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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48.25pt">&nbsp;&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">UNITED
STATES</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"><B>SECURITIES
AND EXCHANGE COMMISSION</B></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"><B>Washington,
D.C. 20549</B></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"></FONT></P>

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<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-family: Times New Roman, Times, Serif; font-size: 10pt"><B>FORM
S-1 </B></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"><B>REGISTRATION
STATEMENT</B></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"><B>UNDER</B></FONT></P>

<P STYLE="margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>THE
SECURITIES ACT OF 1933</B></FONT></P>

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

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

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 16pt"><B>MULIANG
AGRITECH, INC.</B></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">(Exact
name of registrant as specified in its charter)</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"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <TD STYLE="width: 32%; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Nevada</B></FONT></TD>
    <TD STYLE="width: 2%; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="width: 32%; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2870</B></FONT></TD>
    <TD STYLE="width: 2%; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="width: 32%; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>90-1137640</B></FONT></P>


</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="text-align: center"><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">(State
                                   or other jurisdiction of<BR>
 incorporation or organization)</FONT></P>


</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><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">(Primary
                                   Standard Industrial <BR>
                                   Classification Code Number)</FONT></P>


</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><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">(I.R.S.
                                   Employer <BR>
                                   Identification Number)</FONT></P>



</TD></TR>
</TABLE>

<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-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2498
Wanfeng Highway, Lane 181 </B></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"><B>Fengjing
Town, Jinshan District</B></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"><B>Shanghai,
China 201501</B></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"><B>(86)
21-67355092</B></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">(Address,
including zip code, and telephone number, including area code, of registrant&rsquo;s principal executive offices)</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"></FONT></P>

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<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-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Joseph
Smith</B></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"><B>18124
Wedge Pwky, Ste 1050</B></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"><B>Reno,
NV 89511</B></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">(Name,
address, including zip code, and telephone number, including area code, of agent for service)</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>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 49%"><P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">William
                           S. Rosenstadt, Esq.</FONT></P>
                           <P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mengyi
                           &ldquo;Jason&rdquo; Ye, Esq.</FONT></P>
                           <P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ortoli
                           Rosenstadt LLP</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>366 Madison Avenue, 3<SUP>rd</SUP> Floor</B></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"><B>New
York, NY 10017</B></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"><B>+1-212-588-0022
- telephone</B></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"><B>+1-212-826-9307
- facsimile</B></FONT></P>



</TD>
    <TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 49%"><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"><B>Fang
                           Liu Esq.</B></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"><B>Mei
&amp; Mark LLP</B></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"><B>818
18th Street NW</B></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"><B>Suite
410</B></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"><B>Washington,
DC 20006</B></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"><B>+1-888-860-5678
x 718 &mdash; telephone</B></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"><B>+1-888-706-1173
&mdash; facsimile</B></FONT></P>


</TD></TR>
</TABLE>

<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"><B>&nbsp;</B></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"><B></B></FONT></P>

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

<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">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;</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>

<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">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></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>

<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">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;</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>

<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">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;</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>

<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">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.</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="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 51%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Large accelerated filer &#9744;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 48%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accelerated filer &#9744;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-accelerated filer &#9744;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Smaller reporting company &#9746;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Emerging growth company &#9746;</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; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">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&dagger;
provided pursuant to Section 7(a)(2)(B) of the Securities Act. &#9744;</FONT></P>

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


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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">CALCULATION
OF REGISTRATION FEE</FONT></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 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">Title of Class of Securities to be Registered</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>Proposed Aggregate Offering Price</B><SUP>(1)</SUP></FONT></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 of Registration Fee</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%">Common stock, par value $0.0001 per share</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">15,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,818.00</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Common stock underlying Underwriter&rsquo;s Warrants<SUP>(2)</SUP></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,500,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">181.80</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Total</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">16,500,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,999.80</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>



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

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">(1)</TD><TD STYLE="text-align: justify">Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended, which represents the sale of shares at the maximum aggregate
price per share.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"></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: 0.25in; padding: 0; font-size: 10pt; text-indent: 0"><FONT STYLE="font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="padding: 0; text-align: justify; font-size: 10pt; text-indent: 0"><FONT STYLE="font-size: 10pt">We have agreed to issue, on the closing date of this offering, warrants to our underwriter Network 1 Financial Securities, Inc. (&ldquo;Underwriter&rdquo;) to purchase up to ten percentage (10%) of the aggregate number of shares of common stock sold by the Registrant (the &ldquo;Underwriters&rsquo; Warrants&rdquo;). The Underwriter&rsquo;s Warrants may be exercisable at any time, and from time to time, in whole or in part, commencing six (6) months following the effective date of the offering and expiring five years from the effective date of the offering. The exercise price of the Underwriters Warrants is equal to 120% of the offering price of the common stock hereby.</FONT></TD></TR>
</TABLE>


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

<P STYLE="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"><B></B>&nbsp;</P>

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

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


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<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: justify; text-indent: 0"><FONT STYLE="color: Red"><B>The
information in this 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></FONT></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="color: Red"><B>PRELIMINARY
PROSPECTUS&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SUBJECT TO COMPLETION ON June
26, 2019</B></FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>&nbsp;<IMG SRC="img_001.jpg" ALT=""></B></P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0"><B>Minimum Offering:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shares
of Common Stock</B></P>

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



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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0">Muliang
Agritech, Inc. is offering a minimum
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of our
common stock and a maximum
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common
stock. The offering is being made on a &ldquo;best efforts&rdquo; basis without a firm commitment by the underwriter who has
no obligation or commitment to purchase any of our shares. The underwriter must sell the minimum number of shares offered,
if any are sold, and are only required to use their best efforts to sell the shares offered. See
&ldquo;Underwriting.&rdquo; Prior&nbsp;to this offering, our stock is currently quoted on the OTCQB Venture Market
(&ldquo;OTCQB&rdquo;) under the symbol &ldquo;MULG&rdquo;, however, there has been no established public trading market for
our common stock. As of June 26, 2019, the last reported sales price of our common share on the OTCQB was US$27.00 per share,
and on June 26, 2019 we had 56,341,953 shares of common stock outstanding. We expect the offering price of our common stock to
be $ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share. We
intend to apply to list our common stock on the Nasdaq Capital Market under the symbol &ldquo;MULG&rdquo;. We cannot assure
you that our application will be approved.</P>



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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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>&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">Per&nbsp;Common Stock</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">Minimum Offering</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">Maximum Offering</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: 64%; text-align: left; text-indent: -10pt; padding-left: 10pt">Assumed public offering price</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">6,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">15,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Underwriter fees and commissions<SUP>(1)</SUP></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">390,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">975,000</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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Proceeds to us, before expenses<SUP>(1)(2)</SUP></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">5,610,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">14,025,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>



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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></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">(1)</TD><TD STYLE="text-align: justify">We will pay the underwriter a commission equal to six and half percent (6.5%) of the public offering price
for the shares. In addition, our underwriter shall be entitled to a non-accountable expense equal to one and half percent (1.5%)
of the gross proceeds of the offering. We agree to pay our underwriter, the expenses relating to the offering, not to exceed $125,000
in the aggregate, including but not limited to (i) reasonable travel and out-of-pocket expenses, including clearing charges; (ii)
reasonable fees of legal counsel incurred by underwriter in connection with the Offering. See &ldquo;Underwriting&rdquo; in this
prospectus for more information regarding our arrangements with the underwriter.</TD></TR>
<TR STYLE="vertical-align: top">
<TD></TD><TD>(2)</TD><TD STYLE="text-align: justify">The total estimated expenses related to this offering are set forth in the section entitled &ldquo;Fees, Commission
and Expense Reimbursement.&rdquo;</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"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, we have agreed to issue to
the underwriter warrants to purchase up to a total of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary
shares (equal to ten percent (10%) of the maximum number of shares of common stock sold in this offering) and to register herein
such underlying shares. The warrants may be exercised at any time, and from time to time, in whole or in part, commencing six
(6) months following the effective date of this public offering and expiring five (5) years from the effective date of the offering.
The warrants are exercisable at a per share price equal to 120% of the offering price of this offering. The offering will close
or terminate, as the case may be, upon the earlier of: (i) a date mutually acceptable to us and the Underwriter after the minimum
offering amount of our offering is raised, or (ii) 180 days from the effective date (the &ldquo;Effective Date&rdquo;) of this
prospectus (and for a period of up to 60 additional days if extended by agreement of the Company and the Underwriter) (the &ldquo;Termination
Date&rdquo;). Until we sell at least shares, all investor funds will be held in an escrow account at &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
If we do not sell at least &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
shares by the Termination Date, all funds will be promptly returned to investors without interest or deduction. If we complete
this offering, then on the closing date, we will issue the shares to investors in the offering on the shares sold in this offering.&nbsp;One
of the conditions to our obligation to sell any securities through the Underwriter is that, upon the closing of the offering,
the shares of common stock would qualify for listing on the Nasdaq Capital Market.</P>



<P STYLE="font: 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">INVESTING IN OUR
COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE &ldquo;RISK FACTORS&rdquo; BEGINNING ON PAGE 7 TO READ ABOUT FACTORS YOU SHOULD
CONSIDER BEFORE INVESTING IN SHARES OF OUR COMMON STOCK.</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">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.</P>

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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><IMG SRC="image_001.jpg" ALT=""></P>



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

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

<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"></P>

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<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="image_005.jpg" ALT=""></P>

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


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<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="toc"></A>TABLE OF CONTENTS</B></P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; background-color: white; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Page</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 92%; padding-left: 10pt; text-indent: -10pt"><A HREF="#a_001"><FONT STYLE="font-family: Times New Roman, Times, Serif">Prospectus Summary</FONT></A></TD>
    <TD STYLE="width: 8%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">1</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_002"><FONT STYLE="font-family: Times New Roman, Times, Serif">Risk Factors</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">7</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_002a"><FONT STYLE="font-family: Times New Roman, Times, Serif">Special Note Regarding Forward-Looking Statements</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">25</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_003"><FONT STYLE="font-family: Times New Roman, Times, Serif">Use of Proceeds</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">25</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_004"><FONT STYLE="font-family: Times New Roman, Times, Serif">Dividend Policy</FONT></A></TD>
    <TD STYLE="text-align: center">26</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_005"><FONT STYLE="font-family: Times New Roman, Times, Serif">Capitalization</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">26</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_005a"><FONT STYLE="font-family: Times New Roman, Times, Serif">Dilution</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">27</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_006"><FONT STYLE="font-family: Times New Roman, Times, Serif">Post-Offering Ownership</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">28</FONT></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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">29</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_008"><FONT STYLE="font-family: Times New Roman, Times, Serif">Business</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">39</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_010"><FONT STYLE="font-family: Times New Roman, Times, Serif">Management</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">52</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_011"><FONT STYLE="font-family: Times New Roman, Times, Serif">Executive Compensation</FONT></A></TD>
    <TD STYLE="text-align: center">53</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><A HREF="#a_020">Principal Shareholders</A></FONT></TD>
    <TD STYLE="text-align: center">54</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><A HREF="#a_021">Related Party Transactions</A></FONT></TD>
    <TD STYLE="text-align: center">55</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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Description of Securities</FONT></A></TD>
    <TD STYLE="text-align: center">56</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_013"><FONT STYLE="font-family: Times New Roman, Times, Serif">Market Price and Dividend on Our Common Stock and Related Stockholder Matters</FONT></A></TD>
    <TD STYLE="text-align: center">57</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><A HREF="#a_022">Shares Eligible for Future Sale</A></FONT></TD>
    <TD STYLE="text-align: center">57</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_014"><FONT STYLE="font-family: Times New Roman, Times, Serif">Underwriting</FONT></A></TD>
    <TD STYLE="text-align: center">59</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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Legal Matters</FONT></A></TD>
    <TD STYLE="text-align: center">63</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_016"><FONT STYLE="font-family: Times New Roman, Times, Serif">Experts</FONT></A></TD>
    <TD STYLE="text-align: center">63</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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Interests of Named Experts and Counsel</FONT></A></TD>
    <TD STYLE="text-align: center">63</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><A HREF="#a_018"><FONT STYLE="font-family: Times New Roman, Times, Serif">Where You Can Find Additional Information</FONT></A></TD>
    <TD STYLE="text-align: center">63</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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Index to Financial Statements</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">F-1</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; text-align: justify; text-indent: 0.5in">You should rely only
on the information contained in this prospectus or in any related free-writing prospectus. We have not authorized anyone to provide
you with information different from that contained in this prospectus or in any related free-writing prospectus. We are offering
to sell, and seeking offers to buy, the shares of common stock offered hereby, but only under circumstances and in jurisdictions
where offers and sales are permitted and lawful to do so. The information contained in this prospectus is current only as of the
date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the shares of common stock.</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: 0.5in">Neither we nor any
of the underwriters have taken any action that would permit a public offering of the shares of common stock outside the United
States or permit the possession or distribution of this prospectus or any related free-writing prospectus outside the United States.
Persons outside the United States who come into possession of this prospectus or any related free-writing prospectus must inform
themselves about and observe any restrictions relating to the offering of the shares of common stock and the distribution of the
prospectus outside the United States.</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: 0.5in">Until &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2019 (the 25<SUP>th</SUP> day after the date of this prospectus), all dealers that buy, sell or trade the shares of common stock,
whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the obligation of
dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.</P>



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


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<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"><A NAME="a_001"></A><B>PROSPECTUS SUMMARY</B></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: 0.5in"><I>This summary highlights
information contained in greater detail elsewhere in this prospectus. This summary is not complete and does not contain all of
the information you should consider in making your investment decision. You should read the entire prospectus carefully before
making an investment in our shares of common stock. You should carefully consider, among other things, our consolidated financial
statements and the related notes and the sections entitled &ldquo;Risk Factors&rdquo; and &ldquo;Management&rsquo;s Discussion
and Analysis of Financial Condition and Results of Operations&rdquo; included elsewhere in this prospectus.</I></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"><FONT STYLE="font-weight: normal">Prospectus Conventions</FONT></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 0pt 0.5in; text-align: justify; text-indent: 0">Except where the context
otherwise requires and for purposes of this prospectus only, &ldquo;we&rdquo;, &ldquo;us&rdquo;, &ldquo;our company&rdquo;, &ldquo;Company&rdquo;,
&ldquo;our&rdquo; and &ldquo;Muliang Agritech&rdquo; refer to:</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0; text-align: justify">Muliang Agritech, Inc. (&ldquo;Muliang
Agritech&rdquo; when individually referenced), a Nevada company;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0; text-align: justify">Muliang Agricultural Limited (&ldquo;Muliang
HK&rdquo; when individually referenced), a Hong Kong company that is a wholly-owned subsidiary of Muliang Agritech;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0; text-align: justify">Shanghai Mufeng Investment Consulting
Co., Ltd (&ldquo;Shanghai Mufeng&rdquo; when individually referenced), (also referred to as &#19978;&#28023;&#29287;&#26539;&#25237;&#36164;&#21672;&#35810;&#26377;&#38480;&#20844;&#21496;),
a wholly-owned subsidiary of Muliang HK and a wholly foreign-owned enterprise (&ldquo;WFOE&rdquo;) formed under the laws of the
People&rsquo;s Republic of China (the &ldquo;PRC&rdquo;);</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0; text-align: justify">Shanghai Muliang Industry Co., Ltd.
(&ldquo;Shanghai Muliang&rdquo; when individually referenced), (also referred to as &#19978;&#28023;&#29287;&#31918;&#23454;&#19994;&#26377;&#38480;&#20844;&#21496;),
a variable interest entity (&ldquo;VIE&rdquo;) and a PRC company that is a wholly-owned subsidiary of Shanghai Mufeng;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0; text-align: justify">Shanghai Zongbao Environmental Construction
Co., Ltd. (&ldquo;Shanghai Zongbao&rdquo; when individually referenced), (also referred to as &#19978;&#28023;&#32508;&#23453;&#29615;&#22659;&#24037;&#31243;&#26377;&#38480;&#20844;&#21496;),
a PRC company that is a wholly-owned subsidiary of Shanghai Muliang;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0; text-align: justify">Shanghai Muliang Agritech Development
Co., Ltd. (&ldquo;Agritech Development&rdquo; when individually referenced), (also referred to as &#19978;&#28023;&#29287;&#31918;&#20892;&#19994;&#31185;&#25216;&#21457;&#23637;&#26377;&#38480;&#20844;&#21496;),
a PRC Company that is a 60%-owned subsidiary of Shanghai Muliang;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0; text-align: justify">Weihai Fukang Bio-Fertilizer Co.,
Ltd. (&ldquo;Fukang&rdquo; when individually referenced), (also referred to as &#23041;&#28023;&#23500;&#24247;&#29983;&#29289;&#32933;&#26009;&#26377;&#38480;&#20844;&#21496;),
a PRC Company that is a 99.9%-owned subsidiary of Shanghai Muliang;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0; text-align: justify">Shanghai Muliang Agricultural Sales
Co., Ltd. (&ldquo;Muliang Sales&rdquo; when individually referenced), (also referred to as &#19978;&#28023;&#29287;&#31918;&#20892;&#36164;&#38144;&#21806;&#26377;&#38480;&#20844;&#21496;),
a PRC company that is a wholly-owned subsidiary of Shanghai Muliang;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0; text-align: justify">Zhonglian Huinong (Beijing) Technology
Co., Ltd. (&ldquo;Zhonglian&rdquo; when individually referenced), (also referred to as &#20013;&#32852;&#24935;&#20892;(&#21271;&#20140;)&#31185;&#25216;&#26377;&#38480;&#20844;&#21496;),
a PRC company that is a 65%-owned subsidiary of Shanghai Muliang;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0; text-align: justify">Yunnan Muliang Animal Husbandry Development
Co., Ltd. (&ldquo;Yunnan Muliang&rdquo; when individually referenced), (also referred to as&#20113;&#21335;&#29287;&#31918;&#30044;&#29287;&#21457;&#23637;&#26377;&#38480;&#20844;&#21496;),
a PRC company that is an 80%-owned subsidiary of Shanghai Muliang;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0; text-align: justify">Shanghai Zongbao Environmental Construction
Co., Ltd. Cangzhou Branch (&ldquo;Zongbao Cangzhou&rdquo; when individually referenced), (also referred to as&#19978;&#28023;&#32508;&#23453;&#29615;&#22659;&#24037;&#31243;&#26377;&#38480;&#20844;&#21496;&#27815;&#24030;&#20998;&#20844;&#21496;),
a PRC company that is a wholly-owned subsidiary of Shanghai Zongbao;</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: 0.5in">For the sake of clarity,
this prospectus follows the English naming convention of first name followed by 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;Lirong Wang,&rdquo;
even though, in Chinese, Mr. Wang&rsquo;s name is presented as &ldquo;Wang Lirong.&rdquo;</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: 0.5in">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: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
</DIV>
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<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>Overview</B></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: 0.5in">Muliang Agritech was
formed under the laws of the state of Nevada on November 5, 2014. We conduct business primarily through Shanghai Muliang, a variable
interest entity (&ldquo;VIE&rdquo;) formed under the laws of People&rsquo;s Republic of China (the &ldquo;PRC&rdquo; or &ldquo;China&rdquo;).</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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We primarily engage
in the manufacturing and distribution of organic fertilizer and the sales of agricultural products in the PRC. Our organic fertilizer
products are sold under our brand names &ldquo;Zongbao,&rdquo; &ldquo;Fukang,&rdquo; and &ldquo;Muliang.&rdquo;</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; text-indent: 0.5in">Through our patented
technology, we process crop straw (including corn, rice, wheat, cotton, and other crops) into high quality organic nutritious fertilizers
that are easily absorbed by crops in 3 hours. Straws are common agricultural by-product. In PRC, farmers usually remove the straw
stubble that are remains after grains by burning them in order to continue farming on the same land. These activities have resulted
in significant air pollution and damage the surface structure of the soil with loss of nutrients. We turn waste into treasure by
transforming the straws into organic fertilizer, which also effectively reduces air pollution. The straw organic fertilizer we
produce does not contain the heavy metals, antibiotics and harmful bacteria that are common in the traditional manure fertilizer.
Our fertilizers also provide optimum levels of primary plant nutrients which including multi-minerals, proteins and carbohydrates
that promote the healthiest soils capable of growing the healthy crops and vegetables. It can effectively reduce the use of chemical
fertilizers and pesticides as well as reduce the penetration of large chemical fertilizers and pesticides into the soil and thus
avoid water pollution. Therefore, our fertilizer can effectively improve fertility of soil, and the quality and safety of agricultural
products.</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; text-indent: 0.5in">We generated our revenue
mainly from our organic fertilizers, which accounted for approximately 91.3% and 99.1% of our total revenue for the fiscal years
ended December 31, 2018 and 2017, respectively. We currently have two integrated factories in Weihai City, Shandong Province, PRC
to produce our organic fertilizers, which have been in operations since August 2015. We plan to improve the technology for our
existing straw organic fertilizer production lines in the following aspects: (i) adopt more advanced automatic control technology
for raw material feed to shorten the processing time of raw material, and (ii) manufacture powdered organic fertilizer instead
of granular organic fertilizer production in order to avoid the drying and cooling process, as such will increase our production
capacity.</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: 0.5in">With the focus of producing
organic fertilizers, we also engage in the business of selling agriculture food products including apples, and as sales agent for
other large agriculture companies in the PRC. In 2014, we rented 350 mu (about 57.66 acres) of mountainous land as apple orchard.
The sales of apples generated less than 1% of our total revenue for the fiscal years ended December 31, 2018 and 2017, respectively.
We expect to generate more revenues from the sales of apples as the apple orchards become more mature in the next few years.</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: 0.5in">In addition, we plan
to engage in the processing and distribution of black goat products business commencing the fourth quarter of 2019. We are currently
constructing a deep-processing slaughterhouse and processing plant which is expected to have the capacity of slaughtering 200,000
black goats per year in Chuxiong City, Yunnan Province, in China. Our black goat processing products including goat rib lets, goat
loin roast, goat loin chops, goat rack, goat leg, goat shoulder, goat leg shanks, ground goat, goat stew meat, whole goat, half
goat, lamb viscera, etc. We expect to start generate revenue from the black goat products in 2020.</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; text-indent: 0.5in">Our assets mainly include:
(i) 42,895 square meters of industrial land and 28,549 square meters of factory and office space located in Jinshan District, Shanghai
City, (ii) 22,511 square meters of industrial land and 10,373 square meters of plant area and straw organic fertilizer production
line in Weihai City, Shandong Province, and (iii) more than $2 million investment of land use right and the black goat slaughtering
and processing plant located in Shuangbai County, Chuxiong City, Yunnan Province, in China.</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; text-indent: 0.5in">As the factory area in Jinshan District, Shanghai City is too close to the urban area to produce straw
organic fertilizer, some factory buildings, office buildings and spare land in Jinshan District, Shanghai City, have been leased
to third parties.</P>



<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>Industry and Market Background</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 7.15pt 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The straw
in China is in large quantity, has wide variety and broad distribution, and the annual output of straw of is more than 700 million
tons. The straw contains more than 3 million tons of nitrogen, more than 700,000 tons of phosphorus and nearly 7 million tons of
potassium, equivalent to more than a quarter of China&rsquo;s current fertilizer amount of use and equivalent to 300 million tons
of standard coal. However, nearly 100 million tons of straw are burned directly in the fields every year, which not only damages
the beneficial bacteria in the soil surface seriously, but also directly leads to severe air pollution and increases the greenhouse
effect. With the significant amount of production of straws in China, so long as part of the straw can be recycled every year,
it will bring huge sustainable recycling resources to the fertilizer industry. On November 25, 2015, the National Development and
Reform Commission, the Ministry of Finance, the Ministry of Agriculture and the Ministry of Environmental Protection jointly issued
a notice, requiring the utilization rate of straw to exceed 85% by 2020.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Market demand
in China for organic fertilizer is significant. In 2015, the China national sales volume of organic fertilizers was 90 million
tons. According to the current policy of encouraging less use of chemical fertilizer, improving the quality of agricultural products
and restoring land, it is estimated that the demand of organic fertilizers will increase to 180 million tons by 2020. At the same
time, according to a governmental advocate of increasing proportion of organic fertilizer to 50% of the total use of fertilizer,
the demand in China for organic fertilizer will reach more than 500 million tons.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Straw organic fertilizer
industry is an industry of ecological production and recycling economic.</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></B></P>
</DIV>
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<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>Competitive Advantages</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>

<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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">Quality
                                         Advantage: compared with the traditional compost manure fermented fertilizer, our product
                                         has high concentration of organic matter and small molecular organic nutrients that can
                                         be directly absorbed by crops rich in fulvic acid, polysaccharides and monosaccharides.
                                         The effective amount of our product is 50% of the amount of conventional organic fertilizer.</FONT></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-weight: normal">&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">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">Safety
                                         advantage: compared with traditional livestock and poultry manure composting fermented
                                         fertilizer, our product generates less residue of heavy metals, antibiotics, toxic and
                                         harmful bacteria, avoids the pollution of soil, and ensures the quality and safety of
                                         agricultural products.</FONT></TD></TR></TABLE>

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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Implications
of Being an Emerging Growth Company</B></FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">We
qualify as an &ldquo;emerging growth company&rdquo; as defined in the Jumpstart our Business Startups Act of 2012, or the JOBS
Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable
generally to public companies. These provisions include:</FONT></P>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                         ability to include only two years of audited financial statements and only two years
                                         of related management&rsquo;s discussion and analysis of financial condition and results
                                         of operations disclosure; and</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">an
                                         exemption from the auditor attestation requirement in the assessment of our internal
                                         control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002.</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; text-align: justify; text-indent: 0.5in">We may take advantage
of these provisions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease
to be an emerging growth company if we have more than $1.0 billion in annual revenue, have more than $700 million in market value
of our shares of common stock held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year
period.</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>Corporate Information</B></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: 0.5in">Our principal executive
office is located at 2498 Wanfeng Highway, Lane 181, Fengjing Town, Jinshan District, Shanghai, China. The telephone number of
our principal executive offices is (86) 21-67355092. The office space belongs to our President and Chief Executive Officer, Mr.
Lirong Wang, who allows us to use the space for free. Our registered agent in the United States is Joseph Smith.</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>Offering Summary</B>&nbsp;</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: 0.5in">Following completion
of this offering, our ownership will be as follows, assuming completion of the minimum and maximum offerings, respectively. To
the extent we complete an offering between the minimum and maximum offerings, the percentage ownership of participants in this
offering will between the below amounts:</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-top: 0pt; margin-bottom: 0pt; text-align: center"><IMG SRC="image_002.jpg" ALT="">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><IMG SRC="image_003.jpg" ALT=""></P>

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

<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: 40%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shares Offered by us:</FONT></TD>
    <TD STYLE="width: 60%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Minimum:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common stock</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Maximum: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common stock</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <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">Shares Outstanding Prior to Completion of Offering:</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">56,341,953 shares of common stock</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <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">Shares to be Outstanding after Offering*:</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Minimum: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common stock</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Maximum:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common stock</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Assumed Offering Price per Share:</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <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">Gross Proceeds to Us Before Expenses:</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Minimum: $6,000,000</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Maximum: $15,000,000</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <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">Best efforts</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The underwriters are selling our shares of common stock on a &ldquo;best efforts, minimum/maximum&rdquo; basis. Accordingly, the underwriter has no obligation or commitment to purchase any securities. The underwriters are not required to sell any specific number of dollar amount of shares of common stock but will use its best efforts to sell the shares of common stock offered.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We do not intend to close this offering unless we sell at least a minimum number of shares of common stock, at the price per share set forth on the cover page of this prospectus, to result in sufficient proceeds to list our shares of common stock on the Nasdaq Capital Market.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <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">Escrow account</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The gross proceeds from the sale of the shares of common stock in this offering will be deposited in a non-interest bearing escrow account maintained by the escrow agent, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(the &ldquo;Escrow Agent&rdquo;). All check will be deposited directly into the escrow account and all wire transfers will be wired directly to the escrow account. The funds will be held in escrow until the Escrow Agent has advised us and the escrow agent that it has received $6,000,000, the minimum offering, in cleared funds. If we do not receive the minimum of $6,000,000 by 180 days from the effective date of this prospectus (and for a period of up to 60 additional days if extended by agreement of the Company and the underwriter) (the &ldquo;Termination Date&rdquo;)., all funds will be promptly returned to purchasers in this offering after the termination of the offering, without charge, deduction or interest. Prior to the Termination Date, in no event will funds be returned to you unless the offering is terminated. You will only be entitled to receive a refund of your subscription price if we do not raise a minimum of $6,000,000 by the Termination Date. No interest will be paid either to us or to you. See &ldquo;Underwriting &mdash; Deposit of Offering Proceeds.&rdquo;</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: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>
</DIV>
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<DIV STYLE="padding: 3pt; border: Black 1.5pt solid; width: 98%">
<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: top">
    <TD STYLE="width: 40%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Proposed Nasdaq Capital Market Symbol:</FONT></TD>
    <TD STYLE="width: 60%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;MULG&rdquo;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <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">Transfer Agent:</FONT></TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">West Coast Stock Transfer Inc.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">Transfer Agent</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">721 N. Vulcan Ave.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">Suite 205</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">Encinitas, CA&nbsp;92024</P></TD></TR>
<TR STYLE="vertical-align: top">
    <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">Risk Factors:</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investing in these securities involves a high degree of risk. As an investor, you should be able to bear a complete loss of your investment. You should carefully consider the information set forth in the &ldquo;Risk Factors&rdquo; section of this prospectus before deciding to invest in our shares of common stock.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <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">Closing of Offering:</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The offering contemplated by this prospectus will terminate upon the earlier of: (i) a date mutually acceptable to us and the Underwriter after the minimum offering is sold or (ii) 180 days from the effective date of this prospectus (and for a period of up to 60 additional days if extended by agreement of the Company and the underwriter) (the &ldquo;Termination Date&rdquo;). If we complete this offering, net proceeds will be delivered to us on the closing date (such closing date being the above mutually acceptable date on or before the Termination Date, provided the minimum offering has been sold). We will not complete this offering unless our application to list on the Nasdaq Capital Market is approved. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <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">Use of Proceeds:</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We intend to use the proceeds from this offering to for advertising and marketing, working capital and general corporate purposes, including the expansion of our business. To the extent that we are unable to raise the maximum proceeds in this offering, we may not be able to achieve all of our business objectives in a timely manner. See &ldquo;Use of Proceeds&rdquo; for more information.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <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">Dividend Policy:</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We have no present plans to declare dividends and plan to retain our earnings to continue to grow our business.</FONT></TD></TR>
</TABLE>


<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; text-align: center"></P></DIV>

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<DIV STYLE="padding: 3pt; border: Black 1.5pt solid; width: 98%"><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>Summary Financial Information</B></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: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the table
below, we provide you with historical selected financial data for the three months ended March 31, 2019 and the years
ended December 31, 2018 and 2017 and for the three months ended March 31, 2019. This information is derived from our
consolidated financial statements included elsewhere in this prospectus. Historical results are not necessarily indicative of
the results that may be expected for any future period. When you read this historical selected financial data, it is
important that you read it along with the historical financial statements and related notes and &ldquo;Management&rsquo;s
Discussion and Analysis of Financial Condition and Results of Operations&rdquo; included elsewhere in this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&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-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the<BR> Three&nbsp;Months Ended <BR>March 31,<BR> 2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Fiscal <BR>Year Ended<BR> December 31,<BR> 2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Fiscal<BR> Year Ended<BR> December&nbsp;31,<BR> 2017</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">US$<BR> (Unaudited)</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">US$<BR> (Audited)</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">US$<BR> (Audited)</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold">Statement of operation data:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt; width: 64%"><FONT STYLE="font-size: 10pt">Revenues</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right; width: 9%"><FONT STYLE="font-size: 10pt; background-color: #CCEEFF">2,225,368</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right; width: 9%"><FONT STYLE="font-size: 10pt; background-color: #CCEEFF">13,205,024</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right; width: 9%"><FONT STYLE="font-size: 10pt; background-color: #CCEEFF">737,563</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Operating expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">518,556</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">1,632,042</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">$</TD><TD STYLE="font-size: 10pt; text-align: right">1,674,061</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Income/(Loss) from operations</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">367,936</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">$</TD><TD STYLE="font-size: 10pt; text-align: right">3,912,956</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(1,527,734</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Provision for income taxes</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">97,860</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(25,542</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">26,334</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Net income/(Loss)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">445,587</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">$</TD><TD STYLE="font-size: 10pt; text-align: right">4,473,819</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(2,034,858</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Earnings per share, basic and diluted<SUP>(1)</SUP></FONT></TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">0.01</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">0.08</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">$</TD><TD STYLE="font-size: 10pt; text-align: right">(0.04</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Weighted average ordinary shares outstanding<SUP>(1)</SUP></FONT></TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">56,341,718</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">$</TD><TD STYLE="font-size: 10pt; text-align: right">56,170,859</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">56,000,000</TD><TD STYLE="font-size: 10pt; text-align: left">&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; 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-size: 10pt; font-weight: bold; text-align: left; text-indent: -10pt; padding-left: 10pt">Balance sheet data</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-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Current assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">6,559,963</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">6,144,130</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">$</TD><TD STYLE="font-size: 10pt; text-align: right">870,888</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Total assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">25,509,626</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">$</TD><TD STYLE="font-size: 10pt; text-align: right">24,813,602</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">20,048,055</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Current liabilities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">13,145,492</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">13,263,248</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">$</TD><TD STYLE="font-size: 10pt; text-align: right">11,578,988</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Total liabilities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Total equity</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">8,637,015</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">$</TD><TD STYLE="font-size: 10pt; text-align: right">8,095,811</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">930,280</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


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

</DIV>
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<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"><A NAME="a_002"></A><B>RISK FACTORS</B></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: 0.5in"><I></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>An investment in
our shares of common stock involves a high degree of risk. Before deciding whether to invest in our shares of common stock, you
should consider carefully the risks described below, together with all of the other information set forth in this prospectus,
including the section titled &ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operation&rdquo;
and our consolidated financial statements and related notes. If any of these risks actually occurs, our business, financial condition,
results of operations or cash flow could be materially and adversely affected, which could cause the trading price of our shares
of common stock to decline, resulting in a loss of all or part of your investment. The risks described below and in the sections
referenced above are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial
may also affect our business. You should only consider investing in our shares of common stock if you can bear the risk of loss
of your entire investment.</I></P>



