinese market. A great majority of competitive
players have priced their 750mL bottles of wine imported from Spain and New Zealand well above RMB 200. This price falls within
the premium range in the general Chinese wine market. Within the general Chinese wine market, the premium range enjoyed the highest
year-on-year growth compared to other price tiers of wine in 2017. This pricing trend for premium wines is applicable to imported
wine from Spain and New Zealand, which we believe will benefit our growth in 2019. Accordingly, our strategy is to continue pricing
our imported wine products within the premium range levels to generate higher margins. Though marketing and branding are still
integral parts of the wine business in China, wine sales are highly driven by the origin of the wines. Since Spain and New Zealand
are considered prime origins for wine productions, our wine products will continue grab the attention of Chinese drinkers, ensuring
the sustainable growth of our imported wine business.
We have strategically organized our wholesale
and marketing channels. We sell directly to our six major distributors who then retail our products to over 300 storefronts and
outlets. Even though we do not retail our products online, we believe the internet is a great way to market our products. Aside
from promoting our products through traditional TV platforms, we have established our reputation on existing major Chinese e-commerce
platforms such as Taobao.com and further enhanced our business goodwill through our marketing on online-to-offline ("O2O"),
business-to-business ("B2B") and business-to-consumer ("B2C") platforms. We promote our Fenjiu liquors
and imported wine through WeChat and other social media apps to strengthen our marketing efforts and to educate the general public
on Chinese liquor tasting and history of Chinese Fenjiu liquors.
We believe that effective marketing strategies
and creative product designs are two major contributing factors to our success. To improve and maintain the effectiveness of our
marketing strategies, we have established integrated and collaborative processes to drive coordinated operations across our marketing
efforts and sales. Our marketing strategies enable us to promote multiple sales concepts across two major alcohol categories, effectively
attracting different age and cultural groups of the Chinese population. Our marketing plans are tailored to meet the evolving taste
and demands of the Chinese customers. As a result, we believe that the Company's innovative and highly-customized designs
draw considerable public attention, which in turns is a contributing factor to the volume of our sales. We believe it is essential
to improve the overall business sustainability through focusing on marketing strategies and creative product designs to support
our success.
For the nine months ended March 31, 2019,
we generated revenue of approximately 91.4% from Fenjiu liquor wholesale and approximately 8.6% from imported wine wholesale. For
the nine months ended March 31, 2018, we generated revenue of approximately 85.3% from Fenjiu liquor wholesale and approximately
14.7% from imported wine wholesale. For the year ended June 30, 2018, we generated revenue of approximately 84.9% from Fenjiu liquor
wholesale and approximately 15.1% from imported wine wholesale. For the year ended June 30, 2017, we generated revenue of approximately
89.9% from Fenjiu liquor wholesale and approximately 10.1% from imported wine wholesale. We have not experienced any seasonality
in our business.
Business Strategy
Increasing our market share -
We
expect that consumers' increasing awareness of our brand will lead to increased demand of our products. We intend to continue
focusing on developing Chinese Fenjiu liquor and imported wine wholesale markets. Through creating new designs, expanding our marketing
efforts, developing closer relationships with dealers, and building stable relationships with our major suppliers, we expect to
expand our product lines and improve our brand awareness and customer loyalty to meet market demands and improve our sales performance.
Expansion of our sources of supply,
productivity and sales network -
To meet the increasing demand for imported wine and Chinese Fenjiu liquor,
we will continue cooperating with major suppliers to ensure both the quantity and quality of our Chinese Fenjiu liquor and imported
wine inventory. In addition to our present sales network, we expect to increase our investment in training our employees, updating
our website and improving our client information managing system. Our goal is to build a high performance sales network with a
very personal approach to our business partners.
Competitive Strengths
Although we operate in a highly competitive
industry, we believe that the following factors provide us with the competitive advantages in the marketplace that could differentiate
us from our potential competitors:
Our Company has a high brand recognition
in the Chinese Fenjiu liquor market
Our Fenjiu liquor is sold under the "Dagangjiu"
brand and is one of the Chinese Fenjiu liquor market's most popular brands. We have leveraged our business relationship with
Fenjiu Group and relied on Fenjiu Group's international fame to become one of the leading brands in international alcohol
festivals. We believe that our brand's strong recognition reinforces our existing customer goodwill in Shanxi province and
beyond, providing us with a competitive advantage.
32
Our Marketing Team's Extensive
Experience and Superior Reputation in our Industry
We believe that our competitors'
marketing team cannot match our marketing experts' extensive industry experience and their superior reputation. To some degree,
our commercial campaigns are well accepted by consumer trends and resonate with potential liquor distribution partners.
Additionally, we believe our marketing
expertise and design proficiency required to successfully attract new customers combined with our ability to generate a range of
business concepts and capability to customize each sales opportunity according to customers' need are advantages when competing
in the Chinese Fenjiu market. Our expertise also allows us to successfully manage the numerous regional and cultural complexities
involved in operating a traditional liquor business in China.
A Flexible Business Model
Our current business model is flexible.
It can be adjusted to different products we sell and producers we sign cooperative agreements with. While operating a mix of marketing
campaigns and business concepts under our own registered trademarks "Dagangjiu" and "Dagang Jiufang", we
entrust our liquor inventory to reputed large-scale producers. Currently, we are in a strategic partnership with Fenjiu Group.
Our current business strategy emphasizes
on the marketing, packaging and distribution of Fenjiu liquor and imported wines. However, should we decide to change our business
strategy catering to other popular liquor products such as Luzhou-flavor liquor and Maotai-flavor liquor, we can quickly adjust
our marketing strategy and product packaging to meet customers' evolving needs and preferences. Since our brand is well recognized
and our current business model is based on flexible dealership, we can adjust our strategic partnerships to address new product
preferences while maintaining our accumulated goodwill. This approach enables us to update marketing concepts and product mix at
any time and allows us to be flexible in our marketing approach.
This flexible business model has contributed
to the resilience of our business performance.
Service-driven and Cohesive Management Team
Our talented and dedicated senior management
team has guided our organization through its expansion and, we believe, positioned us for continued growth. Additionally, our management
team possesses extensive experience across a broad range of disciplines, including Chinese liquor marketing, sales, E-Commerce,
finance, franchising and business management. Our management team embraces our core purpose to "promote premium alcoholic
beverages to the Chinese population of all ages". They are the promotors of our passionate and customer-oriented business
culture, which is shared by our employees throughout our company. We believe our management team is service-driven and cohesive,
focusing on the Company's long-term business growth.
Principal Products
For the nine months ended March 31, 2019,
we generated revenue of approximately 91.4% from Fenjiu liquor wholesale and approximately 8.6% from imported wine wholesale. For
the nine months ended March 31, 2018, we generated revenue of approximately 85.3% from Fenjiu liquor wholesale and approximately
14.7% from imported wine wholesale. For the year ended June 30, 2018, we generated revenue of approximately 84.9% from Fenjiu liquor
wholesale and approximately 15.1% from imported wine wholesale. For the year ended June 30, 2017, we generated revenue of approximately
89.9% from Fenjiu liquor wholesale and approximately 10.1% from imported wine wholesale. We have not experienced any seasonality
in our business.
Fenjiu Liquor Wholesale
For our Fenjiu liquor wholesale business,
we secure our strategic partnerships with dealers based on our market survey data, market positioning data, sales channels data,
sales capabilities data and sales potential evaluation. We further evaluate dealers according to their geographical and administrative
areas and categorize them into provincial, municipal and county agents. We establish cooperative relationships and strategic sales
partnerships amongst dealers at different levels to further facilitate the sales of our products. We sale our Fenjiu liquor products
directly to these dealers.
For our Fenjiu liquor wholesale business,
we pay special attention to dealers with direct business access to retail stores and outlets. We sell our Fenjiu products with
simple and bulk packaging to these dealers. The idea is to achieve larger profit margins through removing high-end designs and
packaging, thus ensuring a relatively low price of our Fenjiu liquor products. Through this approach, we believe we can reach a
greater number of Chinese customers who are attracted by the cost-effectiveness of our simple and bulk packaging products. We sell
our simple and bulk packaging products to our targeted dealers who then directly resell these products to local retail stores and
outlets.
Revenue generated from our Fenjiu liquor
wholesale business accounted for 91.4% and 85.3%, respectively, of the total revenue derived from our general business in the nine
months ended March 31, 2019 and 2018. Revenue generated from our Fenjiu liquor wholesale business accounted for 89.9% and 84.9%,
respectively, of the total revenue derived from our general business in fiscal year 2017 and 2018.
33
Imported Wine Wholesale
For our imported wine wholesale business,
we secure our strategic partnerships with dealers based on our market survey data, market positioning data, sales channels data,
sales capabilities data and sales potential evaluation. We further evaluate dealers according to their geographical and administrative
areas and categorize them into provincial, municipal and county agents. We establish cooperative relationships and strategic sales
partnerships amongst dealers at different levels to further facilitate the sales of our products. We wholesale our imported wines
directly to these dealers.
Revenue generated from our imported wine
wholesale business accounted for 91.4% and 85.3%, respectively, of the total revenue derived from our general business in the nine
months ended March 31, 2019 and 2018. Revenue generated from our imported wine wholesale business accounted for 10.1% and 15.1%,
respectively, of the total revenue derived from our general business in fiscal year 2017 and 2018.
Competition
There is intense competition in the Chinese
liquor market. As a result, customers face a tremendous number of choices when deciding which brand or product to choose from.
As of March 31, 2019, Fenjiu Group has
nearly 1,000 multi-layered distributors that often serve as Fenjiu brand co-builders. Although the Fenjiu Group is now widely known
as the only producer of Fenjiu throughout the market, intense competition in the wholesale market remains since Fenjiu liquor distributors
will continue working to co-build and enhance their respective brand image alongside Fenjiu Group to capture market shares from
their competitors. Distributors range from mom-and-pop stores in Shanxi Province to larger companies with years of experience
in the Fenjiu liquor industry, each competing for a fair share of the market. Competition can be even more intense amongst the
distributors within the same region.
The Chinese wine market is also very competitive.
Our competitors such as wine producers, distributors or retailers conduct various marketing activities and pricing strategies in
an effort to keep their market shares, which directly impact our sales, revenues, and profitability. We follow the market trend
closely and adjust our own advertising, promotion, pricing and sourcing strategies accordingly. In addition, competitors in the
Chinese wine market compete against us for regaining highly qualified marketing personnel and staff members.
In response to the intense competition
in the Chinese liquor and wine markets, we have implemented a number of initiatives designed to expand our revenues. Our revenue
enhancement initiatives include expanding our marketing efforts, developing new products, and working with start-up companies and
bulk-sale customers directly to decrease our marketing costs.
Customers
Our customers are downstream distributors.
We rely upon several of our large customers from whom we generate substantial revenue each year. The composition of our largest
customers has changed from year to year. For the nine months ended March 31, 2019, six of our customers, Fuqing Jing Hong Trading
Co., Ltd., Beijing Huaxin Rongfa Trading Co., Ltd., Shanxi Moneng Trading Co., Ltd., Fuzhou Jiuyitang Trading Co., Ltd., New Venus
Trade (Fujian) Group Co., Ltd., and Shanghai Baiwang Trading Co., Ltd., accounted for approximately 13.6%, 12.3%, 12.2%, 10.7%,
10.6%, and 10.2% of Huaxin's revenue, respectively. For the year ended June 30, 2018, five of our customers, Beijing Huaxin
Rongfa Trading Co., Ltd., Fuqing Jing Hong Trading Co., Ltd., Shanghai Baiwang Trading Co., Ltd., New Venus Trade (Fujian) Group
Co., Ltd. and Shanxi Moneng Trading Co., Ltd. represented approximately 16.3%, 16.2%, 11.5%, 11.2% and 10.6% of Huaxin's
revenue, respectively. For the year ended June 30, 2017, four of our customers, Fuqing Jing Hong Trading Co., Ltd., Beijing Huaxin
Rongfa Trading Co., Ltd., New Venus Trade (Fujian) Group Co., Ltd. and Shanghai Baiwang Trading Co., Ltd. represented approximately
27%, 30%, 11% and 15% of Huaxin's revenue, respectively. Huaxin currently engages its major customers with purchase agreements
negotiated on an arm's length basis. These purchase agreements customarily cover a one-year period and contain material subsections
such as targeted customers' selling goals, representation and warranties of the customers, rights and responsibility of the
customers, pricing adjustment, logistics and shipping, payment methods, downstream management and dispute resolutions. While we
believe that one or more of our major customers could account for a significant portion of our sales for at least the year 2020,
we anticipate that our customer's base will continue to expand and that in the future we will be less dependent on major
customers.
Suppliers
We primarily rely upon a few main suppliers
from whom we purchase our inventory each year. For the nine months ended March 31, 2019, three of our suppliers, Fenyang Xinxin
Xiangrong Trading Co., Ltd., Shanxi Xinghuacun Liquor Group Wine Industry Development Zone Sales Co., Ltd. (also known as the "Fenjiu
Group"), and Fenyang Xinghua Haokoufu Wine Industry Flagship Store, accounted for approximately 56%, 22% and 10% of our total
supply purchases. For the year ended June 30, 2018, five of our suppliers, Shanxi Xinghuacun Liquor Group Wine Industry Development
Zone Sales Co., Ltd., Fuzhou Tongshunda Trading Co., Ltd., Fenyang Xinghua Haokoufu Wine Industry Flagship Store, Shanxi Yuanquan
Drinking Co., Ltd. and Shanxi Xinjin Merchants Wine Group Co., Ltd., accounted for 41%, 17%, 10%, 8% and 8% of our total supply
purchases. For the year ended June 30, 2017, five of our suppliers, Shanxi Yuanquan Drinking Co., Ltd., Shanxi Wanli Wine Industry
Sales Co., Ltd., Fuyang City Xinghua Haokoufu Wine Industry Flagship Store, Shanxi Xinjin Merchants Wine Group Co., Ltd. and Fuzhou
Tongshunda Trading Co., Ltd. represented for 45%, 21%, 13%, 11% and 8% of the total supply purchases. All supplier contracts with
large suppliers were entered from year to year on an arm's length basis.
34
In general, we enter into procurement agreements
in the ordinary course of business with our suppliers, pursuant to a form of supply order typically on a "deal by deal"
basis. However, we have a strategic partnership with Fenjiu Group. Most recently, we entered into a partnership agreement with
Fenjiu Group on June 30, 2017, pursuant to which Fenjiu Group has agreed to supply us with $4,379,850 worth of Fenjiu liquor during
a three-year period from June 30, 2017 to June 29, 2020. We agreed to buy $4,379,850 worth of Fenjiu liquor using our best effort
pursuant to this strategic partnership agreement, he underwriter has no obligation or commitment to purchase any securities. If
the contract is renewed, the two parties must agree on the terms of contract cooperation for the next year before June 29 of each
year and sign a cooperation contract for the next year. The foregoing description of the strategic agreement and the terms and
conditions of such agreement is qualified in their entirety by the complete text of the strategic agreement, which is filed as
hereto as Exhibit 10.2 (the "Partnership Agreement") to this Form S-1 and is incorporated herein by reference.
Intellectual Property
Protection of our intellectual property
is a strategic priority for our business. We rely on a combination of patent, copyright, trademark and trade secret laws, as well
as confidentiality agreements, to establish and protect our proprietary rights. We do not rely on third-party licenses of intellectual
property for use in our business.
As of the date of this prospectus, we had
obtained two patents for liquor-making devices that can change proofs of various liquors, both of which were registered in 2015.
Our issued PRC patents will expire in 2025. As of the date of this prospectus, we had registered 10 trademarks and had submitted
11 additional trademark applications. Our registered PRC trademarks will expire between 2024 and 2028 but can be renewed before
the trademarks' respective expiration date. As of the date of this prospectus, we do not have any registered domain names.
In addition to the foregoing protections,
we generally control access to and use of our proprietary and other confidential information through the use of internal and external
controls, such as the use of confidentiality agreement with our employees.
Research and Development
We are engaged, through our subsidiaries,
in alcohol wholesale in China and currently focus on the sale of Chinese Fenjiu liquor and imported wines. In order to better guarantee
the authenticity and origin of our premium products, on August 20, 2018 we entered into a contract with Guangzhou Silicon Technology
Co., Ltd. to have Guangzhou Silicon Technology Co., Ltd. develop an anti-counterfeiting laser recognition proprietary system (the
"System") for us. Using blockchain technology, the System is expected to encrypt our premium products' brewing
information, transaction information, identification number and certificate information, producing unique labels that can then
be attached to our liquor and wine bottles. Since blockchain ledgers are impermeable, and manipulation of existing ledgers is impractical,
the authenticity and provenance of our premium products will be better protected. The adoption of the System is also expected to
build greater goodwill and trust in our brand in the long term. We believe that by implementing the System, in a not so distant
future, our customers will be able to base their transactions on the information encrypted on the labels, thus ensuring the authenticity
and privacy of their purchases. We are currently in the internal testing stages of developing the System and cannot be certain
how the use of the System will benefit or materially affect our business operations in the future.
Except for the aforementioned System, we
do not have any other research and development effort in the past three years.
Employees
As of the date of this prospectus, we had
60 employees throughout our operations in 4 offices and 3 warehouses. None of our employees are covered by a collective bargaining
agreement. We have not experienced any work stoppages. The following table sets forth the number of our employees by function as
of the same date:
Functional Area
Number of Employees
Management
13
Financial Department
9
Marketing Department
31
Sales Department
3
Inventory Department
3
Driver
1
Total
60
35
As of July 3, 2019, all of our employees
were located in Fenyang City
,
Shanxi Province, China.
As required by PRC laws and regulations,
we participate in various employee social security plans that are organized by municipal and provincial governments, including
housing, pension, medical insurance and unemployment insurance programs. We are required under Chinese law to make contributions
to employee benefit plans at specified percentages of the salaries, bonuses and certain allowances of our employees, up to a maximum
amount specified by the local government from time to time.
We believe that we maintain a good working
relationship with our employees, and we have not experienced any labor disputes.
Legal Proceedings
Currently there are no legal proceedings
pending or threatened against the Company. However, from time to time, we may become involved in various lawsuits and legal proceedings
which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these
or other matters may arise.
36
DESCRIPTION OF PROPERTY
Our headquarters are located at Building
22, Baihui Shoufu, Xinghuacun Town, Fenyang City, Shanxi Province, China, where we own the property with an aggregate floor area
of approximately 1561.6 square meters. This includes Huaxin's sales and marketing office, communication and business development
office and our management and operations facilities.
Huaxin currently leases from Fenyang Baihui
Real Estate Co., Ltd. on an arm's length basis, approximately 50 square meters of office space at No.2, 1
st
Floor,
Block A4, Baihui Shoufu, Xinghuacun Town, Fenyang City, Shanxi Province, China under a lease that expires on September 6, 2019
and can be renewed subject to mutual agreements by both parties.
Huaxin also currently leases from Taiyuan
Xiangyu Enterprise Management Consulting Co. Ltd. on an arm's length basis, approximately 100 square meters of office space
at No.5, Unit 1, Building 2, No. 343, Fenyang Road, Xiaodian District, Taiyuan City, Shanxi Province, China under a lease that
expires on November 9, 2019 and can be renewed subject to mutual agreements by both parties.
Huaxin also currently leasse from Shanxi
Zhanpeng Metal Products Co., Ltd. on an arm's length basis, approximately 1,000 square meters of office space at No. 2, South
Hero Road, Fenyang City, Shanxi Province, China under a lease that expires on March 9, 2021 and can be renewed subject to mutual
agreements by both parties.
Huaxin also currently leases from Ms. Jiangmei
Guo on an arm's length basis, approximately 140 square meters of office space at No. 1011, Unit 2, Unit 1, Wenxingyuan, Xiaodian
District, Fenyang City, Shanxi Province, China under a lease that expires on December 8, 2019 and can be renewed subject to mutual
agreements by both parties.
Huaxin also currently leases from Mr. Genshan
Zhao on an arm's length basis, approximately 60 square meters of office space at Room 915, Wufeng International, No. 11 Zhenxing
Street, High-Tech Zone, Taiyuan City, Shanxi Province, China under a lease that expires on September 30, 2019 and can be renewed
subject to mutual agreements by both parties.
Huaxin also currently leases from Mr. Jianhong
Zhang on an arm's length basis, approximately 50 square meters of office space at Room 903, 9th Floor, Wufeng International
Building, High-tech Development Zone, Taiyuan City, Shanxi Province, China under a lease that expires on September 20, 2019 and
can be renewed subject to mutual agreements by both parties.
In addition, Huaxin currently leases from
Fenyang City Jiudu Xinhua Liquor Trading Center Co., Ltd. on an arm's length basis, approximately 1,200 square meters of
warehouse space at South District if Shudao Avenue, High-Speed Exit, Xinghua Village, Fenyang City, Shanxi Province, China under
a lease that expires on January 11, 2020 and can be renewed subject to mutual agreements by both parties.
We believe that our current facilities
are adequate and suitable for our operations.
37
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis
of the results of operations and financial condition for the fiscal years ended June 30, 2018 and 2017 and for the nine months
ended March 31, 2019 and 2018 should be read in conjunction with our financial statements and the notes to those financial statements
that are included elsewhere in this Report. Our discussion includes forward-looking statements based upon current expectations
that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing
of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors.
See "Cautionary Note Regarding Forward-looking Statements" on page 19.
Business Overview
We run a growing alcohol wholesale business
guided by a core purpose: to promote premium alcoholic beverages to China's population. We currently focus our business on
the sale of Chinese Fenjiu liquor and imported wines. We aim to achieve this purpose by catering to the ever-evolving customer
tastes in alcohols through our creative marketing strategies and innovative product designs that target different age groups of
China's population. To that end, we have hired marketing talents who have decades of experience in effective alcohol brand
building. As a result, we believe we have managed to respond to the demand for Chinese Fenjiu liquor and imported wines in the
Chinese marketplace.
We believe that Fenjiu liquor presents
great business opportunities for us to utilize creative product designs and marketing strategies to attract Chinese consumers.
Collaborating with Fenjiu Group, the sole producer of Fenjiu liquor in China, we have been focusing on product design to convey
a modern feel to our Fenjiu products while maintaining Fenjiu liquor's historical elegance. We believe our designer packaging,
symbolized by its bright coloring and prominently fat-bellied jars, stands out from those of our competitors. With creative designs
and stylized names, our registered trademarks, such as Dagangjiu (translated as "Big Jar Liquor"), are effective in
capturing the attention of Chinese consumers, young and old.
Established in 2017, we believe our imported
wine distribution business has high growth potential as evidenced from the market prices of the imported wines from Spain and New
Zealand, the two countries where we import most of our wine products from, in the current Chinese market. A great majority of our
competitors have priced their 750mL bottles of wine imported from Spain and New Zealand well above RMB 200. This price falls within
the premium range in the general Chinese wine market. Within the general Chinese wine market, the premium range enjoyed the highest
year-on-year growth compared to other price tiers of wine in 2018. This pricing trend for premium wines is applicable to imported
wines from Spain and New Zealand, which we believe will benefit our growth in 2019. Accordingly, our strategy is to continue pricing
our imported wine products within the premium range levels to generate higher margins. Though marketing and branding are still
integral parts of the wine business in China, wine sales are highly driven by the origin of the wines. Since Spain and New Zealand
are considered prime origins for wine productions, we believe that our imported wine products will continue to attract the attention
of Chinese consumers and promote the sustainable growth of our imported wine business.
Oranco, Inc., or the Company, was incorporated
under the laws of the State of Nevada, on June 16, 1977. From 1977 until 1981 the Company was dormant and undertook no activities.
Beginning in 1982 the Company explored the option of entering into a joint venture to develop a mercury mining property at Mercury
Mountain, Nevada. As a part of these activities the Company, through the sale of its Common Stock, raised funds to engage the services
of an independent mining engineer to prepare a report on the feasibility of the project. By late 1983 it had been determined that
the project did not warrant any further investment. From that time until 1997 the Company's activities concentrated on maintaining
its corporate existence and looking for other opportunities for the Company. In May of 1997 new management was appointed, a shareholders'
meeting was held, amendments to the Company's articles of incorporation were approved, and additional effort was made by
new management to make the Company a viable merger candidate. These efforts included engaging the services of a certified Public
Accounting firm to audit the Company's financial statements, obtaining an opinion of counsel as to the tradability of the
Company's outstanding shares, preparation of the information required by Rule 15c2-11, and applying to the OTC Bulletin Board
for trading on the medium.
By September of 1999, no viable acquisitions
or merger candidates had been located for the Company and management became aware that the Company would be required to register
its shares under the Securities Exchange Act of 1934 in order to maintain its stock on the OTC Bulletin Board. Management determined
that the Company needed new management which might be better positioned to find a suitable acquisition or merger candidate and
which would be in a position of funding the upcoming expenses of the Company. On September 1, 1999 management of the Company resigned
and Claudio Gianascio was appointed as sole director and officer. On November 9, 1999 the Company sold 700,000 of its shares of
Common Stock to Mr. Gianascio for $.05 per share, netting a total of $35,000. On November 18, 1999 the Company filed a registration
statement on Form 10SB which became effective sixty days thereafter.
The Company had an initial authorized capital
of $25,000 consisting of 100,000 shares of $.25 par value Common Stock. On June 10, 1997 the shareholders approved an amendment
to the articles of incorporation of the Company changing the authorized capital to 100,000,000 shares at a par value of $.001 and
providing for a 10 to 1 share forward split of the outstanding shares. The Articles of Amendment were filed with the State of Nevada
on August 6, 1998.
38
In the summer of 2000, the Company completed
a private placement of 2,500,000 units for which it received $250,000. Each unit consisted of one share of Common Stock; one "a"
warrant giving the holder thereof the right to purchase, upon a minimum of 60 days prior notice of exercise, one share of Common
Stock at $.10 per share within two years of the date of issuance; and one "b" warrant giving the holder thereof the
right to purchase, upon a minimum of 60 days prior notice of exercise, one share of Common Stock at $.25 per share within two years
of the date of issuance. Both "a" & "b" warrants expired without exercise.
On December 26, 2017, Million Success Business
Limited, a British Virgin Islands corporation ("Buyer") entered into a Share Purchase Agreement ("Purchase Agreement")
with the then largest shareholder of the Company, Mr. Claudio Gianascio, who owned 90.4% of the total outstanding shares of the
Company ("Seller"). Pursuant to the terms of the Purchase Agreement, the Seller sold to the Buyer all of his shares of
Common Stock of the Company, par value $0.001 per share (the "Common Stock"), or 38,121,530 shares of the Common Stock
for $340,000 (such transaction, the "Share Purchase"). The Share Purchase closed on December 29, 2017.
At the closing of the Share Purchase, there
was a change in our Board and executive officers. Mr. Claudio Gianascio, sole director, President, Treasurer and Secretary of the
Company appointed Mr. Peng Yang to serve as sole director, President, Treasurer and Secretary of the Company, with such appointment
effective on January 5, 2018, being ten days from the date the Information Statement on Schedule 14F-1 (the "Schedule 14F-1")
reporting the change in control as a result of the Share Purchase was mailed to all the stockholders of the Company. Mr. Gianascio
resigned from all his positions with the Company effective on January 5, 2018.
On June 29, 2018, Oranco, Inc. completed
and closed a share exchange (the "Share Exchange") under a Share Exchange Agreement (the "Share Exchange Agreement"),
entered into by and among by and among (i) Oranco, Inc.("ORNC"); (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, ORNC acquired from
the Sellers all of the issued and outstanding equity interests of Reliant in exchange for 349,296,000 newly-issued shares of Common
Stock of the Company to Sellers, of which 28,000,000 were issued at the closing date of June 29, 2018, and the remaining 321,296,000
shares shall be issued at the completion of the increase of the Company's authorized shares (the "Common Stock").
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.
On September 1, 2018, Fenyang Huaxin Spirit
Development Co. Ltd., a subsidiary of the Company, acquired 20% equity interest in Guangzhou Silicon Technology Co., Ltd. a company
established in the People's Republic of China. The acquisition of 20% equity interest in Guangzhou Silicon Technology Co.,
Ltd. was accounted for as an interest in an associate.
As disclosed in the
Form 8-K
filed with
the Securities and Exchange Commission on October 19, 2018, the Company entered into a business agreement with Guangzhou Silicon
Technology Co., Ltd. on August 20, 2018 to have Guangzhou Silicon Technology Co., Ltd. develop an anti-counterfeiting laser recognition
proprietary system using blockchain technology.
For the
nine months ended March 31, 2019 compared with the nine months ended March 31, 2018
Results of Operations
Nine Months Ended
March 31,
Variance
2019
2018
Amount
%
(unaudited)
RMB
(unaudited)
RMB
Revenue
96,037,641
83,258,237
12,779,404
15.3
%
Cost of sales
24,395,247
23,002,777
1,392,470
6.1
%
Gross profit
71,642,394
60,255,460
11,386,934
18.9
%
Selling and distribution expenses
3,020,324
3,338,043
(317,719
)
(9.5
)%
Administrative expenses
6,159,429
3,686,062
2,473,367
67.1
%
Income from operations
62,462,641
53,231,355
9,231,286
17.3
%
Other income
90,807
131,447
(40,640
)
(30.9
)%
Interest and other financial charges
41,238
1,768,720
(1,727,482
)
(97.7
)%
Income before income taxes
62,512,210
51,594,082
10,918,128
21.2
%
Income taxes
16,024,012
12,623,911
3,400,101
26.9
%
Net income
46,488,198
38,970,171
7,518,027
19.3
%
39
Revenue
Nine Months Ended March 31,
Variance
2019
%
2018
%
Amount
%
(unaudited)
RMB
(unaudited)
RMB
Sales of Fenjiu liquor products
87,738,861
91.4
%
71,044,181
85.3
%
16,694,680
23.5
%
Sales of imported wine products
8,298,780
8.6
%
12,214,056
14.7
%
(3,915,276
)
(32.1
)%
Total Amount
96,037,641
100.0
%
83,258,237
100.0
%
12,779,404
15.3
%
For the nine months ended March 31, 2019
and 2018, revenue generated from our Fenjiu liquor wholesale business was RMB87,738,861 and RMB71,044,181, respectively, which
represented an increase of RMB16,694,680 or 23.5%. The increase of revenue generated from our Fenjiu liquor wholesale business
was mainly due to the increased sales volume of our Fenjiu liquor products. Our brand identity has contributed to the success of
our Fenjiu liquor wholesale business. Our brand positively affected our sales.
For the nine months ended March 31, 2019
and 2018, revenue generated from our imported wine wholesale business was RMB8,298,780 and RMB12,214,056, respectively, which represented
a decrease of RMB3,915,276 or 32.1%. The Company adopted a strategy to focus on selling products with relatively higher profit
margins and to reduce selling products with relatively lower profit margins. This accounts for the reduction in this revenue stream.
The weightings on these products were different for the nine months ended March 31, 2019 and 2018. The overall sales was decreased.
Cost of Sales
Nine Months Ended March 31,
Variance
2019
%
2018
%
Amount
%
(unaudited)
RMB
(unaudited)
RMB
Sales of Fenjiu liquor products
22,157,376
90.8
%
19,242,361
83.7
%
2,915,015
15.1
%
Sales of imported wine products
2,237,871
9.2
%
3,760,416
16.3
%
(1,522,545
)
(40.5
)%
Total Amount
24,395,247
100.0
%
23,002,777
100.0
%
1,392,470
6.1
%
For the nine months ended March 31, 2019
and 2018, cost of sales from our Fenjiu liquor wholesale business was RMB22,157,376 and RMB19,242,361, respectively, which represented
an increase of RMB2,915,015 or 15.1%. The increase of cost of sales was mainly due to the increased sales volume.
For the nine months ended March 31, 2019
and 2018, cost of sales from our imported wine wholesale business was RMB2,237,871 and RMB3,760,416, respectively, which represented
a decrease of RMB1,522,545 or 40.5%. The Company adopted a strategy to focus on selling products with relatively higher profit
margins and to reduce selling products with relatively lower profit margins. This accounts for the reduction in this revenue stream.
The weightings on these products were different for the nine months ended March 31, 2019 and 2018. The overall cost of sales was
decreased.