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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B><I><U>Risks Related
to Our Business and Industry</U></I></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>Our fertilizer
business is seasonal and affected by factors beyond our control, which may cause our sales and operating results to fluctuate
significantly.</I></B></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: 0.5in">The sale of products
from our fertilizer-related segments is partially dependent upon planting and growing seasons, which vary from year to year, and
are expected to result in both seasonal patterns and substantial fluctuations in quarterly sales and profitability. Different from
the traditional organic fertilizer that mostly be only used as starter fertilizer. Our products can be used as both the starter
fertilizer and regular fertilizer which can be applied during the all the periods through the crops&rsquo; growth. Weather conditions
and natural disasters, such as heavy rains, hail, floods, freezing conditions, windstorms or fire, also affect decisions by our
distributors, direct customers and end users about the types and amounts of products to use and the timing of harvesting and planting.
As we increase our sales in our current markets and expand into new markets in different geographies, it is possible that we may
experience different seasonality patterns in our business.</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: 0.5in">Disruptions may lead
to delays in harvesting or planting by growers which can result in pushing orders to a future quarter, which could negatively affect
results for the quarter in question and cause fluctuations in our operating results. Seasonal variations may be especially pronounced
because our product lines are mainly sold in China. Planting and growing seasons, climatic conditions and other variables on which
sales of our products are dependent vary from year to year and quarter to quarter. As a result, we may experience substantial fluctuations
in quarterly sales.</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: 0.5in">The overall level of
seasonality in our business is difficult to evaluate as a result of our relatively early stage of development, our limited number
of commercialized products, our expansion into new geographical territories, the introduction of new products and the timing of
introductions of new products. Even though we have conducted protective methods, the Company does have insufficient inventory in
April, May, October and November. It is possible that our business may be more seasonal or experience seasonality in different
periods than anticipated. Other factors may also contribute to the unpredictability of our operating results, including the size
and timing of significant distributor transactions, the delay or deferral of use of our commercial technology or products and the
fiscal or quarterly budget cycles of our direct customers, distributors, licensees and end users. Customers may purchase large
quantities of our products in a particular quarter to store and use over long periods of time or time their purchases to manage
their inventories, which may cause significant fluctuations in our operating results for a particular quarter or year.</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"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Unavoidable Insufficient Inventory
during busy seasons may cause us to lose some portion of our sales.</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: 0.5in">Traditional organic
fertilizers do have seasonal sales because their use can only be applied as starter fertilizers before the crops are planted. Our
organic fertilizers can be used as a starter fertilizer or as regular fertilizers which can be applied during the growing period
of the crops to supplement the nutrients needed for growth. The Company&rsquo;s inventory during the peak seasons (such as April to May,
and October to November) is insufficient. The Company&rsquo;s fertilizer production capacity has been upgraded from the original 50,000
tons to 70,000 tons, however, the seasonal inventory supply is still unavoidable. The inevitable selling shortage may cause us
to lose some portion our sales.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></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: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Competition in
fertilizer and agricultural industrial products is intense and requires continuous technological development.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48.25pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We
currently face significant direct and indirect competition in the markets in which we operate. The markets for fertilizers are
intensely competitive and rapidly changing. Many companies engage in the development of fertilizers, and speed in commercializing
a new product can be a significant competitive advantage.</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; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In most segments of
the fertilizer markets, the number of products <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">available
to </FONT>end customers is steadily increasing as new products are introduced. We may be unable to compete successfully against
our current and future competitors, which may result in price reductions, reduced margins and the inability to achieve market
acceptance for products containing our seed traits and technology. In addition, many of our competitors have substantially greater
financial, marketing, sales, distribution and technical resources than us and some of our competitors have more experience in
R&amp;D, regulatory matters, manufacturing and marketing. We anticipate increased competition in the future as new companies enter
the market and new technologies become available. Programs to improve genetics and crop protection chemicals are generally concentrated
within a relatively small number of large companies, while non-genetic approaches are underway with broader set of companies.
Mergers and acquisitions in the plant science, specialty food ingredient and agricultural biotechnology seed and chemical industries
may result in even more resources being concentrated among a smaller number of our competitors.</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 17.55pt 0pt 5.85pt; text-align: justify; text-indent: 30.15pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 17.55pt 0pt 5.85pt; text-align: justify; text-indent: 30.15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our
technology may be rendered obsolete or uneconomical by technological advances or entirely different approaches developed by one
or more of our competitors, which will prevent or limit our ability to generate revenues from the commercialization of our seed
traits and technology. At the same time, the expiration of patents covering existing products reduces the barriers to entry for
competitors. Our ability to compete effectively and to achieve commercial success depends, in part, on our ability to control manufacturing
and marketing costs&#894; effectively price and market our products, successfully develop an effective marketing program and an
efficient supply chain, develop new products with properties attractive to food manufacturers or growers and commercialize our
products quickly without incurring major regulatory costs. We may not be successful in achieving these factors and any such failure
may adversely affect our business, results of operations and financial condition.</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 17.55pt 0pt 5.85pt; text-align: justify; text-indent: 30.15pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>We may not be successful in developing marketable or
commercial technologies.</I></P>

<P STYLE="font: 7pt 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; text-indent: 0.5in"><FONT STYLE="font-weight: normal">Through
our patented technology, we process crop straw (including corn, rice, wheat, cotton, and other crops) into high quality organic
nutritious fertilizer rich in small molecules, easily absorbed by crops in 3 hours. Our success depends in part on our ability
to identify and develop high value fertilizer and agriculture industrial technologies for use in commercial products. Through our
technology sourcing and product development collaborations we commit substantial efforts and other resources to accomplish this.
It may take several years, if at all, before many of our products complete the development process and become available for production
and commercialization.</FONT></P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48.25pt; 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; text-indent: 0.5in"><FONT STYLE="font-weight: normal">As
of the date of this registration statement, many of our products have been commercialized by our patented technology. There can
be no assurance that our future fertilizer productivity and agriculture industrial technologies will be viable for commercial use,
or that we will be able to generate revenues from those technologies, in a significant manner or at all. If seeds or other products
that utilize our fertilizer or technology are unsuccessful in achieving their desired effect or otherwise fail to be commercialized,
we will not receive revenues from our customers or royalty payments from the commercialization of the fertilizer and technologies
we develop, which could materially and adversely affect our business, financial condition, results of operations and growth strategy.</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-weight: normal">Fertilizers
containing the following traits or biological treatments that we develop may be unsuccessful or fail to achiev<FONT STYLE="font-family: Times New Roman, Times, Serif">e
commercialization for any of the following reasons:</FONT></FONT></P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">&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; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">our
                                         fertilizers may not be successfully validated in the target crops&#894;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">&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; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">our
                                         fertilizers may not have the desired effect on the relevant crop sought by our end market&#894;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">&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; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">we
                                         or our joint ventures or collaborators may be unable to obtain the requisite regulatory
                                         approvals for the fertilizers&#894;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">&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; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">our
                                         competitors may launch competing or more effective fertilizers&#894;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">&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; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">we
                                         may be unable to patent and/or obtain breeders&rsquo; rights or any other intellectual
                                         property rights on our traits and technologies in the necessary jurisdictions&#894;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">&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; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">even
                                         if we obtain patent and/or breeders&rsquo; rights or any other intellectual property
                                         rights on our fertilizers or processing technologies, such rights may be later challenged
                                         by competitors or other parties&#894; and</FONT></TD>
</TR></TABLE>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">&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; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">even
                                         if we obtain patent and/or breeders&rsquo; rights or any other intellectual property
                                         rights on our fertilizers, competitors may design competing products that do not infringe
                                         these intellectual property rights.</FONT></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B><I>If
we are unable to compete successfully with our competitors, our financial condition and results of operations may be harmed.</I></B></FONT></P>

<P STYLE="font: 7pt 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: 0.5in">We encounter intense
competition in each of our business segments on a national, regional and local level. Competition in the industry is primarily
based on quality of services, brand name recognition, geographic coverage and range of services. New and existing competitors may
offer competitive rates, greater convenience or superior services, which could attract customers away from us, resulting in lower
revenues for our operations. Competition among fertilizer companies may cause a decrease in price of sales to attract or retain
talented employees.</P>

<P STYLE="font: 7pt 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: 0.5in">Our major competitors<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;</FONT>are Shijiazhuang Xixing Fertilizer Science and Technology Limited,
Nanjing Ningliang Bio-chemistry Engineering Limited, Shijiazhuang Jintaiyang Biology Organic Fertilizer Limited, Beijing Wotu Tiandi
Biological Science Limited, Zhenzhou Yongfeng Biology Fertilizer Limited, Shandong Jianong Biological Enginerring Limited, Beijing
aeronautics Hengfeng Technology Limited, Beijing Century Armstrong Biological Technology Limited, GengLiduo Biological Techonology
Limited.</P>

<P STYLE="font: 7pt 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: 0.5in">We do not have multinational competitors. Due to the high price of organic fertilizers from other countries,
China has little organic fertilizer imports. The fertilizers produced by international fertilizer companies entering the Chinese
organic fertilizer market are mainly special functional fertilizers such as foliar fertilizers. These functional fertilizers are
not sold well in the domestic market due to high price.</P>



<P STYLE="font: 7pt 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: 0.5in">Some of our competitors
may have a broader national presence than us and may have a more established branding recognition than us in major markets, and
also may have more financial or other resources than us. Others may have smaller aggregate businesses than us, but may be more
established and have greater market presence and brand name recognition on a local or regional basis. We are also subject to competition
from other large national and international companies. These companies may have more financial or other resources than us. If we
fail to compete effectively, our business operations and financial condition will suffer.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>The loss of any of our key suppliers
and/or customers could have a materially adverse effect on our results of operations.</I></B></P>

<P STYLE="font: 7pt 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; text-indent: 0.5in">We consider our major
suppliers in each period to be those suppliers that accounted for more than 10% of overall purchases in such period. For the years
ended December 31, 2018 and 2017, 57% and 53% of our supplies came from two key suppliers, respectively. Although we believe that
we can locate replacement suppliers readily on the market for prevailing prices and that we may not have significant difficulty
replacing a given supplier, any difficulty in replacing such a supplier could adversely affect our company&rsquo;s performance
to the extent it results in higher prices, slower supply chain and ultimately less desirable results of operations.&nbsp;</P>

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

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<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"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, for the
years ended December 31, 2018 and 2017, two key customers accounted for 60% and 31% of our revenues, respectively. As the majority
of our revenues are driven by individual orders for organic fertilizers, there can be no assurance that we will maintain or improve
the relationships with customers who does not have long-term contracts with us. Our major customers often change each period based
on when a given order is placed. If we cannot maintain long-term relationships with major customers or replace major customers
from period to period with equivalent customers, the loss of such sales could have an 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; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>Our product development
cycle is lengthy and uncertain and we may never generate revenues or earn revenues on the sale of our products currently in development.</I></B></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: 0.5in">The research and development
in the crop productivity and agriculture biotech industries is expensive, complex, prolonged and uncertain. We may spend many years
and dedicate significant financial and other resources developing products that may never generate revenues or come to market.
Our process of developing and commercializing technologies involves several phases and can take several years from discovery to
commercialization of a product.</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: 0.5in">Development of new
or improved agricultural products involves risks of failure inherent in the development of product<FONT STYLE="font-family: Times New Roman, Times, Serif">s
based on innovative and complex technologies. These risks include the possibility that:</FONT></P>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">our
                                         products will fail to perform as expected in the field&#894;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">our
                                         products will not receive necessary regulatory permits and governmental clearances in
                                         the markets in which we intend to sell them&#894;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">our
                                         products may have adverse effects on consumers&#894;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">consumer
                                         preferences, which are unpredictable and can vary greatly, may change quickly, making
                                         our products no longer desirable&#894;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">our
                                         competitors develop new products that have other more appealing characteristics than
                                         our products&#894;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">our
                                         products will be viewed as too expensive by food companies or growers as compared to
                                         competitive products&#894;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">our
                                         products will be difficult to produce on a large scale or will not be economical to grow&#894;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">intellectual
                                         property and other proprietary rights of third parties will prevent us, our research
                                         and development partners, or our licensees from marketing and selling our products&#894;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">we
                                         may be unable to patent or otherwise obtain intellectual property protection for our
                                         discoveries in the necessary jurisdictions&#894;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">we
                                         or the customers that we sell our products to may be unable to fully develop or commercialize
                                         our products in a timely manner or at all&#894; and</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">third
                                         parties may develop superior or equivalent products.</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; text-align: justify; text-indent: 0.5in">We intend to continue
to invest in research and development including additional and expanded field testing to validate potential products in real world
conditions. Because of the long product development cycle and the complexities and uncertainties associated with biotech and agricultural
industrial technologies, there can be no assurance that we will ever generate significant revenues from the technologies or products
that we are currently developing without significant delay, without the incurrence of unanticipated costs or at all.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>We depend on our
key personnel and research employees and we may be adversely affected if we are unable to attract and retain qualified scientific
and business personnel.</I></B></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: 0.5in">Our business is dependent
on our ability to recruit and maintain highly skilled and educated individuals through direct employment or collaboration arrangements,
with expertise in a range of disciplines, including biology, chemistry, plant genetics, agronomics, mathematics programming and
other subjects relevant to our business. Our ability to recruit such a work force depends in part on our ability to maintain our
market leadership in agricultural biotech industry in China. Maintaining our ability to attract highly-skilled workers and leading
scientific institutions depends in part on our ability to maintain a strong technology platform and state-of-the-art facilities, as
well as our ability to consistently and successfully commercialize our technology. There can be no assurance that we will be able
to maintain leading scientific capabilities or continue to successfully maintain advanced technology in the market.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>We do not enter
into non-compete agreements with our employees, and therefore we may be unable to prevent our competitors from benefiting from
the expertise of our former employees.</I></B></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: 0.5in">We do not enter into
non-compete agreements with our employees, which prevents us from limiting our key employees from joining our competitors or competing
directly against us. As a result, we may be unable to prevent our competitors from benefiting from the expertise of such employees.
Direct competition by a former employee could materially adversely affect our business, results of operations and ability to capitalize
on our proprietary information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></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 48pt; text-indent: -0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -0.5in"></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"><B><I>We have a limited operating history in our market, which
makes it difficult to evaluate our future prospects.</I></B></P>

<P STYLE="font: 7pt 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; text-indent: 0.5in; text-align: justify">We started engaging in our business in the
last few years and have limited revenues to date. As our business develops or in response to competition, we may continue to introduce
new products and services or make adjustments to our existing offerings and business model. In connection with the introduction
of new products or in response to general economic conditions, we may impose more stringent borrower qualifications to ensure the
quality of loans facilitated by our companies, which may negatively affect the growth of our business. Any significant change to
our business model may not achieve expected results and may have a material and adverse impact on our financial conditions and
results of operations. It is therefore difficult to effectively assess our future prospects. The risks and challenges we encounter
or may encounter in this developing and rapidly evolving market may have impacts on our business and prospects. These risks and
challenges include our ability to, among other things:</P>


<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -0.5in">&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">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">navigate an evolving regulatory environment;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -0.5in">&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">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">expand the base of borrowers and lenders;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -0.5in">&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">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">broaden our loan product offerings;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -0.5in">&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">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">enhance our risk management capabilities;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -0.5in">&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">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">improve our operational efficiency;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -0.5in">&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">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">cultivate a vibrant consumer finance ecosystem;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -0.5in">&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">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">maintain the security of our IT infrastructure and the confidentiality of the information provided and utilized across our platform;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -0.5in">&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">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">attract, retain and motivate talented employees; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -0.5in">&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">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">defend ourselves against litigation, regulatory, intellectual property, privacy or other claims.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">If we fail to educate potential borrowers
and lenders about the value of our services, if the market for our services does not develop as we expect, or if we fail to address
the needs of our target market, or other risks and challenges, our business and results of operations will be harmed.</P>

<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"><B><I>The loss of any of our key customers could reduce our
revenues and our profitability.</I></B></P>

<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; text-indent: 0.5in">For the years ended
December 31, 2018 and 2017, purchases from two customers consisted 31% and 60% of our revenue, respectively. As the majority of
our revenues are driven by individual orders for fertilizer products, there can be no assurance that we will maintain or improve
the relationships with customers who does not have long-term contracts with us. Our major customers often change each period based
on when a given order is placed. If we cannot maintain long-term relationships with major customers or replace major customers
from period to period with equivalent customers, the loss of such sales could have an adverse effect on our business, financial
condition and results of operations.</P>

<P STYLE="font: 7pt 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><I>Any failure of any of our key suppliers to deliver necessary materials could result in delays in our products development
or marketing schedules.</I></B></P>

<P STYLE="font: 7pt 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: 0.5in">For the
years ended December 31, 2018 and 2017, two suppliers accounted 53% and 57% of our purchases, respectively. We are dependent on
our suppliers for our products. Our suppliers may fail to meet timelines or contractual obligations or provide us with sufficient
products, which may adversely affect our business. Certain of our contracts with key suppliers, can be terminated by the supplier
upon giving notice within a certain period and restrict us from using other suppliers. Failure to appropriately structure or adequately
manage our agreements with third parties may adversely affect our supply of products. We are also subject to credit risk with respect
to our third-party suppliers. If any such suppliers become insolvent, an appointed trustee could potentially ignore the service
contracts we have in place with such party, resulting in increased charges or the termination of the service contracts. We may
not be able to replace a service provider within a reasonable period of time, on as favorable terms or without disruption to our
operations. Any adverse changes to our relationships with third-party suppliers could have a material adverse effect on our image,
brand and reputation, as well as on our business, financial condition and results of operations.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">In
addition, to the extent that our creditworthiness is impaired, or general economic conditions decline, certain of our key suppliers
may demand onerous payment terms that could materially adversely affect our working capital position, or such suppliers may refuse
to continue to supply to us. A number of our key suppliers have taken out trade credit insurance on our ability to pay them. To
the extent that such trade credit insurance becomes unobtainable or more expensive due to market conditions, we may face adverse
changes to payment terms by our key suppliers or they may refuse to continue to supply us.</P>

<P STYLE="font: 7pt 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><I>If we do not compete effectively,
our results of operations could be harmed.</I></B></P>

<P STYLE="font: 7pt 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; text-indent: 0.5in">Our industry in China
is intensely competitive and evolving. Our competitors operate with different business models, have different cost structures
or participate selectively in different market segments. They may ultimately prove more successful or more adaptable to new regulatory,
technological and other developments. Some of our current and potential competitors have significantly more financial, technical,
marketing and other resources than we do and may be able to devote greater resources to the development, promotion, sale and support
of their services. Our competitors may also have longer operating histories, more extensive borrower or lender bases, greater
brand recognition and brand loyalty and broader partner relationships than us. Additionally, a current or potential competitor
may acquire one or more of our existing competitors or form a strategic alliance with one or more of our competitors. If we are
unable to compete with such companies and meet the need for innovation in our industry, the demand for our services could stagnate
or substantially decline, we could experience reduced revenues or our services could fail to achieve or maintain more widespread
market acceptance, any of which could harm our business and results of operations.&nbsp;</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If we fail to promote and maintain
our brand in an effective and cost-efficient way, our business and results of operations may be harmed.</I></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; text-indent: 0.5in">The continued development
and success of our business relies on the recognition of our brands. We believe that developing and maintaining awareness of our
brand effectively is critical to attracting new and retaining existing borrowers and lenders to our services. Successful promotion
of our brand and our ability to attract qualified borrowers and sufficient lenders depend largely on the effectiveness of our
marketing efforts and the success of the channels we use to promote our services. Our efforts to build our brand have caused us
to incur significant expenses, and it is likely that our future marketing efforts will require us to incur significant additional
expenses. These efforts may not result in increased revenues in the immediate future or at all and, even if they do, any increases
in revenues may not offset the expenses incurred. If we fail to successfully promote and maintain our brand while incurring substantial
expenses, our results of operations and financial condition would be adversely affected, which may impair our ability to grow
our business.&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"><B><I>If we fail to develop and maintain
an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or
prevent fraud.</I></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; text-indent: 0.5in">Our independent registered
public accounting firm has not conducted an audit of our internal control over financial reporting. We also have a history of not
filing our periodic reports on time due to uncontrollable reasons. As defined in the standards established by the Public Company
Accounting Oversight Board of the United States, or PCAOB, a &ldquo;material weakness&rdquo; 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 the 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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">One material weakness
that has been identified related to our lack of sufficient financial reporting and accounting personnel with appropriate knowledge
of U.S. GAAP and SEC reporting requirements to properly address complex U.S. GAAP accounting issues and to prepare and review our
consolidated financial statements and related disclosures to fulfill U.S. GAAP and SEC financial reporting requirements. The other
material weakness that has been identified related to our lack of comprehensive accounting policies and procedures manual in accordance
with U.S. GAAP.</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: 0.5in">We have implemented
a number of measures to address the material weaknesses that have been identified in connection with the audits of our consolidated
financial statements as of and for the two years ended December 31, 2018 and 2017. However, there is no assurance that we will
not have any material weakness in the future. Failure to discover and address any control deficiencies could result in inaccuracies
in our financial statements and impair our ability to comply with applicable financial reporting requirements and related regulatory
filings on a timely basis. Moreover, ineffective internal control over financial reporting could significantly hinder our ability
to prevent fraud. Ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of
corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and
civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.</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><I>Failure to maintain effective internal
controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and operating
results.</I></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; text-indent: 0.5in">If we fail to comply
with the requirements of Section 404 of the Sarbanes-Oxley Act regarding internal control over financial reporting or to remedy
any material weaknesses in our internal controls that we may identify, such failure could result in material misstatements in our
financial statements, cause investors to lose confidence in our reported financial information and have a negative effect on the
trading price of our common shares.</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: 0.5in">Pursuant to Section
404 of the Sarbanes-Oxley Act and current SEC regulations, we are required to prepare assessments regarding internal controls
over financial reporting. In connection with our on-going assessment of the effectiveness of our internal control over financial
reporting, we may discover &ldquo;material weaknesses&rdquo; in our internal controls as defined in standards established by the
Public Company Accounting Oversight Board, or the PCAOB. A material weakness is a significant deficiency, or combination of significant
deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements
will not be prevented or detected. The PCAOB defines &ldquo;significant deficiency&rdquo; as a deficiency that results in more
than a remote likelihood that a misstatement of the financial statements that is more than inconsequential will not be prevented
or detected. We determined that our disclosure controls and procedures over financial reporting are not effective and were not
effective as of December 31, 2018 and 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; text-indent: 0.5in">The process of designing
and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our
business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls
that is adequate to satisfy our reporting obligations as a public company. We cannot assure you that we will implement and maintain
adequate controls over our financial process and reporting in the future or that the measures we will take will remediate any material
weaknesses that we may identify in the future.</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>

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<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><I>Our business depends on the continued
efforts of our senior management. If one or more of our key executives were unable or unwilling to continue in their present positions,
our business may be severely disrupted.</I></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; text-indent: 0.5in">Our business operations
depend on the continued services of our senior management, particularly the executive officers named in this prospectus. While
we have provided different incentives to our management, we cannot assure you that we can continue to retain their services. We
currently do not carry a &ldquo;key man&rdquo; life insurance on the officers. Therefore, if one or more of our key executives
were unable or unwilling to continue in their present positions, we may incur substantial cost or may not be able to replace them
at all. Consequently, our future growth may be constrained, our business may be severely disrupted and our financial condition
and results of operations may be materially and adversely affected. If that&rsquo;s the case, we may incur additional expenses
to recruit, train and retain qualified personnel. In addition, although we have entered into confidentiality and non-competition
agreements with our management, there is no assurance that any member of our management team will not join our competitors or
form a competing business. If any dispute arises between our current or former 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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Competition for employees is intense,
and we may not be able to attract and retain the qualified and skilled employees needed to support our business.</I></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; text-indent: 0.5in">We believe our success
depends on the efforts and talent of our employees, including risk management, software engineering, financial and marketing personnel.
Our future success depends on our continued ability to attract, develop, motivate and retain qualified and skilled employees. Competition
for highly skilled technical, risk management and financial personnel is extremely intense. We may not be able to hire and retain
these personnel at compensation levels consistent with our existing compensation and salary structure. Some of the companies with
which we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of
employment.</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: 0.5in">In addition, we invest
significant time and expenses in training our employees, which increases their value to competitors who may seek to recruit them.
If we fail to retain our employees, we could incur significant expenses in hiring and training their replacements, and the quality
of our services and our ability to serve borrowers and lenders could diminish, resulting in a material adverse effect to 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"><B><I>Increases in labor costs in the PRC
may 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"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The economy in China
has experienced increases in inflation and labor costs in recent years. As a result, average wages in the PRC are expected to continue
to increase. In addition, we are required by PRC laws and regulations to pay various statutory employee benefits, including pension,
housing fund, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to designated government
agencies for the benefit of our employees. The relevant government agencies may examine whether an employer has made adequate payments
to the statutory employee benefits, and those employers who fail to make adequate payments may be subject to late payment fees,
fines and/or other penalties. We expect that our labor costs, including wages and employee benefits, will continue to increase.
Unless we are able to control our labor costs or pass on these increased labor costs to our users by increasing the fees of our
services, our financial condition and results of operations may be adversely affected.</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><I>We do not have any business insurance
coverage.</I></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; text-indent: 0.5in">Insurance companies
in China currently do not offer as extensive an array of insurance products as insurance companies in more developed economies.
Currently, we do not have any business liability or disruption insurance to cover our operations. We have determined that the costs
of insuring for these risks and the difficulties associated with acquiring such insurance on commercially reasonable terms make
it impractical for us to have such insurance. Any uninsured business disruptions may result in our incurring substantial costs
and the diversion of resources, which could have an adverse effect on our results of operations and financial condition.</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><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"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are vulnerable to
natural disasters and other calamities. Fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins,
war, riots, terrorist attacks or similar events may give rise to server interruptions, breakdowns, system failures, technology
service failures or internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware
as well as adversely affect our ability to provide products and services on our service.</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: 0.5in">Our business could
also be adversely affected by the effects of virus, flu and other diseases. Our business operations could be disrupted if any of
our employees is suspected of having virus, flu and other diseases, since it could require our employees to be quarantined and/or
our offices to be disinfected. In addition, our results of operations could be adversely affected to the extent that any of these
epidemics harms the Chinese economy in general.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>We may be subject
to the general risks underlying the agriculture industry in PRC market</I></B><FONT STYLE="font-size: 10pt"></FONT><B><I>.</I></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The agriculture industry
in the PRC market has been mature. Particularly, we are principally engaged in the fertilizer processing and distribution business
in the People&rsquo;s Republic of China. Therefore, we need to be cautious in selecting our business focus and expansion strategy,
and we should be constantly aware of the innovation risk, technology risk and market risk in the industries. If we fail to make
an accurate judgment of the current market, our performance can be severely impacted.</P>


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>We may be adversely
affected by global economic conditions.</I></B></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: 0.5in">Our ability to continue
to develop and grow our business, build proprietary distribution channels and generate revenues from product sales and royalty
payments may be adversely affected by global economic conditions in the future, including instability in credit markets, declining
consumer and business confidence, fluctuating commodity prices and interest rates, volatile exchange rates and other challenges
that could affect the global economy such as the changing financial regulatory environment. For example, our customers and licensees
may experience deterioration of their businesses, cash flow shortages or difficulties obtaining financing, which could adversely
affect the demand for our technologies, products and services. In addition, our earnings may be adversely affected by fluctuations
in the price of certain commodities, such as grains, milk, meat, biofuels and biomaterials. If commodity prices are negatively
impacted, the value of our products could be directly and negatively impacted. Additionally, growers&rsquo; incomes have historically
been negatively affected by commodity prices. As a result, fluctuations in commodity prices could have an impact on growers&rsquo;
purchasing decisions and negatively affect their ability and decisions to purchase our seeds or products that incorporate our proprietary
technology. We cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely
impact our business.</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: 0.5in"><B><I>Changes in laws and regulations
to which we are subject, or to which we may become subject in the future, may materially increase our costs of operation, decrease
our operating revenues and disrupt our business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 17.55pt 0pt 48.25pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Laws and
regulatory standards and procedures that impact our business are continuously changing. Respond<FONT STYLE="font-family: Times New Roman, Times, Serif">ing
to these changes and meeting existing and new requirements may be costly and burdensome. Changes in laws and regulations may occur
that could:</FONT></P>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in; text-align: justify; padding-right: 0"></TD><TD STYLE="width: 0.25in; text-align: justify; padding-right: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify; padding-right: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">impair
                                         or eliminate our ability to source technology and develop our products, including validating
                                         our products through field trials and passing biosafety evaluations&#894;</FONT></TD></TR></TABLE>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in; text-align: justify; padding-right: 0"></TD><TD STYLE="width: 0.25in; text-align: justify; padding-right: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify; padding-right: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">increase
                                         our compliance and other costs of doing business through increases in the cost to protect
                                         our intellectual property, including know-how, trade secrets and regulatory data, or increases
                                         in the cost to obtain the necessary regulatory approvals to commercialize and market
                                         the products we develop directly or jointly&#894;</FONT></TD></TR></TABLE>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in; text-align: justify; padding-right: 0"></TD><TD STYLE="width: 0.25in; text-align: justify; padding-right: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify; padding-right: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">require
                                         significant product redesign or redevelopment&#894;</FONT></TD></TR></TABLE>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in; text-align: justify; padding-right: 0"></TD><TD STYLE="width: 0.25in; text-align: justify; padding-right: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify; padding-right: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">render
                                         our seed traits and technology and products that incorporate them less profitable or
                                         less attractive compared to competing products&#894;</FONT></TD></TR></TABLE>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in; text-align: justify; padding-right: 0"></TD><TD STYLE="width: 0.25in; text-align: justify; padding-right: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify; padding-right: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">reduce
                                         the amount of revenues we receive from government grants, licenses or other royalties&#894;
                                         and</FONT></TD></TR></TABLE>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&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">
<TD STYLE="width: 0.5in; text-align: justify; padding-right: 0"></TD><TD STYLE="width: 0.25in; text-align: justify; padding-right: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify; padding-right: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">discourage
                                         us and other collaborators from offering, and end markets from purchasing, products that
                                         incorporate our seed traits and technology.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Any
of these events could have a material adverse effect on our business, results of operations and financial condition. Legislation
and</FONT> jurisprudence on intellectual property in the key markets where we seek protection, primarily in China, is evolving
and changes in laws could affect our ability to obtain or maintain intellectual property protection for our products. Any changes
to these existing laws and regulations may materially increase our costs, decrease our revenues and disrupt our business.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>The overall agricultural
industry is susceptible to commodity price changes and we, along with our food manufacturing customers and grower customers, are
exposed to market risks from changes in commodity prices.</I></B></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: 0.5in">Changes in the prices
of certain commodity products could result in higher overall cost along the agricultural supply chain, which may negatively affect
our ability to commercialize our products We will be susceptible to changes in costs in the agricultural industry as a result of
factors beyond our control, such as general economic conditions, seasonal fluctuations, weather conditions, demand, food safety
concerns, product recalls and government regulations. As a result, we may not be able to anticipate or react to changing costs
by adjusting our practices, which could cause our operating results to deteriorate.</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: 0in"><B><I>Our operations
are subject to various health and environmental risks associated with our use, handling and disposal of potentially toxic materials.</I></B></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: 0.5in">We are subject to numerous
federal, state, local and foreign environmental, health and safety laws and regulations, including those governing laboratory procedures,
the handling, use, storage, treatment, manufacture and disposal of wastes, discharge of pollutants into the environment and human
health and safety matters.</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: 0.5in"><FONT STYLE="color: #222222">Although
there are no hazardous substances in the raw materials used by us that will affect and damage the company's employees, factory,
other property and the environment. The safety of raw materials is also one of the requirements when applying for the fertilizer
registration certificate. </FONT>We cannot completely eliminate the risk of contamination or discharge and any resultant injury
from these materials. If these risks were to materialize, we could be subject to fines, liability, reputational harm or otherwise
adverse effects on our business. We may be sued for any injury or contamination that results from our use or the use by third parties
of these materials, or may otherwise be required to remedy the contamination, and our liability may exceed any insurance coverage
and our total assets Furthermore, compliance with environmental, health and safety laws and regulations may be expensive and may
impair our Research &amp;Development efforts. If we fail to comply with these requirements, we could incur substantial costs and
liabilities, including civil or criminal fines and penalties, clean-up costs or capital expenditures for control equipment or operational
changes necessary to achieve and maintain compliance In addition, we cannot predict the impact on our business of new or amended
environmental, health and safety laws or regulations or any changes in the way existing and future laws and regulations are interpreted
and enforced. These current or future laws and regulations may impair our research, development or production efforts.</P>



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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in; text-align: justify"><B><I>Failure to maintain or enhance our brands
or image could have a material and adverse effect on 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: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We believe our brands
are associated with a well-recognized, integrated fertilizers company in the local markets that it operates, with consistent high-quality
products end customers in China. Our brands are integral to our sales and marketing efforts. Our continued success in maintaining
and enhancing our brand and image depends to a large extent on our ability to satisfy customer needs by further developing and
maintaining quality of services across our operations, as well as our ability to respond to competitive pressures. If we are unable
to satisfy customer needs or if our public image or reputation were otherwise diminished, our business transactions with our customers
may decline, which could in turn adversely affect our results of operations.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in; text-align: justify"><B><I>Any failure to protect our trademarks
and other intellectual property rights could have a negative impact on our business.</I></B></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: 0.5in">We believe our intellectual
property rights are critical to our success. Any unauthorized use of our intellectual property rights could harm our competitive
advantages and business. Historically, China has not protected intellectual property rights to the same extent as the United States,
and infringement of intellectual property rights continues to pose a serious risk of doing business in China. Monitoring and preventing
unauthorized use is difficult. The measures we take to protect our intellectual property rights may not be adequate. Furthermore,
the application of laws governing intellectual property rights in China and abroad is uncertain and evolving, and could involve
substantial risks to us. If we are unable to adequately protect our brand, trademarks and other intellectual property rights, we
may lose these rights and our business may suffer materially.</P>