Gross Profit
Nine Months Ended
March 31,
Variance
2019
%
2018
%
Amount
%
(unaudited)
RMB
(unaudited)
RMB
Sales of Fenjiu liquor products
65,581,485
91.5
%
51,801,820
86.0
%
13,779,665
26.6
%
Sales of imported wine products
6,060,909
8.5
%
8,453,640
14.0
%
(2,392,731
)
(28.3
)%
Total Amount
71,642,394
100.0
%
60,255,460
100.0
%
11,386,934
18.9
%
Gross profit from our Fenjiu liquor wholesale
business increased by RMB13,779,665 or 26.6% for the nine months ended March 31, 2019, as compared to the same period of 2018.
The Company increased sales volume of our products primarily due to the contribution of our brand identity. The overall gross profit
contribution percentage of Fenjiu liquor wholesale business was so stable that 74.7% was recorded for the nine months ended March
31, 2019, as comparted to 72.9% for the same period of 2018.
Gross profit from our imported wine wholesale
business decreased by RMB2,392,731 or 28.3% for the nine months ended March 31, 2019, as compared to the same period of 2018. The
gross profit contribution percentage of imported wine wholesale business was 73.0% for the nine months ended March 31, 2019, as
compared to 69.2%. for the same period of 2018. The increase represents that the Company adopted its strategy to focus on selling
products with relatively higher profit margins and to reduce selling products with relatively lower profit margins.
40
Selling and Distribution Expenses
For the nine months ended March 31, 2019,
our selling and distribution expenses were RMB3,020,324, representing a decrease of RMB317,719, or 9.5%, as compared to the same
period of 2018. The decrease was primarily due to freight expense and packaging cost during the nine months ended March 31, 2019,
as compared to the same period of 2018.
Administrative Expense
For the nine months ended March 31, 2019,
our administrative expenses were RMB6,159,429, representing an increase of RMB2,473,367 or 67.1%, as compared to the same period
of 2018. The increase was primarily due to salaries, foreign exchange differences and professional fees for share exchange of Reliant
Galaxy International Limited.
Other Income
For the nine months ended March 31, 2019,
our other income was RMB90,807, representing a decrease of RMB40,640 or 30.9%, as compared to the same period of 2018. The decrease
was primarily due to the decreased write-back of other receivables.
Interest and Other Financial Charges
For the nine months ended March 31, 2019,
our interest and other financial charges were RMB41,238 as compared to interest and other financial charges of RMB1,768,720 in
the same period of 2018. The decrease in interest and other financial charges was primarily due to decreased bank borrowings.
Income Taxes
For the nine months ended March 31, 2019
and 2018, our income taxes increased by RMB3,400,101 or 26.9% to RMB16,024,012 for the nine months ended March 31, 2019 from RMB12,623,911
for the nine months ended March 31, 2018. The increase in the income taxes was primarily due to increased taxable income and higher
tax disallowable expenses for the period indicated.
Liquidity and Capital Resources
Operating Activities
Operating activities generated RMB28,889,057
and RMB44,657,519 of cash in the nine months of 2019 and 2018, respectively. The decrease of RMB15,768,462 in 2019 was primarily
a result of change in net operating assets in 2019 when compared with 2018.
Activity from trade receivables included
a net decrease of RMB33,352,881 compared to a net decrease of RMB1,228,086 for the nine months ended 31 March 2019 and 2018, respectively.
Activity from deposits, prepayments and
other receivables included a net increase of RMB11,945,528 compared to a net increase of RMB17,736,741 for the nine months ended
31 March 2019 and 2018, respectively.
Activity from receipts in advance, accruals
and other payables included a net increase of RMB743,376 compared to a net decrease of RMB8,114,271 for the nine months ended 31
March 2019 and 2018, respectively.
Activity from current tax liabilities included
a net increase of RMB2,598,923 compared to a net decrease of RMB2,148,514 for the nine months ended 31 March 2019 and 2018, respectively.
Investing Activities
Investing activities used RMB250,000 and
RMB407,687 for the nine months ended 31 March 2019 and 2018, respectively.
Cash of RMB250,000 used for investing activities
in 2019 was primarily related to the acquisition of the interest in an associate.
Cash of RMB407,687 used for investing activities
in 2018 was primarily related to the payments for acquisition of property, plant, and equipment.
Financing Activities
Financing activities provided RMB2,250,000
for the nine months ended 31 March 2019 and used RMB27,000,000 for the first nine months ended 31 March 2018.
Cash of RMB2,250,000 provided in 2019 were primarily related
to net proceeds of bank borrowings.
Cash of RMB27,000,000 used in 2018 were primarily related to
net repayment of bank borrowings.
41
For the year ended June 30, 2018 compared with the year
ended June 30, 2017
Results of Operations
Years Ended June 30,
Variance
2018
(audited)
RMB
2017
(audited)
RMB
Amount
%
Revenue
101,759,660
91,144,666
10,614,994
11.6
%
Cost of sales
27,800,667
24,065,113
3,735,554
15.5
%
Gross profit
73,958,993
67,079,553
6,879,440
10.3
%
Selling and distribution expenses
5,477,457
2,521,950
2,955,507
117.2
%
Administrative expenses
7,109,937
5,505,952
1,603,985
29.1
%
Income from operations
61,371,599
59,051,651
2,319,948
3.9
%
Other income
155,700
227,552
71,852
-31.6
%
Interest and other financial charges
1,759,325
3,431,027
1,671,702
-48.7
%
Income before income taxes
59,767,974
55,848,176
3,919,798
7.0
%
Income taxes
15,095,681
14,121,343
974,338
6.9
%
Net income
44,672,293
41,726,833
2,945,460
7.1
%
Revenue
Year Ended June 30,
Variance
2018
(audited)
RMB
%
2017
(audited)
RMB
%
Amount
%
Sales of Fenjiu liquor products
86,358,407
84.9
%
81,973,982
89.9
%
4,384,425
5.3
%
Sales of imported wine products
15,401,253
15.1
%
9,170,684
10.1
%
6,230,369
67.9
%
Total Amount
101,759,660
100.0
%
91,144,666
100.0
%
10,614,994
11.6
%
For the year ended June 30, 2018 and 2017,
revenue generated from our Fenjiu liquor wholesale business was RMB86,358,407 and RMB81,973,982, respectively, which represented
an increase of RMB4,384,425 or 5.3%. The increase in revenue generated from our Fenjiu liquor wholesale business was mainly due
to the increased sales volume of our Fenjiu liquor products.
For the years ended June 30, 2018 and 2017,
revenue generated from our imported wine wholesale business was RMB15,401,253 and RMB9,170,684, respectively, which represented
an increase of RMB6,230,369 or 67.9%. The increase in revenue generated from our imported wine wholesale business was mainly due
to the increased sales volume of our imported wine products.
Cost of Sales
Years Ended June 30,
Variance
2018
(audited)
RMB
%
2017
(audited)
RMB
%
Amount
%
Sales of Fenjiu liquor products
23,250,121
83.6
%
21,645,410
89.9
%
1,604,711
7.4
%
Sales of imported wine products
4,550,546
16.4
%
2,419,703
10.1
%
2,130,843
88.1
%
Total Amount
27,800,667
100.0
%
24,065,113
100.0
%
3,735,554
15.5
%
For the years ended June 30, 2018 and 2017,
the cost of sales from our Fenjiu liquor wholesale business was RMB23,250,121 and RMB21,645,410, respectively, which represented
an increase of RMB1,604,711 or 7.4%. The increase of cost of sales from our Fenjiu liquor wholesale business was mainly due to
the increased sales volume of our Fenjiu liquor products.
For the years ended June 30, 2018 and 2017,
the cost of sales from our imported wine wholesale business was RMB4,550,546 and RMB2,419,703, respectively, which represented
an increase of RMB2,130,843 or 88.1%. The increase of cost of sales from our imported wine wholesale business was mainly due to
the increased sales volume of our imported wine products.
42
Gross Profit
Years Ended June 30,
Variance
2018
(audited)
RMB
%
2017
(audited)
RMB
%
Amount
%
Sales of Fenjiu liquor products
63,108,286
85.3
%
60,328,572
89.9
%
2,779,714
4.6
%
Sales of imported wine products
10,850,707
14.7
%
6,750,981
10.1
%
4,099,726
60.7
%
Total Amount
73,958,993
100.0
%
67,079,553
100.0
%
6,879,440
10.3
%
Gross profit from our Fenjiu liquor wholesale
business increased by RMB2,779,714 or 4.6% for the year ended June 30, 2018, as compared to the same period of 2017. The Company
adopted its strategy to sell products with fairly stable profit margins that gross profit contribution percentage was 73.1% for
the year ended June 30, 2018, as compared to 73.6% for the same period of 2017.
Gross profit from our imported wine wholesale
business increased by RMB4,099,726 or 60.7% for the year ended June 30, 2018, as compared to the same period of 2017. The gross
profit contribution percentage was 70.5% for the year ended June 30, 2018, as compared to 73.6% for the same period of 2017. The
decrease in gross profit contribution percentage represented different product mix.
Selling and Distribution Expenses
For the year ended June 30, 2018, our selling
and distribution expenses were RMB5,477,457, representing an increase of RMB2,955,507, or 117.2%, as compared to the same period
of 2017. The increase was primarily due to increased advertising expenses, packaging expenses and salaries during the year ended
June 30, 2018, as compared to the same period of 2017.
Administrative Expense
For the year ended June 30, 2018, our administrative
expenses were RMB7,109,937, representing an increase of RMB1,603,985 or 29.1%, as compared to the same period of 2017. The increase
was primarily due to professional fees in connection with share exchange with Reliant Galaxy International Limited.
Other Income
For the year ended June 30, 2018, our other
income was RMB155,700, representing a decrease of RMB71,852 or 31.6%, as compared to the same period of 2017. The decrease was
primarily due to the decreased interest income.
Interest and Other Financial Charges
For the year ended June 30, 2018, our interest
and other financial charges were RMB 1,759,325 as compared to interest and other financial charges of RMB3,420,272 in the same
period of 2017. The decrease in interest and other financial charges was primarily due to repayment of bank borrowings.
Income Taxes
For the years ended June 30, 2018 and 2017,
the Company's income taxes increased by RMB974,338 or 6.9% to RMB15,095,681 for the year ended June 30, 2018 from RMB14,121,343
for the year ended June 30, 2017. The increase in the Company's income taxes was primarily due to increased taxable income
of the Company for the year indicated.
Liquidity and Capital Resources
A summary of our changes in cash flows
for the years ended June 30, 2018, 2017 and 2016 is provided below:
As of
June 30
As of
June 30
As of
June 30
2018
2017
2016
(audited)
RMB
(audited)
RMB
(audited)
RMB
Net cash flows provided by (used in):
Cash generated from operating activities
47,292,147
18,910,609
(33,525,505
)
Cash used in investing activities
5,408
(30,893
)
(143,781
)
Cash used in financing activities
(27,400,000
)
(12,700,000
)
32,950,000
Net increase (decrease) in cash and restricted cash
19,897,555
6,179,716
(719,286
)
Cash and cash equivalents, beginning of the year
6,607,407
427,691
1,146,977
Cash and restricted cash, end of period
26,504,962
6,607,407
427,691
43
We use our operating cash flows to meet
our cash requirements and liquidity needs.
Operating Activities
Net cash flows provided by or used in operating
activities consist of net loss adjusted for non-cash expenses such as depreciation and amortization, bad debt expense, amortizations
of debt issuance costs and beneficial conversion features, stock-based compensation, and accrued interest expense. Our operating
assets and liabilities primarily consist of balances related to inventory purchases and accounts receivables. Operating assets
and liabilities that arise from the inventory purchases and accounts receivables may fluctuate significantly from time to time
depending on our inventory purchases and market behaviors.
Cash flows generated from operating activities
were RMB 47.29 million as of June 30, 2018, RMB 18.91 million as of June 30, 2017, and negative RMB 33.53 million as of June 30,
2016. There has been an increase in cash flow of RMB 28.38 million from 2017 to 2018. There has been a significant increase in
cash flow of RMB 52.44 million from 2016 to 2017. The primary reason for the increases in cash flows was increases in net income—there
has been increases in net income of RMB 44.67 million in 2018, RMB 41.63 million in 2017 and RMB 9.59 million in 2016. There were
many factors contributing to our increases in net income, however increased sales, increased gross margins, and increased ability
to turn our inventory into cash are the primary factors that contributed to our increase in net income.
Investing Activities
Net cash generated from investing activities
was RMB 5,408 as of June 30, 2018. Net cash used in investing activities was (RMB 30,893) as of June 30, 2017 and (RMB 143,781)
as of June 30, 2016. For fiscal year 2018, the Company invested (RMB 401,305) in purchasing office spaces. The Company purchased
computers and equipment of (RMB 30,893) in 2017 and (RMB 143,781) in 2016 for operational purposes. Net cash by investing activities
was RMB 406,713 in 2018, consisted primarily of cash received in connection with the share exchange with Reliant Galaxy International
Limited. No net cash generated from investing activities in 2017 and 2016.
Financing Activities
Net cash for investing activities in the
fiscal year 2018 and 2017 consists of acquiring Jinqiang. We spent (RMB 0.4 million) in 2018 and (RMB 2.1 million) in 2017 on acquiring
Jingqiang's shares, and we eventually gained 100% control of Jinqiang on May 7, 2018. We were able to generate significant
cash flows from our sales, which lowered our need for external financing. We were able to pay back bank loans of (RMB 27 million)
in 2018 and (RMB 10.65 million) in 2017. We had financing activities of RMB 32.95 million that contributed to our net cash flows
as of June 30, 2016.
Liquidity
Our net income was RMB 44.67 million as
of June 30, 2018, RMB 41.63 million as of June 30, 2017 and RMB 9.59 million as of June 30, 2016. Our cash flow from business operations
was RMB 47.29 million as of June 30, 2018, RMB 18.91 million as of June 30, 2017 and negative RMB 33.53 million as of June 30,
2018. Management believes that our increased sales caused the decreases in net loss and increases in cash flows.
Management is of the opinion that we have
funds available to continue developing our products and capturing more market shares. Based on the Company's current revenues
and cash flows, management believes that we will be able to fund our development efforts through cash flow or external financing
for the fiscal year 2019. However, there can be no assurances that the Company will be successful in developing new products or
capturing larger market shares and the Company may need additional share capital issued over the next 12 months.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
44
DIRECTORS AND EXECUTIVE OFFICERS
Our directors and executive officers are listed below.
Name
Age
Position
Since
Peng Yang
26
Chief Executive Officer, Director, President and Secretary
01/05/2018
Sze Lok (Patrick) Wong
46
Chief Financial Officer
12/03/2018
A brief description of the background and business experience
of our directors and executive officers for the past five years is as follows:
Mr. Peng Yang
, age 26, has international
business and management experience from his positions working with Huaxin, a company engaged in wine trading and Reliant Investment
(Group) Limited, an investment company. He has served as the general manager assistant and overseas affairs manager of Huaxin since
2015 and as limited director of Reliant Investment (Group) Limited since 2016. Mr. Yang is a leading member of our management team
who has experience in alcohol marketing. Mr. Yang holds a Bachelor's degree of Engineering, with honors, from the University
of Auckland in New Zealand in 2016.
Mr. Sze Lok (Patrick) Wong,
age
46, has served as the CFO of Amax International Holdings Limited from October 2012 to present. From January 2007 to July 2012,
Mr. Wang served as the Senior Manager of Crowe CPA Group. From January 2006 to December 2006, Mr. Wang served as the Head of Internal
Audit Department of Intac International Company. Mr. Wang is a fellow of Institute of Chartered Accountants in England & Wales
and is a Certified Information Systems Auditor of Information Systems Audit and Control Association. He received his Bachelor of
Accountancy with honors from Hong Kong Polytechnic University. He received his Master of Management from Macquarie Graduate School
of Management.
Term of Office
Our directors are appointed for a one-year
term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our
bylaws. Our officers are appointed by our Board of Directors and hold office until removed by the Board of Directors.