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

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

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<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-indent: 0in"><B><I>Increases in labor costs in the PRC
may adversely affect our business and our profitability.</I></B></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: 0.5in">China&rsquo;s economy
has experienced increases in labor costs in recent years. China&rsquo;s overall economy and the average wage in China are expected
to continue to grow. The average wage level for our employees has also increased in recent years. We expect that our labor costs,
including wages and employee benefits, will continue to increase. Unless we are able to pass on these increased labor costs to
our customers by increasing prices for our products or services, our profitability and results of operations may be materially
and adversely affected.</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: 0.5in">In addition, we have
been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees and paying various
statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance
and childbearing insurance to designated government agencies for the benefit of our employees. Pursuant to the PRC Labor Contract
Law, or the Labor Contract Law, that became effective in January 2008 and its implementing rules that became effective in September
2008 and its amendments that became effective in July 2013, employers are subject to stricter requirements in terms of signing
labor contracts, minimum wages, paying remuneration, determining the term of employees&rsquo; probation and unilaterally terminating
labor contracts. In the event that we decide to terminate some of our employees or otherwise change our employment or labor practices,
the Labor Contract Law and its implementation rules may limit our ability to effect those changes in a desirable or cost-effective
manner, which could adversely affect our business and results of operations. Besides, pursuant to the Labor Contract Law and its
amendments, dispatched employees are intended to be a supplementary form of employment and the fundamental form should be direct
employment by enterprises and organizations that require employees. Further, it is expressly stated in the Interim Provisions on
Labor Dispatch that became effective on March 1, 2014 that the number of seconded employees an employer uses may not exceed 10%
of its total labor force and the employer has a two-year transition period to comply with such requirement. Our VIE and its consolidated
subsidiaries and consolidated branch offices had used seconded employees for their principal business activities. The transition
period ended on February 29, 2016, and those PRC subsidiaries have taken steps to decrease the number of seconded employees. If
the relevant PRC subsidiaries are deemed to have violated the limitation on the use of seconded employees under the relevant labor
laws and regulations, we may be subject to fines and incur other costs to make required changes to our current employment practices.</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: 0.5in">As the interpretation
and implementation of labor-related laws and regulations are still evolving, we cannot assure you that our employment practice
does not and will not violate labor-related laws and regulations in China, which may subject us to labor disputes or government
investigations. If we are deemed to have violated relevant labor laws and regulations, we could be required to provide additional
compensation to our employees and 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; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><I><U>Risks Related to Our Corporate
Structure and Doing Business in the PRC</U></I></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If the PRC government deems that
any of our contractual arrangements, do not comply with PRC regulatory restrictions on foreign investment in the relevant industries,
or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties
or be forced to relinquish our interests in those operations.</I></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; text-indent: 0.5in">Foreign ownership of internet-based businesses,
such as distribution of online information, is subject to restrictions under current PRC laws and regulations. For example, foreign
investors are not allowed to own more than 50% of the equity interests in a value-added telecommunication service provider (except
e-commerce) and any such foreign investor must have experience in providing value-added telecommunications services overseas and
maintain a good track record in accordance with the Guidance Catalog of Industries for Foreign Investment promulgated in 2007,
as amended in 2011 and in 2015, respectively, and other applicable 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; text-indent: 0.5in">It is uncertain whether
any new PRC laws, rules or regulations relating to variable interest entity structures will be adopted or if adopted, what they
would provide. In particular, in January 2015, the Ministry of Commerce, or MOC, published a discussion draft of the proposed
Foreign Investment Law for public review and comments. Among other things, the draft Foreign Investment Law expands the definition
of foreign investment and introduces the principle of &ldquo;actual control&rdquo; in determining whether a company is considered
a foreign-invested enterprise, or an FIE. Under the draft Foreign Investment Law, variable interest entities would also be deemed
as FIEs, if they are ultimately &ldquo;controlled&rdquo; by foreign investors, and be subject to restrictions on foreign investments.
However, the draft law has not taken a position on what actions will be taken with respect to the existing companies with the
&ldquo;variable interest entity&rdquo; structure, whether or not these companies are controlled by Chinese parties. It is uncertain
when the draft would be signed into law and whether the final version would have any substantial changes from the draft. Substantial
uncertainties exist with respect to the enactment timetable, interpretation and implementation of draft PRC Foreign Investment
Law and how it may impact the viability of our current corporate structure, corporate governance and business operations&rdquo;
below. If the ownership structure, contractual arrangements and business of our company, are found to be in violation of any existing
or future PRC laws or regulations, or we fail to obtain or maintain any of the required permits or approvals, the relevant governmental
authorities would have broad discretion in dealing with such violation, including levying fines, confiscating our income, shutting
down our servers, discontinuing or placing restrictions or onerous conditions on our operations, requiring us to undergo a costly
and disruptive restructuring, restricting or prohibiting our use of proceeds from this offering to finance our business and operations
in China, and taking other regulatory or enforcement actions that could be harmful to our business. Any of these actions could
cause significant disruption to our business operations and severely damage our reputation, which would in turn 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; text-indent: 0in">&nbsp;</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>PRC regulations
relating to investments in offshore companies by PRC residents may subject our&nbsp;PRC-resident&nbsp;beneficial owners or our
PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries or limit our PRC subsidiaries&rsquo;
ability to increase their registered capital or distribute profits.</I></B></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: 0.5in">In July 2014, SAFE promulgated
the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents&rsquo; Offshore Investment and Financing
and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, which replaces the previous SAFE Circular 75. SAFE
Circular 37 requires PRC residents, including PRC individuals and PRC corporate entities, to register with SAFE or its local branches
in connection with their direct or indirect offshore investment activities. SAFE Circular 37 is applicable to our shareholders
who are PRC residents and may be applicable to any offshore acquisitions that we may make in the future.</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: 0.5in">Under SAFE Circular
37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore
special purpose vehicles, or SPVs, are required to register such investments with SAFE or its local branches. In addition, any
PRC resident who is a direct or indirect shareholder of an SPV, is required to update its registration with the local branch of
SAFE with respect to that SPV, to reflect any material change. Moreover, any subsidiary of such SPV in China is required to urge
the PRC resident shareholders to update their registration with the local branch of SAFE to reflect any material change. If any
PRC resident shareholder of such SPV fails to make the required registration or to update the registration, the subsidiary of such
SPV in China may be prohibited from distributing its profits or the proceeds from any capital reduction, share transfer or liquidation
to the SPV, and the SPV may also be prohibited from making additional capital contributions into its subsidiaries in China. In
February, 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct
Investment, or SAFE Notice 13. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments
and outbound direct investments, including those required under SAFE Circular 37, must be filed with qualified banks instead of
SAFE. Qualified banks should examine the applications and accept registrations under the supervision of SAFE. We have used our
best efforts to notify PRC residents or entities who directly or indirectly hold shares in our holding company and who are known
to us as being PRC residents to complete the foreign exchange registrations. However, we may not be informed of the identities
of all the PRC residents or entities holding direct or indirect interest in our company, nor can we compel our beneficial owners
to comply with SAFE registration requirements. We cannot assure you that all other shareholders or beneficial owners of ours who
are PRC residents or entities have complied with, and will in the future make, obtain or update any applicable registrations or
approvals required by, SAFE regulations. Failure by such shareholders or beneficial owners to comply with SAFE regulations, or
failure by us to amend the foreign exchange registrations of our PRC subsidiaries, could subject us to fines or legal sanctions,
restrict our overseas or cross-border investment activities, limit our PRC subsidiaries&rsquo; ability to make distributions or
pay dividends to us or affect our ownership structure, which could adversely affect our business and prospects.</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: 0.5in">Furthermore, as these
foreign exchange and outbound investment related regulations are relatively new and their interpretation and implementation has
been constantly evolving, it is unclear how these regulations, and any future regulation concerning offshore or cross-border investments
and transactions, will be interpreted, amended and implemented by the relevant government authorities. For example, we may be subject
to a more stringent review and approval process with respect to our foreign exchange activities, such as remittance of dividends
and foreign-currency-denominated borrowings, which may adversely affect our financial condition and results of operations. We cannot
assure you that we have complied or will be able to comply with all applicable foreign exchange and outbound investment related
regulations. In addition, if we decide to acquire a PRC domestic company, we cannot assure you that we or the owners of such company,
as the case may be, will be able to obtain the necessary approvals or complete the necessary filings and registrations required
by the foreign exchange regulations. This may restrict our ability to implement our acquisition strategy and could adversely affect
our business and prospects.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>Changes in the
policies of the PRC government could have a significant impact upon our ability to operate profitably in the PRC.&nbsp;</I></B></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: 0.5in">We conduct all of our
operations and all of our revenue is generated in the PRC. Accordingly, economic, political and legal developments in the PRC will
significantly affect our business, financial condition, results of operations and prospects. Policies of the PRC government can
have significant effects on economic conditions in the PRC and the ability of businesses to operate profitably. Our ability to
operate profitably in the PRC may be adversely affected by changes in policies by the PRC government, including changes in laws,
regulations or their interpretation, particularly those dealing with the Internet, including censorship and other restriction on
material which can be transmitted over the Internet, security, intellectual property, money laundering, taxation and other laws
that affect our ability to operate our website.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>Because our business
is dependent upon government policies that encourage a market-based economy, change in the political or economic climate in the
PRC may impair our ability to operate profitably, if at all.&nbsp;</I></B></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: 0.5in">Although the PRC government
has been pursuing a number of economic reform policies for more than two decades, the PRC government continues to exercise significant
control over economic growth in the PRC. Because of the nature of our business, we are dependent upon the PRC government pursuing
policies that encourage private ownership of businesses. Restrictions on private ownership of businesses would affect the securities
business in general and businesses using real estate service in particular. We cannot assure you that the PRC government will pursue
policies favoring a market-oriented economy or that existing policies will not be significantly altered, especially in the event
of a change in leadership, social or political disruption, or other circumstances affecting political, economic and social life
in the PRC.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>PRC laws and regulations
governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may impair
our ability to operate profitable.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There are substantial
uncertainties regarding the interpretation and application of PRC laws and regulations including, but not limited to, the laws
and regulations governing our business and the enforcement and performance of our arrangements with customers in certain circumstances.
The laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement
may involve substantial uncertainty. The effectiveness and interpretation of newly enacted laws or regulations, including amendments
to existing laws and regulations, may be delayed, and our business may be affected if we rely on laws and regulations which are
subsequently adopted or interpreted in a manner different from our understanding of these laws and regulations. New laws and regulations
that affect existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation
of existing or new PRC laws or regulations may have on our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>Because our business
is conducted in RMB and the price of our shares of common stock is quoted in United States dollars, changes in currency conversion
rates may affect the value of your investments.</I></B></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: 0.5in">Our business is conducted
in the PRC, our books and records are maintained in RMB, which is the currently of the PRC, and the financial statements that we
file with the SEC and provide to our shareholders are presented in United States dollars. Changes in the exchange rate between
the RMB and dollar affect the value of our assets and the results of our operations in United States dollars. The value of the
RMB against the United States dollar and other currencies may fluctuate and is affected by, among other things, changes in the
PRC&rsquo;s political and economic conditions and perceived changes in the economy of the PRC and the United States. Any significant
revaluation of the RMB may materially and adversely affect our cash flows, revenue and financial condition. Further, our shares
offered by this prospectus are offered in United States dollars, we will need to convert the net proceeds we receive into RMB in
order to use the funds for our business. Changes in the conversion rate between the United States dollar and the RMB will affect
that amount of proceeds we will have available for our business.<B>&nbsp;</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>Under the PRC Enterprise
Income Tax Law, or the EIT Law, we may be classified as a &ldquo;resident enterprise&rdquo; of China, which could result in unfavorable
tax consequences to us and our non-PRC shareholders.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The EIT Law and its
implementing rules provide that enterprises established outside of China whose &ldquo;de facto management bodies&rdquo; are located
in China are considered &ldquo;resident enterprises&rdquo; under PRC tax laws. The implementing rules promulgated under the EIT
Law define the term &ldquo;de facto management bodies&rdquo; as a management body which substantially manages, or has control over
the business, personnel, finance and assets of an enterprise. In April 2009, the State Administration of Taxation, or SAT, issued
a circular, known as Circular 82, which provides certain specific criteria for determining whether the &ldquo;de facto management
bodies&rdquo; of a PRC-controlled enterprise that is incorporated offshore is located in China. However, there are no further detailed
rules or precedents governing the procedures and specific criteria for determining &ldquo;de facto management body.&rdquo; Although
our board of directors and management are located in the PRC, it is unclear if the PRC tax authorities would determine that we
should be classified as a PRC &ldquo;resident enterprise.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we are deemed as
a PRC &ldquo;resident enterprise,&rdquo; we will be subject to PRC enterprise income tax on our worldwide income at a uniform
tax rate of 25%, although dividends distributed to us from our existing PRC subsidiary and any other PRC subsidiaries which we
may establish from time to time could be exempt from the PRC dividend withholding tax due to our PRC &ldquo;resident recipient&rdquo;
status. This could have a material and adverse effect on our overall effective tax rate, our income tax expenses and our net income.
Furthermore, dividends, if any, paid to our shareholders may be decreased as a result of the decrease in distributable profits.
In addition, if we were considered a PRC &ldquo;resident enterprise&rdquo;, any dividends we pay to our non-PRC investors, and
the gains realized from the transfer of our shares of common stock may be considered income derived from sources within the PRC
and be subject to PRC tax, at a rate of 10% in the case of non-PRC enterprises or 20% in the case of non-PRC individuals (in each
case, subject to the provisions of any applicable tax treaty). It is unclear whether holders of our shares of common stock would
be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are
treated as a PRC resident enterprise. This could have a material and adverse effect on the value of your investment in us and
the price of our shares of common stock.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>There are significant
uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our
PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the PRC EIT Law
and its implementation rules, the profits of a foreign invested enterprise generated through operations, which are distributed
to its immediate holding company outside the PRC, will be subject to a withholding tax rate of 10%. Pursuant to a special arrangement
between Hong Kong and the PRC, such rate may be reduced to 5% if a Hong Kong resident enterprise owns more than 25% of the equity
interest in the PRC company. Our PRC subsidiary is wholly-owned by our Hong Kong subsidiary. Moreover, under the Notice of the
State Administration of Taxation on Issues regarding the Administration of the Dividend Provision in Tax Treaties promulgated on
February 20, 2009, the tax payer needs to satisfy certain conditions to enjoy the benefits under a tax treaty. These beneficial
owner of the relevant dividends, and (2) the corporate shareholder to receive dividends from the PRC subsidiary must have continuously
met the direct ownership thresholds during the 12 consecutive months preceding the receipt of the dividends. Further, the State
Administration of Taxation promulgated the Notice on How to Understand and Recognize the &ldquo;Beneficial Owner&rdquo; in Tax
Treaties on October 27, 2009, which limits the &ldquo;beneficial owner&rdquo; to individuals, projects or other organizations normally
engaged in substantive operations, and sets forth certain detailed factors in determining the &ldquo;beneficial owner&rdquo; status.
In current practice, a Hong Kong enterprise must obtain a tax resident certificate from the relevant Hong Kong tax authority to
apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a
case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong
tax authority. As of the date of this prospectus, we have not commenced the application process for a Hong Kong tax resident certificate
from the relevant Hong Kong tax authority, and there is no assurance that we will be granted such a Hong Kong tax resident certificate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Even after we obtain
the Hong Kong tax resident certificate, we are required by applicable tax laws and regulations to file required forms and materials
with relevant PRC tax authorities to prove that we can enjoy 5% lower PRC withholding tax rate. We intends to obtain the required
materials and file with the relevant tax authorities when it plans to declare and pay dividends, but there is no assurance that
the PRC tax authorities will approve the 5% withholding tax rate.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>If we become directly
subject to the 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, stock price and reputation.</I></B></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: 0.5in">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 on financial and accounting irregularities and mistakes, 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 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 us, our business and our stock price. 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 our company. This situation will be costly and time consuming and distract
our management from developing our growth. If such allegations are not proven to be groundless, we and our business operations
will be severely affected and you could sustain a significant decline in the value of our stock.<B><I>&nbsp;</I></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>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.</I></B></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: 0.5in">We are regulated by
the SEC and 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 reports 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 China Securities Regulatory Commission, a PRC regulator that is responsible for 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 us, 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: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Changes in China&rsquo;s economic,
political or social conditions or government policies could have a material adverse effect on our business and results of operations.</I></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; text-indent: 0.5in">Substantially all of our operations are
located in China. Accordingly, our business, prospects, financial condition and results of operations may be influenced to a significant
degree by political, economic and social conditions in China generally and by continued economic growth in China as a whole.</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: 0.5in">The Chinese economy differs from the economies
of most developed countries in many respects, including the amount of government involvement, level of development, growth rate,
control of foreign exchange and allocation of resources. Although the Chinese government has implemented measures emphasizing the
utilization of market forces for economic reform, the reduction of state ownership of productive assets and the establishment of
improved corporate governance in business enterprises, a substantial portion of productive assets in China is still owned by the
government. In addition, the Chinese government continues to play a significant role in regulating industry development by imposing
industrial policies. The Chinese government also exercises significant control over China&rsquo;s economic growth through allocating
resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, and providing preferential
treatment to particular industries or companies.</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: 0.5in">While the Chinese economy has experienced
significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy.
The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some
of these measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition
and results of operations may be adversely affected by government control over capital investments or changes in tax regulations.
In addition, in the past the Chinese government has implemented certain measures, including interest rate increases, to control
the pace of economic growth. These measures may cause decreased economic activity in China, and since 2012, China&rsquo;s economic
growth has slowed down. Any prolonged slowdown in the Chinese economy may reduce the demand for our products and services and 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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Uncertainties in the interpretation
and enforcement of Chinese laws and regulations could limit the legal protections available to us.</I></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; text-indent: 0.5in">The PRC legal system is based on written
statutes and prior court decisions have limited value as precedents. Since these laws and regulations are relatively new and the
PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and
enforcement of these laws, regulations and rules involves uncertainties.</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: 0.5in">Although we have taken measures to comply
with the laws and regulations that are applicable to our business operations, including the regulatory principles raised by the
CBRC, and avoid conducting any activities that may be deemed as illegal fund-raising, forming capital pool or providing guarantee
to investors under the current applicable laws and regulations, the PRC government authority may promulgate new laws and regulations
regulating the direct lending service industry in the future. We cannot assure you that our practices would not be deemed to violate
any PRC laws or regulations relating to illegal fund-raising, forming capital pools or the provision of credit enhancement services.
Moreover, we cannot rule out the possibility that the PRC government will institute a license requirement covering our industry
at some point in the future. If such a licensing regime were introduced, we cannot assure you that we would be able to obtain any
newly required license in a timely manner, or at all, which could materially and adversely affect our business and impede our ability
to continue our operations.</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: 0.5in"></P>

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<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: 0.5in">From time to time, we may have to resort
to administrative and court proceedings to enforce our legal rights. However, since PRC administrative and court authorities have
significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the
outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems.
Furthermore, the PRC legal system is based in part on government policies and internal rules (some of which are not published in
a timely manner or at all) that may have retroactive effect. As a result, we may not be aware of our violation of these policies
and rules until sometime after the violation. Such uncertainties, including uncertainty over the scope and effect of our contractual,
property (including intellectual property) and procedural rights, could materially and adversely affect our business and impede
our ability to continue our operations.</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><I>Substantial uncertainties exist with
respect to the enactment timetable, interpretation and implementation of draft PRC Foreign Investment Law and how it may impact
the viability of our current corporate structure, corporate governance and business operations.</I></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; text-indent: 0.5in">The MOC published a discussion draft of
the proposed Foreign Investment Law in January 2015 aiming to, upon its enactment, replace the trio of existing laws regulating
foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture
Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations.
The draft Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime
in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign
and domestic investments. The MOC is currently soliciting comments on this draft and substantial uncertainties exist with respect
to its enactment timetable, interpretation and implementation. The draft Foreign Investment Law, if enacted as proposed, may materially
impact the viability of our current corporate structure, corporate governance and business operations in many aspects.</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: 0.5in">Among other things, the draft Foreign Investment
Law expands the definition of foreign investment and introduces the principle of &ldquo;actual control&rdquo; in determining whether
a company is considered a foreign-invested enterprise, or an FIE. The draft Foreign Investment Law specifically provides that entities
established in China but &ldquo;controlled&rdquo; by foreign investors will be treated as FIEs. Once an entity is considered to
be an FIE, it may be subject to the foreign investment restrictions or prohibitions set forth in a &ldquo;negative list&rdquo;
to be separately issued by the State Council later. If an FIE proposes to conduct business in an industry subject to foreign investment
&ldquo;restrictions&rdquo; in the &ldquo;negative list,&rdquo; the FIE must go through a market entry clearance by the MOC before
being established. If an FIE proposes to conduct business in an industry subject to foreign investment &ldquo;prohibitions&rdquo;
in the &ldquo;negative list,&rdquo; it must not engage in the business. However, an FIE that is subject to foreign investment &ldquo;restrictions,&rdquo;
upon market entry clearance, may apply in writing for being treated as a PRC domestic investment if it is ultimately &ldquo;controlled&rdquo;
by PRC government authorities and its affiliates and/or PRC citizens. In this connection, &ldquo;control&rdquo; is broadly defined
in the draft law to cover the following summarized categories: (i) holding 50% or more of the voting rights of the subject entity;
(ii) holding less than 50% of the voting rights of the subject entity but having the power to secure at least 50% of the seats
on the board or other equivalent decision making bodies, or having the voting power to exert material influence on the board, the
shareholders&rsquo; meeting or other equivalent decision making bodies; or (iii) having the power to exert decisive influence,
via contractual or trust arrangements, over the subject entity&rsquo;s operations, financial matters or other key aspects of business
operations. Once an entity is determined to be an FIE, it will be subject to the foreign investment restrictions or prohibitions
set forth in a &ldquo;negative list,&rdquo; to be separately issued by the State Council at a later date, if the FIE is engaged
in an industry listed in the negative list. Unless the underlying business of the FIE falls within the negative list, which calls
for market entry clearance by the MOC, prior approval from the government authorities as mandated by the existing foreign investment
legal regime would no longer be required for establishment of the FIE.</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: 0.5in">The &ldquo;variable interest entity&rdquo;
structure, or VIE structure, has been adopted by many PRC-based companies, including us, to obtain necessary licenses and permits
in the industries that are currently subject to foreign investment restrictions in China. Under the draft Foreign Investment Law,
variable interest entities that are controlled via contractual arrangement would also be deemed as FIEs, if they are ultimately
&ldquo;controlled&rdquo; by foreign investors. Therefore, for any companies with a VIE structure in an industry category that is
included in the &ldquo;negative list&rdquo; as restricted industry, the VIE structure may be deemed legitimate only if the ultimate
controlling person(s) is/are&nbsp;of PRC nationality (either PRC companies or PRC citizens). Conversely, if the actual controlling
person(s) is/are of foreign nationalities, then the variable interest entities will be treated as FIEs and any operation in the
industry category on the &ldquo;negative list&rdquo; without market entry clearance may be considered as illegal.</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: 0.5in">f the enacted version of the Foreign Investment
Law and the final &ldquo;negative list&rdquo; mandate further actions, such as MOC market entry clearance or certain restructuring
of our corporate structure and operations, to be completed by companies with existing VIE structure like us, there may be substantial
uncertainties as to whether we can complete these actions in a timely manner, or at all, and our business and financial condition
may be materially and adversely affected.</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: 0.5in">The draft Foreign Investment Law, if enacted
as proposed, may also materially impact our corporate governance practice and increase our compliance costs. For instance, the
draft Foreign Investment Law imposes stringent ad hoc and periodic information reporting requirements on foreign investors and
the applicable FIEs. Aside from an investment implementation report and an investment amendment report that are required for each
investment and alteration of investment specifics, an annual report is mandatory, and large foreign investors meeting certain criteria
are required to report on a quarterly basis. Any company found to be non-compliant with these information reporting obligations
may potentially be subject to fines and/or administrative or criminal liabilities, and the persons directly responsible may be
subject to criminal liabilities.</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>

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<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><I>We may be adversely affected by the
complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite
approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.</I></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; text-indent: 0.5in">The PRC government extensively regulates
the internet industry, including foreign ownership of, and the licensing and permit requirements pertaining to, companies in the
internet industry. These internet-related laws and regulations are relatively new and evolving, and their interpretation and enforcement
involve significant uncertainties. As a result, in certain circumstances it may be difficult to determine what actions or omissions
may be deemed to be in violation of applicable laws and regulations.</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: 0.5in">The evolving PRC regulatory system for
the internet industry may lead to the establishment of new regulatory agencies. For example, in May 2011, the State Council announced
the establishment of a new department, the State Internet Information Office (with the involvement of the State Council Information
Office, the MITT, and the Ministry of Public Security). The primary role of this new agency is to facilitate the policy-making
and legislative development in this field, to direct and coordinate with the relevant departments in connection with online content
administration and to deal with cross-ministry regulatory matters in relation to the internet industry.</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: 0.5in">The Circular on Strengthening the Administration
of Foreign Investment in and Operation of Value-added Telecommunications Business, issued by the MITT in July 2006, prohibits domestic
telecommunication service providers from leasing, transferring or selling telecommunications business operating licenses to any
foreign investor in any form, or providing any resources, sites or facilities to any foreign investor for their illegal operation
of a telecommunications business in China. According to this circular, either the holder of a value-added telecommunication services
operation permit or its shareholders must directly own the domain names and trademarks used by such license holders in their provision
of value-added telecommunication services. The circular also requires each license holder to have the necessary facilities, including
servers, for its approved business operations and to maintain such facilities in the regions covered by its license. If an ICP
License holder fails to comply with the requirements and also fails to remedy such non-compliance within a specified period of
time, the MITT or its local counterparts have the discretion to take administrative measures against such license holder, including
revoking its ICP License.</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: 0.5in">The interpretation and application of existing
PRC laws, regulations and policies and possible new laws, regulations or policies relating to the internet industry have created
substantial uncertainties regarding the legality of existing and future foreign investments in, and the businesses and activities
of, internet businesses in China, including our business. We cannot assure you that we have obtained all the permits or licenses
required for conducting our business in China or will be able to maintain our existing licenses or obtain new ones. 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 adverse effect on our business and results of operations.</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><I>PRC regulation of loans to and direct
investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent
us from using the proceeds of our offering to make loans to or make additional capital contributions to our PRC subsidiary, which
could materially and adversely affect our liquidity and our ability to fund and expand our business.</I></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; text-indent: 0.5in">Under PRC laws and
regulations, we are permitted to utilize the proceeds from our offering to fund our PRC subsidiary by making loans to or additional
capital contributions to our PRC subsidiary, subject to applicable government registration and approval requirements.</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: 0.5in">Any loans to our PRC subsidiary, which
are treated as foreign-invested enterprises under PRC laws, are subject to PRC regulations and foreign exchange loan registrations.
For example, loans by us to our PRC subsidiary to finance their activities cannot exceed statutory limits and must be registered
with the local counterpart of the State Administration of Foreign Exchange, or SAFE. The statutory limit for the total amount of
foreign debts of a foreign-invested company is the difference between the amount of total investment as approved by the MOC or
its local counterpart and the amount of registered capital of such foreign-invested company.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may also decide to finance our PRC subsidiary
by means of capital contributions. These capital contributions must be approved by the MOC or its local counterpart. On March 30,
2015, SAFE promulgated Circular 19, which expands a pilot reform of the administration of the settlement of the foreign exchange
capitals of foreign-invested enterprises nationwide. Circular 19 came into force and replaced both previous Circular 142 and Circular
36 on June 1, 2015. Circular 19 allows all foreign-invested enterprises established in the PRC to use their foreign exchange capitals
to make equity investment and removes certain other restrictions provided in Circular 142. However, Circular 19 continues to prohibit
foreign-invested enterprises from, among other things, using RMB fund converted from its foreign exchange capitals for expenditure
beyond its business scope, providing entrusted loans or repaying loans between non-financial enterprises. In addition, SAFE strengthened
its oversight of the flow and use of the RMB capital converted from foreign currency registered capital of a foreign-invested company.
The use of such RMB capital may not be altered without SAFE&rsquo;s approval, and such RMB capital may not in any case be used
to repay RMB loans if the proceeds of such loans have not been used. Violations of Circular 19 could result in severe monetary
or other penalties. These circulars may significantly limit our ability to use RMB converted from the cash provided by our offshore
financing activities to fund the establishment of new entities in China by our PRC subsidiary, to invest in or acquire any other
PRC companies through our PRC subsidiary, or to establish new variable interest entities in the PRC.</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: 0.5in"></P>

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<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: 0.5in">In light of the various
requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot
assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals
on a timely basis, if at all, with respect to future loans to our PRC subsidiary or future capital contributions by us to our
PRC subsidiary. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds we expect
to receive from our offering and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially
and adversely affect our liquidity and our ability to fund and expand our business.</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"><B><I>Failure to make adequate contributions
to various employee benefit 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"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are required under PRC laws and regulations
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 our employees up to a maximum amount specified by the local government from time to time at locations
where we operate our businesses. 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. We have not made adequate employee benefit
payments. We may be required to make up the contributions for these plans as well as to pay late fees and fines. If we are subject
to late fees or fines in relation to the underpaid employee benefits, our financial condition and results of operations may be
adversely affected.</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><I>The M&amp;A Rules and certain other
PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make
it more difficult for us to pursue growth through acquisitions in China.</I></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; text-indent: 0.5in">The Regulations on Mergers and Acquisitions
of Domestic Companies by Foreign Investors, or the M&amp;A Rules, adopted by six PRC regulatory agencies in August 2006 and amended
in 2009, and some other regulations and rules concerning mergers and acquisitions established additional procedures and requirements
that could make merger and acquisition activities by foreign investors more time consuming and complex, including requirements
in some instances that the MOC be notified in advance of any change-of-control transaction in which a foreign investor takes control
of a PRC domestic enterprise. Moreover, the Anti-Monopoly Law requires that the MOC shall be notified in advance of any concentration
of undertaking if certain thresholds are triggered. In addition, the security review rules issued by the MOC that became effective
in September 2011 specify that mergers and acquisitions by foreign investors that raise &ldquo;national defense and security&rdquo;
concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that
raise &ldquo;national security&rdquo; concerns are subject to strict review by the MOC, and the rules prohibit any activities attempting
to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement. In the
future, we may grow our business by acquiring complementary businesses. Complying with the requirements of the above-mentioned
regulations and other relevant rules to complete such transactions could be time consuming, and any required approval processes,
including obtaining approval from the MOC or its local counterparts may delay or inhibit our ability to complete such transactions,
which could affect our ability to expand our business or maintain our market share.</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><I>Any failure to comply with PRC regulations
regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines
and other legal or administrative sanctions.</I></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; text-indent: 0.5in">In February 2012, SAFE promulgated the
Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan
of Overseas Publicly-Listed Company, replacing earlier rules promulgated in March 2007. Pursuant to these rules, PRC citizens and
non-PRC citizens who reside in China for a continuous period of not less than one year who participate in any stock incentive plan
of an overseas publicly listed company, subject to a few exceptions, are required to register with SAFE through a domestic qualified
agent, which could be the PRC subsidiary of such overseas listed company, and complete certain other procedures. In addition, an
overseas entrusted institution must be retained to handle matters in connection with the exercise or sale of stock options and
the purchase or sale of shares and interests. We and our executive officers and other employees who are PRC citizens or who have
resided in the PRC for a continuous period of not less than one year and who have been granted options or other awards are subject
to these regulations. Failure to complete the SAFE registrations may subject them to fines and legal sanctions and may also limit
our ability to contribute additional capital into our PRC subsidiary and limit our PRC subsidiary&rsquo; ability to distribute
dividends to us. We also face regulatory uncertainties that could restrict our ability to adopt additional incentive plans for
our directors, executive officers and employees under PRC law.</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><I>Regulatory bodies of the United States
may be limited in their ability to conduct investigations or inspections of our operations in China.</I></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; text-indent: 0.5in">From time to time, the Company may receive
requests from certain U.S. agencies to investigate or inspect the Company&rsquo;s operations, or to otherwise provide information.
While the Company will be compliant with these requests from these regulators, there is no guarantee that such requests will be
honored by those entities who provide services to us or with whom we associate, especially as those entities are located in China.
Furthermore, an on-site inspection of our facilities by any of these regulators may be limited or entirely prohibited. Such inspections,
though permitted by the Company and its affiliates, are subject to the capricious nature of Chinese enforcers, and may therefore
be impossible to facilitate.</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>

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<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"><FONT STYLE="background-color: white"><B><I>The
laws and regulations governing the online consumer finance industry in China are evolving rapidly. If any of our business practices
is deemed to violate any PRC laws or regulations, or if our arrangements with financing partners are adjusted, we may have to change
our business model, and our business, financial condition and results of operations would be materially and adversely affected.</I></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; text-indent: 0.5in">On December 1, 2017, the Internet Finance
Rectification Office and the Online Lending Rectification Office jointly issued the Notice on Regulating and Rectifying &ldquo;Cash
Loan&rdquo; Business, or Circular 141, outlining general requirements on the &ldquo;cash loan&rdquo; business conducted by network
microcredit companies, banking financial institutions and online lending information intermediaries. Circular 141 specifies the
features of &ldquo;cash loans&rdquo; as not relying on consumption scenarios, with no specified use of loan proceeds, no qualification
requirement on customers and unsecured etc. Circular 141 sets forth several general requirements with respect to &ldquo;cash loan&rdquo;
business, including, without limitation: (i) no organizations or individuals may conduct the lending business without obtaining
approvals for the lending business; (ii) the aggregated borrowing costs of borrowers charged by institutions in the forms of interest
and various fees should be annualized and subject to the limit on interest rate of private lending set forth in the Private Lending
Judicial Interpretations issued by the Supreme People&rsquo;s Court; (iii) all relevant institutions shall follow the &ldquo;know-your-customer&rdquo;
principle and prudentially assess and determine the borrower&rsquo;s eligibility, credit limit and cooling-off period, etc. Loans
to any borrower without income sources are prohibited; and (iv) all relevant institutions shall enhance the internal risk control
and prudentially use the &ldquo;data-driven&rdquo; risk management model. In additions, Circular 141 emphasizes several requirements
on the online lending information intermediaries. For instance, such intermediaries are prohibited from facilitating any loans
to students or other persons without repayment source or repayment capacity, or loans with no designated use of proceeds. Also,
such intermediaries are not permitted to deduct interest, handling fee, management fee or deposit from the principal of loans provided
to the borrowers in advance. Any violation of Circular 141 may result in penalties, including but not limited to suspension of
operation, orders to make rectification, condemnation, disapproval of recordation, revocation of license, order to cease business
operation, and criminal liabilities.</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: 0.5in">Given that the loans we select qualified
car dealerships borrowers based on their historical sales volume generated through credit card transactions using UnionPay&rsquo;s
system and our loans are based on real consumption scenarios with specified use, we believe they should not be deemed as &ldquo;cash
loans&rdquo; under Circular&nbsp;141, and thus our microfinancing business is not subject to the regulation of Circular&nbsp;141.</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: 0.5in">However, as the Circular&nbsp;141 has been
issued fairly recently and the laws and regulations governing the online consumer finance industry in China are evolving rapidly,
there are substantial uncertainties regarding the interpretation and application of the regulations. Accordingly, we cannot rule
out the possibility that the PRC regulatory authorities may take a view that is contrary to ours and view the microfinancing business
as &ldquo;cash loans.&rdquo; Therefore, in the event that the loans are deemed as &ldquo;cash loans&rdquo; under the Circular&nbsp;141,
we may have to significantly change our business model, which would 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: center; text-indent: 0in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B><I><U>Risks Relating
to this Offering</U></I></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Our common stock has limited public
trading market</I></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; text-indent: 0.5in">There is a limited established public trading
marketing for our common stock and there can be no assurance that one will ever develop. Market liquidity will depend on the perception
of our operating business and any steps that our management might take to bring us to the awareness of investors. There can be
no assurance given that there will be any awareness generated. Consequently, investors may not be able to liquidate their investment
or liquidate it at a price that reflects the value of the business. As a result holders of our securities may not find purchasers
for our securities should they to sell securities held by them. Consequently, our securities should be purchased only by investors
having no need for liquidity in their investment and who can hold our securities for an indefinite period of 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"><B><I>We are not likely to pay dividends
in the foreseeable future.</I></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; text-indent: 0.5in">We currently intend to retain any future
earnings for use in the operation and expansion of our business. Accordingly, we do not expect to pay any dividends in the foreseeable
future, but will review this policy as circumstances dictate.</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><I>Our common stock may be subject now
and in the future to the SEC&rsquo;s &ldquo;Penny Stock&rdquo;</I></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; text-indent: 0.5in">We may be subject now and in the future
to the SEC&rsquo;s &ldquo;penny stock&rdquo; rules if our shares of common stock sell below $5.00 per share. Penny stocks generally
are equity securities with a price of less than $5.00. The penny stock rules require broker-dealers to deliver a standardized risk
disclosure document prepared by the SEC which provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson, and monthly account statements showing the market value of each penny
stock held in the customer&rsquo;s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information
must be given to the customer orally or in writing prior to completing the transaction and must be given to the customer in writing
before or with the customer&rsquo;s confirmation.</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: 0.5in">In addition, the penny stock rules require
that prior to a transaction; the broker dealer must make a special written determination that the penny stock is a suitable investment
for the purchaser and receive the purchaser&rsquo;s written agreement to the transaction. The penny stock rules are burdensome
and may reduce purchases of any offerings and reduce the trading activity for shares of our common stock. As long as our shares
of common stock are subject to the penny stock rules, the holders of such shares of common stock may find it more difficult to
sell their securities.</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>