Family Relationships
There
are no family relationships among our directors or executive officers.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our
directors or executive officers has, during the past ten years:
●
been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding
traffic violations and other minor offenses);
●
had any bankruptcy petition filed by or against the business or property of the person, or of any
partnership, corporation or business association of which he was a general partner or executive officer, either at the time of
the bankruptcy filing or within two years prior to that time;
●
been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated,
of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending
or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings
and loan, or insurance activities, or to be associated with persons engaged in any such activity;
●
been found by a court of competent jurisdiction in a civil action or by the Commission or the Commodity
Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed,
suspended, or vacated;
●
been the subject of, or a party to, any federal or state judicial or administrative order, judgment,
decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private
litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation
respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order
of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition
order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
●
been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended
or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as
defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that
has disciplinary authority over its members or persons associated with a member.
45
Except as set forth in our discussion below
in "Certain Relationships and Related Transactions," none of our directors or executive officers has been involved
in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed
pursuant to the rules and regulations of the Commission.
Code of Ethics
The Company
has adopted a code of ethics that applies to the Company's principal executive officer, principal financial officer, principal
accounting officer or controller which was attached as Exhibit 99.1 to the March 29, 2004 10KSB for the period ended 12/31/2003.
Corporate Governance
The business and affairs of the company
are managed under the direction of our Board. In addition to the contact information in this annual report, each stockholder will
be given specific information on how he/she can direct communications to the officers and directors of the corporation at our annual
stockholders meetings. All communications from stockholders are relayed to the members of the Board of Directors.
Board Committees
We do not have any independent directors
on our Board of Directors. Our Board of Directors currently has one director, Mr. Peng Yang, who is also our Chief Executive Officer
and is therefore not independent. Our Board of Directors does not have any committees, as companies whose securities are quoted
on the OTC Pink are not required to have board committees. However, if, at such time in the future, we appoint independent directors
to our Board of Directors, we expect to form the appropriate board committees.
We currently
do not have a standing audit, nominating or compensation committee. Our Board of Directors handles functions that would otherwise
be handled by each such committee. We believe that there is not a need for a nominating committee at this time because our Board
of Directors consists of solely one director who is not independent.
Board Leadership Structure and Role
in Risk Oversight
Our Board of Directors is primarily responsible
for overseeing our risk management processes. The Board receives and reviews periodic reports from management, auditors, legal
counsel, and others, as considered appropriate regarding our company's assessment of risks. The Board focuses on the most
significant risks facing our company and our company's general risk management strategy, and also ensures that risks undertaken
by our company are consistent with the Board's appetite for risk. While the Board oversees our company's risk management,
management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective
approach for addressing the risks facing our company and that our Board leadership structure supports this approach.
46
EXECUTIVE COMPENSATION
No current or prior officer or director
has received any remuneration or compensation from the Company in the past three fiscal years, nor has any member of the Company's
management been granted any option or stock appreciation right. Accordingly, no tables relating to such items have been included
within this Item. Besides Sze Lok (Patrick) Wong, none of our employees is subject to a written employment agreement. None of our
officer has received a cash salary since our founding. The Company has no agreement or understanding, express or implied, with
any director, officer or principal stockholder, or their affiliates or associates, regarding compensation in the form of salary,
bonuses, stocks, options, warrants or any other form of remuneration, for services performed on behalf of the Company. Nor are
there compensatory plans or arrangements, including payments to any officer in relation to resignation, retirement, or other termination
of employment, or any change in control of the Company, or a change in the officer's responsibilities following a change
in control of the Company.
47
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 July 3, 2019, 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 (2)
One Liberty Plaza, Suite 2310 PMB# 21, New York, NY 10006
322,079,450
76.78
%
Sze Lok (Patrick) Wong
0
0
%
One Liberty Plaza, Suite 2310 PMB# 21, New York, NY 10006
All directors and executive officers as a group (2 persons)
322,079,450
76.78
%
(1)
Percentage is calculated based on 419,487,480 shares of Common Stock issued and outstanding as of July
3, 2019.
(2)
Includes 53,121,530
shares of Common Stock held of record by Million Success Business Limited, an entity controlled by Peng Yang, our CEO.
48
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Transactions with Related Persons
The Company had the following related party balances as of June
30, 2018 and 2017:
June 30,
2018
(Audited)
June 30,
2017
(Audited)
Revenue generated from related party
14,359,832
25,110,022
Interest income from director
-
214,046
Trade receivables from related party
-
15,000,875
July 1,
2016
Settlement
Repayment
New Loans
June 30,
2017
Amount due to director
(13,395,233
)
-
-
-
(13,395,233
)
Amount due from director
16,642,476
(178,277
)
(4,650,000
)
-
11,814,199
Net amount due from/(to) director
3,247,243
(178,277
)
(4,650,000
)
-
(1,581,034
)
July 1,
2017
Settlement
Repayment
New Loans
June 30,
2018
Amount due to director
(13,395,233
)
-
-
(95,976,484
)
(109,371,717
)
Amount due from director
11,814,199
1,326,150
13,140,349
Net amount due to director
(1,581,034
)
-
-
(94,650,334
)
96,231,368
June 30,
2018
June 30,
2017
Revenue
14,359,832
25,110,022
14,359,832
25,110,022
As of March 31, 2019, the Company had an amount of RMB 96,676,656 due to Mr. Peng Yang, our director and
CEO.
As of June 30, 2018, the Company had an
amount of RMB 13,140,349 due from Mr. Peng Yang, our director, and an amount of RMB 109,371,717 due to Mr. Peng Yang. During the
year ending June 30, 2017, the Company had an amount of RMB 11,814,199 due from Mr. Peng Yang and an amount of RMB 13,395,233 due
to Mr. Peng Yang. The Company's loan due to Mr. Peng Yang does not bear interest and are due on demand. These amounts due
to and due from Mr Peng Yang are eligible to net off against each other.
As of June 30, 2018, the Company recognized
an amount of RMB 14,359,832 as revenue generated from trade transactions with Fuqing Jing Hong Trading Co., Ltd, the director of
which is a family member of Mr. Yang, a former director of the Company, who resigned on June 28, 2018. During the year ending June
30, 2017, the Company recognized an amount of RMB 25,110,022 as revenue generated from trade transactions with Fuqing Jing Hong
Trading Co., Ltd. Management is of the opinion that these related party transactions were conducted in the normal course of business
of the Company with standard sales terms and conditions.
During the year ending June 30, 2017, the
Company was owed an amount of RMB 15,000,875 as trade receivables from Fuqing Jing Hong Trading Co. The Company does not have any
trade receivable that can be recognized as related transactions as of June 30, 2018. Management is of the opinion that these related
party transactions were conducted in the normal course of business of the Group with standard sales terms and conditions.
We currently have a policy in place for
dealing with related party matters.
Director Independence
Our Common
Stock is listed on the OTC Market Inc. OTC Pinks inter-dealer quotation systems, which does not have director independence requirements.
49
LEGAL PROCEEDINGS
From time to time, we may become involved
in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties
and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware
of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition
or operating results.
LEGAL MATTERS
The validity of the shares of Common Stock
offered hereby will be passed upon for us Hunter Taubman Fischer & Li LLC as counsel to the Company. Certain legal matters
as to PRC law will be passed upon for us by Zhonglun W&D Law Firm.
EXPERTS
The consolidated financial statements for
each of the years ended June 30, 2018 and 2017, as set forth in this prospectus and elsewhere in the registration statement have
been so included in reliance on the report of PKF Littlejohn LLP, an independent registered public accounting firm, given on their
authority as experts in accounting and auditing. The current address of PKF Littlejohn LLP is located in 1 Westferry Circus, Canary
Wharf, London, E14 4HD.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus
as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being
registered or upon other legal matters in connection with the registration or offering of the Common Stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant.
Nor was any such person connected with the registrant as a promoter, voting trustee, director, officer, or employee.
WHERE YOU CAN FIND MORE INFORMATION
We filed with the SEC a registration statement
under the Securities Act for the Common Stock in this offering. This prospectus does not contain all of the information in the
registration statement and the exhibits and schedule that were filed with the registration statement. For further information with
respect to us and our Common Stock, we refer you to the registration statement and the exhibits that were filed with the registration
statement. Statements contained in this prospectus about the contents of any contract or any other document that is filed as an
exhibit to the registration statement are not necessarily complete, and we refer you to the full text of the contract or other
document filed as an exhibit to the registration statement.
We file annual, quarterly, and current
reports and other information with the SEC. Our filings with the SEC are available to the public on the SEC's website at
www.sec.gov
. The information we file with the SEC or contained on, or linked to through, our corporate website or any other
website that we may maintain is not part of this prospectus or the registration statement of which this prospectus is a part. You
may also read and copy, at the SEC's prescribed rates, any document we file with the SEC, including the registration statement
(and its exhibits) of which this prospectus is a part, at the SEC's Public Reference Room located at 100 F Street, N.E.,
Washington, D.C. 20549. You can call the SEC at 1-800-SEC-0330 to obtain information on the operation of the Public Reference Room.
50
ORANCO,
INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Consolidated Financial Statements  – Nine Months
    Ended March 31, 2019
Condensed Consolidated Balance Sheets at March 31, 2019 (unaudited)
F-3
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Nine Months Ended March 31, 2019 and 2018 (unaudited)
F-4
Consolidated Statements of Changes In Stockholders' Equity for the Nine Months Ended March 31, 2019 and 2018 (unaudited)
F-5
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2019 and 2018 (unaudited)
F-6
Notes to Unaudited Condensed Consolidated Financial Statements
F-7 - F-21
Consolidated
    Financial Statements – Year Ended June 30, 2018 and 2017
Report
    of Independent Registered Public Accounting Firm
F-23
Consolidated
    Statements of Balance Sheets as of June 30, 2018 and 2017
F-24
Consolidated
    Statements of Operations for the Years Ended June 30, 2018 and 2017
F-25
Consolidated
    Statements of Shareholders'
    Equity as of June 30, 2018 and 2017
F-26
Consolidated
    Statements of Cash Flows for the Years Ended June 30, 2018 and 2017
F-27
Notes to Consolidated Financial Statements
F-28
    - F-45
F-
1
ORANCO,
INC.
CONSOLIDATED
FINANCIAL STATEMENTS
NINE
MONTHS ENDED MARCH 31, 2019
F-
2
ORANCO,
INC.
CONSOLIDATED
BALANCE SHEETS (Unaudited)
(Chinese
Renminbi)
(unaudited)
March 31,
2019
June 30,
2018
ASSETS:
Current assets
Cash and cash equivalents
57,394,020
26,504,962
Trade receivables
67,286,738
33,933,857
Inventories
7,671,629
7,346,549
Deposits, prepayments and other receivables
21,304,062
33,249,590
Prepaid land lease
109,680
109,680
153,766,129
101,144,638
Non-current assets
Investment in an associate
1,000,000
-
Property, plant and equipment
3,132,158
3,296,146
Prepaid land lease
4,827,160
4,909,420
8,959,318
8,205,566
Total assets
162,725,447
109,350,204
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade payables
144,093
44,636
Receipts in advance, accruals and other payables
6,633,402
5,140,025
Amount due to Director
11,894,851
96,231,368
Current tax liabilities
5,527,130
2,928,207
Bank borrowings
2,250,000
-
26,449,476
104,344,236
Non-current liability
Amount due to director
84,781,805
-
Shareholders' equity
Number of authorized shares with par value US$0.001
100,000,000
100,000,000
Number of issued and outstanding shares
98,191,480
98,191,480
Number of fully paid shares to be issued
321,296,000
321,296,000
Share capital
638,708
638,708
Fully paid shares to be issued
2,126,520
2,126,520
Retained earnings
48,728,938
2,240,740
Equity attributable to equity holders of the Company
51,494,166
5,005,968
Non-controlling interest
-
-
Total shareholders' equity
51,494,166
5,005,968
Total liabilities and shareholders' equity
162,725,447
109,350,204
The
accompanying notes are an integral part of the  financial statements.
F-
3
ORANCO,
INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited)
(Chinese
Renminbi)
(unaudited)
Three months ended
March 31,
(unaudited)
Nine months ended
March 31,
2019
2018
2019
2018
Revenue
32,654,876
26,085,393
96,037,641
83,258,237
Cost of sales
8,801,480
6,914,306
24,395,247
23,002,777
Selling and distribution expenses
884,727
1,010,459
3,020,324
3,338,043
Administrative expenses
1,338,458
769,741
6,159,429
3,686,062
11,024,665
8,694,506
33,575,000
30,026,882
Other income
32,471
11,289
90,807
131,447
Interest and other financial charges
7,198
9,395
41,238
1,768,720
Income before income taxes
21,655,484
17,392,781
62,512,210
51,594,082
Income taxes
5,432,298
4,775,792
16,024,012
12,623,911
Net Income
16,223,186
12,616,989
46,488,198
38,970,171
Attributable to:
Equity holders of the Company
16,223,186
12,205,233
46,488,198
37,862,781
Former non-controlling interests
-
411,756
-
1,107,390
16,223,186
12,616,989
46,488,198
38,970,171
Earnings per share:
Basic and diluted earnings per share
0.04
2.86
0.11
8.87
The
accompanying notes are an integral part of the financial statements.
F-
4
ORANCO,
INC.
CONSOLIDATED
STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)
(Chinese
Renminbi)
Share
capital
Shares to be
issued (Note a)
Additional
paid-in
capital
Retained
Earnings
Attributable to
the Company
Non-controlling
interests
Total
shareholders'
Equity
Balance at December 31, 2017
27,775
-
(27,774
)
77,910,983
77,910,984
3,578,390
81,489,374
Total comprehensive income for the year
-
-
12,205,233
12,205,233
411,756
12,616,989
Balance at March 31, 2018
27,775
-
(27,774
)
90,116,216
90,116,217
3,990,146
94,106,363
Balance at December 31, 2018
638,708
2,126,520
-
32,505,752
35,270,980
-
35,270,980
Total comprehensive income for the year
-
-
-
16,223,186
16,223,186
-
16,223,186
Balance at March 31, 2019
638,708
2,126,520
-
48,728,938
51,494,166
-
51,494,166
Share capital
Shares to be
issued (Note a)
Additional
paid-in
capital
Retained
Earnings
Attributable to
the Company
Non-controlling
interests
Total
shareholders'
Equity
Balance at June 30, 2017
27,775
-
(27,774
)
52,253,435
52,253,436
2,882,756
55,136,192
Total comprehensive income for the year
-
-
37,862,781
37,862,781
1,107,390
38,970,171
Balance at March 31, 2018
27,775
-
(27,774
)
90,116,216
90,116,217
3,990,146
94,106,363
Balance at June 30, 2018
638,708
2,126,520
-
2,240,740
5,005,968
-
5,005,968
Total comprehensive income for the year
-
-
-
46,488,198
46,488,198
-
46,488,198
Balance at March 31, 2019
638,708
2,126,520
-
48,728,938
51,494,166
-
51,494,166
The
accompanying notes are an integral part of the  financial statements.
F-
5
ORANCO,
INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited)
(Chinese
Renminbi)
(unaudited)
Nine months ended
March 31,
2019
(unaudited)
Nine months ended
March 31,
2018
Operating activities
Net income
46,488,198
38,970,171
Adjustments to reconcile net income to cash generated from operating activities:
Depreciation and amortization
246,248
255,635
Changes in working capital:
Inventories
(325,080
)
16,238
Trade receivables
(33,352,881
)
(1,228,086
)
Deposits, prepayments and other receivables
11,945,528
17,736,741
Trade payables
99,457
410,493
Receipts in advance, accruals and other payables
743,376
(8,114,271
)
Current tax liabilities
2,598,923
(2,148,514
)
Amount due to Director
445,288
(1,240,888
)
Cash generated from operating activities
28,889,057
44,657,519
Investing activities
Acquisition of interest in an associate
(250,000
)
-
Payments for acquisition of property, plant and equipment
-
(407,687
)
Cash used in investing activities
(250,000
)
(407,687
)
Financing activities
Repayment of bank borrowings
-
(27,000,000
)
Proceeds of bank borrowings
2,250,000
-
Cash used in financing activities
2,250,000
(27,000,000
)
Increase in cash and cash equivalents
30,889,057
17,249,832
Cash and cash equivalents, beginning of the period
26,504,962
6,607,407
Cash and cash equivalents, end of the period
57,394,019
23,857,239
Supplemental disclosure of cash flows information
Cash paid during the year for interest
(34,040
)
(1,768,720
)
Cash paid during the year for income taxes
(13,427,680
)
(10,475,397
)
The
accompanying notes are an integral part of the financial statements.
F-
6
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(Chinese
Renminbi)
1.
SUMMARY
    OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
(a)
Description
    of Business
Oranco,
Inc. (the "Company") was incorporated under the laws of the State of Nevada on June 16, 1977. The Company has been
in the business of the development of mineral deposits. During 1983 all activities were abandoned, and the Company had remained
inactive until June 29, 2018 when it acquired the business of Reliant Galaxy International Limited ("Reliant"). The
Company and its subsidiaries (the "Group") are principally engaged in the trading of spirits in the People's
Republic of China (the "PRC").
As
disclosed in the
Form 8-K
filed with the Securities and Exchange Commission on October 19, 2018, the Company entered into a business
agreement with Guangzhou Silicon Technology Co., Ltd. on August 20, 2018 to have Guangzhou Silicon Technology Co., Ltd. develop
an anti-counterfeiting laser recognition proprietary system using blockchain technology.
Details
of the subsidiaries are set out in note 20 to the consolidated financial statements.
(b)
The
    basis of consolidation and presentation
The
Consolidated Financial Statements include the Financial Statements of Oranco, Inc. and the Financial Statements of its wholly-owned
subsidiaries.
Subsidiaries
are all entities over which the Group has control. The Group controls an entity when the Group is exposed to or has rights to
variable returns from its involvement with the investee and has the ability to affect those returns through its power over the
investee. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated
from the date that control ceases.
The
accompanying financial statements have been prepared in accordance with the U.S. generally accepted accounting principles or GAAP.
The Company operates in one reportable segment and solely within the PRC. Accordingly, no segment or geographic information has
been presented.
Non-controlling
interests are shown as a component of shareholders' equity on the consolidated balance sheet and the share of the net income
attributable to non-controlling interests is shown as a component of net income in the consolidated statements of operations.
Business
Combinations
The
acquisition of other subsidiaries that meet the criteria for business combinations is accounted for using the acquisition method
of accounting. The consideration transferred for the acquisition is the fair values of the assets transferred, the liabilities
incurred to the former owners of the acquiree and the equity interests issued by the Group.
The
consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially
at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquiree at the non-controlling
interest's proportionate share of the recognized amounts of the acquiree's identifiable net assets. Acquisition-related
costs are expensed as incurred.
Any
contingent consideration to be transferred by the Group are recognized at fair value at the acquisition date. Subsequent changes
to the fair value of the contingent consideration that is deemed to be an asset or liability is recognized, either in the Statement
of Operations or as a change to other comprehensive income. Contingent consideration that is classified as equity is not remeasured,
and its subsequent settlement is accounted for within equity. Goodwill is initially measured as the excess of the aggregate of
the consideration transferred and the fair value of non-controlling interest over the identifiable net assets acquired and liabilities
assumed.
F-
7
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (Unaudited)
(Chinese
Renminbi)
1.
SUMMARY
    OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(c)
Financial
    instruments
Financial
instruments of the Group primarily consist of cash and cash equivalents, trade receivables, deposits, prepayments and other receivables,
prepaid land lease, trade payables, receipts in advance, accruals and other payables, and bank borrowings. The carrying values
of the Group's financial instruments approximate their fair values, principally because of the short-term maturity of these
instruments or their terms.
The
Group has no derivative financial instruments.
(d)
Cash
    and cash equivalents
Cash
and cash equivalents consist of cash on hand and highly liquid investments which are unrestricted as to withdrawal or use, and
which have maturities of three months or less when purchased.
(e)
Revenue
    recognition
The
Group's revenues are derived from sales of products recorded net of value added tax ("VAT"). Revenue is recognized
when all of the following conditions are met: persuasive evidence of an arrangement exists, delivery of the products has occurred
or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. These criteria are
related to each of the following major revenue generating activities described below.
(i)
Revenue
    from the sale of goods is recognized when the significant risks and rewards of ownership have been transferred to the buyer,
    provided that the Group maintains neither managerial involvement to the degree usually associated with ownership nor effective
    control over the goods sold. This is usually taken as the time when the goods are delivered and the customers have accepted
    the goods.
The
    Company adopted ASU 2014-09, Revenue from Contracts with Customers, on July 1, 2018. The Company recognizes revenue when (or
    as) services are transferred to clients. Revenue is recognized based on the amount of consideration that management expects
    to receive in exchange for these services in accordance with the client. To determine the amount and timing of revenue recognition,
    the Company must (1) identify the contract with the client, (2) identify the performance obligations in the contracts, (3)
    determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5)
    recognize revenue when (or as) the Company satisfies a performance obligation.
(ii)
interest
    income is recognized on an accrual basis using the effective interest method.
(f)
Trade
    receivables and allowance for doubtful accounts
Trade
receivables are stated at the amount the Group expects to collect. The Group maintains allowances for doubtful accounts for estimated
losses. Management considers the following factors when determining the collectability of specific accounts: historical experience,
creditworthiness of the clients, aging of the receivables and other specific circumstances related to the accounts. Allowance
for doubtful accounts is made and recorded into general and administrative expenses based on the aging of trade receivables and
on any specifically identified receivables that may become uncollectible. Trade receivables which are deemed to be uncollectible
are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered
remote. The Company takes a write off of the account balances when the Company can demonstrate all means of collection on the
outstanding balances have been exhausted. There is no allowance for doubtful accounts in these consolidated financial statements.
(g)
Inventories
Inventories
are stated at the lower of cost or net realizable value. Cost is determined using the weighted average method. The components
of inventories include raw materials, processing cost of finished goods and purchase cost of products. The Group routinely evaluate
the net realizable value of the inventories in light of current market conditions and market trends and record a write-down against
the cost of inventories should the net realizable value falls below the cost.
F-
8
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (Unaudited)
(Chinese
Renminbi)
1.
SUMMARY
    OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(h)
Property,
    plant and equipment and depreciation
Property,
plant and equipment are carried at cost less accumulated depreciation and any recorded impairment. Depreciation is calculated
on a straight-line basis over the following estimated useful lives:
Category
Estimated
    useful life
Estimated
    residual values
Building
20
    years
0-10%
Computer
    and office equipment
3
    years
0-10%
Repairs
and maintenance are expensed as incurred and asset improvements are capitalized. Consideration is given at each balance sheet
date to determine whether there is any indication of impairment of the carrying amounts of the property, plant and equipment.
The indication could be an unfavorable development of a business or severe economic slowdown as well as reorganization of the
operation. In assessing value in use, the estimated future cash flows are discounted to their present value, based on the time
value of money and the risks specific to the country where the assets are located.
(i)
VAT
    and VAT refund
VAT
on sales is charged at 17% on revenue from product sales and is subsequently paid to the PRC tax authorities after netting input
VAT on purchases. The excess of output VAT over input VAT is recognized in other payables, and the excess of input VAT over output
VAT is recognized in other receivables in the consolidated balance sheets.
(j)
Operating
    leases
Leases
where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases.
Payments made under operating leases are charged to the consolidated statements of operations on a straight-line basis over the
lease periods.
(k)
Foreign
    currency translation
Substantially
all of the Group's operations are conducted in China and as a result, the functional and reporting currency of the Group
is the Chinese Renminbi.
Monetary
assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional
currencies at the prevailing rates of exchange at the balance sheet date. Transactions in currencies other than the functional
currency are converted into the functional currency at the applicable rates of exchange prevailing at the transaction dates. Transaction
gains and losses are recognized in the consolidated statements of operations.
In
translating the financial statements of the Company's subsidiaries outside the PRC into the reporting currency, assets and
liabilities are translated from the subsidiaries' functional currencies to the reporting currency at the exchange rate at
the balance sheet date. Equity amounts are translated at historical exchange rates; revenues, expenses, and other gains and losses
are translated using the average rate for the period. Translation adjustments are reported as cumulative translation adjustments
and are shown as a separate component of other comprehensive income/(loss) in the consolidated statements of operations. During
2018 and 2017, such translation adjustments were not material.
F-
9
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (Unaudited)
(Chinese
Renminbi)
1.
SUMMARY
    OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(l)
Income
    taxes
Income
taxes are provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.
The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not
to be sustained upon audit of the related tax authority. An uncertain income tax position will not be recognized if it has less
than a 50% likelihood of being sustained. Changes in recognition or measurement are reflected in the period in which the change
in judgment occurs. The Group records interest and penalties related to unrecognized tax benefits (if any) in interest expenses
and general and administrative expenses, respectively.
On
December 22, 2017, the United States enacted TCJA which instituted fundamental changes to the taxation of multinational corporations,
including a reduction the U.S. corporate income tax rate to 21% beginning in 2018. The TCJA also requires a one-time transition
tax on the mandatory deemed repatriation of the cumulative earnings of the Company's foreign subsidiary as of December 31,
2017. To determine the amount of this transition tax, the Company must determine the amount of earnings generated since inception
by the relevant foreign subsidiary, as well as the amount of non-U.S. income taxes paid on such earnings, in addition to potentially
other factors. The Company acquired the foreign operations on 29 June 2018, hence the Company does not have any qualifying earnings
or profits from its foreign subsidiary under the transition tax calculation thus no transition tax is payable.
(m)
Fair
    value measurement
The
Group defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
When
determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group
considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants
would use when pricing the asset or liability.
The
Group's financial instruments include cash and cash equivalents, term deposits, trade and other receivables, and trade and
other payables. The Group considers the carrying amounts approximate fair value because of the short maturity of these financial
instruments.
(n)
Business
    combinations
In
a business combination achieved in stages, the Group remeasures its previously held equity interest in the acquire immediately
before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in earnings.
(o)
Transactions
    between entities under common control
When
accounting for a transfer of assets or exchange of shares between entities under common control of the Group, the carrying amounts
of the assets and liabilities transferred shall remain unchanged subsequent to the transaction, and no gain or loss shall be recorded
in the Group's consolidated statements of operations.
(p)
Commitments
    and contingencies
In
the normal course of business, the Group is subject to loss contingencies, such as legal proceedings and claims arising out of
its business, that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, and
non-income tax matters. An accrual for a loss contingency is recognized when it is probable that a liability has been incurred
and the amount of loss can be reasonably estimated. If a potential material loss contingency is not probable but is reasonably
possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the
range of possible loss if determinable and material, is disclosed.
F-
10
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (Unaudited)
(Chinese
Renminbi)
1.
SUMMARY
    OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(q)
Adoption
    of new accounting standards
On
July 1, 2018, we adopted ASU No. 2014-09, "Revenue from Contracts with Customers" and the related amendments using
the modified retrospective method. The adoption of ASC 606 had no impact on total reported revenues, costs and net income.
In
January 2017, the FASB issued ASU No. 2017-01, "Business Combinations: Clarifying the Definition of a Business" ("ASU
2017-01"). ASU 2017-01 clarifies the definition of a business for determining whether transactions should be accounted for
as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for annual periods and interim periods within
those annual periods beginning after December 15, 2017, and early adoption is permitted. The Company adopted this standard on
July 1, 2018 and will apply the standard to any future business combinations.
The
adoption of the standard in the consolidated financial statements for the financial year ended June 30, 2019 will have no significant
impact to the provision for income taxes and will have no impact to the net cash used in, or generated by, operating, investing,
or financing activities in the Group's consolidated statements of cash flows.
(r)
Recently
    issued accounting pronouncements not yet adopted
In
August 2016, FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments. The standard provides new
authoritative guidance addressing eight specific cash flow issues with the objective of reducing the existing diversity in practice
in how certain transactions are presented and classified in the statement of cash flows. The standard is effective for the Group
in the first quarter of the fiscal year 2019. The Company does not expect the adoption of this standard to have a significant
impact on its consolidated financial statements.
In
February 2016, FASB issued ASU No. 2016-02, Leases. The standard increases transparency and comparability among organizations
by requiring companies to recognize leased assets and related liabilities on the balance sheet and disclose key information about
leasing arrangements. This standard is effective for the Group in the first quarter of the fiscal year 2020. The Group is evaluating
the impact the adoption of this standard will have on its consolidated financial statements.
The
Group is finalizing the impact of the standard on its consolidated financial statements and disclosures, as well as changes to
its systems, processes, and internal controls. The Company's preliminary assessments are subject to change.
F-
11
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (Unaudited)
(Chinese
Renminbi)
2.
REVENUE
    AND OTHER INCOME
Revenue
represents the invoiced spirits products sold to the external customers less discounts, returns, and surcharges.
(unaudited)
Nine months
ended
March 31,
2019
(unaudited)
Nine months
ended
March 31,
2018
Revenue
96,037,641
83,258,237
Other income
90,807
131,447
96,128,448
83,389,684
All
revenue is derived in China.
A
concentration analysis of the revenue is as follows:
(unaudited)
Nine months
ended
March 31,
2019
(unaudited)
Nine months
ended
March 31,
2018
Customer A
13
%
19
%
Customer B
12
%
19
%
Customer C
12
%
11
%
Customer D
11
%
11
%
Customer E
11
%
10
%
Customer F
10
%
8
%
Others
32
%
21
%
100
%
100
%
An
analysis of other income is as follows:
(unaudited)
Nine months
ended
March 31,
2019
(unaudited)
Nine months
ended
March 31,
2018
Bank interest income
58,336
42,658
Written back of other payables
-
77,500
58,336
120,158
F-
12
ORANCO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
– CONTINUED (Unaudited)
(Chinese Renminbi)
3.
SELLING
AND DISTRIBUTION EXPENSES
The following expenses are included
in the selling and distribution expenses:
(unaudited)
Nine months ended
March 31,
2019
(unaudited)
Nine months ended
March 31,
2018
Freight
16,209
36,303
Packaging cost
147,716
931,652
163,925
967,955
4.
PROPERTY,
PLANT AND EQUIPMENT, NET
Property, plant and equipment,
net, consist of the following:
March 31,
2019
June 30,
2018
Computer and office equipment
268,550
268,550
Building
3,754,625
3,754,625
4,023,175
4,023,175
Less: accumulated depreciation
(891,017
)
(727,029
)
Property, plant and equipment, net,
3,132,158
3,296,146
5.
PREPAID
LAND LEASE, NET
Prepaid land lease, net, consists
of the following:
March 31,
2019
June 30,
2018
Prepaid land lease
5,412,120
5,412,120
Less: accumulated amortization
(475,280
)
(393,020
)
Prepaid land lease, net
4,936,840
5,019,000
The carrying amounts of the
prepaid land lease are analyzed as:
March 31,
2019
June
    30,
2018
Current assets
109,680
109,680
Non-current assets
4,827,160
4,909,420
4,936,840
5,019,000
Prepaid land lease represents
the cost of the rights of the use of the land in respect of leasehold land in the People's Republic of China, on which the
Group's buildings are situated.
The lease term is 70 years,
ending in 2082.
F-
13
ORANCO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
– CONTINUED (Unaudited)
(Chinese Renminbi)
6.
INVENTORIES
Inventories consist of the following:
March 31,
2019
June 30,
2018
Raw materials
3,702,029
4,451,541
Finished goods
3,785,667
2,622,873
Packaging material
183,933
272,135
7,671,629
7,346,549
7.
TRADE
RECEIVABLES
March 31,
2019
June 30,
2018
Trade receivables
67,286,738
33,933,857
67,286,738
33,933,857
No allowance for doubtful debts
has been made for both years.
The Group normally allows credit
terms to well-established customers ranging from 30 to 150 days. The Group seeks to maintain strict control over its trade receivables.
Overdue trade receivables are reviewed regularly by the Board of Directors.
8.
DEPOSITS,
PREPAYMENTS AND OTHER RECEIVABLES
March 31,
2019
June
    30,
2018
Prepaid expenses
20,706,252
23,571,363
Deposits
-
9,000,000
Other receivables
597,810
678,227
21,304,062
33,249,590
F-
14
ORANCO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
– CONTINUED (Unaudited)
(Chinese Renminbi)
9.
CASH
AND CASH EQUIVALENTS
March 31,
2019
June
    30,
2018
Cash on hand
199,553
394,082
Cash held in banks
57,194,467
26,110,880
57,394,020
26,504,962
Cash held in banks earns interest
at floating rates based on daily bank deposit rates.
10.