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<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><I>The offering price for our shares
of common stock may not be indicative of prices that will prevail in the trading market and such market prices may be volatile.</I></B></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: 0.5in">The offering price
for our shares of common stock will be determined by negotiations between us and the underwriter, and does not bear any relationship
to our earnings, book value or any other indicia of value. We cannot assure you that the market price of our shares of common stock
will not decline significantly below the offering price. The financial markets in the United States and other countries have experienced
significant price and volume fluctuations in the last few years. Volatility in the price of our shares of common stock may be caused
by factors outside of our control and may be unrelated or disproportionate to changes in our results of operations.</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><I>You will experience immediate and
substantial dilution in the net tangible book value of our shares of common stock purchased.</I></B></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: 0.5in">The offering price
of our shares of common stock is substantially higher than the net tangible book value per share of our common stock. Consequently,
when you purchase our shares of common stock in the offering and upon completion of the offering, you will incur immediate dilution
of US$  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, based on an assumed offering price of US$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;. In addition, you may experience further dilution to the extent that
additional shares of common stock are issued upon exercise of outstanding warrants or options we may grant from time to time.<B><I>&nbsp;</I></B><I>&nbsp;</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"><B><I>We do not intend to pay dividends
for the foreseeable future.</I></B></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: 0.5in">We currently intend
to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any
dividends in the foreseeable future. As a result, you may only receive a return on your investment in our shares of common stock
if the market price of our shares of common stock increases.</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><I>If securities or industry analysts
do not publish research or reports about our business, or if the publish a negative report regarding our shares of common stock,
the price of our shares of common stock and trading volume could decline.</I></B></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: 0.5in">The trading market
for our shares of common stock may depend in part on the research and reports that industry or securities analysts publish about
us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the
price of our shares of common stock would likely decline. If one or more of these analysts cease coverage of our company or fail
to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our shares
of common stock and the trading volume to decline.</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><I>The market price of our shares of
common stock may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares
at or above the offering price.</I></B></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: 0.5in">The offering price
for our shares of common stock will be determined through negotiations between the underwriter and us and may vary from the market
price of our shares of common stock following our offering. If you purchase our shares of common stock in this offering, you may
not be able to resell those shares at or above the offering price. The market price of our shares of common stock may fluctuate
significantly in response to numerous factors, many of which are beyond our control, including:</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">&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; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal">actual
                                         or anticipated fluctuations in our revenue and other operating results;</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>&nbsp;</I></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; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal">the
                                         financial projections we may provide to the public, any changes in these projections
                                         or our failure to meet these projections;</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal">&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; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal">actions
                                         of securities analysts who initiate or maintain coverage of us, changes in financial
                                         estimates by any securities analysts who follow our company, or our failure to meet these
                                         estimates or the expectations of investors;</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal">&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; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal">announcements
                                         by us or our competitors of significant products or features, technical innovations,
                                         acquisitions, strategic partnerships, joint ventures, or capital commitments;</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal">&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; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal">price
                                         and volume fluctuations in the overall stock market, including as a result of trends
                                         in the economy as a whole;</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.75pt"><FONT STYLE="font-weight: normal; font-style: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.75pt"><I></I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.75pt"><FONT STYLE="font-weight: normal; font-style: normal">&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; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal">lawsuits
                                         threatened or filed against us; and</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal">&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; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal">other
                                         events or factors, including those resulting from war or incidents of terrorism, or responses
                                         to these events.</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.75pt"><FONT STYLE="font-weight: normal; font-style: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, the stock
markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity
securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating
performance of those companies. In the past, stockholders have filed securities class action litigation following periods of market
volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources
and the attention of management from our business, and adversely affect our business.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>Our management
has broad discretion to determine how to use the funds raised in the offering and may use them in ways that may not enhance our
results of operations or the price 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: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We anticipate that
we will use the net proceeds from this offering for working capital and other corporate purposes. Our management will have significant
discretion as to the use of the net proceeds to us from this offering and could spend the proceeds in ways that do not improve
our results of operations or enhance the market price of our shares of common stock.</P>

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


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<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"><B><A NAME="a_002a"></A>CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS</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; text-align: justify; text-indent: 0.5in"><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"><B>&nbsp;</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a_003"></A><B>USE OF PROCEEDS</B><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></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: justify; text-indent: 0.5in">We estimate that our
net proceeds from the sale of the shares of common stock that we are offering will be approximately $ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;assuming a public offering
price of $ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable
by us.</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; text-indent: 0.5in">We plan to use the
net proceeds of this offering for working capital needs, including devoting further resources to the below use of proceeds. which
may include investment in product development, sales and marketing activities, acquisition of other companies, technology infrastructure,
team development, capital expenditures, improvement of corporate facilities and other general and administrative matters. The foregoing
represents our current intentions based upon our present plans and business conditions to use and allocate the net proceeds of
this offering. Our management, however, will have significant flexibility and discretion to apply the net proceeds of this offering.
If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as described
in this prospectus.</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: justify; background-color: white; text-indent: 0.5in">We intend to use
the net proceeds of this offering as follows after we complete the remittance process, and we have ordered the specific uses of
proceeds in order of priority.</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"></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="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>&nbsp;</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Description of Use</B></P></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Minimum Offering</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Estimated Amount of Net Proceeds </B></P></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Maximum Offering</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Estimated Amount of Net Proceeds</B></P></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 77%">Construction of organic fertilizer plant</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">$</TD>
    <TD STYLE="width: 9%; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Construction of black goat food processing plant</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Technology research and development&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>General working capital&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Total</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">$</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">$</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD></TR>
</TABLE>


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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pending other uses, we intend to invest
the proceeds to us in investment-grade, interest-bearing securities such as money market funds, certificates of deposit, or direct
or guaranteed obligations of the U.S. government, or hold as cash. We cannot predict whether the proceeds invested will yield a
favorable return. Our management will have broad discretion in the application of the net proceeds we receive from this offering,
and investors will be relying on the judgment of our management regarding the application of the net proceeds.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In using the proceeds of this offering,
we are permitted under PRC laws and regulations as an offshore holding company to provide funding to our wholly foreign-owned subsidiary
in China only through loans or capital contributions and to our consolidated variable interest entity only through loans, subject
to the filings with government authorities and limit on the amount of capital contributions and loans. Subject to completion of
applicable government filing and registration requirements, we may extend inter-company loans to our wholly foreign-owned subsidiary
in China or make additional capital contributions to our wholly-foreign-owned subsidiary to fund its capital expenditures or working
capital. If we provide funding to our wholly foreign-owned subsidiary through loans, the total amount of such loans may not exceed
the difference between the entity&rsquo;s total investment as approved by the foreign investment authorities and its registered
capital. Such loans must be registered with SAFE or its local branches, which usually takes up to 20 working days to complete.
We cannot assure you that we will be able to obtain these government registrations or approvals on a timely basis, if at all.</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>

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    <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: center"><B><A NAME="a_004"></A>DIVIDEND POLICY</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; text-align: justify; text-indent: 0.5in">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">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_005"></A>CAPITALIZATION</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: justify; text-indent: 0.5in">The following
tables set forth our capitalization as of March 31, 2019 on a pro forma as adjusted basis giving effect to the sale
of the offering at an assumed public offering price of $
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share and to reflect the application
of the proceeds after deducting the estimated underwriter fees. You should read this table in conjunction with our financial
statements and related notes appearing elsewhere in this prospectus and &ldquo;Use of Proceeds&rdquo; and &ldquo;Description
of Securities.&rdquo;</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%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">On an actual basis;</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%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 24px; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On a pro forma basis to give effect to the sale of the offering at an assumed public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share</FONT></TD></TR>
</TABLE>


<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; text-align: center"><B>Minimum Offering (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common
stock)</B></P>



<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>U.S. Dollars</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"></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">As of<BR> March 31, 2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <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">Actual</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"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Pro forma<SUP>(1)</SUP></B></P></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">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="width: 76%; text-align: left; text-indent: -10pt; padding-left: 20pt">Current Assets</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">6,559,963</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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</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: 20pt">Intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,273,406</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: 20pt">Property</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,142,871</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; text-indent: -10pt; padding-left: 20pt">Other Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">533,386</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; text-indent: -10pt; padding-left: 10pt">Total Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,509,626</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>&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-indent: -10pt; padding-left: 10pt">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: 20pt">Current Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,145,492</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: 20pt">Other Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,602,640</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; text-indent: -10pt; padding-left: 20pt">Total Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,748,132</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>&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; text-indent: -10pt; padding-left: 10pt">Shareholder&rsquo;s 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: 20pt">Common stock (56,341,718 shares issued and outstanding with par value of $0.0001)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,634</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: 20pt"><FONT STYLE="font-size: 10pt">Additional paid-in capital<SUP>(2)</SUP></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,38,854</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: 20pt">Accumulated deficit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,330,741</TD><TD STYLE="text-align: left">)</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: 20pt">Accumulated other comprehensive income (loss)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">563,268</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: 20pt">Noncontrolling interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">124,479</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; text-indent: -10pt; padding-left: 20pt">Total shareholders&rsquo; equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,761,494</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; text-indent: -10pt; padding-left: 10pt">Total Liabilities and Shareholders&rsquo; Equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,509,626</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: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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

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

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 0; margin-bottom: 0"><DIV STYLE="font-size: 1pt; border-top: Black 1.5pt solid; width: 25%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="margin-top: 0; margin-bottom: 0"></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"></TD><TD STYLE="width: 0.5in">(1)</TD><TD STYLE="text-align: justify">Gives effect to the sale of the minimum offering at an assumed public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
per share and reflects the application of the proceeds after deducting the estimated underwriting discounts and our estimated offering
expense.</TD></TR></TABLE>

<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"></TD><TD STYLE="width: 0.5in">(2)</TD><TD STYLE="text-align: justify">In the minimum offering, pro forma
adjusted for additional paid in capital reflects the net proceeds of approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; we expect to receive, after deducting underwriting
discount of $390,000, underwriter non-accountable expense allowance of $90,000, up to $125,000 in other underwriting expenses,
and approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; in issuer offering expenses.</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>

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    <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"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Maximum Offering (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">shares
of common stock)</FONT>&nbsp;</B></P>

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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></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>&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">As of<BR> March 31, 2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <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">Actual</TD><TD STYLE="font-weight: bold; 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"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Pro forma<SUP>(1)</SUP></B></P></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">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="width: 76%; text-align: left; text-indent: -10pt; padding-left: 20pt">Current Assets</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">6,559,963</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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</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: 20pt">Intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,273,406</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: 20pt">Property</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,142,871</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: 20pt">Other Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">533,386</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; text-indent: -10pt; padding-left: 10pt">Total Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,509,626</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>&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-indent: -10pt; padding-left: 10pt">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: 20pt">Current Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,145,492</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: 20pt">Other Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,602,640</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; text-indent: -10pt; padding-left: 20pt">Total Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,748,132</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>&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; text-indent: -10pt; padding-left: 10pt">Shareholder&rsquo;s 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: 20pt">Common stock (56,341,718shares issued and outstanding with par value of $0.0001)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,634</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: 20pt"><FONT STYLE="font-size: 10pt">Additional paid-in capital<SUP>(2)</SUP></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,38,854</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: 20pt">Accumulated deficit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,330,741</TD><TD STYLE="text-align: left">)</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: 20pt">Accumulated other comprehensive income (loss)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">563,268</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: 20pt">Noncontrolling inteest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">124,479</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; text-indent: -10pt; padding-left: 20pt">Total shareholders&rsquo; equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,761,494</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; text-indent: -10pt; padding-left: 10pt">Total Liabilities and Shareholders&rsquo; Equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,509626</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: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

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

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 0; margin-bottom: 0"><DIV STYLE="font-size: 1pt; border-top: Black 1.5pt solid; width: 25%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="margin-top: 0; margin-bottom: 0"></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"></TD><TD STYLE="width: 0.5in">(1)</TD><TD STYLE="text-align: justify">Gives effect to the sale of the maximum offering, as applicable, at an assumed public
                                                           offering price of $ per share and reflects the application of the proceeds after deducting the estimated underwriting
                                                           discounts and our estimated offering expenses.</TD></TR></TABLE>

<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%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In the maximum offering, pro forma adjusted for additional paid in capital reflects the net proceeds of approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;we expect to receive, after deducting underwriting discount of $975,000, underwriter non-accountable expense allowance of $225,000, up to $125,000 in other underwriting expenses, and approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in issuer offering expenses.</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_005a"></A>DILUTION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">If you invest in our
shares of common stock, your interest will be diluted to the extent of the difference between the offering price per share and
the pro forma net tangible book value per share after the offering. Dilution results from the fact that the per share offering
price is substantially in excess of the book value per share attributable to the existing shareholders for our presently outstanding
shares of common stock. Our net tangible book value attributable to shareholders at March 31, 2019 was $ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or approximately $  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share. Net tangible book value per share as of March 31, 2019 represents the amount of total assets less intangible assets and
total liabilities, divided by the number of shares outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">If the minimum offering
is sold, we will have  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common stock outstanding upon completion of the offering. Our post offering pro forma net tangible
book value, which gives effect to receipt of the net proceeds from the offering and issuance of additional shares in the offering,
but does not take into consideration any other changes in our net tangible book value after March 31, 2019, will be approximately
$ or approximately $ per share. This would result in dilution to investors in this offering of approximately $  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share or approximately
% from the assumed offering price of $  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share. Net tangible book value per share would increase to the benefit of present shareholders
by $ per share attributable to the purchase of the shares by investors in this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">If the maximum offering
is sold, we will have  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common stock outstanding upon completion of the offering. Our post offering pro forma net tangible
book value, which gives effect to receipt of the net proceeds from the offering and issuance of additional shares in the offering,
but does not take into consideration any other changes in our net tangible book value after March 31, 2019, will be approximately
$  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or approximately $  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share. This would result in dilution to investors in this offering of approximately $  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share or approximately
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% from the assumed offering price of $ per share. Net tangible book value per share would increase to the benefit of present shareholders
by $  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share attributable to the purchase of the shares by investors in this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The following table
sets forth the estimated net tangible book value per share after the offering and the dilution to persons purchasing shares based
on the foregoing minimum and maximum offering assumptions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><FONT STYLE="font-size: 7pt">&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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Minimum</B></FONT><BR> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Offering&nbsp;<SUP>(1)</SUP></B></FONT></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>Maximum</B></FONT><BR> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Offering&nbsp;<SUP>(2)</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%">Assumed offering price per share</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Net tangible book value per share as of March 31, 2019</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</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">Increase in net tangible book value per share after this offering</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</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">Net tangible book value per share after the offering</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</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">Dilution per share to new investors</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><FONT STYLE="font-size: 7pt">&nbsp;</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: 4%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>(1)</SUP></FONT></TD>
    <TD STYLE="width: 96%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Assumes gross proceeds from offering of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ordinary Shares.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>(2)</SUP></FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Assumes gross proceeds from offering of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ordinary Shares.</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

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

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    <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: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a_006"></A><B>POST-OFFERING OWNERSHIP</B></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: 0.5in">The following chart
illustrates our pro forma proportionate ownership, upon completion of the offering under alternative minimum and maximum offering
assumptions, by present shareholders and investors in this offering, compared to the relative amounts paid by each. The charts
reflect payment by present shareholders as of the date the consideration was received and by investors in this offering at the
offering price without deduction of commissions or expenses. The charts further assume no changes in net tangible book value other
than those resulting from the offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&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">Shares&nbsp;Purchased</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">Total&nbsp;Consideration</TD><TD STYLE="font-weight: normal; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: normal; text-align: center"><B>Average&nbsp;Price</B></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: normal">&nbsp;</TD></TR>
<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">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">Percent</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">Percent</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">Per&nbsp;Share</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -10pt; padding-left: 10pt">MINIMUM OFFERING</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>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;&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;&nbsp;&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="width: 42%; text-align: left; text-indent: -10pt; padding-left: 20pt">Existing shareholders</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">56,341,953</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%">%<FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></TD>
    <TD STYLE="width: 1%; text-align: left"></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%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left"></TD><TD STYLE="width: 9%; text-align: right"></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: 30pt">New investors</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>&nbsp;</TD>
    <TD STYLE="text-align: left"></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>&nbsp;</TD>
    <TD STYLE="text-align: left"></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: 40pt">Total</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>&nbsp;</TD>
    <TD STYLE="text-align: left"></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>&nbsp;</TD>
    <TD STYLE="text-align: left"></TD><TD STYLE="text-align: right">&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&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">Shares&nbsp;Purchased</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">Total&nbsp;Consideration</TD><TD STYLE="font-weight: normal; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: normal; text-align: center"><B>Average&nbsp;Price</B></TD></TR>
<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">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">Percent</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">Percent</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">Per&nbsp;Share</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -10pt; padding-left: 10pt">MAXIMUM OFFERING</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>&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>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 43%; text-align: left; text-indent: -10pt; padding-left: 20pt">Existing shareholders</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">56,341,953</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%">%</TD>
    <TD STYLE="width: 1%; text-align: left"></TD><TD STYLE="width: 9%; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&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: 9%; text-align: right">&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></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 30pt">New investors</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>&nbsp;</TD>
    <TD STYLE="text-align: left"></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>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -10pt; padding-left: 40pt">Total</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>&nbsp;</TD>
    <TD STYLE="text-align: left"></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>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD></TR>
</TABLE>

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


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<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"><A NAME="a_007"></A>MANAGEMENT&rsquo;S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION<BR>
AND RESULTS OF OPERATIONS</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; text-indent: 0.5in"><I>The information set forth
in this section contains
certain &ldquo;forward-looking statements&rdquo;, including, among others (i) expected changes in our revenue and profitability,
(ii) prospective business opportunities and (iii) our strategy for financing our business. Forward-looking statements are statements
other than historical information or statements of current condition. Some forward-looking statements may be identified by use
of terms such as &ldquo;believes&rdquo;, &ldquo;anticipates&rdquo;, &ldquo;intends&rdquo; or &ldquo;expects&rdquo;. These forward-looking
statements relate to our plans, liquidity, ability to complete financing and purchase capital expenditures, growth of our business
including entering into future agreements with companies, and plans to successfully develop and obtain approval to market our product.
We have based these forward-looking statements largely on our current expectations and projections about future events and financial
trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Although we believe that
our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our
knowledge of our business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion
of forward-looking statements in this Annual Report should not be regarded as a representation by us or any other person that our
objectives or plans will be achieved.</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>We assume no obligation
to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting forward-looking
statements.</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Our revenues and results
of operations could differ materially from those projected in the forward-looking statements as a result of numerous factors, including,
but not limited to, the following: the risk of significant natural disaster, the inability of the our company to insure against
certain risks, inflationary and deflationary conditions and cycles, currency exchange rates, and changing government regulations
domestically and internationally affecting our products and businesses.</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>You should read the following
discussion and analysis in conjunction with the Financial Statements and Notes attached hereto, and the other financial data appearing
elsewhere in this Annual Report.</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>US Dollars are denoted herein
by &ldquo;USD&rdquo;, &ldquo;$&rdquo; and &ldquo;dollars&rdquo;.</I></P>

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We primarily engage
in the manufacturing and distribution of organic fertilizer and the sales of agricultural products in the PRC. Our organic fertilizer
products are sold under our brand names &ldquo;Zongbao,&rdquo; &ldquo;Fukang,&rdquo; and &ldquo;Muliang.&rdquo;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Through our patented
technology, we process crop straw (including corn, rice, wheat, cotton, and other crops) into high quality organic nutritious fertilizers
that are easily absorbed by crops in 3 hours. Straws are common agricultural by-product. In PRC, farmers usually remove the straw
stubble that are remains after grains by burning them in order to continue farming on the same land. These activities have resulted
in significant air pollution and damage the surface structure of the soil with loss of nutrients. We turn waste into treasure by
transforming the straws into organic fertilizer, which also effectively reduces air pollution. The straw organic fertilizer we
produce does not contain the heavy metals, antibiotics and harmful bacteria that are common in the traditional manure fertilizer.
Our fertilizers also provide optimum levels of primary plant nutrients which including multi-minerals, proteins and carbohydrates
that promote the healthiest soils capable of growing the healthy crops and vegetables. It can effectively reduce the use of chemical
fertilizers and pesticides as well as reduce the penetration of large chemical fertilizers and pesticides into the soil and thus
avoid water pollution. Therefore, our fertilizer can effectively improve fertility of soil, and the quality and safety of agricultural
products.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We generated our revenue
mainly from our organic fertilizers, which accounted for approximately 91.3% and 99.1% of our total revenue for the fiscal years
ended December 31, 2018 and 2017, respectively. We currently have two integrated factories in Weihai City, Shandong Province, PRC
to produce our organic fertilizers, which have been in operations since August 2015. We plan to improve the technology for our
existing straw organic fertilizer production lines in the following aspects: (i) adopt more advanced automatic control technology
for raw material feed to shorten the processing time of raw material, and (ii) manufacture powdered organic fertilizer instead
of granular organic fertilizer production in order to avoid the drying and cooling process, as such will increase our production
capacity.</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: 0.5in">With the focus of producing
organic fertilizers, we also engage in the business of selling agriculture food products including apples, and as sales agent for
other large agriculture companies in the PRC. In 2014, we rented 350 mu (about 57.66 acres) of mountainous land as apple orchard.
The sales of apples generated less than 1% of our total revenue for the fiscal years ended December 31, 2018 and 2017, respectively.
We expect to generate more revenues from the sales of apples as the apple orchards become more mature in the next few years.</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: 0.5in">In addition, we plan
to engage in the processing and distribution of black goat products business commencing the fourth quarter of 2019. We are currently
constructing a deep-processing slaughterhouse and processing plant which is expected to have the capacity of slaughtering 200,000
black goats per year in Chuxiong City, Yunnan Province, in China. Our black goat processing products including goat rib lets, goat
loin roast, goat loin chops, goat rack, goat leg, goat shoulder, goat leg shanks, ground goat, goat stew meat, whole goat, half
goat, lamb viscera, etc. We expect to start generate revenue from the black goat products in 2020.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our assets mainly include:
(i) 42,895 square meters of industrial land and 28,549 square meters of factory and office space located in Jinshan District, Shanghai
City, (ii) 22,511 square meters of industrial land and 10,373 square meters of plant area and straw organic fertilizer production
line in Weihai City, Shandong Province, and (iii) more than $2 million investment of land use right and the black goat slaughtering
and processing plant located in Shuangbai County, Chuxiong City, Yunnan Province, in China.</P>

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

<P STYLE="margin: 0pt 0; text-align: justify; text-indent: 0.5in">As the factory area in Jinshan District, Shanghai City is too close to the urban area to produce straw
organic fertilizer, some factory buildings, office buildings and spare land in Jinshan District, Shanghai City, have been leased
to third parties.</P>

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April
4, 2019, the Company&rsquo;s Board of Directors and majority shareholder approved a 5 to 1 reverse stock split of all of the issued
and outstanding shares of the Company&rsquo;s common stock, change of corporate name from &ldquo;Mullan Agritech Inc.&rdquo; to
&ldquo;Muliang Agritech Inc.&rdquo;, and creation of one hundred million (100,000,000) shares of Blank Check Preferred Stock.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 5,
2019, we filed a Certificate of Amendment to our Articles of Incorporation with the Secretary of State of the State of Nevada
to reflect the Name Change and to authorize the creation of Blank Check Preferred Stock. As a result, the capital stock of
the Company consists of 500,000,000 shares of common stock, $0.0001 par value, and 100,000,000 shares of blank check
preferred stock, $0.0001 par value. To the fullest extent permitted by the laws of the State of Nevada, as the same now
exists or may hereafter be amended or supplemented, the Board of Directors may fix and determine the designations, rights,
preferences or other variations of each class or series within each class of preferred stock of the Company. The Company may
issue the shares of stock for such consideration as may be fixed by the Board of Directors.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April
16, 2019, we filed a Certificate of Change to our Articles of Incorporation with the Secretary of State of the State of Nevada
to reflect the reverse stock split. Any fractional shares are to be rounded up to whole shares. The reverse stock split does not
affect the par value or the number of authorized shares of common stock of the Company.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The reverse
stock split and the name change took effect on May 7, 2019. In connection with the name change, our stock symbol changed to &ldquo;MULG&rdquo;.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our discussion
and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have
been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires
us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We evaluate,
on an on-going basis, our estimates for reasonableness as changes occur in our business environment. We base our estimates on experience,
the use of independent third-party specialists, and various other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Critical
accounting policies are defined as those that are reflective of significant judgments, estimates and uncertainties, and potentially
result in materially different results under different assumptions and conditions. We believe the following are our critical accounting
policies:</P>

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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0">Basis of Presentation</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our consolidated financial statements
are prepared in accordance with generally accepted accounting principles in the United States, or</P>

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">As reflected in the accompanying consolidated financial statements,
we had net accumulated deficit of $11,330,741 and $11,773,401 as of March 31, 2019 and December 31, 2018, respectively. Our cash
balances as of March 31, 2019 and December 31, 2018 were $6,317 and $12,778, respectively. We had current liability of $13,145,492
at March 31, 2019 which would be due within the next 12 months. In addition, we had a working capital deficit of $6,585,529 and
$7,119,118 at March 31, 2019 and December 31, 2018, respectively.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The company plans to continue its expansion and investments,
which will require continued improvements in revenue, net income, and cash flows.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The ability of the Company to continue as a going concern is
dependent on the Company&rsquo;s ability to further implement its business plan, raise additional capital, and generate more revenues.
The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue
as a going concern.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Muliang Agritech consolidates the following entities, including
wholly-owned subsidiaries, Muliang HK, Shanghai Mufeng, and its wholly controlled variable interest entities, Muliang Industry,
and Zhongbao, 60% controlled Agritech Development, 99% controlled Fukang, 65% controlled Zhonglian and 80% controlled Yunnan Muliang.
The 40% equity interest holder of Agritech Development, 1% equity interest holders in Fukang, 35% equity interest holders in Zhonglian,
and 20% interest in Yunnan Muliang are accounted as non-controlling interest in the Company&rsquo;s consolidated financial statements.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The variable interest entities consolidated for which the Company
is deemed the primary beneficiary. All significant inter-company accounts and transactions have been eliminated in consolidation.</P>

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

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

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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0">Use of Estimates</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In preparing financial statements
in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts
of revenues and expenses during the reporting period. Significant estimates, required by management, include the recoverability
of long-lived assets and the valuation of inventories. Actual results could differ from those estimates.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We state accounts receivable
at cost, net of allowance for doubtful accounts. Based on our past experience and current practice in the PRC, management provides
for an 100% allowance for doubtful accounts equivalent to those accounts that are not collected within one year, and 50% for receivables
outstanding for longer than six months. It is management&rsquo;s belief that the current bad debt allowance adequately reflects
an appropriate estimate based on management&rsquo;s judgment.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We value our fertilizer inventories
at the lower of cost, determined on a weighted average basis, and net realizable value (the estimated market price). Substantially
all inventory expenses, packaging and supplies are valued by the weighted average method.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Apple Orchard
consists primarily of rent for an apple farm, labor cost, fertilizers, apple seeds, apple seedlings and others. The costs to
purchase and cultivate apple trees and the expenditures related to labor and materials to plant apple trees until they become
commercially productive are capitalized, which require a 2-year period. The estimated production life for apple tree is 10
years, and the costs are amortized without a residual value. Expenses incurred maintaining apple trees during the growth
cycle until seedling apple trees or grafted varieties are fruited are capitalized into inventory and included in Work In
Process&mdash;apple orchard, a component of inventories.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Amortized expenses pertaining
to apple orchard are included in inventory costs for those apples to be sold and ultimately become a component of cost of goods
sold. Similar to other assets, the failure of our apple orchard to be serviceable over the entirety of their anticipated useful
lives or to be sold at their anticipated residual value will negatively impact our operating results.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">On January 1, 2018, the Company adopted ASC 606 using the modified
retrospective method. Results for the reporting period beginning after January 1, 2018 are presented under ASC 606, while prior
period amounts have not been adjusted and continue to be reported in accordance with the Company&rsquo;s historic accounting under
Topic 605.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Management has determined that the adoption of ASC 606 did not
impact the Company&rsquo;s previously reported financial statements in any prior period nor did it result in a cumulative effect
adjustment to opening retained earnings.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Revenue for sale of products is derived from contracts with
customers, which primarily include the sale of fertilizer products and environmental protection equipment. The Company&rsquo;s
sales arrangements do not contain variable consideration. The Company recognizes revenue at a point in time based on management&rsquo;s
evaluation of when performance obligations under the terms of a contract with the customer are satisfied and control of the products
has been transferred to the customer. For vast majority of the Company&rsquo;s product sales, the performance obligations and control
of the products transfer to the customer when products are delivered, and customer acceptance is made.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Pursuant to the guidance of ASC Topic 840, rent shall be&nbsp;reported
as income by lessors over the&nbsp;lease term&nbsp;as it becomes receivable. The Company currently leased part of the building
of the Shanghai new plant to third parties as warehouse. The Company recognizes building leasing revenue over the beneficial period
described by the agreement, as the revenue is realized or realizable and earned.&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The Company recognized rental income from leasing a portion
of its manufacturing facility located in Shanghai to third parties. For the three months ended March 31, 2019 and 2018, rental
income of $165,711 and $118,962 were recognized as other income.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 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; text-indent: 0.5in">The Company accounts for income
taxes under the provision of FASB ASC 740-10, which requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred
income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities
and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods
in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce
deferred tax assets to the amount expected to be realized.</P>

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In October 2016, the FASB issued ASU 2016-17, <I>&ldquo;Consolidation
(Topic 810): Interests Held through Related Parties That Are under Common Control&rdquo;</I>. These amendments change the evaluation
of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that
is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that
are under common control with the reporting entity. If a reporting entity satisfies the first characteristic of a primary beneficiary
(such that it is the single decision maker of a variable interest entity), the amendments require that reporting entity, in determining
whether it satisfies the second characteristic of a primary beneficiary, to include all of its direct variable interests in a variable
interest entity and, on a proportionate basis, its indirect variable interests in a variable interest entity held through related
parties, including related parties that are under common control with the reporting entity. The amendments in this ASU are effective
for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal
years. Early adoption is permitted, including adoption in an interim period. If an entity adopts the pending content that links
to this paragraph in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes
that interim period. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial
statements.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In February 2016, the FASB issued ASU 2016-02, &ldquo;<I>Leases
(Topic 842)</I>&rdquo;. ASU 2016-02 specifies the accounting for leases. For operating leases, ASU 2016-02 requires a lessee to
recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, on its balance
sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated
over the lease term, generally on a straight-line basis. In addition, this standard requires both lessees and lessors to disclose
certain key information about lease transactions. ASU 2016-02 is effective for publicly-traded companies for annual reporting periods,
and interim periods within those years, beginning after December 15, 2018. Lessees (for capital and operating leases) and lessors
(for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing
at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified
retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period
presented. Lessees may not apply a full retrospective transition approach.</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-indent: 0.5in; text-align: justify">In July 2018, the FASB issued ASU 2018-10, &ldquo;<I>Codification
Improvements to Topic 842, Leases</I>&rdquo;. The amendments in ASU 2018-10 affect narrow aspects of the guidance issued in the
amendments in ASU 2016-02 including those regarding residual value guarantees, rate implicit in the lease, lessee reassessment
of lease classification, lessor reassessment of lease term and purchase option, variable lease payments that depend on an index
or a rate, investment tax credits, lease term and purchase option, transition guidance for amounts previously recognized in business
combinations, certain transition adjustments, transition guidance for leases previously classified as capital leases under Topic
840, transition guidance for modifications to leases previously classified as direct financing or sales-type leases under Topic
840, transition guidance for sale and leaseback transactions, impairment of net investment in the lease, unguaranteed residual
asset, effect of initial direct costs on rate implicit in the lease, and failed sale and leaseback transactions. In July 2018,
the FASB issued ASU 2018-11, &ldquo;<I>Leases (Topic 842): Targeted Improvements</I>&rdquo;. The amendments in ASU 2018-11 affect
the guidance issued in ASU 2016-02, &ldquo;Leases (Topic 842)&rdquo;, which is not yet effective. The amendments provide entities
with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity
initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance
of retained earnings in the period of adoption. The amendments also provide lessors with a practical expedient to not separate
non-lease components from the associated lease component and, instead, to account for those components as a single component in
certain circumstances. In December 2018, the FASB issued ASU 2018-20, &ldquo;<I>Leases (Topic 842) &ndash; Narrow-Scope Improvements
for Lessors.</I>&rdquo; ASU 2018-20 allow lessors to make an accounting policy election not to evaluate whether sales taxes and
similar taxes imposed by a governmental authority on a specific lease revenue-producing transaction are the primary obligation
of the lessor as owner of the underlying leased asset. The amendments also require a lessor to exclude lessor costs paid directly
by a lessee to third parties on the lessor&rsquo;s behalf from variable payments and include lessor costs that are paid by the
lessor and reimbursed by the lessee in the measurement of variable lease revenue and the associated expense. In addition, the amendments
clarify that when lessors allocate variable payments to lease and non-lease components, they are required to follow the recognition
guidance in the new lease standard for the lease component and other applicable guidance, such as the new revenue standard, for
the non-lease component. For entities that early adopted Topic 842, the amendments are effective upon issuance of ASU 2018-10,
AUS 2018-11and ASU 2018-20, and the transition requirements are the same as those in Topic 842. For entities that have not adopted
Topic 842, the effective date and transition requirements will be the same as the effective date and transition requirements in
Topic 842.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In January 2017, the FASB issued ASU 2017-03, &ldquo;<I>Accounting
Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323)</I>&rdquo;. This pronouncement
amends the SEC&rsquo;s reporting requirements for public filers regarding new accounting pronouncements or existing pronouncements
that have not yet been adopted. Companies are to provide qualitative disclosures if they have not yet implemented an accounting
standards update. Companies should disclose if they are unable to estimate the impact of a specific pronouncement, and provide
disclosures including a description of the effect on accounting policies that the registrant expects to apply. These provisions
apply to all pronouncements that have not yet been implemented by registrants. There are additional provisions that relate to corrections
to several other prior FASB pronouncements. The Company has incorporated language into other recently issued accounting pronouncement
notes, where relevant for the corrections in FASB ASU 2017-03. The Company is implementing the updated SEC requirements on not
yet adopted accounting pronouncements with these consolidated financial statements.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In January 2017, the FASB issued ASU 2017-03, &ldquo;<I>Accounting
Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323)</I>&rdquo;. This pronouncement
amends the SEC&rsquo;s reporting requirements for public filers regarding new accounting pronouncements or existing pronouncements
that have not yet been adopted. Companies are to provide qualitative disclosures if they have not yet implemented an accounting
standards update. Companies should disclose if they are unable to estimate the impact of a specific pronouncement, and provide
disclosures including a description of the effect on accounting policies that the registrant expects to apply. These provisions
apply to all pronouncements that have not yet been implemented by registrants. There are additional provisions that relate to corrections
to several other prior FASB pronouncements. The Company has incorporated language into other recently issued accounting pronouncement
notes, where relevant for the corrections in FASB ASU 2017-03. The Company is implementing the updated SEC requirements on not
yet adopted accounting pronouncements with these consolidated financial statements.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In January 2017, the FASB issued ASU 2017-03, &ldquo;<I>Accounting
Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323)</I>&rdquo;. This pronouncement
amends the SEC&rsquo;s reporting requirements for public filers regarding new accounting pronouncements or existing pronouncements
that have not yet been adopted. Companies are to provide qualitative disclosures if they have not yet implemented an accounting
standards update. Companies should disclose if they are unable to estimate the impact of a specific pronouncement, and provide
disclosures including a description of the effect on accounting policies that the registrant expects to apply. These provisions
apply to all pronouncements that have not yet been implemented by registrants. There are additional provisions that relate to corrections
to several other prior FASB pronouncements. The Company has incorporated language into other recently issued accounting pronouncement
notes, where relevant for the corrections in FASB ASU 2017-03. The Company is implementing the updated SEC requirements on not
yet adopted accounting pronouncements with these consolidated financial statements.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In August 2017, the FASB issued guidance, which amends the existing
accounting standards for derivatives and hedging. The amendment improves the financial reporting of hedging relationships to better
represent the economic results of an entity&rsquo;s risk management activities in its financial statements and made certain targeted
improvements to simplify the application of the hedge accounting guidance in current U.S. GAAP.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In August 2018, the FASB issued ASU 2018-13, <I>&ldquo;Fair
Value Measurement (Topic 820), &ndash; Disclosure Framework &ndash; Changes to the Disclosure Requirements for Fair Value Measurement</I>,&rdquo;
which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst
or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. The amendments in this Update modify the disclosure
requirements on fair value measurements based on the concepts in FASB Concepts Statement, Conceptual Framework for Financial Reporting&mdash;Chapter
8: Notes to Financial Statements, including the consideration of costs and benefits. The amendments on changes in unrealized gains
and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements,
and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual
period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods
presented upon their effective date. The amendments are effective for all entities for fiscal years beginning after December 15,
2019, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the potential
impacts of ASU 2018-13 on its consolidated financial statements.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The Company believes that there were no other accounting standards
recently issued that had or are expected to have a material impact on our financial position or results of operations.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We are principally engaged in the organic fertilizer manufacture
and distribution business in the PRC, which account for 86% of our total revenue for the three months ended March 31, 2019.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Currently, almost all of our revenue is derived from powdered
organic fertilizer product, as it is easier to absorb for soil and plants, compared with the granular organic fertilizer.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are principally
engaged in the organic fertilizer manufacture and distribution business in the PRC, which account for 91% of our total revenue
of 2018.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Currently,
majority of our revenue is derived from powdered organic fertilizer product, as it is easier to absorb for soil and plants, compared
with the granular organic fertilizer.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the
year ended December 31, 2018, Management also started to develop the sales of agricultural products (food). Sales from agricultural
products (food) accounted for around 9% and 16% of our total sales for the year ended December 31, 2018 and for the three months ended March 31, 2019, respectively.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the
year ended December 31, 2018, we received capital contribution of approximately $2.7 million from our shareholder. We also generated
a significant net income instead of suffering a loss. All of which improved the Company&rsquo;s financial position significantly
as of December 31, 2018.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0"><I>Operation Result for the Years
Ended December 31, 2018 and 2017 and for the Three Months Ended March 31, 2019</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48.25pt"><I>&nbsp;</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 131.95pt 0pt 12.95pt; text-indent: 2.75in">&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; background-color: White">
    <TD STYLE="text-align: center"><B>&nbsp;</B></TD><TD STYLE="text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center"><B>&nbsp;</B></TD><TD STYLE="text-align: center"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>For
                                         the Three Months&nbsp;Ended</B></P>