TRADE
PAYABLES
March 31,
2019
June
    30,
2018
Trade payables
144,093
44,636
144,093
44,636
For the larger suppliers, the
Group makes payment in advance for the inventories. For the smaller suppliers, the Group obtains credit terms ranging from 30 to
90 days.
A concentration analysis of
the suppliers based on the purchases made during the six-month periods is as follows:
(unaudited)
Nine months ended
March 31,
2019
(unaudited)
Nine months ended
March 31,
2018
Supplier A
56
%
40
%
Supplier B
22
%
16
%
Supplier C
10
%
10
%
Supplier D
3
%
9
%
Supplier E
3
%
9
%
Supplier F
1
%
8
%
Others
5
%
8
%
100
%
100
%
F-
15
ORANCO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
– CONTINUED (Unaudited)
(Chinese Renminbi)
11.
RECEIPTS
IN ADVANCE, ACCRUALS AND OTHER PAYABLES
Receipts in advance, accruals
and other payables consist of the following:
March 31,
2019
June
    30,
2018
Accrued payroll and bonus
2,064,024
2,560,883
Other payables
887,706
734,122
Other tax payables
1,174,043
623,868
Receipt in advance
2,507,629
1,221,152
6,633,402
5,140,025
12.
AMOUNT
DUE TO A DIRECTOR
March 31,
2019
June
    30,
2018
Amount due to a director
96,676,656
96,231,368
96,676,656
96,231,368
March 31,
2019
June 30,
2018
Classified as:
Non-current liabilities
84,781,805
-
Current liabilities
11,894,851
96,231,368
96,676,656
96,231,368
The amount due to a director
is interest-free, unsecured and not repayable on demand.
Renminbi 94,051,934 of the amount
due to a director relates to Reliant's acquisition of Sure Rich Investment (Group) Limited. The amount is due to the seller
of Sure Rich Investment (Group) Limited, who is also a director of Reliant and the Company.
13.
BANK
BORROWINGS
March 31,
2019
June 30,
2018
Secured - at amortized cost
Loans from bank – Note (i)
2,250,000
-
2, 250,000
-
Classified as:
Current liabilities
2, 250,000
-
2, 250,000
-
Note:
(i)
Loan from the bank is bearing a fixed interest rate ranging from 5.44% per annum.
F-
16
ORANCO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
– CONTINUED (Unaudited)
(Chinese Renminbi)
14.
SHARE
CAPITAL AND CAPITAL MANAGEMENT
Issued
    and fully paid
Shares
    to be issued
Company
Number of shares
value
US$
value
RMB
Number of shares
value
US$
value
RMB
At June 30, 2018
98,191,480
98,191
638,708
321,296,000
321,296
2,126,520
Common stock conversion
Conversion of amount due to a director
Shares issued for cash
Shares issued as consideration for business acquisition
Shares to be issued as consideration for business acquisition
Reverse merger
At March 31, 2019
98,191,480
98,191
638,708
321,296,000
321,296
2,126,520
Each share has a nominal value
of US$0.001 per share.
The shares to be issued as consideration
for business acquisition are the 321,296,000 new shares at $0.001 per share as part of the consideration of the acquisition of
Reliant Galaxy International Limited. The aggregated nominal value of the shares is US$321,296.
F-
17
ORANCO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
– CONTINUED (Unaudited)
(Chinese Renminbi)
15.
INCOME
TAXES
The Company is subject to taxes
in the USA. The Company has had no taxable income under Federal or State tax laws. The Company has loss carryforwards totaling
$359,065 that may be offset against future federal income taxes. If not used, the carryforwards will expire 20 years after they
are incurred.
The Company's subsidiary
in the BVI is not subject to taxation.
The Company's Hong Kong
subsidiary is subject to taxes in Hong Kong. The Hong Kong subsidiary has had no taxable income.
The Company's PRC subsidiaries
are subject to taxes in China. The applicable PRC statutory income tax rate is 25% according to the Enterprise Income Tax Law.
A reconciliation of the income
tax expenses in China is set out below:
(unaudited)
Nine months ended
March 31,
2019
(unaudited)
Nine months ended
March 31,
2018
Profit before income tax
62,512,210
51,594,082
Taxation at the applicable tax rate of 25%
15,768,870
12,898,521
Tax effect on non-taxable income
(285,732
)
-
Tax effects of expense that are not deductible
540,874
15,469
(Over)/under-provision in respect of previous year
-
(290,079
)
Income taxes
16,024,012
12,623,911
16.
CONTRIBUTION
PLAN IN THE PRC
As stipulated by the PRC state
regulations, the subsidiaries in the PRC participate in the state-run defined contribution retirement scheme. All employees are
entitled to an annual pension payment equal to a fixed proportion of the average basic salary of the geographical area of their
last employment at their retirement date. The PRC subsidiaries are required to make contributions to the local social security
bureau at 29.4% to 37.4% of the previous year's average basic salary amount of the geographical area where the employees
are under employment with the PRC subsidiaries. The Group has no obligation for the payment of pension benefits beyond the annual
contributions as set out above.
According to the relevant rules
and regulations of the PRC, the PRC subsidiaries and their employees are each required to make contributions to an accommodation
fund at 9% of the salaries and wages of the employees which are administered by the Public Accumulation Funds Administration Centre.
There is no further obligation for the Group except for such contributions to the accommodation fund. The Group had no significant
obligation apart from the contributions as stated above.
F-
18
ORANCO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
– CONTINUED (Unaudited)
(Chinese Renminbi)
17.
OPERATING
LEASE ARRANGEMENT
The Group has total future minimum
lease payments under non-cancellable operating lease payable as follows:
(unaudited)
Nine months ended
March 31,
2019
June
    30,
2018
Within 1 year
454,331
134,294
After 1 year but within 2 years
75,985
18,000
After 2 years but within 3 years
-
9,000
After 3 years
-
-
530,316
161,294
The Group is the lessee of a
few office premises and staff residence held under operating leases. The leases typically run for an initial period of one to five
years.
18.
RELATED
PARTY BALANCES AND TRANSACTIONS
The Group made sales to Fuqing
Jing Hong Trading Co., Ltd, the director of which was a family member of the CEO Mr. Yang Peng. The family resigned from Fuqing
Jing Hong Trading Co., Ltd on June 28, 2018, hence Fuqing Jing Hong ceased to be a related party on June 28, 2018.
(unaudited)
Nine months ended
March 31,
2019
(unaudited)
Nine months ended
March 31,
2018
Revenue
-
14,394,218
-
14,394,218
Management is of the opinion
that these related party transactions were conducted in the normal course of business of the Group with standard sales terms and
conditions.
19.
CONTINGENT
LIABILITIES
At the end of each reporting
period, neither the Group nor the Company had any significant contingent liabilities.
F-
19
ORANCO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
– CONTINUED (Unaudited)
(Chinese Renminbi)
20.
DETAILS
OF SUBSIDIARIES
Company name
Place and date
    of incorporation
Capital
Attributable
    Equity
interest
Principal activities
Reliant Galaxy International Limited
Established in British Virgin Islands on January 3, 2017
Registered and
paid-in capital of
RMB 69,100
100
%
Investment holding
Sure Rich Investment
Established in
Share capital
100
%
Investment holding
(Group) Limited
Hong Kong
On February 1, 2007
RMB 1
Fujian Jinou Trading Co., Ltd.
Established in the PRC
on July 5, 2004
Registered and
paid-in capital of US$
1,650,000
100
%
Investment holding and Trading of spirit
Fenyang Huaxin Spirit Development Co., Ltd.
Established in the PRC
on November 7, 2013
Registered and
Paid-in capital of RMB
1,000,000
Note (i)
100
%
Trading of spirit
Fenyang Jinqiang Spirit Co., Ltd.
Established in the PRC
on November 7, 2013
Registered and
Paid-in capital of RMB
5,000,000
100
%
Trading of spirit
Beijing Huaxin Tianchuang Enterprise Management Consulting Co., Ltd.
Established in the PRC
on April 14, 2018
Registered and
issued capital of
RMB1,000,000
51
Note
%
(i)
Dormant
Notes:
(i)
The
subsidiary was registered with payable share capital and the Company committed to pay up its share of the issued capital in the
amount of RMB 510,000 on March 31, 2038, which is 20 years from the date of incorporation permitted by the Regulation of the People's
Republic of China on Company Registration. The amount due to the subsidiary is interest-free and unsecured.
F-
20
ORANCO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
– CONTINUED (Unaudited)
(Chinese Renminbi)
21.
DETAILS
OF AN ASSOCAITE
Company
    name
Place
    and date of incorporation
Capital
Attributable
    Equity
interest
Principal
    activities
Guangzhou Silicon Technology Co., Ltd
Established in the PRC
on September 8, 2015
Registered and
issued capital of
RMB5,000,000
20 Note % (i)
Development, sale and provision of software solutions
Notes:
(i)
On
September 1, 2018, Fenyang Huaxin Spirit Development Co., Ltd acquired shares of 20% of the associate Guangzhou Silicon Technology
Co., Ltd which then became an associate of the Company. The associate's results were not material to the Group in the period
to March 31, 2019.
F-
21
ORANCO,
INC.
CONSOLIDATED
FINANCIAL STATEMENTS
YEAR
ENDED JUNE 30, 2018
F-
22
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and Shareholders of Oranco, Inc.
Opinion
on the Consolidated Financial Statements
We
have audited the accompanying consolidated balance sheets of Oranco, Inc. (the "Company") as of June 30, 2018 and 2017,
and the related consolidated statements of operations, shareholders' equity and cash flows for each of the two years in
the period ended June 30, 2018 and the related notes (collectively referred to as the "consolidated financial statements").
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the
Company as of June 30, 2018 and 2017, and the results of its operations and its cash flows for each of the two years in the periods
ended June 30, 2018, in conformity with accounting principles generally accepted in the United States of America.
Basis
for Opinion
These
consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered
with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to
the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but
not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.
Accordingly, we express no such opinion.
Our
audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/
                            PKF Littlejohn LLP
We
have served as the Company's auditor since March 7, 2018.
PKF
Littlejohn LLP
London,
UK
September
28, 2018
F-
23
ORANCO,
INC.
CONSOLIDATED
BALANCE SHEETS
(
Chinese
Renminbi
)
June 30,
2018
June 30,
2017
ASSETS:
Current assets
Cash and cash equivalents
26,504,962
6,607,407
Inventories
7,346,549
8,597,710
Trade receivables
33,933,857
47,517,200
Deposits, prepayments and other receivables
33,249,590
19,590,026
Prepaid land lease
109,680
109,680
101,144,638
82,422,023
Non-current assets
Property, plant and equipment
3,296,146
3,120,166
Prepaid land lease
4,909,420
5,019,100
8,205,566
8,139,266
Total assets
109,350,204
90,561,289
LIABILITIES
AND SHAREHOLDERS' EQUITY
Current liabilities
Trade payables
44,636
118,115
Receipts in advance, accruals and other payables
5,140,025
4,098,669
Amount due to Director
96,231,368
1,581,034
Current tax liabilities
2,928,207
2,627,279
Bank borrowings
-
27,000,000
104,344,236
35,425,097
Shareholders' equity
Number of authorized shares with par value US$0.001
100,000,000
100,000,000
Number of issued and outstanding shares
98,191,480
4,269,950
Number of fully paid shares to be issued
321,296,000
-
Share capital
638,708
27,775
Fully paid shares to be issued
2,126,520
-
Additional paid-in capital
-
(27,774
)
Retained earnings
2,240,740
52,253,435
Equity attributable to equity holders of the Company
5,005,968
52,253,436
Non-controlling interest
-
2,882,756
Total shareholders' equity
5,005,968
55,136,192
Total liabilities and shareholders' equity
109,350,204
90,561,289
The
accompanying notes are an integral part of the consolidated financial statements.
F-
24
ORANCO,
INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(
Chinese
Renminbi
)
Year ended
June 30,
2018
Year ended
June 30,
2017
Revenue
101,759,660
91,144,666
101,759,660
91,144,666
Cost of sales
27,800,667
24,065,113
Selling and distribution expenses
5,477,457
2,521,950
Administrative expenses
7,109,937
5,516,707
40,388,061
32,103,770
Other income
155,700
227,552
Interest and other financial charges
1,759,325
3,420,272
Income before income taxes
59,767,974
55,848,176
Income taxes
15,095,681
14,121,343
Net Income
44,672,293
41,726,833
Attributable to:
Equity holders of the Company
43,313,447
34,091,734
Former non-controlling interests
1,358,846
7,635,099
44,672,293
41,726,833
Earnings per share:
Basic and diluted earnings per share
1.54
7.98
The
accompanying notes are an integral part of the consolidated financial statements.
F-
25
ORANCO, INC.
CONSOLIDATED
STATEMENTS OF SHAREHOLDERS' EQUITY
(
Chinese
Renminbi
)
Share capital
Shares to be issued (Note a)
Additional paid-in capital
Retained Earnings/ (loss)
Attributable to the Company
Non-controlling interests
Total
shareholders' Equity
Balance at June 30, 2016
27,775
-
(27,774
)
6,009,858
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 of additional interest in subsidiary
-
-
-
12,151,843
12,151,843
(14,201,843
)
(2,050,000
)
Balance at June 30, 2017
27,775
-
(27,774
)
52,253,435
52,253,436
2,882,756
55,136,192
Total comprehensive income for the year
-
-
-
43,313,447
43,313,447
1,358,846
44,672,293
Acquisition of additional interest in subsidiary
-
-
-
3,841,602
3,841,602
(4,241,602
)
(400,000
)
Conversion of loans to common stock
246,671
-
-
-
246,671
-
246,671
Conversion of amount due to director to common stock
97,570
-
176,986
-
274,556
-
274,556
Shares issued for cash
84,561
-
591,925
-
676,486
-
676,486
Shares issued as consideration for business acquisition
182,131
-
-
(182,131
)
-
-
-
Fully paid shares to be issued as consideration for business acquisition
-
2,126,520
-
(2,126,520
)
-
-
-
Reverse merger
-
-
(741,137
)
(94,859,093
)
(95,600,230
)
-
(95,600,230
)
Balance at June 30, 2018
638,708
2,126,520
-
2,240,740
5,005,968
-
5,005,968
Note
a:
Under the Share Exchange Agreement
dated June 29, 2018, 321,296,000 shares of Oranco, Inc. shall be issued to the sellers of Reliant Galaxy International Limited
at the completion of the increase of the Company's authorized common stock. The increase of the Company's authorized
common stock to 500,000,000 is yet to be completed. More details are discussed in note 21.
The
accompanying notes are an integral part of the consolidated financial statements.
F-
26
ORANCO,
INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(
Chinese
Renminbi
)
Year ended
Year ended
June 30,
June 30,
2018
2017
Operating activities
Net income
44,672,293
41,726,833
Adjustments to reconcile net income to cash generated from operating activities:
Depreciation and amortization
335,005
342,042
Changes in working capital:
Inventories
1,251,161
(3,371,289
)
Trade receivables
13,583,343
(26,672,612
)
Deposits, prepayments and other receivables
(13,659,564
)
6,138,826
Trade payables
(73,479
)
(2,185,541
)
Receipts in advance, accruals and other payables
305,431
(3,988,885
)
Current tax liabilities
300,928
2,093,158
Amount due to Director
577,029
4,828,077
Cash generated from operating activities
47,292,147
18,910,609
Investing activities
Acquisition of additional interest in subsidiary
(400,000
)
(2,050,000
)
Cash acquired on merger
406,713
-
Payments for acquisition of property, plant and equipment
(401,305
)
(30,893
)
Cash used in investing activities
(394,592
)
(2,080,893
)
Financing activities
Repayment of bank borrowings
(27,000,000
)
(10,650,000
)
Cash used in financing activities
(27,000,000
)
(10,650,000
)
Increase in cash and cash equivalents
19,897,555
6,179,716
Cash and cash equivalents, beginning of the year
6,607,407
427,691
Cash and cash equivalents, end of the year
26,504,962
6,607,407
Supplemental disclosure of cash flows information
Cash paid during the year for interest
(1,759,325
)
(3,420,272
)
Cash paid during the year for income taxes
(14,509,505
)
(12,028,185
)
The
non-cash transactions have been disclosed in note 22.
The
accompanying notes are an integral part of the consolidated financial statements.
F-
27
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(
Chinese
Renminbi
)
1.
SUMMARY OF BUSINESS
    AND SIGNIFICANT ACCOUNTING POLICIES
(a)
Description of Business
The
Company was incorporated under the laws of the State of Nevada on June 16, 1977. The Company has been in the business of the development
of mineral deposits. During 1983 all activities were abandoned, and the Company had remained inactive until June 29, 2018 when
it acquired the business of Reliant Galaxy International Limited ("Reliant"). The Company and its subsidiaries (the
"Group") are principally engaged in the trading of spirits in the People's Republic of China (the "PRC").
Details
of the subsidiaries are set out in note 20 to the consolidated financial statements.
(b)
The basis of consolidation and presentation
The Consolidated Financial Statements
include the Financial Statements of Oranco, Inc. and the Financial Statements of its wholly-owned subsidiaries.
Subsidiaries are all entities over
which the Group has control. The Group controls an entity when the Group is exposed to or has rights to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee. Subsidiaries are
fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control
ceases.
The accompanying financial statements
have been prepared in accordance with the U.S. generally accepted accounting principles or GAAP. The Company operates in one reportable
segment and solely within the PRC. Accordingly, no segment or geographic information has been presented.
Non-controlling interests are shown as a component of shareholders' equity on the consolidated
balance sheet and the share of the net income attributable to non-controlling interests is shown as a component of net income
in the consolidated statements of operations.
F-
28
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(
Chinese
Renminbi
)
1.
SUMMARY
OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(b)
Basis
of consolidation and presentation – continued
Business
Combinations
The acquisition of other subsidiaries
that meet the criteria for business combinations is accounted for using the acquisition method of accounting. The consideration
transferred for the acquisition is the fair values of the assets transferred, the liabilities incurred to the former owners of
the acquiree and the equity interests issued by the Group.
The consideration transferred includes
the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition
date. The Group recognizes any non-controlling interest in the acquiree at the non-controlling interest's proportionate share
of the recognized amounts of the acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred.
Any contingent consideration to
be transferred by the Group are recognized at fair value at the acquisition date. Subsequent changes to the fair value of the
contingent consideration that is deemed to be an asset or liability is recognized, either in the Statement of Operations or as
a change to other comprehensive income. Contingent consideration that is classified as equity is not remeasured, and its subsequent
settlement is accounted for within equity. Goodwill is initially measured as the excess of the aggregate of the consideration
transferred and the fair value of non-controlling interest over the identifiable net assets acquired and liabilities assumed.
(c)
Financial instruments
Financial
instruments of the Group primarily consist of cash and cash equivalents, trade receivables, deposits, prepayments and other receivables,
prepaid land lease, trade payables, receipts in advance, accruals and other payables, and bank borrowings. The carrying values
of the Group's financial instruments approximate their fair values, principally because of the short-term maturity of these instruments
or their terms.
The
Group has no derivative financial instruments.
(d)
Cash and cash equivalents
Cash
and cash equivalents consist of cash on hand and highly liquid investments which are unrestricted as to withdrawal or use, and
which have maturities of three months or less when purchased.
F-
29
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(
Chinese
Renminbi
)
1.
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(e)
Revenue recognition
The
Group's revenues are derived from sales of products recorded net of value added tax ("VAT"). Revenue is recognized
when all of the following conditions are met: persuasive evidence of an arrangement exists, delivery of the products has occurred
or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. These criteria are
related to each of the following major revenue generating activities described below.
(i)
Revenue
                                         from the sale of goods is recognized when the significant risks and rewards of ownership
                                         have been transferred to the buyer, provided that the Group maintains neither managerial
                                         involvement to the degree usually associated with ownership nor effective control over
                                         the goods sold. This is usually taken as the time when the goods are delivered and the
                                         customers have accepted the goods.
(ii)
Interest
                                         income is recognized on an accrual basis using the effective interest method.
(f)
Trade receivables
    and allowance for doubtful accounts
Trade receivables
are stated at the amount the Group expects to collect. The Group maintains allowances for doubtful accounts for estimated losses.
Management considers the following factors when determining the collectability of specific accounts: historical experience, creditworthiness
of the clients, aging of the receivables and other specific circumstances related to the accounts. Allowance for doubtful accounts
is made and recorded into general and administrative expenses based on the aging of trade receivables and on any specifically
identified receivables that may become uncollectible. Trade receivables which are deemed to be uncollectible are charged off against
the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company
takes a write off of the account balances when the Company can demonstrate all means of collection on the outstanding balances
have been exhausted. There is no allowance for doubtful accounts in these consolidated financial statements.
(g)
Inventories
Inventories
are stated at the lower of cost or net realizable value. Cost is determined using the weighted average method. The components
of inventories include raw materials, processing cost of finished goods and purchase cost of products. The Group routinely evaluate
the net realizable value of the inventories in light of current market conditions and market trends and record a write-down against
the cost of inventories should the net realizable value falls below the cost.
F-
30
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(
Chinese
Renminbi)
1.
SUMMARY OF BUSINESS
    AND SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(h)
Property, plant
    and equipment and depreciation
Property,
plant and equipment are carried at cost less accumulated depreciation and any recorded impairment. Depreciation is calculated
on a straight-line basis over the following estimated useful lives:
Category
Estimated useful life
Estimated residual values
Building
20 years
0-10%
Computer and office equipment
3 years
0-10%
Repairs and maintenance
are expensed as incurred and asset improvements are capitalized. Consideration is given at each balance sheet date to determine
whether there is any indication of impairment of the carrying amounts of the property, plant and equipment. The indication could
be an unfavorable development of a business or severe economic slowdown as well as reorganization of the operation. In assessing
value in use, the estimated future cash flows are discounted to their present value, based on the time value of money and the
risks specific to the country where the assets are located.
(i)
VAT and VAT refund
VAT
on sales is charged at 17% on revenue from product sales and is subsequently paid to the PRC tax authorities after netting input
VAT on purchases. The excess of output VAT over input VAT is recognized in other payables, and the excess of input VAT over output
VAT is recognized in other receivables in the consolidated balance sheets.
(j)
Operating leases
Leases
where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases.
Payments made under operating leases are charged to the consolidated statements of operations on a straight-line basis over the
lease periods.
(k)
Foreign currency
    translation
Substantially
all of the Group's operations are conducted in China and as a result, the functional and reporting currency of the Group
is the Chinese Renminbi.
Monetary
assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional
currencies at the prevailing rates of exchange at the balance sheet date. Transactions in currencies other than the functional
currency are converted into the functional currency at the applicable rates of exchange prevailing at the transaction dates. Transaction
gains and losses are recognized in the consolidated statements of operations.
F-
31
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(
Chinese
Renminbi)
1.
SUMMARY OF BUSINESS
    AND SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(k)
Foreign currency
    translation - continued
In translating the
financial statements of the Company's subsidiaries outside the PRC into the reporting currency, assets and liabilities are
translated from the subsidiaries' functional currencies to the reporting currency at the exchange rate at the balance sheet
date. Equity amounts are translated at historical exchange rates; revenues, expenses, and other gains and losses are translated
using the average rate for the period. Translation adjustments are reported as cumulative translation adjustments and are shown
as a separate component of other comprehensive income/(loss) in the consolidated statements of operations. During 2018 and 2017,
such translation adjustments were not material.
(l)
Income taxes
Income taxes are provided
for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities. The impact
of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not
to be sustained upon audit of the related tax authority. An uncertain income tax position will not be recognized if it has less
than a 50% likelihood of being sustained. Changes in recognition or measurement are reflected in the period in which the change
in judgment occurs. The Group records interest and penalties related to unrecognized tax benefits (if any) in interest expenses
and general and administrative expenses, respectively.
On
December 22, 2017, the United States enacted TCJA which instituted fundamental changes to the taxation of multinational corporations,
including a reduction the U.S. corporate income tax rate to 21% beginning in 2018. The TCJA also requires a one-time transition
tax on the mandatory deemed repatriation of the cumulative earnings of the Company's foreign subsidiary as of December 31,
2017. To determine the amount of this transition tax, the Company must determine the amount of earnings generated since inception
by the relevant foreign subsidiary, as well as the amount of non-U.S. income taxes paid on such earnings, in addition to potentially
other factors. The Company acquired the foreign operations on 29 June 2018, hence the Company does not have any qualifying earnings
or profits from its foreign subsidiary under the transition tax calculation thus no transition tax is payable.
(m)
Fair value measurement
The
Group defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
When
determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group
considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants
would use when pricing the asset or liability.
F-
32
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(
Chinese
Renminbi)
1.
SUMMARY OF BUSINESS
    AND SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(m)
Fair value measurement-continued
The Group's
financial instruments include cash and cash equivalents, term deposits, trade and other receivables, and trade and other payables.
The Group considers the carrying amounts approximate fair value because of the short maturity of these financial instruments.
(n)
Business combinations
In
a business combination achieved in stages, the Group remeasures its previously held equity interest in the acquire immediately
before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in earnings.
(o)
Transactions between
    entities under common control
When
accounting for a transfer of assets or exchange of shares between entities under common control of the Group, the carrying amounts
of the assets and liabilities transferred shall remain unchanged subsequent to the transaction, and no gain or loss shall be recorded
in the Group's consolidated statements of operations.
(p)
Commitments and
    contingencies
In
the normal course of business, the Group is subject to loss contingencies, such as legal proceedings and claims arising out of
its business, that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, and
non-income tax matters. An accrual for a loss contingency is recognized when it is probable that a liability has been incurred
and the amount of loss can be reasonably estimated. If a potential material loss contingency is not probable but is reasonably
possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the
range of possible loss if determinable and material, is disclosed.
F-
33
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(
Chinese
Renminbi)
1.
SUMMARY OF BUSINESS
    AND SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
(q)
Recently issued
    accounting pronouncements not yet adopted
In
January 2017, the FASB issued ASU No. 2017-01, "Business Combinations: Clarifying the Definition of a Business" ("ASU
2017-01"). ASU 2017-01 clarifies the definition of a business for determining whether transactions should be accounted for
as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for annual periods and interim periods within
those annual periods beginning after December 15, 2017, and early adoption is permitted. The Company will adopt this standard
on July 1, 2018 and will apply the standard to any future business combinations.
In August 2016, FASB issued ASU
No. 2016-15, Classification of Certain Cash Receipts and Cash Payments. The standard provides new authoritative guidance addressing
eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain transactions are
presented and classified in the statement of cash flows. The standard is effective for the Group in the first quarter of the fiscal
year 2019. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial
statements.
In February 2016, FASB issued
ASU No. 2016-02, Leases. The standard increases transparency and comparability among organizations by requiring companies to recognize
leased assets and related liabilities on the balance sheet and disclose key information about leasing arrangements. This standard
is effective for the Group in the first quarter of the fiscal year 2020. The Group is evaluating the impact the adoption of this
standard will have on its consolidated financial statements.
In
May 2014, FASB issued ASU, 2014-09, Revenue from Contracts with Customers. The standard is a comprehensive new revenue recognition
model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount
that reflects the consideration expected to be received in exchange for those goods or services. In August 2015, FASB issued ASU
2015-14, Revenue from Contracts with Customers, to defer the effective date of ASU 2014-09 by one year to annual reporting periods
beginning after December 15, 2017, but permits entities to adopt the original effective date if they choose. Based on the Group's
preliminary assessment, it does not expect the adoption of the standard to result in material changes in revenue. Further, deferred
costs to obtain contracts, which will be recognized in sales and marketing expense in future periods, are not expected to be material.
The
adoption of the standard in the consolidated financial statements for the financial year ended June 30, 2019 will have no significant
impact to the provision for income taxes and will have no impact to the net cash used in, or generated by, operating, investing,
or financing activities in the Group's consolidated statements of cash flows.
The
Group is finalizing the impact of the standard on its consolidated financial statements and disclosures, as well as changes to
its systems, processes, and internal controls. The Company's preliminary assessments are subject to change.
F-
34
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(
Chinese
Renminbi)
2.
REVENUE AND OTHER
    INCOME
Revenue
represents the invoiced spirits products sold to the external customers less discounts, returns, and surcharges.
June 30,
2018
June 30,
2017
Revenue
101,759,660
91,144,666
Other income
155,700
227,552
101,915,360
91,372,218
All
revenue is derived in China.
A
concentration analysis of the revenue is as follows:
June 30,
2018
June 30,
2017
Customer A
16
%
30
%
Customer B
16
%
27
%
Customer C
12
%
15
%
Customer D
11
%
12
%
Customer E
11
%
2
%
Customer F
9
%
5
%
Others
25
%
9
%
100
%
100
%
An
analysis of other income is as follows:
June
30,
2018
June 30,
2017
Sundry income
-
25
Bank interest income
78,200
13,481
Interest from a director
-
214,046
Written back of other payables
77,500
-
155,700
227,552
F-
35
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(
Chinese
Renminbi)
3.
SELLING AND DISTRIBUTION
    EXPENSES
The
following expenses are included in the selling and distribution expenses:
June 30,
2018
June 30,
2017
Freight
40,623
114,539
Packaging cost
1,090,553
846,298
1,131,176
960,837
4.
PROPERTY, PLANT
    AND EQUIPMENT, NET
Property,
plant and equipment, net, consist of the following:
June 30, 2018
June 30,
2017
Computer and office equipment
268,550
221,868
Building
3,754,625
3,400,000
4,023,175
3,621,868
Less: accumulated depreciation
(727,029
)
(501,702
)
Property, plant and equipment, net,
3,296,146
3,120,166
5.
PREPAID LAND LEASE,
    NET
Prepaid
land lease, net, consists of the following:
June 30, 2018
June 30,
2017
Prepaid land lease
5,412,120
5,412,120
Less: accumulated amortization
(393,020
)
(283,340
)
Prepaid land lease, net
5,019,000
5,128,780
The
carrying amounts of the prepaid land lease are analyzed as:
June 30, 2018
June 30,
2017
Current assets
109,680
109,680
Non-current assets
4,909,420
5,019,100
5,019,000
5,128,780
F-
36
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(
Chinese
Renminbi)
5.
PREPAID LAND LEASE,
    NET - CONTINUED
Prepaid land lease represents
the cost of the rights of the use of the land in respect of leasehold land in the People's Republic of China, on which the
Group's buildings are situated.
The lease term is 70 years,
ending in 2082.
6.
INVENTORIES
Inventories
consist of the following:
June 30,
2018
June 30,
2017
Raw materials
4,451,541
5,924,514
Finished goods
2,622,873
2,203,370
Packaging material
272,135
469,826
7,346,549
8,597,710
7.
TRADE RECEIVABLES
June 30,
2018
June 30,
2017
Trade receivables
33,933,857
47,517,200
33,933,857
47,517,200
The
Group normally allows credit terms to well-established customers ranging from 30 to 150 days. The Group seeks to maintain strict
control over its trade receivables. Overdue trade receivables are reviewed regularly by the Board of Directors.
8.
DEPOSITS, PREPAYMENTS
    AND OTHER RECEIVABLES
June 30,
2018
June 30,
2017
Prepaid expenses
23,571,363
17,808,559
Deposits
9,000,000
330,000
Other receivables
678,227
1,451,467
33,249,590
19,590,026
F-
37
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(
Chinese
Renminbi)
9.
CASH AND CASH EQUIVALENTS
June 30,
2018
June 30,
2017
Cash on hand
394,082
183,119
Cash held in banks
26,110,880
6,424,288
26,504,962
6,607,407
Cash
held in banks earns interest at floating rates based on daily bank deposit rates.
10.
TRADE PAYABLES
June 30,
2018
June 30,
2017
Trade payables
44,636
118,115
44,636
118,115
For
the larger suppliers, the Group makes payment in advance for the inventories. For the smaller suppliers, the Group obtains credit
terms ranging from 30 to 90 days.
A
concentration analysis of the suppliers based on the purchases made during the year is as follows:
June
30,
2018
June 30,
2017
Supplier A
41
%
-
Supplier B
17
%
8
%
Supplier C
10
%
13
%
Supplier D
8
%
45
%
Supplier E
8
%
11
%
Supplier F
7
%
21
%
Others
11
%
2
%
100
%
100
%
F-
38
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(
Chinese
Renminbi)
11.