</TD><TD STYLE="text-align: center"><B>&nbsp;</B></TD><TD STYLE="text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center"><B>&nbsp;</B></TD><TD COLSPAN="5" STYLE="text-align: center"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>For
                                         the Years</B></P>

</TD><TD STYLE="text-align: center"><B>&nbsp;</B></TD><TD STYLE="text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center"><B>&nbsp;</B></TD><TD STYLE="text-align: center"><B>&nbsp;</B></TD><TD STYLE="text-align: center"><B>&nbsp;</B></TD><TD STYLE="text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center"><B>&nbsp;</B></TD><TD STYLE="text-align: center"><B>&nbsp;</B></TD><TD STYLE="text-align: center"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; text-align: center"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>March&nbsp;31,</B></P>


</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD COLSPAN="5" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"></P>

 <P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>Ended December 31</B></P>

</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>


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


</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; text-align: center"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>2019</B></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>2018</B></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>2017</B></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B><B>Fluctuation</B></B></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; text-align: center"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>$</B></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>$</B></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>$</B></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"><B>&nbsp;</B></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>%</B></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,915,973</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">13,205,024</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">737,563</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">12,467,461</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">1,690</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">Cost of goods sold</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">309,395</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,660,026</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">591,236</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,068,790</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,196</TD><TD STYLE="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>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,225,368</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,544,998</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">146,327</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,398,671</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,689</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-weight: normal; font-style: normal">Operating expenses:</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><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">General and administrative expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">341,556</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,100,271</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,511,019</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(410,748</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: White">
    <TD STYLE="text-align: left">Selling expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">177,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">531,771</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">163,042</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">368,729</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">226</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Total operating expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">518,556</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,632,042</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,674,061</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(42,019</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-3</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Income (Loss) from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">367,936</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,912,956</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,527,734</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,440,690</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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal">Other
    income (expense):</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><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">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(94,596</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(421,054</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(508,818</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">87,764</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">Subsidy income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">146,560</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">756,197</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">756,197</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;N/A</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Rental income, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">122,960</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">228,208</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">228,208</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;N/A</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 (expense), net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">587</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(28,030</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,028</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(56,058</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;N/A</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">Total other income (expense)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">175,511</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">535,321</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(480,790</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,016,111</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-211</TD><TD STYLE="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 (Loss) before income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">543,447</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,448,277</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,008,524</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,456,801</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-321</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">97,860</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(25,542</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,334</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(51,876</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-197</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Net income (loss)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">445,587</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,473,819</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,034,858</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,508,677</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-320</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify">Total revenue increased from $1,188,020
for the three months ended March 31, 2018 to $2,225,368 for the three months ended March 31, 2019, which represented an increase
of $1,037,348, or approximately 87.32%. The significant increase in revenue was mainly due to a larger demand for our organic fertilizer
products from large scale agricultural companies and farmer professional cooperatives for the three months ended March 31, 2019.
We have developed more customers, such as Huizhou Sijilv Agricultural Products Co., Ltd., Jilin Jijie Farmers&rsquo; Professional
Union, and Guangzhou Lvxing Organic Agricultural Products Co., Ltd., who are buying a large quantity of our products. We are continuing
to obtain more stable customers in 2019.</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; text-indent: 0.5in; text-align: justify">Our high-quality agriculture food
products sales also increased significantly for the three months ended March 31, 2019 and it was expected to continue to increase
throughout the 2019.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Total revenue
increased from $737,563 for the year ended December 31, 2017 to $13,205,024 for the year ended December 31, 2018, which represented
an increase of $12,467,461, or approximately 1,690%. The significant increase in revenue was mainly due to a larger demand for
our organic fertilizer products from large scale agricultural companies and farmer professional cooperatives for the year ended
December 31, 2018. We have developed more customers, such as Huizhou Sijilv Agricultural Products Co., Ltd., Jilin Jijie Farmers&rsquo;
Professional Union, and Guangzhou Lvxing Organic Agricultural Products Co., Ltd., who are buying a large quantity of our products.
We are continuing to obtain more stable customers in 2019.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We also
started to sell high quality agriculture food products for the year ended December 31, 2018 and expect to increase the sales of
this business segment significantly in the near future.</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; text-align: justify"><I>Cost of sales</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify">Cost of sales for increased from
$682,779 for the three months ended March 31, 2018 to $1,338,876 for the three months ended March 31, 2019, which represented an
increase of approximately $656,097, or 96.09%. The significant increase in cost of sales was in line with the significant increase
in our revenue from fertilizer sales and agriculture product sales for the same period.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Cost of sales
for organic fertilizer increased from $591,236 for the year ended December 31, 2017 to $7,660,026 for the year ended December 31,
2018, which represented an increase of approximately $7,068,790, or 12 times. The significant increase in cost of sales was in
line with the significant increase in our revenue from fertilizer sales and agriculture product sales for the same period.</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>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Gross Profit (Loss)</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify">The gross profit for organic fertilizer
increased significantly from $505,241 for the three months ended March 31, 2018 to gross profit of $891,036 for the three months
ended March 31, 2019. The gross margin increased from 43% for the three months ended March 31, 2018 to 47% for the three months
ended March 31, 2019. The gross margin of around 45% represents our normal operation result of sales to final customers. The significant
increase in gross margin was mainly due to the advantage from economies of scale for our organic fertilizer production.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify">The agriculture food products sales
incurred a slight gross loss of $4,545 for the three months ended March 31, 2019. We expected to generate gross profit with the
increase of sales scale in 2019.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The gross
profit for organic fertilizer increased significantly from $146,327 for the year ended December 31, 2017 to gross profit of $5,476,778
for the year ended December 31, 2018. The gross margin increased from 20% for the year ended December 31, 2017 to 45% for the year
ended December 31, 2018. The gross margin of 45% represents our normal operation result of sales to final customers. The significant
increase in gross margin was mainly due to a small quantity of depreciation for some idle equipment was recorded as the cost of
goods sold for the year ended December 31, 2017. We turned to selling powdered organic fertilizer instead of granular organic fertilizer
for the year ended December 31, 2018, as powdered organic fertilizer has a higher gross margin than granular organic fertilizer.</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; text-align: justify; text-indent: 0.5in">The gross
profit for agriculture food products was $1,148,203, and gross margin was approximately 6% for the year ended December 31, 2018.</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; text-align: justify"><I>Expenses</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We incurred
$177,000 in selling expenses for the three months ended March 31, 2019, compared to $23,317 for the three months ended March 31,
2018. We incurred $341,556 in general and administrative expenses for the three months ended March 31, 2019, compared to $392,510
for the three months ended March 31, 2018. Total selling, general and administrative expenses increased by $102,729, or 24.70%
for the three months ended March 31, 2019 as compared to the same period in 2018. Our selling expenses increased by $153,683 and
our general and administrative expenses decreased by $50,954. The increase in our selling expenses was mainly due to the increase
in salaries expense, travelling expense, etc., for selling department. The decrease in general and administrative expenses was
because some employees and resource in administrative department transferred to support the selling department for the three months
ended March 31, 2019.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We incurred
$531,771 in selling expenses for the year ended December 31, 2018, compared to $163,042 for the year ended December 31, 2017. We
incurred $1,100,271 in general and administrative expenses for the year ended December 31, 2018, compared to $1,511,019 for the
year ended December 31, 2017. Total selling, general and administrative expenses slightly decreased by $42,019, or 3% for the year
ended December 31, 2018 as compared to the same period in 2017. Our selling expenses increased by $368,729 and our general and
administrative expenses decreased by $410,748. The increase in our selling expenses was mainly due to the increase in salaries
expense, travelling expense, etc., for selling department. The decrease in general and administrative expenses was due to more
depreciation expense for idle building reclassified from general and administrative expense to rental cost as more idle building
was leased in 2018. However, we expect to increase our general and administrative expense for the next year, as our sales continued
to grow.</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; text-align: justify"><I>Interest income (expense)</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify">We incurred $94,596 in interest expense
during the three months ended March 31, 2019, compared with interest expense of $108,081 for the three months ended March 31, 2018.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We incurred $421,054
in interest expense during the year ended December 31, 2018, compared with interest expense of $508,818 for the year ended
December 31, 2017. The decrease in interest expense was mainly due to the repayment of $754,422 interest bearing bank loan
for the year ended December 31, 2018.</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; text-align: justify"><I>Net Income (loss)</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our net income was $445,587 for the
three months ended March 31, 2019, compared with net income of $47,871 for the three months ended March 31, 2018, representing
an increase of $397,716, or 830.81%.</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; text-indent: 0.5in; text-align: justify">The significant increase of $397,716 in
net income was mainly due to (1) the increase of 381,251 in gross profit; (2) the increase of $144,372 and $49,434 in government
grant and net rental income;(3)in spite of the increase of $12,729 in operating expense.</P>

<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">Our net
income was $4,473,819 for the year ended December 31, 2018, compared with net loss of $2,034,858 for the year ended December 31,
2017. We ceased to incur net losses and began to generate a profit because we increased our revenue and gross profit significantly
for the year ended December 31, 2018. We expanded our organic fertilizers business significantly, received a government subsidy
of $756,197 and generated more net rental income in 2018.</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>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Liquidity
is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and otherwise
operate on an ongoing basis. At March 31, 2019 and December 31, 2018 our working capital deficit was $6,585,529 and $7,119,118,
respectively. At December 31, 2018 and December 31, 2017 our working capital deficit was $7,119,118 and $10,708,100, respectively.
The significant improvement in our working capital deficit was reflecting greater increase in our current assets.</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; text-align: justify; text-indent: 0.5in">We have
financed our operations over the three months ended March 31, 2019 and 2018 primarily through proceeds from net cash inflow in
operation, and advances from related parties. And we have financed our operations over the years ended December 31, 2018 and 2017
primarily through proceeds from stock issuance and advances from related parties, and net cash inflow from operation.</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; text-align: justify; text-indent: 0.5in">The components of cash flows are discussed below:</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">&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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="6" STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>For the <BR>
Three Months Ended</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>March 31,</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>2019</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>2018</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 78%"><FONT STYLE="font-size: 10pt">Net cash provided by (used in) operating activities</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 10pt">917,171</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 10pt">995,260</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Net cash provided by (used in) investing activities</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(246,966</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(752,397</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Net cash used in financing activities</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(676,947</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(222,615</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 10pt">Exchange rate effect on cash</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">281</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">570</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 10pt">Net cash inflow (outflow)</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">(6,461</FONT></TD>
    <TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">20,818</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 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-weight: bold; text-align: center; padding-top: 0; padding-bottom: 0; padding-left: 0; text-indent: 0">&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">For the <BR>
Years Ended <BR>
December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center; padding-top: 0; padding-bottom: 0; padding-left: 0; text-indent: 0">&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; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left; padding-left: 0; padding-top: 0; padding-bottom: 0; text-indent: 0">Net cash provided by (used in) operating activities</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,823,544</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(1,715,588</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0; padding-top: 0; padding-bottom: 0; text-indent: 0">Net cash provided by (used in) investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,469,701</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(651</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: 0; padding-top: 0; padding-bottom: 0; text-indent: 0">Net cash provided by financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">548,337</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,708,331</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 0; padding-left: 0; padding-top: 0; text-indent: 0">Exchange rate effect on cash</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">101,547</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">(254</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: 0; padding-left: 0; padding-top: 0; text-indent: 0">Net cash inflow (outflow)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,727</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(8,162</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
</TABLE>

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

<P STYLE="margin: 0"><B><I>Cash provided by (used in) Operating Activities</I></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify">Net cash provided by operating activities
was $917,171 for the three months ended March 31, 2019. The net cash inflow consisted primarily of net income of $445,587 which
was adjusted by depreciation and amortization of $291,069. The Company had an increase of $38,911 in other payable, an increase
of $25,638 in our advance from customers, an increase of $145,941 in account payable, a decrease of $149,975 in prepayment, and
a decrease of $133,884 in account receivable, which were offset by an increase of $82,007 in other receivable, and an increase
of $329,687 in inventory.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify">Net cash provided by operating activities
was $995,260 for the three months ended March 31, 2018. The net cash inflow consisted primarily of net income of $47,871 which
was adjusted by depreciation and amortization of $223,491. The Company had an increase of $1,560,502 in other payable, an increase
of $540,560 in our advance from customers, an increase of $125,853 in account payable-related party, a decrease of $37,661 in inventory
which were offset by an increase of $568,309 in accounts, receivable, an increase of $377,045 in account receivable - related party,
and a decrease of $489,512 in account payable and accrued payable.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify">Net cash provided by operating
activities was $1,823,544 for the year ended December 31, 2018. Cash provided by operating activities for the year ended December
31, 2018 consisted primarily of net income of $4,473,819, which was adjusted by depreciation and amortization of $849,792, and
deferred income tax assets of $472,749. The Company had an increase of $270,176 in other payables, an increase of $447,207 in income
tax payable, which were offset by an increase of $3,893,269 in accounts receivable, and an increase of $58,409 in inventory.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify">Net cash used in operating activities
was $1,715,588 for the year ended December 31, 2017. Cash used in operating activities for the year ended December 31, 2017 consisted
primarily of net loss of $2,034,858 which was adjusted by depreciation and amortization of $649,976. The Company had a decrease
of $1,339,649 in account payable, an increase of $268,096 in prepaid expense, an increase of $46,077 in other receivable, which
were offset by an increase of $1,042,996 in other payable, a decrease of $ 143,989 in inventory.</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>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Cash provided by (used in) Investing Activities</I></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify">Net cash used in investing activities was $246,966
for the three months ended March 31, 2019. The activities consisted of purchase of biological assets of $18,508, and investment
in construction in progress of $228,458. Net cash used in investing activities was $2,469,701 for the year ended December 31, 2018.
The activities consisted of our investments of $1,514,586 in the construction for black goat slaughtering and processing project
in Yunnan province&#894; purchase of land use right of $936,238 for black goat slaughtering and processing project&#894; and additional
investment of apple orchard of $18,877.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify">Net cash used in investing activities was $752,397 for
the three months ended March 31, 2018. The activities primarily consisted of purchase of biological assets of $7,313, and investment
in construction in progress of $745,084. Net cash used in investing activities was $651 for the year ended December 31, 2017. The
investments included purchase of biological assets of $651.</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"><B><I>Cash Provided by Financing Activities</I></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify">Net cash used in financing activities was $676,947 for the three
months ended March 31, 2019. During the period, cash used in financing activities consisted of the repayment to related parties
of $724,803, repayment of short-term loan of $14,823, and offset by proceeds from third party individual of $62,679.</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; text-indent: 0.5in; text-align: justify">Net cash used in financing activities was $222,615 for the three
months ended March 31, 2018. During the period, cash used in financing activities consisted of the repayment to related parties
of $222,615, repayment of short-term loans of $786,584 offset by proceeds from notes payable of $786,584.</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; text-indent: 0.5in; text-align: justify">Net cash provided by financing activities was $548,337 for the
year ended December 31, 2018. During the period, cash provided by financing activities consisted of the proceeds from notes payable
of $1,812,718, proceeds of $2,599,413 in capital contribution from shareholders, offset by repayment of $3,109,372 to related parties
and repayment of $754,422 in short term loans.</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; text-indent: 0.5in; text-align: justify">Net cash provided by financing
activities was $1,708,331 for the year ended December 31, 2017. During the year, cash provided by financing activities included
capital borrowed from related parties of $2,191,534, and Proceeds from short-term loans of $547,580, which were partly offset by
repayments of $1,030,783 in our short-term loans.</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; text-indent: 0.5in; text-align: justify">We anticipate that our current
cash reserves plus cash from our operating activities will not be sufficient to meet our ongoing obligations and fund our operations
for the next twelve months. As a result, we will need to seek additional funding in the near future. We currently do not have a
specific plan of how we will obtain such funding&#894; however, we anticipate that additional funding will be in the form of equity
financing from the sale of shares of our common stock or renewing our current obligations with loaners. We may also seek to obtain
short-term loans from our directors or unrelated parties. Additional funding may not be available, or at acceptable terms, to us
at this time. If we are unable to obtain additional financing, we may be required to reduce the scope of our business development
activities, which could harm our business plans, financial condition and operating results.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Contractual Commitments</U></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; text-indent: 0.5in">The following table summarizes our contractual obligations at
March 31, 2019 and the effect those obligations are expected to have on our liquidity and cash flow in future periods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></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>&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="18" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Payments Due by Period as of March 31, 2019</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Less than</B></FONT><BR>
<FONT STYLE="font-size: 10pt"><B>1&nbsp;Year</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>1 &ndash; 3</B></FONT><BR>
<FONT STYLE="font-size: 10pt"><B>Years</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>3 &ndash; 5</B></FONT><BR>
<FONT STYLE="font-size: 10pt"><B>Years</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Over</B></FONT><BR>
<FONT STYLE="font-size: 10pt"><B>5&nbsp;Years</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Contractual obligations</FONT></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" 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: #CCEEFF">
    <TD STYLE="width: 40%"><FONT STYLE="font-size: 10pt">Loans</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">9,329,719</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">5,727,079</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">3,602,640</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 10pt">Others</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">9,329,719</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">5,727,079</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">3,602,640</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD></TR>
</TABLE>
<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>

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    <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: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table summarizes
our contractual obligations at December 31, 2018 and the effect those obligations are expected to have on our liquidity and cash
flow in future periods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; 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>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="18" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Payments Due by Period as of December 31, 2018</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-top: 0; text-align: center; margin-bottom: 0"><B>&nbsp;</B></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><B>Total</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-top: 0; margin-bottom: 0; text-align: center"><B>Less than</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>1 Year</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-top: 0; text-align: center; margin-bottom: 0"><B>1 &ndash; 3</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><B>Years</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-top: 0; text-align: center; margin-bottom: 0"><B>3 &ndash; 5</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><B>Years</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-top: 0; text-align: center; margin-bottom: 0"><B>Over 5</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><B>Years</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Contractual obligations</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><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: 40%; text-align: left"> Loans</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">9,058,493</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">5,603,950</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">3,454,543</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 0">Others</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">9,058,493</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">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,603,950</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,454,543</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">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><U>Commitments for Capital Expenditure
</U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</P>


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 18, 2018, the
Company signed a building construction agreement with Yunnan Junxiong Construction Engineering Co., Ltd. for the black goat slaughtering
and processing project located in Shuangbai County, Chuxiong City, Yunnan Province, PRC. The total contract price is $1,599,674
(RMB 11,000,000), all of which is unpaid as of December 31, 2018.</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; text-align: justify; text-indent: 0.5in">In addition,
the Company signed a set of construction agreements with third parties in 2018 for the black goat slaughtering and processing project,
including surveying and mapping contract, equipment installation contract, and electricity installation contract, etc. As of December
31, 2018, a total amount of $436,275 (RMB3,000,000) is unpaid</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Under SEC
regulations, we are required to disclose off-balance sheet arrangements that have or are reasonably likely to have a current or
future effect on our financial condition, such as changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to investors. An off-balance sheet arrangement means a transaction,
agreement or contractual arrangement to which any entity that is not consolidated with us is a party, under which we have:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&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; padding-right: 0"></TD><TD STYLE="width: 0.25in; padding-right: 0">&#9679;</TD><TD STYLE="padding-right: 0">any obligation under certain guarantee contracts,</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&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; padding-right: 0"></TD><TD STYLE="width: 0.25in; padding-right: 0">&#9679;</TD><TD STYLE="padding-right: 0; text-align: justify">any retained or contingent interest in assets transferred to an unconsolidated entity or similar
arrangement that serves as credit, liquidity or market risk support to that entity for such assets,</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&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; padding-right: 0"></TD><TD STYLE="width: 0.25in; padding-right: 0">&#9679;</TD><TD STYLE="padding-right: 0; text-align: justify">any obligation under a contract that would be accounted for as a derivative instrument, except
that it is both indexed to our stock and classified in shareholder equity in our statement of financial position, and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&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; padding-right: 0"></TD><TD STYLE="width: 0.25in; padding-right: 0">&#9679;</TD><TD STYLE="padding-right: 0; text-align: justify">any obligation arising out of a material variable interest held by us in an unconsolidated entity
that provides financing, liquidity, market risk or credit risk support to us, or engages in leasing, hedging or research and development
services with us.</TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We do not have any off-balance
sheet arrangements that we are required to disclose pursuant to these regulations. In the ordinary course of business, we enter
into operating lease commitments, purchase commitments and other contractual obligations. These transactions are recognized in
our financial statements in accordance with generally accepted accounting principles in the United States.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><A NAME="a_008"></A>BUSINESS</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><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; text-indent: 0.5in">We primarily engage
in the manufacturing and distribution of organic fertilizer and the sales of agricultural products in the PRC. Our organic fertilizer
products are sold under our brand names &ldquo;Zongbao,&rdquo; &ldquo;Fukang,&rdquo; and &ldquo;Muliang.&rdquo;</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; text-indent: 0.5in">Through our patented
technology, we process crop straw (including corn, rice, wheat, cotton, and other crops) into high quality organic nutritious fertilizers
that are easily absorbed by crops in 3 hours. Straws are common agricultural by-product. In PRC, farmers usually remove the straw
stubble that are remains after grains by burning them in order to continue farming on the same land. These activities have resulted
in significant air pollution and damage the surface structure of the soil with loss of nutrients. We turn waste into treasure by
transforming the straws into organic fertilizer, which also effectively reduces air pollution. The straw organic fertilizer we
produce does not contain the heavy metals, antibiotics and harmful bacteria that are common in the traditional manure fertilizer.
Our fertilizers also provide optimum levels of primary plant nutrients which including multi-minerals, proteins and carbohydrates
that promote the healthiest soils capable of growing the healthy crops and vegetables. It can effectively reduce the use of chemical
fertilizers and pesticides as well as reduce the penetration of large chemical fertilizers and pesticides into the soil and thus
avoid water pollution. Therefore, our fertilizer can effectively improve fertility of soil, and the quality and safety of agricultural
products.</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; text-indent: 0.5in">We generated our revenue
mainly from our organic fertilizers, which accounted for approximately 91.3% and 99.1% of our total revenue for the fiscal years
ended December 31, 2018 and 2017, respectively. We currently have two integrated factories in Weihai City, Shandong Province, PRC
to produce our organic fertilizers, which have been in operations since August 2015. We plan to improve the technology for our
existing straw organic fertilizer production lines in the following aspects: (i) adopt more advanced automatic control technology
for raw material feed to shorten the processing time of raw material, and (ii) manufacture powdered organic fertilizer instead
of granular organic fertilizer production in order to avoid the drying and cooling process, as such will increase our production
capacity.</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: 0.5in">With the focus of producing
organic fertilizers, we also engage in the business of selling agriculture food products including apples, and as sales agent for
other large agriculture companies in the PRC. In 2014, we rented 350 mu (about 57.66 acres) of mountainous land as apple orchard.
The sales of apples generated less than 1% of our total revenue for the fiscal years ended December 31, 2018 and 2017, respectively.
We expect to generate more revenues from the sales of apples as the apple orchards become more mature in the next few years.</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: 0.5in">In addition, we plan
to engage in the processing and distribution of black goat products business commencing the fourth quarter of 2019. We are currently
constructing a deep-processing slaughterhouse and processing plant which is expected to have the capacity of slaughtering 200,000
black goats per year in Chuxiong City, Yunnan Province, in China. Our black goat processing products including goat rib lets, goat
loin roast, goat loin chops, goat rack, goat leg, goat shoulder, goat leg shanks, ground goat, goat stew meat, whole goat, half
goat, lamb viscera, etc. We expect to start generate revenue from the black goat products in 2020.</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; text-indent: 0.5in">Our assets mainly include:
(i) 42,895 square meters of industrial land and 28,549 square meters of factory and office space located in Jinshan District, Shanghai
City, (ii) 22,511 square meters of industrial land and 10,373 square meters of plant area and straw organic fertilizer production
line in Weihai City, Shandong Province, and (iii) more than $2 million investment of land use right and the black goat slaughtering
and processing plant located in Shuangbai County, Chuxiong City, Yunnan Province, in China.</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; text-indent: 0.5in">As the factory area
in Jinshan District, Shanghai City is too close to the urban area to produce straw organic fertilizer, some factory buildings,
office buildings and spare land in Jinshan District, Shanghai City, have been leased to third parties.</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>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Corporation History and Structure</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following diagram
illustrates and assumes the completion of the Reorganization, including consolidation of our subsidiaries and VIEs:</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><IMG SRC="image_006.jpg" ALT="">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Shanghai Muliang Industry
Co., Ltd. (referred to herein as &ldquo;Muliang Industry&rdquo;) was incorporated in PRC on December 7, 2006 as a limited liability
company, owned 95% by Lirong Wang and 5% by Zongfang Wang. Muliang Industry through its own operations and its subsidiaries is
engaged in the business of developing, manufacturing, and selling organic fertilizers and bio-organic fertilizers for use in the
agricultural industry.</P>

<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; text-align: justify; text-indent: 0.5in">On May 27, 2013, Muliang
Industry entered into and consummated an equity purchase agreement whereby it acquired 99% of the outstanding equity of Weihai
Fukang Bio-Fertilizer Co., Ltd. (&ldquo;Fukang&rdquo;), a corporation organized under the laws of the People&rsquo;s Republic of
China. Fukang was incorporated in Weihai City, Shandong Province on January 6, 2009. Fukang is focused on the distribution of organic
fertilizers and the development of new bio-organic fertilizers. As a result of the completion of the transaction, Fukang became
a 99% owned subsidiary of Muliang Industry, with the remaining 1% equity interest owned by Mr. Hui Song.</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: 0.5in">On July 11, 2013, Muliang
Industry established a wholly owned subsidiary, Shanghai Muliang Agritech Development Co., Ltd. (&ldquo;Agritech Development&rdquo;)
in Shanghai, China. On November 6, 2013, Muliang Industry sold 40% of the outstanding equity of Agritech Development to Mr. Jianping
Zhang for consideration of approximately $65,000 or RMB 400,000. Agritech Development does not currently conduct any operations.</P>

<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; text-align: justify; text-indent: 0.5in">On July 17, 2013, Muliang
Industry entered into an equity purchase agreement to acquire 100% of the outstanding equity of Shanghai Zongbao Environmental
Construction Co., Ltd. (&ldquo;Zongbao&rdquo;) with consideration of approximately $3.2 million or RMB 20 million, effectively
becoming the wholly-owned subsidiary of Muliang Industry. Zongbao was incorporated in Shanghai on January 25, 2008. Zongbao processes
and distributes organic fertilizers. Zongbao wholly owns, Shanghai Zongbao Environmental Construction Co., Ltd. Cangzhou Branch
(&ldquo;Zongbao Cangzhou&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; text-indent: 0.5in">On August 21, 2014,
Muliang Agricultural Limited (&ldquo;Muliang HK&rdquo;) was incorporated in Hong Kong as an investment holding company.</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>

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<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: 0.5in">January 27, 2015, Muliang
HK incorporated a wholly foreign-owned enterprise, Shanghai Mufeng Investment Consulting Co., Ltd (&ldquo;Shanghai Mufeng&rdquo;),
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; text-indent: 0.5in">On July 8, 2015, Mullan
Agritech entered into certain stock purchase agreement with Muliang Agriculture, Inc., pursuant to which Mullan Agritech, for a
consideration of $5,000, acquired 100% interest in Muliang HK and its wholly-owned subsidiary Shanghai Mufeng. Both Muliang HK
and Shanghai Mufeng are controlled by the Company&rsquo;s sole officer and director, Lirong Wang.</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: 0.5in">On July 23, 2015, Muliang
Industry established a wholly owned subsidiary, Shanghai Muliang Agricultural Sales Co., Ltd. (&ldquo;Muliang Sales&rdquo;) in
Shanghai, 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; text-indent: 0.5in">On September 3, 2015,
Mullan Agritech effected a split of its outstanding common stock resulting in an aggregate of 150,525,000 shares outstanding of
which 120,000,000 were owned by Chenxi Shi the founder of Mullan Agritech and its sole officer and director. The remaining 30,525,000
were held by a total of 39 investors.</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: 0.5in">On January 11, 2016,
Mullan Agritech issued 129,475,000 shares of its common stock to Lirong Wang for an aggregate consideration of $64,737.50. On the
same date, Chenxi Shi, the sole officer and director of Mullan Agritech on that date, transferred 120,000,000 shares of common
stock of the Company held by him to Lirong Wang for $800 pursuant to a transfer agreement.</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: 0.5in">On February 10, 2016,
Shanghai Mufeng entered into a set of contractual agreements known as Variable Interest Entity (&ldquo;VIE&rdquo;) Agreements,
including (1) Exclusive Technical Consulting and Service Agreement, (2) Equity Pledge Agreement, and (3) Call Option Cooperation
Agreement, with Muliang Industry, and its Principal Shareholders. As a result of the Stock Purchase Agreement and the set of VIE
Agreements, Shanghai Muliang Industry Co., Ltd., along with its consolidated subsidiaries, became entities controlled by Mullan
Agritech whereby Mullan Agritech would derive all substantial economic benefit generated by Muliang Industry and its subsidiaries.</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: 0.5in">As a result, Mullan
Agritech has a direct wholly-owned subsidiary, Muliang HK and an indirectly wholly owned subsidiary Shanghai Mufeng. Through its
VIE Agreements, Mullan Agritech exercises control over Muliang Industry. Muliang Industry has two wholly-owned subsidiaries (Zongbao
and Muliang Sales), one 99% owned subsidiary (Fukang), one 60% owned subsidiary (Agritech Development), and one indirectly wholly
owned subsidiary Zongbao Cangzhou.</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: 0.5in">On June 6, 2016, Muliang
Industry established a wholly-owned subsidiary, namely, Muliang (Ningling) Bio-chemical Fertilizer Co. Ltd (&ldquo;Ningling Fertilizer&rdquo;)
in Henan Province, the central plain of China. Ningling Fertilizer is setup for a new production line of bio-chemical fertilizer
and has not begun any operation yet.</P>

<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; text-align: justify; text-indent: 0.5in">On July 7, 2016, Muliang
Industry established a subsidiary, namely, Zhonglian Huinong (Beijing) Technology Co., Ltd (&ldquo;Zhonglian&rdquo;) in Beijing
City, China. Muliang Industry owns 65% shares of Zhonglian, and a third-party company, Zhongrui Huilian (Beijing) Technology Co.,
Ltd owns the other 35% shares. Zhonglian is to develop and operate online agricultural products trading platform.</P>

<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; text-align: justify; text-indent: 0.5in">On October 27, 2016,
Muliang Industry established a subsidiary, namely, Yunnan Muliang Animal Husbandry Development Co., Ltd (&ldquo;Yunnan Muliang&rdquo;)
in Yunnan Province, China. Muliang Industry owns 55% shares of Yunnan Muliang, and a third-party company, Shuangbai County Development
Investment Co., Ltd. owns the other 45% shares. Yunnan Muliang was setup for the sales development of West 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; text-indent: 0.5in">On October 12, 2017,
the Company canceled the registration of Ningling with the administration authorities for Industry and Commerce. Ningling has historically
been reported as a component of our operations and incurred $33,323 to loss before income taxes provisions for the year ended December
31, 2017. The termination does not constitute a strategic shift that will have a major effect on our operations or financial results
and as such, the termination is not classified as discontinued operations in our consolidated financial statements.</P>

<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; text-align: justify; text-indent: 0.5in">Mullan Agritech, Muliang
HK, Shanghai Mufeng, Muliang Industry, Zongbao, Zongbao Cangzhou, Muliang Sales, Fukang, Agritech Development, Ningling Fertilizer,
Yunnan Muliang, and Zhonglian are referred to as subsidiaries the Company and its consolidated subsidiaries are collectively referred
to herein as the &ldquo;Company&rdquo;, &ldquo;we&rdquo; and &ldquo;us&rdquo;, unless specific reference is made to an entity.</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>

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<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: justify; text-indent: 0.5in">On April 4, 2019, the
Company&rsquo;s Board of Directors and majority shareholder approved a 5 to 1 reverse stock split of all of the issued and outstanding
shares of the Company&rsquo;s common stock, change of corporate name from &ldquo;Mullan Agritech Inc.&rdquo; to &ldquo;Muliang
Agritech Inc.&rdquo;, and creation of one hundred million (100,000,000) shares of Blank Check Preferred 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; text-align: justify; text-indent: 0.5in">On April 5, 2019, we
filed a Certificate of Amendment to our Articles of Incorporation with the Secretary of State of the State of Nevada to reflect
the Name Change and to authorize the creation of Blank Check Preferred Stock. As a result, the capital stock of the Company consists
of 500,000,000 shares of common stock, $0.0001 par value, and 100,000,000 shares of blank check preferred stock, $0.0001 par value.
To the fullest extent permitted by the laws of the State of Nevada, as the same now exists or may hereafter be amended or supplemented,
the Board of Directors may fix and determine the designations, rights, preferences or other variations of each class or series
within each class of preferred stock of the Company. The Company may issue the shares of stock for such consideration as may be
fixed by the Board of Directors.</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; text-indent: 0.5in">On April 16, 2019,
we filed a Certificate of Change to our Articles of Incorporation with the Secretary of State of the State of Nevada to reflect
the reverse stock split. Any fractional shares are to be rounded up to whole shares. The reverse stock split does not affect the
par value or the number of authorized shares of common stock of the Company.</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; text-indent: 0.5in">The reverse stock split
and the name change took effect on May 7, 2019. In connection with the name change, our stock symbol changed to &ldquo;MULG&rdquo;.</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: center">&nbsp;<B>Our Industry</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"><I><U>The Status and Market Demand of Straw Organic Fertilizer
Industry in China</U></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; text-indent: 0.5in">The straw in China
is in large quantity, has wide variety and broad distribution, and the annual output of straw of is more than 700 million tons.
The straw contains more than 3 million tons of nitrogen, more than 700,000 tons of phosphorus and nearly 7 million tons of potassium,
equivalent to more than a quarter of China&rsquo;s current fertilizer amount of use and equivalent to 300 million tons of standard
coal. However, nearly 100 million tons of straw are burned directly in the fields every year, which not only damages the beneficial
bacteria in the soil surface seriously, but also directly leads to severe air pollution and increases the greenhouse effect. With
the significant amount of production of straws in China, so long as part of the straw can be recycled every year, it will bring
huge sustainable recycling resources to the fertilizer industry. On November 25, 2015, the National Development and Reform Commission,
the Ministry of Finance, the Ministry of Agriculture and the Ministry of Environmental Protection jointly issued a notice, requiring
the utilization rate of straw to exceed 85% by 2020.</P>

<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: 0.5in">Market demand in China
for organic fertilizer is significant. In 2015, the China national sales volume of organic fertilizers was 90 million tons. According
to the current policy of encouraging less use of chemical fertilizer, improving the quality of agricultural products and restoring
land, it is estimated that the demand of organic fertilizers will increase to 180 million tons by 2020. At the same time, according
to a governmental advocate of increasing proportion of organic fertilizer to 50% of the total use of fertilizer, the demand in
China for organic fertilizer will reach more than 500 million tons.</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; text-indent: 0.5in">Straw organic fertilizer
industry is an industry of ecological production and recycling economic.</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><U>The Environmental Considerations of Promoting Straw Organic
Fertilizer</U></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; text-indent: 0.5in">Less Air Pollution.
Even if each county area builds a 100,000 tons of straw disposal factory, 100 counties in total can approximately reduce 10 million
tons of straw burning, reduce carbon dioxide emissions by 15 million tons, and reduce a large number of carbon monoxide, volatile
organic particles (PM), nitrogen oxides, benzene, polycyclic aromatic hydrocarbons and other harmful gases.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Less soil pollution,
more environment restoration. Straw is a circulating agricultural resource and the best organic fertilizer resource. Straw organic
fertilizer is also the main measure to convert wasteland, tidal flat and saline-alkali land into arable land, transform barren
land into medium-low yield field and upgrade medium-low yield field to high-quality fertile field.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Less water pollution.
The utilization rate of traditional chemical fertilizers is generally below 30%, and 70% of the dissolved chemical fertilizers
directly enter the underground water bodies and flow into rivers, resulting in eutrophication of water bodies. Increasing the application
of organic fertilizer is one of the important methods to reduce water pollution.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Our Products </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; text-align: justify; text-indent: 0.5in">We are committed to
ensuring the quality of agricultural products. We aim to provide high-quality and environmental friendly straw organic fertilizer
for our customers. Our organic fertilizers are the products of natural decomposition and are easy for plants to absorb and digest.
While we are primarily engaged in producing organic fertilizers, we also sell agriculture food products such as apples. We generated
our revenue mainly from our organic fertilizers, which constituted approximately 91.3% and 99.1% of our total revenue for the fiscal
years ended December 31, 2018 and 2017, respectively. The sales of apples generated less than 1% of our total revenue for the fiscal
years ended December 31, 2018 and 2017, respectively. In addition, we invested in the construction of a deep-processing slaughterhouse
which is expected to have the capacity of slaughtering 200,000 black goats per year in Chuxiong City, Yunnan Province, in China.
We expect to complete the construction in the fourth quarter of 2019 and start generating revenues from the black goat processing
products in 2010. The rest of our revenues for the last two fiscal years comes from the sales of agricultural foods as an intermediate
sales agent for large diary companies in China such as Bright Dairy &amp; Food Co., Ltd., and Mengniu Dairy industry Limited, etc.</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"><U>Organic Fertilizer</U></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; text-indent: 0.5in">Our fertilizer products
are sold under our brand names &ldquo;Zongbao,&rdquo; &ldquo;Fukang,&rdquo; and &ldquo;Muliang.&rdquo; There are seven lines of
our organic fertilizers including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Soil improvement and preparation fertilizer,
which including compound micros, probiotics that can supplement microorganisms and trace elements of soil. It can be used as bother
starter fertilizer and regular fertilizer; </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Root protection fertilizer, which is an
organic nutrient water-soluble fertilizer that can help the growth of crops&rsquo; roots;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 20pt">&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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Foliar nutrition fertilizer, which is
a biological growth promoter to help customers take care of the foliar of their plants;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 20pt">&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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Lower pesticide residue fertilizer, which
can help our customers reduce the usage of pesticide and enhance the resistance ability for plants;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 20pt">&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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Fruit special fertilizer which contains
enhanced nutrient availability to increase plant performance;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 20pt">&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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Fruit tree fertilizer that promotes healthy
roots and fruit growth and are ideal for all fruit trees and berries;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 20pt">&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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Corn and peanuts fertilizer that are specially
used for corns and peanuts. </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; text-align: justify; text-indent: 0.5in">Our organic fertilizer
contains all-purpose nutrition that can be used in the different stages of plan growth. It aims to increase soil fertility, improve
soil aggregate structure, provide nutrient absorption ability for crop, improve water maintain capacity and improve fertilizer
utilization, thus creating a sustaining environment and healthy soil.</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>

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<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"><U>Agricultural Products (Food)</U></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">While concentrating on the development
of organic fertilizers, we are actively developing the agricultural food 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"><I>Apple orchard </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; text-indent: 0.5in">In 2014, we leased
350 mu (about 57.66 acres) of mountainous land as apple farm and, for the purpose of using our own fertilizer to demonstrate the
advantages of our straw organic fertilizer. Selling of apples generated less than 1% of our total revenue for the fiscal years
ended December 31, 2018 and 2017, respectively. As the apple trees become more mature, we expect to generate more revenues from
the sales of apples in the future.</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"><I>Other Agricultural products</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; text-indent: 0.5in">We are also acting
as intermediate sales agent for the agricultural products from large agricultural products companies, such as Bright Dairy &amp;
Food Co., Ltd., Mengniu Dairy industry Limited, Haitian Flavoring &amp; Food Co., Ltd., and Hangzhou Wahaha Group, etc.</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"><U>Future Products</U></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>Black Goat Processing Products</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; text-indent: 0.5in">Currently we invested
in a goat slaughtering and processing factory located in Shuangbai County, Chuxiong City, Yunnan Province, PRC starting in 2018.
This factory is expected to be completed in the fourth quarter of 2019 with a capacity of deep processing of 200,000 black goats
per year. Our products will include goat rib lets, goat loin roast, goat loin chops, goat rack, goat leg, goat shoulder, goat leg
shanks, ground goat, goat stew meat, whole goat, half goat, and lamb viscera, etc. We expect to commence the sales of black goat
processing products and generate revenue in 2020.</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"><I>Forage Grass</I></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: 0.5in">We are exploring the
options to use forage grass as an alternative for traditional feed for live-stocks. We currently have several research and development
projects with schools and institutions. See &ldquo;Research and Development&rdquo; 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: center"><FONT STYLE="background-color: white"><B>Our
Technology and Manufacturing Process</B></FONT></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: justify; text-indent: 0.5in; background-color: white">We
utilize our patented technologies to process crop straws into organic fertilizer.</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">Crop
straws include the stems, roots, leaves, pods and vines of crops. The main ingredients are&nbsp;cellulose, hemicellulose and lignin,
as well as a small amount of minerals.&nbsp;Straw is a crude fiber material and&nbsp;is&nbsp;waxy and lignified, the&nbsp;fermentation&nbsp;cycle
is long&nbsp;for the&nbsp;straw&nbsp;to be processed into&nbsp;organic fertilizer. It takes 15 days to 60 days for the&nbsp;microbial
action.&nbsp;This&nbsp;is a&nbsp;common challenge&nbsp;for&nbsp;large-scale&nbsp;and&nbsp;timely manufacture&nbsp;of straw fertilizer.</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">The
crop straws will be processed into a nutrient-rich organic fertilizer in a closed container by low-pressure, medium-temperature
acid hydrolysis technology (with 9-to-13-kg pressure and at 150-to-180-degree temperature). The basic principle is as follows:</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; text-indent: 0.5in; background-color: white">We
utilize cellulose hydrolysis, hemicellulose hydrolysis and lignin hydrolysis methods to process cellulose, hemicellulose and lignin
into short-chain cellulose, polysaccharide, monosaccharide, oligomer, etc. Based on the demand for our organic fertilizers and
the controlled processing conditions, on average our methods produce a mix with a majority of short-chain cellulose, some polysaccharides
and a small amount of monosaccharides.</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; text-align: justify; text-indent: 0.5in; background-color: white">The
straws are stored in our warehouse after compacting the straws in a briquetting machine. The straw compacts are easy to transfer
and occupy less storage space. The straw compacts will be first crushed to 3 cm to 5 cm in length. The straws are then processed
in the hydrothermal degradation tank for 2 to 3 hours. We pump steam generated by a boiler into the hydrothermal degradation tank,
so that the temperature in the hydrothermal degradation tank is maintained between 150&deg;C and 180&deg;C and the pressure is
maintained at 0.9-1.3MPa. After 2-3 hours of thermal degradation, we release the pressure to 0.2~0.4MPa. By releasing the pressure,
the straws explode to the storage tank, resulting in a mechanical treatment of the explosion impinging stream, breaking the cellulose,
hemicellulose and lignin in the straw, breaking the hydrogen bonds, degrading fiber crystallization regions into an amorphous stage
and degrading macromolecules into micromolecules. After that, we add different auxiliary materials through an automatic batching
system to make different organic fertilizers suitably for difference crops. We then repeat a process of crushing, granulating,
cooling and screening before packaging the fertilizers into products.</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></B></P>

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<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 0.1pt 0pt 0; text-align: center"><B>Sales and Marketing</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1pt; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1pt; text-align: justify; text-indent: 35.9pt">We believe that
our sales services, combined with the quality and reputation of our products will help us retain and attract new customers.</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: 0.5in">We distribute and sell
our products to our end-customers through several different channels, including professional markets, sales department of our company
and distributors:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 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"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Professional Market</I>: we built long-term
cooperation relationship with private agricultural companies and agricultural cooperative associations for sales;</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>

<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"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Sales Department:</I> we have sixteen
sales representatives with our sales department that are professionally trained to efficiently promote and deliver products to
our customers;</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>

<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"><FONT STYLE="font-family: Times New Roman, Times, Serif">Third-party <I>Agent and Distributors</I>:
we utilize various third-party agents and distributors to sell and distribute our products; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 20pt">&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"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>E-commerce</I>:
                                         we are designing and setting up online trading platform to sell our products which is
                                         expected to be completed in 2020.</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; text-align: justify; text-indent: 0.5in">By using various channels
to sell and distribute our products to customers, we can directly serve our customers and end-customers by providing customer service
and support.</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: center"><B>Suppliers and 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"><U>Suppliers</U></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: 0.5in">Most of our suppliers
are local suppliers from Qingdao city, Shandong province. The main raw materials for organic fees include: (i) hydrolysed crop
straw, which are chemically decayed wheat straw, corn straw and other kinds of crop straw, accounting for about 54% of the total
raw materials; (ii) plant ash (Potassium carbonate, K<SUB>2</SUB>CO<SUB>3</SUB>), accounting for estimated 4% of the total raw
materials; and (iii) Humic acid, accounting for about 3% of the total raw materials. Other auxiliary materials include monoammonium
phosphate, urea, etc.</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: 0.5in">The following table
sets forth information as to each supplier that accounted for 10% or more of the Company&rsquo;s purchase for the years ended December
31, 2018 and 2017.</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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="14" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>For the year ended December 31,</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Suppliers</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2018</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2017</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Amount</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>%</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Amount</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>%</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 52%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3,651,430</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">43</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">%</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">B</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">212,453</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">46</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">C</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">49,578</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">11</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">D</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">840,657</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">%</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD>
    <TD>&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; text-indent: 0.5in">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Customers</U></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: 0.5in">Our customers are mainly
located in provinces of Guangdong, Jilin and Shandong.</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: 0.5in">The following table
sets forth information as to each customer that accounted for 10% or more of the Company&rsquo;s revenues for the years ended December
31, 2018 and 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="14" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>For the year ended December 31,</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Customers</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2018</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2017</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Amount</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>%</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Amount</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>%</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</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; background-color: #CCEEFF">
    <TD STYLE="width: 52%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">358,710</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">48</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">B</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">92,446</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><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">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">C</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2,096,121</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">16</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">%</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">D</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,952,652</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">15</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">%</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<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"><B>Our Growth Strategy</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; text-indent: 0.5in"><FONT STYLE="background-color: white">We
intend to build upon our proven ability to produce high-quality organic fertilizer and increase our presence and market share in
the agriculture industry. We have begun to implement the growth strategies described below and expect to continue to do so over
the several years following this offering. Although the net proceeds of this offering will be available to assist us to implement
our growth strategies, we cannot estimate the ultimate amount of capital needed to achieve our expected growth. We may need additional
capital to implement these strategies, particularly in the event we pursue acquisitions of complementary businesses or technologies.</FONT></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>Scale Up Production of Organic Fertilizer
and Accelerate Penetration in Local and Regional Markets </I></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: 0.5in">We plan to construct
a new organic fertilizer factory in Heilongjiang Province, China. We have entered into a strategic cooperation agreement with Suihua
City of Heilongjiang Province to produce a total of 1 million tons of organic fertilizer. We expect to produce 100,000 tons of
organic fertilizer in 2019 and the remaining within the next 5 years. In addition, we will establish warehouse and distribution
center in Heilongjiang Province, which is expected to accelerate penetration in the local and regional 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"><I>Increase Sources of Revenue by Expanding
Our Current Business </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; text-indent: 0.5in">We have a slaughtering
and processing plant for black goats under construction in Yunnan Province, China. We expect the plant to begin operations in the
fourth quarter of 2019 and start generating revenue in 2020. Demand for lamb in China as an alternative to pork is increasing due
to growing concern on swine disease and pork quality. We plan to offer lamb and lamb products to consumers via a subscription program
available on our website and mobile app in the future.</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>Continue to Invest in Research and Development
and Expand Our Product Portfolio </I></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: 0.5in">We have invested significant
capital in the development and improvement of our products. One of the R&amp;D results introduced us to a type of forage grass
that contains 30% more protein than other crops. We plan to work with the forage grass farmers in Xinjiang Province and produce
plant protein powder from the forage grass to be used in food and beverages in 2020.</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: center"><B>Competitive Advantages</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"><I>Competitive Advantage of Our Technology</I></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%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Quick disposal: straw can be disposed into powder in 3 hours.</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: 48px">&nbsp;</TD>
    <TD STYLE="width: 24px"><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">Continuous operation: the production line is formed with connecting hydrolysis tanks, which allows the full use of steam heat and continuous charging, hydrolysis and discharge.</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: 48px">&nbsp;</TD>
    <TD STYLE="width: 24px"><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">Environmental protection: all the disposal devices are closed containers and pipelines to avoid gas and material leakage.</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>

<!-- 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 -->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: 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: 48px">&nbsp;</TD>
    <TD STYLE="width: 24px"><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">High fertilizer efficiency: the organic fertilizer matrix after straw disposal has a higher content of organic matter than the compost products of livestock and poultry manure, and has a comprehensive organic nutritional composition. It also avoids pesticide, insect pest returning to the field, excessive loose soil and hidden trouble of fermenting and burning seedlings in the field.</FONT></TD></TR>
</TABLE>
<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: 48px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Less space: 80,000 tons of straw disposal plant only need 6.6 &ndash; 8.2 acres of land.</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: 48px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Strong replicability: our technology and production line can be reproduced in different countries.</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"><I>Competitive Advantage of Our Products</I></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%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px">&nbsp;</TD>
    <TD STYLE="width: 24px"><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">Quality Advantage. Compared with the traditional compost manure fermented fertilizer, our product has high concentration of organic matter and small molecular organic nutrients that can be directly absorbed by crops rich in fulvic acid, polysaccharides and monosaccharides. The effective amount of our product is 50% of the amount of conventional organic fertilizer.</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: 48px">&nbsp;</TD>
    <TD STYLE="width: 24px"><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">Safety advantage. Compared with traditional livestock and poultry manure composting fermented fertilizer, our product generates less residue of heavy metals, antibiotics, toxic and harmful bacteria, avoids the pollution of soil, and ensures the quality and safety of agricultural products.</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; text-align: center"><B>Research and Development</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"><I>Forage Grass Production Capacity</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; text-indent: 0.5in">In July 2014, we entered
into a Technology Transfer Agreement and a Consulting Agreement with the Chinese Academy of Agricultural Sciences in connection
with forage grass. We seek to increase the production capacity of forage grass through this collaboration.</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>Food Product Development</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; text-indent: 0.5in">In October 2015, we
entered into a Food Development Agreement with Shanghai Food Science and Technology School. The goal of this project is to explore
the technology and product application of forage grass seeds for plant protein, dietary fiber and food and beverage.</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"><I>Animal Waste Disposal </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; text-indent: 0.5in">In January 2019, we
entered into a Technology Development Agreement with Shanghai Academy of Agricultural Sciences to research ways to dispose and
utilize animal waste from our black goat slaughtering and processing plant. We aim to minimize environmental impact and avoid any
water pollution.</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; text-align: center"><B>Intellectual Property</B></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; text-indent: 0.5in">We rely on certain
intellectual property to protect our domestic business interests and ensure our competitive position in our industry.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have 12 patents
and 5 registered trademarks on sludge and straw technology, and we are a pilot company of technology in Jinshan District, Shanghai.
Among the patents we now own, &ldquo;microwave induced catalytic hydrolysis treatment sludge&rdquo; was reviewed by Chinese Academy
of Sciences Shanghai Technology Chaxin Consulting Centre (report no. 200921C0703709, 200821C0701507). According to the review by
the Centre, there is no public report of the same kind of research, and therefore, the project is innovative and is advanced at
the international level.</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></B></P>

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<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"><I>Patents</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; text-align: justify; text-indent: 0.5in">We own the following
patents through our subsidiaries and/or VIE entities:</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="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>No.</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Patent Name</B></FONT></TD>
    <TD>&nbsp;</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>Patent Number</B></FONT></TD>
    <TD>&nbsp;</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>Certificate Number</B></FONT></TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; width: 6%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 68%; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pressure relief material discharge and storage device</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL2009200705204</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; padding-left: 0.8pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">130427</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chemical catalytic hydrolysis tank</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL2009200705219</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.8pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1370181</FONT></TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Material storage bin with crusher</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL2009200706156</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.8pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1370214</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pneumatic check valve type tank cap</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL2009200706160</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.8pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1370180</FONT></TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Regenerative heat exchanger</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL2009200705223</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.8pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1419186</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">6</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Method for preparing novel material by catalyzing and hydrolyzing mud through microwave inducing</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL2008100346358</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.8pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">814191</FONT></TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Method for removing heavy metals from activated sludge</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL2009100494481</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.8pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1224500</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Method for comprehensively treating grating garbage and activated sludge in sewage plant</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL2009100494462</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.8pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1276553</FONT></TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">9</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Method for preparing water soluble quick-acting organic fertilizer from activated sludge</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL2009100494458</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.8pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1311657</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mechanical force chemical treating method for organic solid wastes</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL2009100494477</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.8pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1372950</FONT></TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">11</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Method for preparing fuel oil by activated sludge in pipe bundle cracking furnace</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL2011100405076</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.8pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1513772</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Method for directly flashing treated water into superheated steam and application</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL2011100405127</FONT></TD>
    <TD STYLE="vertical-align: bottom">&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"><I>Trademarks</I></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; text-indent: 0.5in">We own several trademarks
through our subsidiaries and/or VIE entities, including muliang, zongbao, xiutubao, yijifeng, jingletu, and huangdicao. Muliang
and zongbao are our company&rsquo;s brand names.</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: center"><B>Our Property, Plant and Equipment</B></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; text-indent: 0.5in">Our principal executive
office is located at 2498 Wanfeng Highway, Lane 181, Fengjing Town, Jinshan District, Shanghai, China, and our telephone number
is (86) 21-67355092. The office space belongs to our President and Chief Executive Officer, Mr. Lirong Wang, who allows us to use
the space for free.</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; text-indent: 0.5in">Property, plant and
equipment at December 31, 2018 and 2017 consisted of:</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="text-align: center; white-space: nowrap">&nbsp;</TD>
    <TD STYLE="text-align: center; white-space: nowrap">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; white-space: nowrap"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>December&nbsp;31,</B></FONT></TD>
    <TD STYLE="text-align: center; white-space: nowrap">&nbsp;</TD>
    <TD STYLE="text-align: center; white-space: nowrap">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; white-space: nowrap"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>December&nbsp;31,</B></FONT></TD>
    <TD STYLE="text-align: center; white-space: nowrap">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2018</B></FONT></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2017</B></FONT></TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 78%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Building</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12,838,100</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">13,603,224</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operating equipment</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2,754,463</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2,968,880</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Vehicle</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">104,121</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">58,492</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Office equipment</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">59,897</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">18,500</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Apple Orchard</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,026,505</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,029,230</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Construction in progress</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">341,173</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">17,124,259</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">17,678,326</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Less: Accumulated depreciation</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2,196,936</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1,461,897</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">14,927,323</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">16,216,429</FONT></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<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"><B>Our Employees</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; text-indent: 0.5in">As of the date of this prospectus, we have
106 full-time employees. The following table sets forth the number of our employees by function:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&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="border-bottom: black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Functional Area</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Number of Employees</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 89%; padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Senior management</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sales and Procurement</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">16</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounting</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Human resources and administrative personnel</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CDEEFE">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Warehouse</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Factory</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">65</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CDEEFE">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Total</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">106</FONT></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<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: justify; text-indent: 0.5in">We provide social insurance
for each employee in accordance with Chinese law, including pension insurance, medical insurance, unemployment insurance, work
injury insurance and maternity insurance, and housing provident fund.</P>



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

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

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

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Our operation in China
is subject to a number of PRC laws and regulations. This section summarizes all material PRC laws and regulations relevant to our
business and operations in China and the key provisions of such regulations.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>Fertilizer
License</I></B></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; text-indent: 0.5in; background-color: white">The
examination and approval of fertilizer license is based on Article 25 of the Agricultural Law of the People's Republic of China,
the Management for the Administration of Fertilizer Registration (Order No. 32 and No. 38 by the Ministry of Agriculture), and
the Requirements for Fertilizer Registration Materials (Publication No. 161 from the Ministry of Agriculture). Organic fertilizers
are required to be registered with provincial agricultural department.</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">There
are four examination and approval requirements for obtaining a fertilizer license (1) A valid business license issued by Administration
for Industry and Commerce, whose business scope shall cover the industry of fertilizer; (2) Products must comply with the relevant
requirements of laws, regulations and relevant national policies (such as safety and environmental protection); (3) The product
quality must comply with national standards, industry standards, local standards or enterprise standards approved by the quality
supervision department; and (4) The application materials must be true, legal, complete and effective.</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">All
of our fertilizer products currently have valid five-year fertilizer licenses that are renewable upon the expiration date in the
year of 2022.</P>



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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Corporate Laws and Industry Catalogue
Relating to Foreign Investment</I></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The establishment,
operation, and management of corporate entities in China are governed by the Company Law of the PRC, or the Company Law, effective
in 1994, as amended in 1999, 2004, and 2005, respectively. The Company Law is applicable to our PRC subsidiaries and affiliated
PRC entity unless the PRC laws on foreign investment have stipulated otherwise.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The establishment,
approval, registered capital requirement, and day-to-day operational matters of wholly foreign-owned enterprises (&ldquo;WFOE&rdquo;),
are regulated by the WFOE Law of the PRC effective in 1986, as amended in 2000, and the Implementation Rules of the WFOE Law of
the PRC effective in 1990, as amended in 2001.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Investment activities
in the PRC by foreign investors are principally governed by the Guidance Catalogue of Industries for Foreign Investment, or the
Catalogue, which was promulgated and is amended from time to time by the Ministry of Commerce and the National Development and
Reform Commission. The Catalogue divides industries into three categories: encouraged, restricted, and prohibited. Industries not
listed in the Catalogue are generally open to foreign investment unless specifically restricted by other PRC regulations.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Establishment of WFOEs
is generally permitted in encouraged industries. Some restricted industries are limited to equity or contractual joint ventures,
while in some cases Chinese partners are required to hold the majority interests in such joint ventures.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">For example, sales
and distribution of audio and video products are among the restricted categories, and only contractual joint ventures in which
Chinese partners holding majority interests can engage in the distribution of audio and video products in China.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In addition, restricted
category projects are also subject to higher-level government approvals. Foreign investors are not allowed to invest in industries
in the prohibited category.</P>

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In January 2008, the
PRC Enterprise Income Tax Law (The &ldquo;EIT&rdquo; Law) took effect. The EIT applies a uniform 25% enterprise income tax rate
to both foreign-invested enterprises and domestic enterprises, unless where tax incentives are granted to special industries and
projects. Under the EIT Law and its implementation regulations, dividends generated from the business of a PRC subsidiary after
January 1, 2008 and payable to its foreign investor may be subject to a withholding tax rate of 10% if the PRC tax authorities
determine that the foreign investor is a non-resident enterprise, unless there is a tax treaty with China that provides for a preferential
withholding tax rate. Distributions of earnings generated before January 1, 2008 are exempt from PRC withholding tax.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Under the EIT Law,
an enterprise established outside China with &ldquo;de facto management bodies&rdquo; within China is considered a &ldquo;resident
enterprise&rdquo; for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on
its worldwide income. A circular issued by the State Administration of Taxation in April 2009 regarding the standards used to classify
certain Chinese-invested enterprises controlled by Chinese enterprises or Chinese enterprise groups and established outside of
China as &ldquo;resident enterprises&rdquo; clarified that dividends and other income paid by such PRC &ldquo;resident enterprises&rdquo;
will be considered PRC-source income and subject to PRC withholding tax, currently at a rate of 10%, when paid to non-PRC enterprise
shareholders. This circular also subjects such PRC &ldquo;resident enterprises&rdquo; to various reporting requirements with the
PRC tax authorities.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Under the implementation
regulations to the EIT Law, a &ldquo;de facto management body&rdquo; is defined as a body that has material and overall management
and control over the manufacturing and business operations, personnel and human resources, finances, and properties of an enterprise.
In addition, the tax circular mentioned above specifies that certain PRC-invested overseas enterprises controlled by a Chinese
enterprise or a Chinese enterprise group in the PRC will be classified as PRC resident enterprises if the following are located
or residence in the PRC: senior management personnel and departments that are responsible for daily production, operation, and
management; financial and personnel decision making bodies; key properties, accounting books, the company seal, and minutes of
board meetings and shareholders&rsquo; meetings; and half or more of the senior management or directors having voting rights.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Regulations Relating to Foreign Exchange</I></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Pursuant to the Regulations
on the Administration of Foreign Exchange issued by the State Council and effective in 1996, as amended in January 1997 and August
2008, current account transactions, such as sale or purchase of goods, are not subject to PRC governmental control or restrictions.
Certain organizations in the PRC, including foreign-invested enterprises, may purchase, sell, and/or remit foreign currencies at
certain banks authorized to conduct foreign exchange business upon providing valid commercial documents. Approval of the PRC State
Administration of Foreign Exchange (&ldquo;SAFE&rdquo;), however, is required for capital account transactions.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In August 2008, SAFE
issued a circular on the conversion of foreign currency into Renminbi by a foreign-invested company that regulates how the converted
Renminbi may be used. The circular requires that the registered capital of a foreign-invested enterprise converted into Renminbi
from foreign currencies may only be utilized for purposes within its business scope. For example, such converted amounts may not
be used for investments in or acquisitions of other PRC companies, unless specifically provided otherwise, which can inhibit the
ability of companies to consummate such transactions. In addition, SAFE strengthened its oversight of the flow and use of the Renminbi
registered capital of foreign-invested enterprises converted from foreign currencies. The use of such Renminbi capital may not
be changed without SAFE&rsquo;s approval, and may not in any case be used to repay Renminbi loans if the proceeds of such loans
have not been utilized. Violations may result in severe penalties, such as heavy fines.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Pursuant to the PRC
Labor Law effective in 1995 and the PRC Labor Contract Law effective in 2008, a written labor contract is required when an employment
relationship is established between an employer and an employee. Other labor-related regulations and rules of the PRC stipulate
the maximum number of working hours per day and per week as well as the minimum wages. An employer is required to set up occupational
safety and sanitation systems, implement the national occupational safety and sanitation rules and standards, educate employees
on occupational safety and sanitation, prevent accidents at work, and reduce occupational hazards.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In the PRC, workers
dispatched by an employment agency are normally engaged in temporary, auxiliary, or substitute work. Pursuant to the PRC Labor
Contract Law, an employment agency is the employer for workers dispatched by it and must perform an employer&rsquo;s obligations
toward them. The employment contract between the employment agency and the dispatched workers, and the placement agreement between
the employment agency and the company that receives the dispatched workers must be in writing. Also, the company that accepts the
dispatched workers must bear joint and several liabilities for any violation of the Labor Contract Law by the employment agencies
arising from their contracts with dispatched workers. An employer is obligated to sign an indefinite term labor contract with an
employee if the employer continues to employ the employee after two consecutive fixed-term labor contracts. The employer also has
to pay compensation to the employee if the employer terminates an indefinite term labor contract. Except where the employer proposes
to renew a labor contract by maintaining or raising the conditions of the labor contract and the employee is not agreeable to the
renewal, an employer is required to compensate the employee when a definite term labor contract expires. Furthermore, under the
Regulations on Paid Annual Leave for Employees issued by the State Council in December 2007 and effective as of January 2008, employees
who have served an employer for more than one (1) year and less than ten years are entitled to a 5-day paid vacation, those whose
service period ranges from 10 to 20 years are entitled to a 10-day paid vacation, and those who have served for more than 20 years
are entitled to a 15-day paid vacation. An employee who does not use such vacation time at the request of the employer shall be
compensated at three times their normal salaries for each waived vacation day.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Pursuant to the Regulations
on Occupational Injury Insurance effective in 2004 and the Interim Measures concerning the Maternity Insurance for Enterprise Employees
effective in 1995, PRC companies must pay occupational injury insurance premiums and maternity insurance premiums for their employees.
Pursuant to the Interim Regulations on the Collection and Payment of Social Insurance Premiums effective in 1999 and the Interim
Measures concerning the Administration of the Registration of Social Insurance effective in 1999, basic pension insurance, medical
insurance, and unemployment insurance are collectively referred to as social insurance. Both PRC companies and their employees
are required to contribute to the social insurance plans. Pursuant to the Regulations on the Administration of Housing Fund effective
in 1999, as amended in 2002, PRC companies must register with applicable housing fund management centers and establish a special
housing fund account in an entrusted bank. Both PRC companies and their employees are required to contribute to the housing funds.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Wholly foreign-owned
companies in the PRC may pay dividends only out of their accumulated profits after tax as determined in accordance with PRC accounting
standards. Remittance of dividends by a wholly foreign-owned enterprise out of China is subject to examination by the banks designated
by SAFE. Wholly foreign-owned companies may not pay dividends unless they set aside at least 10% of their respective accumulated
profits after tax each year, if any, to fund certain reserve funds, until such time as the accumulative amount of such fund reaches
50% of the wholly foreign-owned company&rsquo;s registered capital. In addition, these companies also may allocate a portion of
their after-tax profits based on PRC accounting standards to staff welfare and bonus funds at their discretion. These reserve funds
and staff welfare and bonus funds are not distributable as cash dividends.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Safe Regulations on Offshore Special
Purpose Companies Held by PRC Residents or Citizens</I></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Pursuant to the Notice
on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents to Engage in Financing and Inbound Investment via
Overseas Special Purpose Vehicles, or Circular No. 75, issued in October 2005 by SAFE and its supplemental notices, PRC citizens
or residents are required to register with SAFE or its local branch in connection with their establishment or control of an offshore
entity established for the purpose of overseas equity financing involving a roundtrip investment whereby the offshore entity acquires
or controls onshore assets or equity interests held by the PRC citizens or residents. In addition, such PRC citizens or residents
must update their SAFE registrations when the offshore special purpose vehicle undergoes material events relating to increases
or decreases in investment amount, transfers or exchanges of shares, mergers or divisions, long-term equity or debt investments,
external guarantees, or other material events that do not involve roundtrip investments. Subsequent regulations further clarified
that PRC subsidiaries of an offshore company governed by the SAFE regulations are required to coordinate and supervise the filing
of SAFE registrations in a timely manner by the offshore holding company&rsquo;s shareholders who are PRC citizens or residents.
If these shareholders fail to comply, the PRC subsidiaries are required to report to the local SAFE branches. If the shareholders
of the offshore holding company who are PRC citizens or residents do not complete their registration with the local SAFE branches,
the PRC subsidiaries may be prohibited from distributing their profits and proceeds from any reduction in capital, share transfer
or liquidation to the offshore company, and the offshore company may be restricted in its ability to contribute additional capital
to its PRC subsidiaries. Moreover, failure to comply with the SAFE registration and amendment requirements described above could
result in liability under PRC law for evasion of applicable foreign exchange restrictions.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On August 8, 2006,
six PRC regulatory agencies, including China Securities Regulatory Commission (&ldquo;CSRC&rdquo;), promulgated a rule entitled
Provisions Regarding Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (&ldquo;the M&amp;A Rules&rdquo;) to
regulate foreign investment in PRC domestic enterprises. The M&amp;A rules, among other things, requires an overseas special purpose
vehicle (&ldquo;SPV&rdquo;), formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies
or individuals, to obtain the approval of CSRC prior to publicly listing their securities on an overseas stock exchange.. There
remains some uncertainty as to how this regulation will be interpreted or implemented in the context of an overseas offering. If
the CSRC or another PRC regulatory agency subsequently determines that approval is required for this offering, we may face sanctions
by the CSRC or another PRC regulatory agency.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The M&amp;A Rules also
establish procedures and requirements that could make some acquisitions of Chinese companies by foreign investors more time-consuming
and complex, including requirements in some instances that the Ministry of Commerce be notified in advance of any change-of-control
transaction in which a foreign investor takes control of a Chinese domestic enterprise.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On March 28, 2007, SAFE
promulgated the Application Procedure of Foreign Exchange Administration for Domestic Individuals Participating in Employee Share
Holding Plan or Share Option Plan of Overseas Listed Company, or the Share Option Rule. Pursuant to the Share Option Rule, Chinese
citizens who are granted share options by an overseas publicly listed company are required to register with SAFE through a Chinese
agent or Chinese subsidiary of the overseas publicly listed company and complete certain other procedures. Our PRC employees who
have been granted share options will be subject to these regulations. Failure of our PRC share option holders to complete their
SAFE registrations may subject these PRC employees to fines and legal sanctions and may also limit our ability to contribute additional
capital into our PRC subsidiaries and limit our PRC subsidiaries&rsquo; ability to distribute dividends to us.</P>