RECEIPTS IN ADVANCE,
    ACCRUALS AND OTHER PAYABLES
Receipts
in advance, accruals and other payables consist of the following:
June 30,
2018
June 30,
2017
Accrued expenses
2,288,475
1,853,366
Accrued payroll and bonus
272,408
181,334
Other payables
734,122
626,167
Other tax payables
623,868
377,257
Receipt in advance
1,221,152
1,060,545
5,140,025
4,098,669
12.
AMOUNT
DUE TO A DIRECTOR
June 30,
2018
June 30,
2017
Amount due to a director
96,231,368
1,581,034
96,231,368
1,581,034
The
amount due to a director is interest-free, unsecured and repayable on demand.
Renminbi 94,051,934
of the amount due to a director relates to Reliant's acquisition of Sure Rich Investment (Group) Limited. The amount is
due to the seller of Sure Rich Investment (Group) Limited, who is also a director of Reliant and the Company.
13.
BANK BORROWINGS
June 30,
2018
June 30,
2017
Secured - at amortized cost
Loans from financial institution – Note (i)
-
27,000,000
-
27,000,000
Classified as:
Current liabilities
-
27,000,000
-
27,000,000
Note:
(i)
Loans
                                         from the financial institution are bearing a fixed interest rate ranging from 10% to 10.5%
                                         per annum.
F-
39
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(
Chinese
Renminbi)
14.
SHARE CAPITAL AND CAPITAL MANAGEMENT
Issued and fully paid
Shares to be issued
Additional
    paid in capital
Company
Number
                                         of shares
value
US$
value
RMB
Number
                                         of shares
value
US$
value
RMB
value
US$
value
RMB
Total
RMB
At
June 30, 2017 and June 30, 2016
4,269,950
4,270
27,775
-
-
-
(4,269
)
(27,774
)
1
Common stock conversion
37,921,530
37,922
246,671
-
-
-
-
-
246,671
Conversion of amount
    due to a director
15,000,000
15,000
97,570
-
-
-
27,209
176,986
274,556
Shares issued for cash
13,000,000
13,000
84,561
-
-
-
91,000
591,925
676,486
Shares issued as consideration for business acquisition
28,000,000
28,000
182,131
-
-
-
-
-
182,131
Shares to be issued as consideration for business acquisition
-
-
-
321,296,000
321,296
2,126,520
-
-
2,126,520
Reverse merger
-
-
-
-
-
-
(113,940
)
(741,137
)
(741,137
)
At June 30, 2018
98,191,480
98,191
638,708
321,296,000
321,296
2,126,520
-
-
2,765,228
Each
share has a nominal value of US$0.001 per share.
The shares to be issued as consideration for business acquisition are the
321,296,000 new shares at $0.001 per share as part of the consideration of the acquisition of Reliant Galaxy International Limited.
The aggregated nominal value of the shares is US$321,296.
F-
40
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(
Chinese
Renminbi)
15.
INCOME TAXES
The Company is subject to taxes
in the USA. The Company has had no taxable income under Federal or State tax laws. The Company has loss carryforwards totaling
$359,065 that may be offset against future federal income taxes. If not used, the carryforwards will expire 20 years after they
are incurred.
The Company's subsidiary
in the BVI is not subject to taxation.
The
Company's Hong Kong subsidiary is subject to taxes in Hong Kong. The Hong Kong subsidiary has had no taxable income.
The Company's PRC subsidiaries
are subject to taxes in China. The applicable PRC statutory income tax rate is 25% according to the Enterprise Income Tax Law.
A reconciliation of the income
tax expenses in China is set out below:
June
30,
2018
June
30,
2017
Profit before income tax
59,767,974
55,848,176
Taxation at the applicable
    tax rate of 25%
14,941,994
13,962,044
Tax effect on non-taxable income
(42,182
)
(53,512
)
Tax effects of expense
    that are not deductible
808,014
190,229
(Over)/under-provision in respect of previous year
(612,145
)
22,582
Income taxes
15,095,681
14,121,343
16.
CONTRIBUTION PLAN IN THE PRC
As stipulated by the PRC state
regulations, the subsidiaries in the PRC participate in the state-run defined contribution retirement scheme. All employees are
entitled to an annual pension payment equal to a fixed proportion of the average basic salary of the geographical area of their
last employment at their retirement date. The PRC subsidiaries are required to make contributions to the local social security
bureau at 29.4% to 37.4% of the previous year's average basic salary amount of the geographical area where the employees
are under employment with the PRC subsidiaries. The Group has no obligation for the payment of pension benefits beyond the annual
contributions as set out above.
According to the relevant rules
and regulations of the PRC, the PRC subsidiaries and their employees are each required to make contributions to an accommodation
fund at 9% of the salaries and wages of the employees which are administered by the Public Accumulation Funds Administration Centre.
There is no further obligation for the Group except for such contributions to the accommodation fund. The Group had no significant
obligation apart from the contributions as stated above.
F-
41
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(
Chinese
Renminbi)
17.
OPERATING LEASE
    ARRANGEMENT
The
Group has total future minimum lease payments under non-cancellable operating lease payable as follows:
June
30,
2018
June
30,
2017
Within 1 year
134,294
115,211
After 1 year but within 2 years
18,000
-
After 2 years but within 3 years
9,000
-
After 3 years
-
-
161,294
115,211
The
Group is the lessee of a few office premises and staff residence held under operating leases. The leases typically run for an
initial period of one to five years.
18.
RELATED PARTY BALANCES
    AND TRANSACTIONS
The
Group had the following transactions with related parties during the financial periods:
June
30,
2018
June
30,
2017
Revenue generated from related party
14,359,832
25,110,022
Interest income from director
-
214,046
Trade receivables from related party
-
15,000,875
July 1,
2016
Settlement
Repayment
New Loans
June 30,
2017
Amount due to director
(13,395,233
)
-
-
-
(13,395,233
)
Amount due from director
16,642,476
(178,277
)
(4,650,000
)
-
11,814,199
Net amount due from/(to) director
3,247,243
(178,277
)
(4,650,000
)
-
(1,581,034
)
July 1,
2017
Settlement
Repayment
New Loans
June 30,
2018
Amount due to director
(13,395,233
)
-
-
(95,976,484
)
(109,371,717
)
Amount due from director
11,814,199
1,326,150
13,140,349
Net amount due to director
(1,581,034
)
-
-
(94,650,334
)
96,231,368
F-
42
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(
Chinese
Renminbi)
18.
RELATED PARTY BALANCES
    AND TRANSACTIONS - CONTINUED
The
Group made sales to Fuqing Jing Hong Trading Co., Ltd, the director of which was a family member of the CEO Mr. Yang Peng. The
family resigned from Fuqing Jing Hong Trading Co., Ltd on June 28, 2018, hence Fuqing Jing Hong ceased to be a related party on
June 28, 2018.
June
30,
2018
June
30,
2017
Revenue
14,359,832
25,110,022
14,359,832
25,110,022
Management
is of the opinion that these related party transactions were conducted in the normal course of business of the Group with standard
sales terms and conditions.
19.
CONTINGENT LIABILITIES
At
the end of each reporting period, neither the Group nor the Company had any significant contingent liabilities.
F-
43
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(
Chinese
Renminbi)
20.
DETAILS OF SUBSIDIARIES
Company name
Place and date of incorporation
Capital
Attributable
Equity interest
Principal activities
Reliant Galaxy International
Limited
Established in
British Virgin Islands
on January 3, 2017
Registered and
paid-in capital of
RMB 69,100
100
%
Investment
holding
Sure Rich Investment
Established in
Share capital
100
%
Investment
(Group) Limited
Hong Kong
On February 1, 2007
RMB 1
holding
Fujian Jinou Trading Co., Ltd.
Established in the PRC
on July 5, 2004
Registered and
paid-in capital of US$
1,650,000
100
%
Investment
holding
Fenyang Huaxin Spirit Development Co., Ltd.
Established in the PRC
on November 7, 2013
Registered and
Paid-in capital of RMB
1,000,000
Note (i)
100
%
Trading of spirit
Fenyang Jinqiang Spirit Co., Ltd.
Established in the
PRC
on November 7, 2013
Registered and
Paid-in capital of RMB
5,000,000
100
Note
%
(i)
Trading of spirit
Beijing Huaxin Tianchuang Enterprise Management Consulting Co., Ltd.
Established in the
PRC
on April 14, 2018
Registered and
issued capital of
RMB1,000,000
51
Note
%
(ii)
Dormant
Notes:
(i)
On May 7, 2018, Sure Rich Investment (Group) Limited acquired the remaining 8% of the 92% owned subsidiary Fenyang Jinqiang Spirit Co., Ltd, which then became a direct wholly-owned subsidiary of the Company.
(ii)
The
subsidiary was registered with payable share capital and the Company committed to pay up its share of the issued capital in the
amount of RMB 510,000 on March 31, 2038, which is 20 years from the date of incorporation permitted by the Regulation of the People's
Republic of China on Company Registration. The amount due to the subsidiary is interest-free and unsecured.
F-
44
ORANCO,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(
Chinese
Renminbi)
21.
REVERSE MERGER
On
June 29, 2018, Oranco, Inc. acquired 100% of the issued capital of Reliant in a share for share exchange with the shareholders
of Reliant at that time. Due to the relative size of the companies, the shareholders of Reliant became the majority shareholders
in the consolidated group.
Pursuant
to the share for share exchange, Oranco shall issue an aggregated 349,296,000 new shares of common stock, with par value of $0.001
per share, of which 28,000,000 were issued at the closing date of June 29, 2018, and the remaining 321,296,000 shares shall be
issued at the completion of the increase of the Company's authorized shares. The 321,296,000 shares are classified as fully
paid-up shares to be issued as of June 30, 2018.
At
the date of acquisition, Oranco, Inc. was a shell company with minimal assets and operations. The transaction has been treated
as a group reconstruction and has been accounted for using the reverse merger accounting method. Accordingly, the consolidated
financial statements have been treated as being a continuation of the consolidated financial statements of Reliant, with Oranco,
Inc. being treated as the acquired entity for accounting purposed. Accordingly, the financial information for the current period
and comparatives reflects the consolidated operations of Reliant.
22.
NOTE TO THE CONSOLIDATED
    STAETMENT OF CASH FLOWS
Disclosure
of non-cash transactions:
a.
Renminbi
                                         94,051,934 of the amount due to a director relates to Reliant's acquisition of
                                         Sure Rich Investment (Group) Limited being the consideration of Sure Rich Investment
                                         (Group) Limited payable by Reliant. The amount is due to the seller of Sure Rich Investment
                                         (Group) Limited, who is also a director of Reliant and the Company.
b.
The
                                         Group acquired liabilities of Renminbi 757,296 as part of the reverse merger.
F-
45
73,898,080 Shares of Common Stock
Oranco, Inc.
PROSPECTUS
, 2019
You should rely only on the information contained in this document.
We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal
to sell these securities. The information in this document may only be accurate on the date of this document.
Additional risks and uncertainties not presently known or that
are currently deemed immaterial may also impair our business operations. The risks and uncertainties described in this document
and other risks and uncertainties which we may face in the future will have a greater impact on those who purchase our common stock.
These purchasers will purchase our common stock at the market price or at a privately negotiated price and will run the risk of
losing their entire investment.
PART II. INFORMATION NOT REQUIRED IN
PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth an itemization of all estimated
expenses, all of which we will pay, in connection with the issuance and distribution of the securities being registered:
Nature of Expense
Amount
SEC registration fee
$
7,166
Legal fees and expenses
$
172,651
Accounting fees and expenses
$
12,000
Printing and related expenses
$
10,000
TOTAL
$
201,817
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Neither our articles of incorporation nor
Bylaws prevent us from indemnifying our officers, directors and agents to the extent permitted under the Nevada Revised Statute
("NRS"). NRS Section 78.7502 provides that a corporation shall indemnify any director, officer, employee or agent of
a corporation against expenses, including attorneys' fees, actually and reasonably incurred by him in connection with any
the defense to the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise
in defense of any action, suit or proceeding referred to Section 78.7502(1) or 78.7502(2), or in defense of any claim, issue or
matter therein.
NRS 78.7502(1) provides that a corporation
may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation,
by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with the action, suit or proceeding if he: (a) is not liable pursuant to NRS 78.138;
or (b) acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation,
and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
NRS Section 78.7502(2) provides that a
corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including
amounts paid in settlement and attorneys' fees actually and reasonably incurred by him in connection with the defense or
settlement of the action or suit if he: (a) is not liable pursuant to NRS 78.138; or (b) acted in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the corporation. Indemnification may not be made for any
claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all
appeals there from, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the
extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application
that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses
as the court deems proper.
NRS Section 78.747 provides that except
as otherwise provided by specific statute, no director or officer of a corporation is individually liable for a debt or liability
of the corporation, unless the director or officer acts as the alter ego of the corporation. The court as a matter of law must
determine the question of whether a director or officer acts as the alter ego of a corporation.
Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions,
we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities
Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities
being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed hereby
in the Securities Act and we will be governed by the final adjudication of such issue.
ITEM 15. RECENT SALES OF UNREGISTERED
SECURITIES.
None.
II-
1
ITEM 16. EXHIBITS
Exhibit
Number
Description
2.1*
Share Exchange Agreement, dated as of June 29, 2018, by and among the Registrant, Reliant and the shareholders of Reliant (incorporated by reference to our Form 8-K exhibit 2.1 filed with the SEC on July 6, 2018)
3.1*
Initial articles of incorporation (incorporated by reference to our Form 10-K exhibit 3.1 filed with the SEC on November 18, 1999)
3.2*
Articles of Amendment to the articles of incorporation (incorporated by reference to our Form 10-K exhibit 3.2 filed with the SEC on November 18, 1999)
3.3*
By-Laws (incorporated by reference to our Form 10-K exhibit 3.2 filed with the SEC on November 18, 1999)
5.1†
Opinion of Hunter Taubman Fischer & Li LLC
10.1*
Employment Agreement between the Company and Sze Lok (Patrick) Wong, dated December 3, 2018 (incorporated by reference to our Form 8-K exhibit 10.1 filed with the SEC on December 07, 2018)
10.2*
Partnership Agreement, dated as of June 30, 2017, by and between the Registrant and Shanxi Xinghuacun Liquor Group Spirit Development Zone Sales Co., Ltd. (incorporated by reference to our Form 8-K exhibit 10.1 filed with the SEC on September 14, 2018)
21.1†
List of Subsidiaries
23.1†
Consent of PKF Littlejohn LLP, Independent Registered Public Accounting Firm
23.2
Consent of Hunter Taubman Fischer & Li LLC (included in Exhibit 5.1)
99.1*
Share Purchase Agreement, Dated December 26, 2017 between Million Success Business Limited and Claudio Gianascio (incorporated by reference to our SC 13D exhibit 99.1 filed with the SEC on January 8, 2018)
99.2*
Code of Ethics (incorporated by reference to our Form 10KSB exhibit 99.1 filed with the SEC on March 29, 2004)
*
Previously filed.
†
Filed herewith.
ITEM 17. UNDERTAKINGS
The undersigned
registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i)
To include any prospectus required by section 10(a)(3) of the Securities Act;
(ii)
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
(2)
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at
the termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act to any purchaser:
(i)
If the registrant is relying on Rule 430B:
(A)
Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as
of the date the filed prospectus was deemed part of and included in the registration statement; and
(B)
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of
the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any
person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date;
or
II-
2
(ii)
If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating
to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A,
shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in
a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that
was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately
prior to such date of first use.
(5)
That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution
of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant
pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if
the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant
will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to
Rule 424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred
to by the undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-
3
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized. In the City of New York, New York on July 3, 2019.
ORANCO, INC.
By:
/s/ Peng Yang
Peng Yang
Chief Executive Officer
(Principal Executive Officer)
Date: July 3, 2019
By:
/s/ Sze Lok (Patrick) Wong
Sze Lok (Patrick) Wong
Chief Financial Officer
(Principal Accounting and Financial Officer)
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Title
Date
/s/ Peng Yang
Chief Executive Officer, Director, President and Secretary
July 3, 2019
Peng Yang
(Principal Executive Officer)
/s/ Sze Lok (Patrick) Wong
Chief Financial Officer
July 3, 2019
Sze Lok (Patrick) Wong
(Principal Accounting and Financial
    Officer)
II-4