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


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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Directors, Executive Officers and Corporate Governance.</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table sets forth certain information with
respect to our directors, executive officers and significant employees:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&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: 22%; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Name</B></FONT></TD>
    <TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 7%; border-bottom: Black 1.5pt solid; padding-right: 12.4pt; padding-left: 12.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Age</B></FONT></TD>
    <TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 69%; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Position</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Lirong Wang</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I></I></B></P></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 12.4pt; padding-left: 12.4pt; text-align: center"><FONT STYLE="font-size: 10pt">45</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">President, Chief Executive Officer, Chief Financial Officer, and Director</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Lirong Wang</I></B></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; text-align: justify; text-indent: 0.5in">Mr. Wang has been the sole
officer and director of the Company since January 11, 2016. Mr. Wang has also been the Chairman and CEO of Shanghai Muliang Industries
Co., Ltd. since December 2006. From November 2002 to November 2006, Mr. Wang was general manager of Shanghai Aoke Chemical Products
Co., Ltd. Mr. Wang received his bachelor&rsquo;s degree in storage management from Harbin University of Commerce in 1996.</P>

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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0">Term of Office</P>

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">There are no family relationships between any of our
directors or executive officers.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">To our knowledge, no director, nominee for director,
or executive officer of the Company has been a party in any legal proceeding material to an evaluation of his ability or integrity
during the past ten years.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The company has not adopted a Code of Ethics applicable
to its Principal Executive Officer and Principal Financial Officer.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0"><B>Corporate Governance</B></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0"><B>Board Committees</B></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; text-align: justify; text-indent: 0.5in">We presently do not have an audit
committee, compensation committee or nominating committee or committee performing similar functions, as our management believes
that until this point it has been premature at the early stage of our management and business development to form an audit, compensation
or nominating committee. Until these committees are established, these decisions will continue to be made by our Board of Directors.
The Company expects to create committees which are compliant with the rules of Nasdaq in connection with its application to the
Nasdaq Capital Market.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0"><B>Board Leadership Structure and Role in
Risk Oversight</B></P>

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

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


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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_011"></A>Executive Compensation.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following summary compensation table sets forth
the compensation earned by our named executive officers for the years ended December 31, 2018 and 2017.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B></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="text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Salary</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Bonus</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Stock
    Awards</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">All
    Other Compensation</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Name
    and Principal Position</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></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">Fiscal
    Year</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></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">($)</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">($)</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></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">($)</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">($)</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></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></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; text-align: left; padding-left: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Lirong
    Wang&#9;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2018</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">17,450</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">17,450</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-style: italic; text-align: left; padding-left: 11.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">President,&nbsp;Chief
    Executive Officer,&#9;<I>Chief Financial Officer, Secretary, and Treasurer</I></FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2017</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">18,443</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">18,443</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE>



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

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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0">Compensation of Directors</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Directors are permitted
to receive fixed fees and other compensation for their services as directors. The Board of Directors (which currently consists
solely of Lirong Wang) has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, directors
in such capacity.</P>

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

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

<P STYLE="font: bold 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: 0.5in">Currently, we do not have an employment
agreement in place with our officers and directors.</P>

<P STYLE="font: bold 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-indent: 0"><B>Option Grants</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We had no outstanding equity awards as of
the end of fiscal years ended December 31, 2018 and 2017.</P>

<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-indent: 0"><B>Option Exercises and Fiscal Year-End Option
Value Table</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">There were no stock options exercised during
fiscal years ended December 31, 2018 and 2017 by the executive officers.</P>

<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-indent: 0"><B>Outstanding Equity Awards at Fiscal Year-End
Table</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We had no outstanding equity awards as of
the end of fiscal years ended December 31, 2018 and 2017.</P>

<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-indent: 0"><B>Long-Term Incentive Plans and Awards</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">There were no awards made to a named executive
officer in fiscal 2018 and 2017 under any long-term incentive plan.</P>

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

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



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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Directors are permitted to receive fixed fees and other
compensation for their services as directors. The Board of&nbsp;Directors has the authority to fix the compensation of directors.</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; text-align: justify; text-indent: 0.5in">Our directors did not receive any compensation for their services as directors for the years ended December
31, 2018 and 2017.</P>



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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a_020"></A><B>PRINCIPAL SHAREHOLDERS</B></P>



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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table provides
information as to shares of common stock beneficially owned as of June 26, 2019, by:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&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>each director&#894;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&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>each named executive officer&#894;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&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>each person known by us to beneficially own at least 5% of our common stock&#894; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&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>all directors and executive officers as a group.</TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Beneficial ownership is determined
in accordance with the rules of the SEC. Unless otherwise indicated below, to our knowledge, the persons and entities named in
the table have sole voting and sole investment power with respect to all shares beneficially owned (subject to community property
laws where applicable). Unless otherwise indicated, the address of each beneficial owner listed below is 1958 Qianming East Road,
Fengjing, Jinshan District, Shanghai, China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 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">Name of Beneficial Owners</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">Percent of Common Stock</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; text-indent: -10pt; padding-left: 10pt">Lirong Wang</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">36,322,973</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">64.862</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -10pt; padding-left: 10pt">All officers and directors as a group (1 persons)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36,322,973</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">64.862</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -10pt; padding-left: 10pt">Other 5% shareholders:</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">None.</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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"></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: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Applicable
    percentages are based on 56,341,953 shares outstanding as of June 26, 2019 adjusted as required by rules of the SEC.
    Beneficial     ownership is determined under the rules of the SEC and generally includes voting or investment power with
    respect to     securities. Shares of common stock subject to options, warrants and convertible notes currently exercisable or
    convertible,     or exercisable or convertible within 60 days are deemed outstanding for computing the percentage of the
    person holding such     securities but are not deemed outstanding for computing the percentage of any other person. Unless
    otherwise indicated in the     footnotes to this table, Company believes that each of the shareholders named in the table has
    sole voting and investment     power with respect to the shares of common stock indicated as beneficially owned by
    them.</FONT></TD></TR>
</TABLE>


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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_021"></A>RELATED PARTY TRANSACTIONS</B></P>



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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0"><I><U>Account receivable and sales from related
parties</U></I></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company did not
make sales to any related party for the year ended December 31, 2018 and 2017 and for the three months ended March 31, 2019 and
2018. And the Company has no account receivable balance as of March 31, 2019 and 2018.</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; text-indent: 0in"><I><U>Account pa</U>y<U>able and
purchase</U> f<U>rom related parties</U></I></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the year
ended December 31, 2018, the Company purchased fertilizer manufacturing equipment of $120,945 from Shanghai Aoke Chemicals
Co., Ltd, an entity controlled by Mr. Lirong Wang, CEO and majority shareholder of the Company. <FONT STYLE="background-color: white">As
of March 31, 2019 and December 31, 2018, account payable to Shanghai Aoke Chemicals Co., Ltd. were $119,205 and
$116,340.</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; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company did not
purchase other material or service from related parties for the year ended December 31, 2018 and 2017. <FONT STYLE="background-color: white">The
Company did not make any purchase from related parties for the three months ended March 31, 2019.</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in"><I><U>Due from Related Parties</U></I></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company does not
have balances due from related parties as of March 31, 2019, December 31, 2018 and 2017, respectively.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in"><I><U>Due to related party</U></I></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Outstanding
balance due to Mr. Lirong Wang and Mr. Guohua Lin below are advances from related parties for working capital of the Company which
are due on demand, non-interest bearing, and unsecured, unless further disclosed.</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">&nbsp;</FONT></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: 0; text-align: center; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="padding: 0; text-align: center; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>March&nbsp;31,</B></FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="padding: 0; text-align: center; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>December&nbsp;31,</B></FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-align: center; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 0; text-align: center; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2019</B></FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2018</B></FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Relationship</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 24%; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
    Lirong Wang</FONT></TD>
    <TD STYLE="width: 1%; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; padding: 0; text-align: right; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">680,238</FONT></TD>
    <TD STYLE="width: 1%; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%; padding: 0; text-align: right; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,442,751</FONT></TD>
    <TD STYLE="width: 1%; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 50%; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    CEO and Chairman / Actual controlling person</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ms. Xueying Sheng</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-align: right; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">161,403</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-align: right; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">169,743</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-align: center; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Controller/Accounting
    manager of the Company</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr. Guohua Lin</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding: 0; text-align: right; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">85,083</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding: 0; text-align: right; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3,054</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-align: center; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Senior
    management / One of the Company&rsquo;s shareholders</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 4.5pt double; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 4.5pt double; padding: 0; text-align: right; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">926,724</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 4.5pt double; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 4.5pt double; padding: 0; text-align: right; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,615,547</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-align: center; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></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"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">For
the three months ended March 31, 2019, the Company borrowed $574,295 from Mr. Lirong Wang, and repaid $1,114,501.</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">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">For
the three months ended March 31, 2019, the Company borrowed $83,742 from Mr. Guohua Lin, and repaid $271.&nbsp;&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">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
November 8, 2017, the Company borrowed $31,993 from Ms. Xueying Sheng. The loan is unsecured, without maturity, and bears an interest
rate of 20%.</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">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">For
the three months ended March 31, 2019, the Company borrowed $25,976 from Ms. Xueying Sheng and repaid $38,431.</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">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">These
loans are due on demand, non-interest bearing, and unsecured.</FONT></P>



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

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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0">Independence of the Board of Directors</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">For a director to be &ldquo;independent&rdquo;
under these standards, the Board must affirmatively determine that the director has no material relationship with us, either directly
or as a partner, shareholder, or officer of an organization that has a relationship with us. Applying corporate governance standards,
and all other applicable laws, rules and regulations, the Board of Directors has determined that none of our directors are independent.
This does not constitute an independent board of directors.</P>

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


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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Our capital stock shall
consist of 500,000,000 shares of common stock, $0.0001 par value, and 100,000,000 shares of blank check preferred stock, $0.0001
par value. To the fullest extent permitted by the laws of the State of Nevada, as the same now exists or may hereafter be amended
or supplemented, the Board of Directors may fix and determine the designations, rights, preferences or other variations of each
class or series within each class of preferred stock of the Company. We may issue the shares of stock for such consideration as
may be fixed by the Board of Directors.</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: 36pt">As of
June 26, 2019, there were 56,341,953 shares of common stock issued and outstanding. There are no shares
of our preferred stock issued and outstanding.</P>



<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"><B>Common Stock</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Each share of our common stock entitles its holder to one vote
in the election of each director and on all other matters voted on generally by our stockholders, other than any matter that (1)
solely relates to the terms of any outstanding series of preferred stock or the number of shares of that series and (2) does not
affect the number of authorized shares of preferred stock or the powers, privileges and rights pertaining to the common stock.
No share of our common stock affords any cumulative voting rights. This means that the holders of a majority of the voting power
of the shares voting for the election of directors can elect all directors to be elected if they choose to do so.</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; text-align: justify; text-indent: 0.5in">Holders of our common stock will be entitled to dividends in
such amounts and at such times as our Board of Directors in its discretion may declare out of funds legally available for the payment
of dividends. We currently intend to retain our entire available discretionary cash flow to finance the growth, development and
expansion of our business and do not anticipate paying any cash dividends on the common stock in the foreseeable future. Any future
dividends will be paid at the discretion of our Board of Directors after taking into account various factors, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; 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="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">general business conditions;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; 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="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">industry practice;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; 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="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">our financial condition and performance;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; 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="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">our future prospects;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; 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="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">our cash needs and capital investment plans;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; 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="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">our obligations to holders of any preferred stock we may issue;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; 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="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">income tax consequences; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; 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="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">the restrictions Delaware and other applicable laws and our credit arrangements then impose.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">If we liquidate or dissolve our business,
the holders of our common stock will share ratably in all our assets that are available for distribution to our stockholders after
our creditors are paid in full and the holders of all series of our outstanding preferred stock, if any, receive their liquidation
preferences in full.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Our common stock has no preemptive rights
and is not convertible or redeemable or entitled to the benefits of any sinking or repurchase fund.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We do not have any preferred shares outstanding
as of the date of this prospectus. However, preferred shares may be issued from time to time in one or more series, each consisting
of a number of preferred shares as determined by our Board of Directors, who also may fix the designations, rights, privileges,
restrictions and conditions attached to the shares of each series of preferred shares. The preferred shares of each series shall,
with respect to payment of dividends and distributions of assets in the event of liquidation, dissolution or winding-up of our
company, whether voluntary or involuntary, or any other distribution of our assets among our shareholders for the purpose of winding-up
our affairs, rank on a preference over shares of our common stock and the shares of any other class ranking junior to the preferred
shares.</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"><B>Transfer Agent and Registrar</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; text-indent: 0.5in">The Transfer Agent
for our common stock is West Coast Stock Transfer Co., located at 721 N. Vulcan Ave., Suite 205, Encinitas, CA&nbsp;92024.</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>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><A NAME="a_013"></A>MARKET PRICE AND DIVIDENDS ON OUR COMMON
STOCK AND<BR>
RELATED STOCKHOLDER MATTERS</B></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our common stock is currently quoted
on OTCQB under the symbol &ldquo;MULG&rsquo;&rdquo;, however, there has been no established public trading market for our
common stock. As of June 26, 2019, the last reported sale price of our shares of common stock on the OTCQB was US$27.00 per
share, and on June 26, 2019 we had 56,341,953 shares of common stock outstanding.</P>

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Holders of Capital Stock</B></FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-indent: 0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As of the date of this prospectus, we had
1,022 holders of our common stock.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Stock Option Grants</B></FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-indent: 0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">We do not have a stock option plan in place and have not granted any stock options at this time.</FONT></P>

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

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




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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-indent: 0.5in; text-align: justify">To date, we have not declared
or paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on
our common stock. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our
Board of Directors has the discretion to declare and pay dividends in the future.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-indent: 0.5in; text-align: justify">Payment of dividends in the future will depend
upon our earnings, capital requirements, and any other factors that our Board of Directors deems relevant.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2pt; text-align: center"><A NAME="a_022"></A><B>SHARES ELIGIBLE FOR FUTURE
SALE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white; text-align: justify">Immediately prior
to this offering, there was little to no trading activity in our common stock. Future sales of substantial amounts of common stock
in the public market, or the perception that such sales may occur, could adversely affect the market price of our common stock.
Immediately prior to the offering, there are 56,341,953 shares of common stock outstanding. Upon the completion of the offering,
we will have an aggregate of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common stock (for the maximum offering amount) or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (for minimum offering amount) shares outstanding
immediately.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white; text-align: justify">All shares sold
in this offering will be freely tradable without restriction or further registration under the Securities Act, except for any shares
purchased by our &ldquo;affiliates,&rdquo; as that term is defined in Rule 144 under the Securities Act, whose sales would be subject
to the Rule 144 resale restrictions described below, other than the holding period requirement. The remaining shares of common
stock, representing approximately % or % of our outstanding shares, following the maximum offering or minimum offering, respectively,
will be held by our existing shareholders. Many of these shares are &ldquo;restricted securities&rdquo; as that phrase is defined
in Rule 144 under the Securities Act. Subject to certain contractual restrictions, including the&nbsp;lock-up&nbsp;agreements described
below, holders of restricted shares will be entitled to sell those shares in the public market pursuant to an effective registration
statement under the Securities Act or if they qualify for an exemption from registration under Rule 144. Sales of these shares
in the public market after the restrictions under the lock-up agreements lapse, or the perception that those sales may occur, could
cause the prevailing market price to decrease or to be lower than it might be in the absence of those sales or perceptions. As
a result of&nbsp;lock-up agreements described below, and the provisions of Rules 144 under the Securities Act, the restricted securities
will be available for sale in the public market.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We, all of our directors and officers and
certain shareholders have agreed with the underwriter, subject to certain exceptions, not to sell, transfer or dispose of, directly
or indirectly, any of our shares of common stock or any securities convertible into or exercisable or exchangeable for shares of
our common stock for a period of 180-days after the date of this prospectus without the prior written consent of the underwriter.
This consent may be given at any time without public notice. Upon expiration of the&nbsp;lock-up&nbsp;period, these shares will
be available for sale in the public market, subject in some cases to applicable volume limitations under Rule 144.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We also agreed to register shares underlying
the Underwriter&rsquo;s Warrants. Once exercised, of which there can be no guarantee, subject to the relative lock up period described
elsewhere in this prospectus, those shares shall be freely tradable without restriction or further registration under the Securities
Act.</P>

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

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

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<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; background-color: white"><B>Rule 144</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Some of our stockholders will be forced
to hold their shares of our common stock for at least a&nbsp;six-month&nbsp;period before they are eligible to sell those shares,
and even after that&nbsp;six-month&nbsp;period, sales may not be made under Rule 144 promulgated under the Securities Act unless
we and such stockholders are in compliance with other requirements of Rule 144.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In general, Rule 144 provides that (i)&nbsp;any
of our&nbsp;non-affiliates&nbsp;that has held restricted common stock for at least six months is thereafter entitled to sell its
restricted stock freely and without restriction, provided that we remain compliant and current with our SEC reporting obligations,
and (ii)&nbsp;any of our affiliates, which includes our directors, executive officers and other person in control of us, that has
held restricted common stock for at least six months is thereafter entitled to sell its restricted stock subject to the following
restrictions: (a)&nbsp;we are compliant and current with our SEC reporting obligations, (b)&nbsp;certain manner of sale provisions
are satisfied, (c)&nbsp;a Form 144 is filed with the SEC, and (d)&nbsp;certain volume limitations are satisfied, which limit the
sale of shares within any three-month period to a number of shares that does not exceed the greater of 1% of the total number of
outstanding shares. A person who has ceased to be an affiliate at least three months immediately preceding the sale and who has
owned such shares of common stock for at least one year is entitled to sell the shares under Rule 144 without regard to any of
the limitations described above.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Summary of Shares Available for Future
Sale</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-indent: 0.5in; text-align: justify">The following table summarizes the total
shares potentially available for future sale. To the extent we sell a number of shares of common stock between the minimum and
maximum offering, the below tables will be adjusted proportionately as to numbers of shares available for sale and dates on which
such shares may be sold (as to currently outstanding shares).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&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: white">
    <TD STYLE="width: 48%; border-bottom: black 1.5pt solid; padding-left: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Minimum Offering Shares</B></FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 51%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Date Available for Sale</B></FONT></TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; padding-left: 0; text-indent: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currently&nbsp;Outstanding&nbsp;Shares of Common Stock Subject to Lock-up Agreement: <SUP>(1)</SUP></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: justify; padding-left: 0in; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">After 180-day from the date of effectiveness or commencement of sales of the public offering.</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; padding-left: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shares Offered in this Offering: </FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: justify; padding-left: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">After the completion of this offering, these shares will be freely tradable.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&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: white">
    <TD STYLE="width: 48%; border-bottom: black 1.5pt solid; padding-left: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Maximum Offering Shares</B></FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 51%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Date Available for Sale</B></FONT></TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; padding-left: 0; text-indent: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currently&nbsp;Outstanding&nbsp;Shares of Common Stock Subject to Lock-up Agreement: <SUP>(1)</SUP></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">After 180-days from the date of effectiveness or commencement of sales of the public offering.</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; padding-left: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shares Offered in this Offering: </FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">After the completion of this offering, these shares will be freely tradable.</FONT></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">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
number of shares of common stock outstanding as of June 26, 2019.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;<B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><A NAME="a_014"></A>UNDERWRITING</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In connection with
this offering, we will enter into an underwriting agreement with Network 1 Financial Securities, Inc., which we sometimes refer
to herein as the Underwriter. The Underwriter is not purchasing or selling any securities offered by this prospectus but will assist
us in this offering on a &ldquo;best efforts&rdquo; basis. The Underwriter has no obligation to buy any of the common stock from
us nor are they required to arrange the purchase or sale of any specific number or dollar amount of the common stock, but have
agreed to use their &ldquo;best efforts&rdquo; to arrange for the sale of a minimum of [ ] shares of common stock and a maximum
of [ ] shares of common stock. The Underwriter may retain other brokers or dealers to act as sub-agents on its behalf in connection
with this offering and may pay any sub-agent a solicitation fee with respect to any securities placed by it. Affiliates of the
company and affiliates and associated persons of the Underwriter may invest in this offering on the same terms and conditions as
the public investors participating in this offering, and any common stock purchased will make up a portion of the minimum offering
needed to complete this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The shares of common
stock are being offered on a &ldquo;best efforts&rdquo; basis, meaning that the Underwriter is not obligated to purchase any common
stock. No common stock will be sold unless at least a minimum of [ ] shares of common stock have been sold no later than [ ], 20[
], unless extended until [ ], 20[ ] with the consent of our board of directors. All monies collected for subscriptions will be
held in a separate escrowed bank account at [ ]. [ ] shall serve as escrow agent. The monies shall remain in the bank account until
the total amount of [ ] shares of common stock have been sold. Any checks for the purchase of shares should be made payable to
&ldquo;[ ] Escrow Account&rdquo; The Underwriter will instruct their customers to transfer funds from their respective accounts
directly to the escrow agent by wire transfer and will instruct other purchasers of the shares to make checks payable to &ldquo;[
] Escrow Account&rdquo;. Upon receipt, the Escrow Agent shall promptly deposit funds in the escrowed bank account. Upon receipt
of funds sufficient for the sale of [ ] shares and satisfaction of all other closing conditions, the funds may be transferred to
our business account. In the event the minimum total of [ ] shares is not sold prior to [ ], unless extended until [ ] with the
consent of our board of directors, all monies will be returned to investors, without interest or deduction, within one business
day.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table
shows the public offering price, Underwriter commissions and proceeds, before expenses, to us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></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: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Price</B></FONT><BR>
<FONT STYLE="font-size: 10pt"><B>per Share</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Commission</B></FONT><BR>
<FONT STYLE="font-size: 10pt"><B>per Share</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Proceeds to</B></FONT><BR>
<FONT STYLE="font-size: 10pt"><B>Company</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 64%"><FONT STYLE="font-size: 10pt">Minimum Offering ($6,000,000)</FONT></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD STYLE="width: 1%"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Maximum Offering ($15,000,000)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We and the Underwriter
have agreed to pay commissions of 6.5% per share (or $[ ] per share) on the offering proceeds. We have agreed to pay to the Underwriter
upon the consummation of the offering, a non-accountable expense allowance equal to 1.5% of the gross proceeds of the offering.
We have also agreed to pay the Underwriter reasonable out-of-pocket expenses including but not limited to, (i) reasonable travel
and out-of-pocket expenses, including clearing charges; (ii) reasonable fees of legal counsel incurred by the Underwriter in connection
with the offering. The total accountable expenses shall not exceed $125,000. We have paid an advance of $75,000 to the Underwriter
to be applied to the Underwriter&rsquo; anticipated out-of-pocket expenses. The advance will be returned to us to the extent such
out-of-pocket accountable expenses are not actually incurred in accordance with FINRA Rule 5110(f)(2)(C).</P>





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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have also agreed
to grant to the Underwriter a warrant covering a number of shares equal to 10% of the aggregate number of the Shares sold in the
offering. The Underwriter warrants will be exercisable, in whole or in part, during a period commencing on the effective date
of the registration statement and will expire on the five-year anniversary of the effective date of the offering. The Underwriter
warrants will be exercisable at a price equal to 120% of the offering price and shall not be redeemable. We have registered the
shares underlying the Underwriter warrants in the registration statement. The Underwriter warrants may not be sold, transferred,
assigned, pledged or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would
result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the
effective date of the registration statement , of which this prospectus forms a part (in accordance with FINRA Rule 5110), except
that they may be assigned, in whole or in part, to any successor, officer, manager, member, or partner of the underwriter, and
to members of the syndicate or selling group and their respective officers, managers, members or partners. The Underwriter warrants
may be exercised as to all or a lesser number of shares, and will provide for cashless exercise. The Underwriter warrants shall
further provide for adjustment in the number and price of such warrants (and the share of the common stock underlying such warrants)
in the event of recapitalization, merger or other structural transaction to prevent dilution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Terms of the Offering</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are offering, on
a best efforts basis, a minimum of US$6,000,000 and a maximum of US$15,000,000. The offering is being made without a firm commitment
by the Underwriter, which has no obligation or commitment to purchase any securities. The Underwriter is not required to sell
any specific number of dollar amount of the common stock but will use its best efforts to sell of the common stock offered. The
common stock is being offered for a period through and including [&nbsp;&nbsp; ], unless extended until [&nbsp;&nbsp; ] with the
consent of our board of directors. If the minimum offering amount is not raised prior to [ &nbsp;&nbsp;], or [ &nbsp;&nbsp;] if
the offering is extended, all subscription funds from the escrow account will be returned to investors promptly without interest
(since the funds are being held in a non-interest bearing account) or deduction of fees. The offering may terminate on the earlier
of (i) any time after the minimum offering amount of our common stock is raised, or (ii) [ ], unless extended by our board of
directors until [ &nbsp;&nbsp;]. Reasons the board may consider in determining whether to extend or terminate the offering may
include, but are not limited to: amount of funds raised, potential to raise additional capital, and response to the offering as
of that date. If we can successfully raise the minimum offering amount within the offering period, the proceeds from the offering
will be released to us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Escrow Agent and Deposit of Offering Proceeds</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Underwriter and
the Company have agreed in accordance with the provisions of SEC Rule 15c2-4 to cause all funds received by the Underwriter for
the sale of the common stock to be promptly deposited in a non-interest bearing escrow account (&ldquo;Escrow Account&rdquo;) maintained
by [ &nbsp;&nbsp;] (the &ldquo;Escrow Agent&rdquo;) as escrow agent for the investors in the offering, who will deposit the funds received
in the Escrow Account into a special bank account established by [&nbsp; ]. The purpose of the Escrow Account is for (i) the deposit
of all subscription monies (checks or wire transfers) which are received by the underwriter from prospective purchasers of our
offered common stock and are delivered by the underwriter to the Escrow Agent, (ii) the holding of amounts of subscription monies
which are collected through the banking system, and (iii) the disbursement of collected funds. The Escrow Agent will exercise signature
control on the escrow account and will act based on joint instructions from our Company and the Underwriter. On the closing date
for the offering, and presuming that all conditions to closing have been satisfied (such as NASDAQ approval and other conditions
described herein), proceeds in the bank account maintained will be delivered to our company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Underwriter shall
promptly deliver to the Escrow Agent all funds in the form of checks or wire transfers which it receives from prospective purchasers
of our common stock by noon of the next business day following receipt where internal supervisory review is conducted at the same
location at which subscription documents and funds are received. Simultaneously with each deposit to the Escrow Account, the Underwriter
shall inform the Escrow Agent about the subscription information for each prospective purchaser. Upon the Escrow Agent&rsquo;s
receipt of such monies, they shall be credited to the Escrow Account and then deposited to the bank account at [ ]. All checks
delivered to the Escrow Agent shall be made payable to &ldquo;[ &nbsp;&nbsp;] Escrow Account&rdquo;. The Escrow Agent shall not be required
to accept for credit to the Escrow Account or for deposit into the Escrow Account checks which are not accompanied by the appropriate
subscription information. Wire transfers representing payments by prospective purchasers shall not be deemed deposited in the Escrow
Account until the Escrow Agent has received in writing the subscription information required with respect to such payments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">No interest will be
available for payment to either us or the investors (since the funds are being held in a non-interest bearing account). All subscription
funds will be held in trust pending the raising of the minimum offering amount and no funds will be released to us until the completion
of the offering. Release of the funds to us is based upon the Escrow Agent reviewing the records of the depository institution
holding the escrow to verify that the funds received have cleared the banking system prior to releasing the funds to us. All subscription
information and subscription funds through checks or wire transfers should be delivered to the Escrow Agent. Failure to do so will
result in subscription funds being returned to the investor. In event that the offering is terminated, all subscription funds from
the escrow account will be returned to investors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">If we terminate this
offering, all amounts will be promptly returned to the investors as described below. In the event of any dispute between us and
the Underwriter, including whether and how funds are to be reimbursed, the Escrow Agent is entitled to petition a court of competent
jurisdiction to resolve any such dispute.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Investors must pay in
full for the common stock at the time of investment. Payment for the shares may be made (i) by check, bank draft or money order
made payable to &ldquo;[&nbsp;&nbsp; ] Escrow Account&rdquo; and delivered to the Underwriter no less than four business days before the date
of closing, or (ii) by wire made payable to &ldquo;[ ] Escrow Account&rdquo;. The checks, bank drafts and money orders will be
forwarded/returned by the Underwriter and their dealers to the Escrow Agent by noon of the following business day. The Underwriter
will inform prospective purchasers of the anticipated date of closing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Proceeds deposited in
escrow with the Escrow Agent may not be withdrawn by investors prior to the earlier of the closing of the offering or the date
the offering is terminated. If the offering is withdrawn or canceled or terminated and proceeds therefrom are not received by us
on or prior to the date the offering is terminated, all proceeds will be promptly returned by the Escrow Agent without interest
or deduction to the persons from which they are received (within one business day) in accordance with applicable securities laws.
All such proceeds will be placed in a non-interest bearing account pending such time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Electronic Offer, Sale and Distribution of Ordinary Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">A prospectus in electronic
format may be made available on the websites maintained by the Underwriter. In addition, the common stock may be sold by the Underwriter
to securities dealers who resell the common stock to online brokerage account holders. Other than the prospectus in electronic
format, the information on the Underwriter&rsquo;s website and any information contained in any other website maintained by the
Underwriter is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved
and/or endorsed by us or the Underwriter in its capacity as Underwriter and should not be relied upon by investors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Lock-up Agreements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We, each of our directors
and officers and holders of ten percent or more of our common stock on a fully diluted basis immediately prior to the consummation
of this offering have agreed or are otherwise contractually restricted for a period of 180 days after the date of this prospectus,
without the prior written consent of the Underwriter not to directly or indirectly:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: -0.25in">&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">
    <TD STYLE="width: 48px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B>&#9679;</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">issue (in the case of us), offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any shares of our common stock or other capital stock or any securities convertible into or exercisable or exchangeable for our common stock or other capital stock;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt"><B>&#9679;</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">in the case of us, file or cause the filing of any registration statement under the Securities Act with respect to any shares of our common stock or other capital stock or any securities convertible into or exercisable or exchangeable for our common stock or other capital stock, other than registration statements on Form S-8 filed with the SEC after the closing date of this offering; or</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt"><B>&#9679;</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">enter into any swap or other agreement, arrangement, hedge or transaction that transfers to another, in whole or in part, directly or indirectly, any of the economic consequences of ownership of our common stock or other capital stock or any securities convertible into or exercisable or exchangeable for our common stock or other capital stock,</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">whether any transaction described in any
of the foregoing bullet points is to be settled by delivery of our common stock or other capital stock, other securities, in cash
or otherwise, or publicly announce an intention to do any of the foregoing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">There are no existing
agreements between the Underwriter and any person who will execute a lock-up agreement in connection with this offering providing
consent to the sale of shares prior to the expiration of the lock-up period. The lock up does not apply to the issuance of shares
upon the exercise of rights to acquire shares of common stock pursuant to any existing stock option or the conversion of any of
our preferred convertible stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Procedures and Requirements for Subscription</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">If you decide to subscribe for any shares
in this offering, you must:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></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: 48px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">execute and deliver a subscription agreement; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">deliver the subscription price to the Company by cashier&rsquo;s check or wire transfer of immediately available funds.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The subscription agreement
requires you to disclose your name, address, social security number, telephone number, email address, number of shares you are
purchasing, and the price you are paying for your shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Upon the Company&rsquo;s
acceptance of a subscription and receipt of full payment, and subject to the timing qualification set forth above, the Company
shall countersign the subscription agreement and issue a stock certificate along with a copy of the subscription agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We have the right to
accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will
be returned immediately by us to the subscriber, without interest or deductions. Subscriptions for securities will be accepted
or rejected within three (3) business days after we receive them.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><U>Offer Restrictions outside the United States</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Other than in the United
States, no action has been taken by us or the Underwriter that would permit a public offering of the securities offered by this
prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be
offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection
with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that
will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus
comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this
prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by
this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt"><B>&nbsp;&nbsp;&nbsp;</B></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"><I>Australia. </I>This
                                                               prospectus is not a product disclosure statement, prospectus or other type of disclosure document for the purposes of
                                                               Corporations Act 2001 (Commonwealth of Australia) (the &ldquo;Act&rdquo;) and does not purport to include the information
                                                               required of a product disclosure statement, prospectus or other disclosure document under Chapter 6D.2 of the Act. No product
                                                               disclosure statement, prospectus, disclosure document, offering material or advertisement in relation to the offer of the
                                                               shares has been or will be lodged with the Australian Securities and Investments Commission or the Australian Securities
                                                               Exchange.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Accordingly,
(1) the offer of the shares under this prospectus may only be made to persons: (i) to whom it is lawful to offer the shares without
disclosure to investors under Chapter 6D.2 of the Act under one or more exemptions set out in Section 708 of the Act, and (ii)
who are &ldquo;wholesale clients&rdquo; as that term is defined in section 761G of the Act, (2) this prospectus may only be made
available in Australia to persons as set forth in clause (1) above, and (3) by accepting this offer, the offeree represents that
the offeree is such a person as set forth in clause (1) above, and the offeree agrees not to sell or offer for sale any of the
shares sold to the offeree within 12 months after their issue except as otherwise permitted under the Act.</FONT></P>


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Canada.
</I>The shares may not be offered, sold or distributed, directly or indirectly, in any province or territory of Canada other than
the provinces of Ontario and Quebec or to or for the benefit of any resident of any province or territory of Canada other than
the provinces of Ontario and Quebec, and only on a basis that is pursuant to an exemption from the requirement to file a prospectus
in such province, and only through a dealer duly registered under the applicable securities laws of such province or in accordance
with an exemption from the applicable registered dealer requirements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

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


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



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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>Cayman
Islands.</I> This prospectus does not constitute a public offer of the shares, whether by way of sale or subscription, in the
Cayman Islands. Each underwriter has represented and agreed that it has not offered or sold, and will not offer or sell, directly
or indirectly, any shares to any member of the public in the Cayman Islands.</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>European
Economic Area. </I>In relation to each Member State of the European Economic Area that has implemented the Prospectus
Directive, or a Relevant Member State, from and including the date on which the Prospectus Directive is implemented in that
Relevant Member State, or the Relevant Implementation Date, an offer of the shares to the public may not be made in that
Relevant Member State prior to the publication of a prospectus in relation to the shares that has been approved by the
competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and the
competent authority in that Relevant Member State has been notified, all in accordance with the Prospectus Directive, except
that it may, with effect from and including the Relevant Implementation Date, make an offer of the shares to the public in
that Relevant Member State at any time,</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B></B></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: 10pt Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">to
legal entities that are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose
corporate purpose is solely to invest in securities;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -24pt"><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; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">to
any legal entity that has two or more of (1) an average of at least 250 employees during the last financial year, (2) a total
balance sheet of more than &euro;43,000,000, and (3) an annual net turnover of more than &euro;50,000,000, as shown in its last
annual or consolidated accounts;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -24pt"><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; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">to
fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive; or</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -24pt"><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; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">in
any other circumstances that do not require the publication by the company of a prospectus pursuant to Article 3 of the Prospectus
Directive;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -24pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">provided
that no such offer of shares shall result in a requirement for the publication by the company of a prospectus pursuant to Article
3 of the Prospectus Directive.</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: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">For
purposes of the above provision, the expression &ldquo;an offer of shares to the public&rdquo; in relation to any shares in any
Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer
and the shares to be offered so as to enable an investor to decide to purchase or subscribe the shares, as the same may be varied
in that Member State by any measure implementing the Prospectus Directive in that Member State, and the expression &ldquo;Prospectus
Directive&rdquo; means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Hong
Kong.&nbsp;</I>The shares may not be offered or sold by means of this document or any other document other than (i) in circumstances
that do not constitute an offer or invitation to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong
Kong) or the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong), or (ii) to &ldquo;professional investors&rdquo; within
the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other
circumstances that do not result in the document being a &ldquo;prospectus&rdquo; within the meaning of the Companies Ordinance
(Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the shares may be issued or may be in the
possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), that is directed at, or the
contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of
Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or
only to &ldquo;professional investors&rdquo; within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong
Kong) and any rules made thereunder.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>Malaysia</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">The shares have not been and
may not be approved by the securities commission Malaysia, or SC, and this document has not been and will not be registered as
a prospectus with the SC under the Malaysian capital markets and services act of 2007, or CMSA. Accordingly, no securities or
offer for subscription or purchase of securities or invitation to subscribe for or purchase securities are being made to any person
in or from within Malaysia under this document except to persons falling within any of paragraphs 2(g)(i) to (xi) of schedule
5 of the CMSA and distributed only by a holder of a capital markets services license who carries on the business of dealing in
securities and subject to the issuer having lodged this prospectus with the SC within seven days from the date of the distribution
of this prospectus in Malaysia. The distribution in Malaysia of this document is subject to Malaysian laws. Save as aforementioned,
no action has been taken in Malaysia under its securities laws in respect of this document. This document does not constitute
and may not be used for the purpose of a public offering or an issue, offer for subscription or purchase, invitation to subscribe
for or purchase any securities requiring the approval of the sc or the registration of a prospectus with the SC under the CMSA.</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>People&rsquo;s
Republic of China. </I>This prospectus may not be circulated or distributed in the PRC and the shares may
not be offered or sold, and will not offer or sell to any person for re-offering or resale directly or indirectly to any resident
of the PRC except pursuant to applicable laws and regulations of the PRC. For the purpose of this paragraph, PRC does not include
Taiwan and the special administrative regions of Hong Kong and Macau.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>Singapore</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">The
securities represented may not be offered or sold, nor may any document or other material in connect with such securities be distributed,
either directly or indirectly, (i) to persons in Singapore other than under circumstances in which such offer or sale does not
constitute an offer or sale of such securities to the public in Singapore or (ii) to the public or any member of the public in
Singapore other than pursuant to, and in accordance with the conditions of, an exemption invoked under division 5a or part iv
of the companies act, chapter 50 of Singapore and to persons to whom the securities may be offered or sold under such exemption.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>United
Kingdom.</I>&nbsp;An offer of the shares may not be made to the public in the United Kingdom within the meaning
of Section 102B of the Financial Services and Markets Act 2000, as amended, or the FSMA, except to legal entities that are authorized
or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest
in securities or otherwise in circumstances that do not require the publication by the company of a prospectus pursuant to the
Prospectus Rules of the Financial Services Authority, or the FSA.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">An
invitation or inducement to engage in investment activity (within the meaning of Section 21 of FSMA) may only be communicated
to persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services
and Markets Act 2000 (Financial Promotion) Order 2005 or in circumstances in which Section 21 of FSMA does not apply to the company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">All
applicable provisions of the FSMA with respect to anything done by the underwriter in relation to the shares must be complied
with in, from or otherwise involving the United Kingdom.</FONT></P>


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_015"></A><B>LEGAL MATTERS</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The validity of the common
shares offered hereby will be passed upon for us by Ortoli Rosenstadt LLP. Certain legal matters as to PRC law will be passed
upon for us by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;. Ortoli Rosenstadt LLP may rely upon&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; with respect to matters governed by PRC law.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The current address of Ortoli Rosenstadt LLP is 366 Madison Avenue, 3rd Floor, New York, NY 10017. The
current address of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;is&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_016"></A><B>EXPERT</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The consolidated
financial statements for each of the years ended December 31, 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 WWC, PC, an independent registered public
accounting firm, given on their authority as experts in accounting and auditing. The current address of WWC, PC is located is
2010 Pioneer Court, San Mateo, CA 94403.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The consolidated financial statements for
the years ended December 31, 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 WWC, PC, given on their authority as experts in accounting and auditing.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><A NAME="a_017"></A>INTERESTS OF NAMED EXPERTS AND COUNSEL</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">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, managing or principal underwriter, voting trustee, director,
officer, or employee.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_018"></A><B>WHERE YOU CAN FIND MORE INFORMATION</B></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">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>. Those filings are also available to the public on our corporate website at <I>www.ccmus.com</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="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_019"></A>INDEX TO FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 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">
    <TD STYLE="width: 90%; padding-left: 0.125in; text-indent: -0.125in"><B>&nbsp;</B></TD>
    <TD STYLE="width: 10%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>PAGE</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in"><A HREF="#a_14"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Report of Independent Registered Accounting Firm</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-2</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in"><A HREF="#a_15"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Balance Sheets as of December 31, 2018 and 2017</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-3</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in"><A HREF="#a_16"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Statements of
    Operations and Comprehensive Loss for the years ended December 31, 2018 and 2017</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-4</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in"><A HREF="#a_17"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Statements of
    Stockholders&rsquo; Equity for the years ended December 31, 2018 and 2017</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-5</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in"><A HREF="#a_18"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Statements of Cash
    Flows for the years ended December 31, 2018 and 2017</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-6</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in"><A HREF="#a_19"><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 STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-7 &ndash; F-28</FONT></TD></TR>
</TABLE>
<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: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt; width: 90%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#s_01">Consolidated Balance Sheets as of March 31, 2019 (Unaudited) and December 31, 2018 (Audited)</A></FONT></TD>
    <TD STYLE="text-align: center; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-29</FONT></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: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#s_02">Consolidated Statements of Operations and Comprehensive Income for the three&nbsp;months ended March 31, 2019 and&nbsp;2018</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-30</FONT></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: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding: 0 0 0 0.125in; text-indent: -0.125in"><A HREF="#s_03">Condensed Statements of Changes in Stockholders&rsquo; Equity for the year ended December 31, 2018 and three months ended March 31, 2019</A><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 240pt; text-align: left; text-indent: -220pt"></P>


</TD>
    <TD STYLE="text-align: center">F-31</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: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#s_04">Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-32</FONT></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: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#s_05">Notes to Consolidated Financial Statements</A></FONT></TD>
    <TD STYLE="text-align: center; white-space: nowrap"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-33</FONT> &ndash;
    F-55</TD></TR>
</TABLE>
<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>

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    <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"><A NAME="a_14"></A><B>REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</B></P>

<P STYLE="font: 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%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To:</FONT></TD>
    <TD STYLE="width: 96%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Board of Directors and Stockholders of</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Muliang Agritech, Inc.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Opinion on the Financial Statements</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 have audited the accompanying
consolidated balance sheets of Muliang Agritech, Inc. (the Company) as of December 31, 2018 and 2017, and the related
consolidated statements of operations and comprehensive loss, stockholders&rsquo; equity, and cash flows for each of the
years in the two-year period ended December 31, 2018, and the related notes (collectively referred to as the financial
statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the two years
ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.</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 accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the
Company had incurred substantial losses during the year, and has a working capital deficit, which raises substantial doubt about
its ability to continue as a going concern. Management&rsquo;s plan in regards to this matters are described in Note 1. These financial
statements do not include any adjustments that might result from the outcome of this uncertainty.</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>Basis for Opinion</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">These financial statements are the responsibility
of the Company&rsquo;s management. Our responsibility is to express an opinion on the Company&rsquo;s 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.</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 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.</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 audits 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 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 financial statements. We believe that our audits provide a
reasonable basis for our opinion.</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">WWC, P.C.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Certified Public Accountants</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">San Mateo, CA</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">April 16, 2019</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">We have served as the Company&rsquo;s auditor since March 15,
2016.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_15"></A>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSOLIDATED BALANCE SHEETS</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; text-align: center"><B></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>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">December 31,</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">December 31,</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="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Audited</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">Audited</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><U>ASSETS</U></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">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Current 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="width: 76%; text-align: left">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">12,778</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">9,051</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accounts receivable, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,090,887</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">358,516</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">446,630</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">412,648</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Prepayment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,491,102</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,076</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">Other receivables, net</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">102,733</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">67,597</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; text-indent: 10pt">Total Current Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,144,130</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">870,888</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">Property, plant and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,927,323</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,216,429</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">Intangible assets, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,213,130</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,505,967</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other assets and deposits</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">74,268</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">454,771</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">Deferred tax asset</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">454,751</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>&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: 4pt; text-indent: 30pt">Total Assets</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">24,813,602</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">20,048,055</TD><TD STYLE="padding-bottom: 4pt; 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-decoration: underline; text-align: center">LIABILITIES AND STOCKHOLDERS&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>&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">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">Short-term loans</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">150,515</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">159,074</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">Current portion of long-term debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,453,435</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,998,033</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accounts payable and accrued payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,585,732</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,975,899</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">Advances from customers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">211,114</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,986</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Income tax&nbsp;payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">430,181</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">Other payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">816,724</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">982,909</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">Due to related party</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">1,615,547</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">4,441,087</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-left: 9pt">Total Current Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,263,248</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,578,988</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Long-term loans</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">3,454,543</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">7,538,787</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-left: 27pt">Total Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,717,791</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,117,775</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">Stockholders&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: -9pt; padding-left: 9pt">Common stock, $0.0001 par value, 500,000,000 shares authorized, 56,341,718 and 56,000,000 shares issued and outstanding as of December 31, 2018 and 2017, respectively.</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,634</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,600</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Additional paid in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,398,854</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,817,585</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">Accumulated deficit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,773,401</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(16,118,404</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">Accumulated other comprehensive gain</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">344,187</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">240,402</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">Stockholders&rsquo; Equity &nbsp;- Muliang Agritech, Inc. and Subsidiaries</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,975,274</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">945,183</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">Noncontrolling 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">120,537</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">(14,903</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; text-indent: 10pt">Total Stockholders&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">8,095,811</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">930,280</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: 4pt; text-indent: 30pt">Total Liabilities and Stockholders&rsquo; Equity</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">24,813,602</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">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">20,048,055</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: center"><B>&nbsp;</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to consolidated financial
statements</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>

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<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_16"></A>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS</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; text-align: center"><B></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="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">For the Years Ended<BR> December 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="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>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</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; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; padding-left: 0.75pt">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">13,205,024</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">737,563</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; padding-left: 0.75pt">Cost of goods sold</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">7,660,026</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">591,236</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-left: 9pt">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,544,998</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">146,327</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.75pt">&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-left: 0.75pt">Operating expenses:</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: 0.75pt">General and administrative expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,100,271</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,511,019</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: 0.75pt">Selling 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">531,771</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">163,042</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; padding-left: 9pt">Total operating 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">1,632,042</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">1,674,061</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-left: 0.75pt">&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: 1.5pt; padding-left: 9pt">Income (Loss) from operations</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">3,912,956</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">(1,527,734</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="padding-left: 0.75pt">&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: 0.75pt">Other income (expense):</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: 0.75pt">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(421,054</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(508,818</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.75pt">Subsidy income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">756,197</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: 0.75pt">Rental income, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">228,208</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">98,418</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: 0.75pt">Other income (expense), net</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">(28,030</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">(70,390</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-left: 9pt">Total other income (expense)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">535,321</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(480,790</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.75pt">&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-bottom: 1.5pt; padding-left: 9pt">Income (Loss) before 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">4,448,277</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">(2,008,524</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.75pt">&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; padding-left: 0.75pt">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">(25,542</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">26,334</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: 0.75pt">&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-bottom: 1.5pt; padding-left: 9pt">Net income (loss)</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">4,473,819</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">(2,034,858</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.75pt">&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; padding-left: 0.75pt">Net income (loss) attributable to 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">128,816</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">(18,406</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; padding-bottom: 1.5pt; padding-left: 0.75pt">Net income (loss) attributable to Muliang Agritech, Inc. common stockholders</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,345,003</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(2,016,452</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="padding-left: 0.75pt">&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: 0.75pt">Other comprehensive income (loss):</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: 0.75pt">Unrealized foreign currency translation adjustment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">103,785</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">147,936</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 0.75pt">&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: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt; padding-left: 9pt">Total Comprehensive loss</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">4,577,604</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(1,886,922</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.75pt">Total comprehensive (income) loss attributable to non-controlling interests</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">135,440</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,214</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: 0.75pt">Total comprehensive (income) loss attributable to Muliang Agritech, Inc. common stockholders</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,442,164</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,893,136</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.75pt">&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; padding-left: 0.75pt">Earnings per common 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-left: 0.75pt">Basic and diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.08</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.04</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.75pt">&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; padding-left: 0.75pt">Weighted average common shares outstanding</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: 0.75pt">Basic</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56,170,859</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.75pt">Diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56,170,859</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>



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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to consolidated financial
statements</P>

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

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

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    <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"><A NAME="a_17"></A><B>MULIANG
AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS&rsquo; EQUITY</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; text-align: center"><B></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="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">Common Stock</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">Additional<BR> Paid-in</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">Accumulated</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">Accumulated<BR> Other<BR> Comprehensive</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">Non-<BR> controlling</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">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&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">Shares</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">Capital</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">Deficit</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">Income (Loss)</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">Interest</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">Total</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: 30%; text-indent: -9pt; padding-left: 9pt">Balance, December&nbsp;31, 2016</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">56,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">5,600</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">16,817,585</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">(14,101,952</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">92,466</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">(2,711</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">2,810,988</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">&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><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: -9pt; padding-left: 9pt">Net income</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">(2,016,452</TD><TD STYLE="text-align: left">)</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">(18,406</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,034,858</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; text-indent: -9pt; padding-left: 9pt">Foreign currency translation adjustment</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">-</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">147,936</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">6,214</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">154,150</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: -9pt; padding-left: 9pt">&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><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: -9pt; padding-left: 9pt">Balance, December 31, 2017</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">5,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">16,817,585</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(16,118,404</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">240,402</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(14,903</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">930,280</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">&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><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: -9pt; padding-left: 9pt">Issuance of common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">341,718</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,581,269</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">2,581,303</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: -9pt; padding-left: 9pt">Net income</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">4,345,003</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">128,816</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,473,819</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: -9pt; padding-left: 9pt">Foreign currency translation adjustment</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">-</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">103,785</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">6,624</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">110,409</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: -9pt; padding-left: 9pt">&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><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-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Balance, December 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">56,341,718</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">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">5,634</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">19,398,854</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">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(11,773,401</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">344,187</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">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">120,537</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">8,095,811</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: center"><B>&nbsp;</B>&nbsp;<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to consolidated financial
statements</P>

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

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

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<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_18"></A>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSOLIDATED STATEMENTS OF CASH FLOWS</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; text-align: center"><B></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="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center">For the Year&nbsp;&nbsp;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; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 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="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="text-align: justify">&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">
    <TD STYLE="font-weight: bold">CASH FLOWS FROM 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 (loss)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">4,473,819</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(2,034,858</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Adjustments to reconcile net income (loss) to net cash provided by (used in) 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">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">849,792</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">649,976</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Bad debt expense(reverse)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,880</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">104,888</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">Deferred income tax assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(472,749</TD><TD STYLE="text-align: left">)</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">Changes in assets and 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: rgb(204,238,255)">
    <TD STYLE="text-align: left">Restricted cash</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">1,063</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,893,269</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,859</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(58,409</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">143,989</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Prepayment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,319</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(268,096</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Other receivables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(40,308</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(46,077</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accounts payable and accrued payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36,002</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,339,649</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Advances from customers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">197,844</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,321</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Income tax payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">447,207</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">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">270,176</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">1,042,996</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; text-indent: 20pt">Net cash provided by (used in) operating 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">1,823,544</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">(1,715,588</TD><TD STYLE="padding-bottom: 1.5pt; 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">CASH FLOWS FROM 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">Purchase of intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(936,238</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(651</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Purchase of biological assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(18,877</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: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Investment in construction in progress</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">(1,514,586</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></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt; text-indent: 20pt">Net cash used in investing 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">(2,469,701</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">(648</TD><TD STYLE="padding-bottom: 1.5pt; 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">CASH FLOWS FROM 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">Borrowing &nbsp;of short-term loans</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">547,580</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Proceeds from third party individual</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,812,718</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">Proceeds from (Repayment to) related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,109,372</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,191,534</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Repayment of short-term loans</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(754,422</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,030,783</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">Capital contribution from shareholders</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">2,599,413</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="font-weight: bold; text-align: left; padding-bottom: 1.5pt; text-indent: 20pt">Net cash provided by 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">548,337</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">1,708,331</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>&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">EFFECT OF EXCHANGE RATE CHANGES ON CASH</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">101,547</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">(254</TD><TD STYLE="padding-bottom: 1.5pt; 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="text-align: left">NET INCREASE (DECREASE) IN CASH</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,727</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,162</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, BEGINNING OF 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">9,051</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">17,213</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: 4pt">CASH, END OF YEAR</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">12,778</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">9,051</TD><TD STYLE="padding-bottom: 4pt; 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">SUPPLEMENTAL DISCLOSURES:</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 period for:</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">Cash paid for interest expense, net of capitalized interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,579,634</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">589,163</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; text-indent: 10pt">Cash paid for income tax</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; 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; text-align: left">NON-CASH TRANSACTIONS OF INVESTING AND 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">Long term loan transfer to short term loan</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4,459,831</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</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">Debt to stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">326,550</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>



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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to consolidated financial
statements</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>

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<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"><A NAME="a_19"></A><B>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</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"><B>NOTE 1 &ndash; ORGANIZATION AND NATURE OF OPERATIONS</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: 0; text-align: justify">Muliang Agritech, Inc. formerly known as Mullan
Agritech, Inc and previously M&amp;A Holding Corporation. (&ldquo;Muliang Agritech&rdquo;) was incorporated under the laws of the
State of Nevada on November 5, 2014. Muliang Agritech&rsquo;s core business activities of developing, manufacturing, and selling
organic fertilizers and bio-organic fertilizers for use in agricultural industry are conducted through several indirectly owned
subsidiaries in China.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 9, 2016, Mullan Agritech filed a Certificate
of Amendment to its Articles of Incorporation (the &ldquo;Amendment&rdquo;) with the Secretary of State of the State of Nevada,
changing its name from &ldquo;M &amp; A Holding Corporation,&rdquo; to &ldquo;Mullan Agritech, Inc.&rdquo; On April 5, 2019, Company
filed another Certificate of Amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada, changing
its name from &ldquo;Mullan Agritech, Inc.&rdquo; to &ldquo;Muliang Agritech, Inc.&rdquo;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 11, 2016, the Financial Industry
Regulatory Authority (FINRA) effected in the marketplace the change of the corporate name from &ldquo;M &amp; A Holding Corporation,&rdquo;
to &ldquo;Mullan Agritech, Inc.&rdquo;, and effective on such date. Mullan Agritech trades under its new name, Mullan Agritech,
Inc.</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>History</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">Shanghai Muliang Industry Co., Ltd. (referred
to herein as &ldquo;Muliang Industry&rdquo;) was incorporated in PRC on December 7, 2006 as a limited liability company, owned
95% by Lirong Wang and 5% by Zongfang Wang. Muliang Industry through its own operations and its subsidiaries is engaged in the
business of developing, manufacturing, and selling organic fertilizers and bio-organic fertilizers for use in the agricultural
industry.</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 May 27, 2013, Muliang Industry entered
into and consummated an equity purchase agreement whereby it acquired 99% of the outstanding equity of Weihai Fukang Bio-Fertilizer
Co., Ltd. (&ldquo;Fukang&rdquo;), a corporation organized under the laws of the People&rsquo;s Republic of China. Fukang was incorporated
in Weihai City, Shandong Province on January 6, 2009. Fukang is focused on the distribution of organic fertilizers and the development
of new bio-organic fertilizers. As a result of the completion of the transaction, Fukang became a 99% owned subsidiary of Muliang
Industry, with the remaining 1% equity interest owned by Ms. Hui Song.</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 July 11, 2013, Muliang Industry
established a wholly owned subsidiary, Shanghai Muliang Agritech Development Co., Ltd. (&ldquo;Agritech Development&rdquo;)
in Shanghai, China. On November 6, 2013, Muliang Industry sold 40% of the outstanding equity of Agritech Development to Mr.
Jianping Zhang for consideration of approximately $65,000 or RMB 400,000. Agritech Development does not currently conduct any
operations.</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 July 17, 2013, Muliang Industry entered
into an equity purchase agreement to acquire 100% of the outstanding equity of Shanghai Zongbao Environmental Construction Co.,
Ltd. (&ldquo;Zongbao&rdquo;) with consideration of approximately $3.2 million or RMB 20 million, effectively becoming the wholly-owned
subsidiary of Muliang Industry. Zongbao was incorporated in Shanghai on January 25, 2008. Zongbao processes and distributes organic
fertilizers. Zongbao wholly owns, Shanghai Zongbao Environmental Construction Co., Ltd. Cangzhou Branch (&ldquo;Zongbao Cangzhou&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">On August 21, 2014, Muliang Agricultural
Limited (&ldquo;Muliang HK&rdquo;) was incorporated in Hong Kong as an investment holding company.</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">January 27, 2015, Muliang HK incorporated
a wholly foreign-owned enterprise, Shanghai Mufeng Investment Consulting Co., Ltd (&ldquo;Shanghai Mufeng&rdquo;), in the People&rsquo;s
Republic of China (&ldquo;PRC&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"></P>

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<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>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 1 &ndash; ORGANIZATION AND NATURE OF OPERATIONS (CONTINUED)</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">On July 8, 2015, Mullan Agritech entered
into certain stock purchase agreement with Muliang Agriculture, Inc., pursuant to which Mullan Agritech, for a consideration of
$5,000, acquired 100% interest in Muliang HK and its wholly-owned subsidiary Shanghai Mufeng. Both Muliang HK and Shanghai Mufeng
are controlled by the Company&rsquo;s sole officer and director, Lirong Wang.</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 July 23, 2015, Muliang Industry established
a wholly owned subsidiary, Shanghai Muliang Agricultural Sales Co., Ltd. (&ldquo;Muliang Sales&rdquo;) in Shanghai, 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"></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 3, 2015, Muliang Agritech effected
a split of its outstanding common stock resulting in an aggregate of 30,105,000 shares outstanding of which 24,000,000 were owned
by Chenxi Shi the founder of Muliang Agritech and its sole officer and director. The remaining 6,105,000 were held by a total of
39 investors.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 11, 2016, Muliang Agritech issued
25,895,000 shares of its common stock to Lirong Wang for an aggregate consideration of $64,737.50. On the same date, Chenxi Shi,
the sole officer and director of Muliang Agritech on that date, transferred 24,000,000 shares of the common stock of the Company
held by him to Lirong Wang for $800 pursuant to a transfer agreement.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 10, 2016, Shanghai Mufeng entered
into a set of contractual agreements known as Variable Interest Entity (&ldquo;VIE&rdquo;) Agreements, including (1) Exclusive
Technical Consulting and Service Agreement, (2) Equity Pledge Agreement, and (3) Call Option Cooperation Agreement, with Muliang
Industry, and its Principal Shareholders. As a result of the Stock Purchase Agreement and the set of VIE Agreements, Shanghai Muliang
Industry Co., Ltd., along with its consolidated subsidiaries, became entities controlled by Muliang Agritech whereby Muliang Agritech
would derive all substantial economic benefit generated by Muliang Industry and its subsidiaries.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As a result, Muliang Agritech has a direct
wholly-owned subsidiary, Muliang HK and an indirectly wholly owned subsidiary Shanghai Mufeng. Through its VIE Agreements, Muliang
Agritech exercises control over Muliang Industry. Muliang Industry has two wholly-owned subsidiaries (Zongbao and Muliang Sales),
one 99% owned subsidiary (Fukang), one 60% owned subsidiary (Agritech Development), and one indirectly wholly owned subsidiary
Zongbao Cangzhou.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 6, 2016, Muliang Industry established
a wholly-owned subsidiary, namely, Muliang (Ningling) Bio-chemical Fertilizer Co. Ltd (&ldquo;Ningling Fertilizer&rdquo;) in Henan
Province, the central plain of China. Ningling Fertilizer, with registered capital of RMB 20,000,000, is setup for a new production
line of bio-chemical fertilizer and has not begun any operation yet. Ningling Fertilizer was subsequently deregistered as the Company
had no further plans to begin operations.</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 July 7, 2016, Muliang Industry established
a subsidiary, namely, Zhonglian Huinong (Beijing) Technology Co., Ltd. (&ldquo;Zhonglian&rdquo;) in Beijing, China. Muliang Industry
owns 65% shares of Zhonglian, and a third-party company, Zhongrui Huilian (Beijing) Technology Co., Ltd. owns the other 35% shares.
Zhonglian, with registered capital of RMB 10,000,000, was established to develop and operate an online agricultural products trading
platform.</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 October 27, 2016, Muliang Industry
established a wholly-owned subsidiary, Yunnan Muliang Animal Husbandry Development Co., Ltd. (&ldquo;Yunnan Muliang&rdquo;)
in Yunnan Province, China. Muliang Industry owns 55% shares of Yunnan Muliang, and a third-party company, Shuangbai County
Development Investment Co., Ltd. owns the other 45% shares. On December 8, 2018, Muliang Industry acquired 25% shares of
Yunnan Muliang with a consideration of $727,125(RMB5,000,000) from Shuangbai County Development Investment Co., Ltd. And the
other 20% shares were acquired by Lirong Wang. Yunnan Muliang, with registered capital of RMB 20,000,000, was established for
the development of sales in the western region of 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"></P>

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<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>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</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"><B>NOTE 1 &ndash; ORGANIZATION AND NATURE OF OPERATIONS (CONTINUED)</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">Muliang HK, Shanghai Mufeng, Muliang Industry,
Zongbao, Zongbao Cangzhou, Muliang Sales, Fukang, Agritech Development, Muliang Agritech, Zhonglian, and Yunnan Muliang are referred
to as subsidiaries the Company and its consolidated subsidiaries are collectively referred to herein as the &ldquo;Company&rdquo;,
&ldquo;we&rdquo; and &ldquo;us&rdquo;, unless specific reference is made to an entity.</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 were
prepared assuming that the Company has controlled Muliang HK and its intermediary holding companies, operating subsidiaries, and
variable interest entities: Shanghai Mufeng, Muliang Industry, Zongbao, Zongbao Cangzhou, Muliang Sales, Fukang, and Agritech Development,
from the first period presented. The transactions detailed above have been accounted for as reverse takeover transaction and a
recapitalization of the Company; accordingly, the Company (the legal acquirer) is considered the accounting acquiree and Muliang
HK (the legal acquiree) is considered the accounting acquirer. No goodwill has been recorded. As a result of this transaction,
the Company is deemed to be a continuation of the business of Muliang HK, Shanghai Mufeng, and Muliang Industry.</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>Liquidity and Going Concern</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 accompanying financial statements have been prepared in conformity with generally accepted accounting
principles which contemplate continuation of the Company as a going-concern basis. The going-concern basis assumes that assets
are realized<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">, and liabilities are extinguished in the
ordinary course of business at amounts disclosed in the financial statements. The Company&rsquo;s ability to continue as a going
concern depends upon the liquidation of current assets. For the years ended December 31, 2018 and 2017, the Company reported net
income of $4,473,819 and net loss of $2,034,858, respectively. The Company had working capital deficit of approximately $7.12 million
and $10.71 million as of December 31, 2018 and December 31, 2017. Although the Company had net cash inflow of $1,823,544 and net
cash outflow of $1,715,588 from its operating activities during the years ended December 31, 2018 and 2017. The Company generated
income from operation of $3,912,956 and incurred interest expense of $421,054 for the year ended December 31, 2018. The overall
situation of the Company still raises doubt as to whether the Company may continue as a going concern.</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">In an effort to improve its financial position,
the Company is working to obtain new loans from banks and related parties, renew its current loans, and to improve its operations
upon its modified fertilizer factories. The Company obtained capital contribution of approximately $16 million in 2015 and $2.7
in the first half of 2018 from its shareholders. The Company expects to have more capital contribution from its shareholders in
the near 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"><B>Basis of Presentation</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 accompanying consolidated financial
statements have been prepared in conformity with US GAAP. The basis of accounting differs from that used in the statutory accounts
of the Company, which are prepared in accordance with the accounting principles of the PRC (&ldquo;PRC GAAP&rdquo;). The differences
between US GAAP and PRC GAAP have been adjusted in these consolidated financial statements. The Company&rsquo;s functional currency
is the Chinese Renminbi (&ldquo;RMB&rdquo;); however, the accompanying consolidated financial statements have been translated and
presented in United States Dollars (&ldquo;USD&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"></P>

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<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>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</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: justify"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES</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>Use of Estimates</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 preparation of these financial statements
in conformity with generally accepted accounting principles requires the Company to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of these
financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates
on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly,
actual results may differ from these estimates. Significant estimates include the useful lives of property and equipment, land
use rights, assumptions used in assessing collectability of receivables and impairment for long-term assets.</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>Principles of Consolidation</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">Muliang Agritech consolidates the following
entities, including wholly-owned subsidiaries, Muliang HK, Shanghai Mufeng, and its wholly controlled variable interest entities,
Muliang Industry, and Zhongbao, 60% controlled Agritech Development, 99% controlled Fukang, 65% controlled Zhonglian and 80% controlled
Yunnan Muliang. The 40% equity interest holder of Agritech Development, 1% equity interest holders in Fukang, 35% equity interest
holders in Zhonglian, and 20% interest in Yunnan Muliang are accounted as non-controlling interest in the Company&rsquo;s consolidated
financial statements.</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 variable interest entities consolidated
for which the Company is deemed the primary beneficiary. All significant inter-company accounts and transactions have been eliminated
in consolidation.</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>Control by Principal Stockholders</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 Company&rsquo;s directors and executive
officers and their affiliates or related parties own, beneficially and in the aggregate, the majority of the voting power of the
outstanding shares of our common stock. Accordingly, if our directors and executive officers and their affiliates or related parties
vote their shares uniformly, they would have the ability to control the approval of most corporate actions, including increasing
our authorized capital stock and the dissolution or merger of our company or the sale of our assets.</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>Cash and Cash Equivalents</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 purposes of the statements of cash
flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less and money market accounts
to be cash equivalents. The Company maintains cash with various financial institutions.</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>Accounts Receivable</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">Accounts receivable are presented net of
an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews
the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability
of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors,
including the age of the balance, a customer&rsquo;s historical payment history, its current credit-worthiness and current economic
trends. Accounts are written off after exhaustive efforts at collection.</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>

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<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>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</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>Inventories</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">Inventories, consisting of raw materials,
work in process, and finished goods related to the Company&rsquo;s products are stated at the lower of cost or market utilizing
the weighted average method.</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>Property, Plant and Equipment</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">Plant and equipment are carried at cost
and are depreciated on a straight-line basis over the estimated useful lives of the assets. The cost of repairs and maintenance
is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost
and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year
of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances
reflect the fact that their recorded value may not be recoverable.</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">Included in property and equipment is construction-in-progress
which consisted of factory improvements and machinery pending installation and includes the costs of construction, machinery and
equipment, and any interest charges arising from borrowings used to finance these assets during the period of construction or installation
of the assets. No provision for depreciation is made on construction-in-progress until such time as the relevant assets are completed
and ready for their intended use.</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">Estimated useful lives of the Company&rsquo;s
assets are as follows:</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: bottom">
    <TD STYLE="width: 79%">&nbsp;</TD>
    <TD STYLE="width: 1%"></TD>
    <TD STYLE="width: 20%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Useful Life</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Building</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">20 years</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operating equipment</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5-10 years</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Vehicle</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3-5 years</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Electronic equipment</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3-20 years</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Office equipment</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3-20 years</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Apple orchard</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10 years</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 apple orchard includes rental for an
apple farm, labor cost, fertilizers, apple seeds, apple seedlings and others. The costs to purchase and cultivate apple trees and
the expenditures related to labor and materials to plant apple trees until they become commercially productive are capitalized,
which require a two-year period. The estimated production life for apple tree is 10 years, and the costs are depreciated without
a residual value. Expenses incurred maintaining apple trees during the growth cycle until seedling apple trees or grafted varieties
are fruited are capitalized into inventory and included in Work In Process&mdash;apple orchard, a component of inventories.</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">Depreciation expenses pertaining to apple
trees will be included in inventory costs for those apples to be sold and ultimately become a component of cost of goods sold.
Similar to other assets, the failure of our apple trees to be serviceable over the entirety of their anticipated useful lives or
to be sold at their anticipated residual value will negatively impact our operating results.</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>

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<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>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</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>Intangible Assets</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"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Included in the intangible assets are land
use rights and non-patented technology. According to the laws of the PRC, the government owns all the land in the PRC. Companies
or individuals are authorized to possess and use the land only through land use rights granted by the Chinese government. Useful
life for non-patented technology refers to the period during which economic benefits can be generated. Intangible assets are being
amortized using the straight-line method over their lease terms or estimated useful life.</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">Estimated useful lives of the Company&rsquo;s
intangible assets are as follows:</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: bottom">
    <TD STYLE="width: 79%">&nbsp;</TD>
    <TD STYLE="width: 1%"></TD>
    <TD STYLE="width: 20%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Useful Life</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Land use rights</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">50 years</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-patented technology</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10 years</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 Company carries intangible assets at
cost less accumulated amortization. In accordance with US GAAP, the Company examines the possibility of decreases in the value
of intangible assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.
The Company computes amortization using the straight-line method over estimated useful life of 50 years for the land use 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"><B>Impairment of Long-lived Assets</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">In accordance with ASC Topic 360, the Company
reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets
may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted
future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between
the asset&rsquo;s estimated fair value and its book value. The Company recorded no impairment charge for the years ended December
31, 2018 and 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"><B>Advances from 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">Advances from customers consist of prepayments
from customers for merchandise that had not yet been shipped. The Company will recognize the deposits as revenue as customers take
delivery of the goods and title to the assets is transferred to customers in accordance with the Company&rsquo;s revenue recognition
policy.</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>Non-controlling Interest</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">Non-controlling interests in the Company&rsquo;s
subsidiaries are recorded in accordance with the provisions of ASC 810 and are reported as a component of equity, separate from
the parent&rsquo;s equity. Purchase or sale of equity interests that do not result in a change of control are accounted for as
equity transactions. Results of operations attributable to the non-controlling interest are included in our consolidated results
of operations and, upon loss of control, the interest sold, as well as interest retained, if any, will be reported at fair value
with any gain or loss recognized in earnings.</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>Revenue Recognition</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">On January 1, 2018, the Company adopted ASC 606 using the modified
retrospective method. Results for the reporting period beginning after January 1, 2018 are presented under ASC 606, while prior
period amounts have not been adjusted and continue to be reported in accordance with the Company&rsquo;s historic accounting under Topic
605.</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 has determined that the adoption of ASC 606 did not
impact the Company&rsquo;s previously reported financial statements in any prior period nor did it result in a cumulative effect
adjustment to opening retained earnings.</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 for sale of products is derived from contracts with
customers, which primarily include the sale of fertilizer products and environmental protection equipment. The Company&rsquo;s
sales arrangements do not contain variable consideration. The Company recognizes revenue at a point in time based on management&rsquo;s
evaluation of when performance obligations under the terms of a contract with the customer are satisfied and control of the products
has been transferred to the customer. For vast majority of the Company&rsquo;s product sales, the performance obligations and control
of the products transfer to the customer when products are delivered, and customer acceptance is made.</P>

<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; text-align: justify">Pursuant to the guidance of ASC Topic 840,
rent shall be&nbsp;reported as income by lessors over the&nbsp;lease term&nbsp;as it becomes receivable. The Company currently
leased part of the building of the Shanghai new plant to third parties as warehouse. The Company recognizes building leasing revenue
over the beneficial period described by the agreement, as the revenue is realized or realizable and earned.&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">The Company recognized rental income from
leasing a portion of its manufacturing facility located in Shanghai to third parties. For the years ended December 31, 2018 and
2017, rental income of $388,309 and $248,431 were recognized as other 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"></P>

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<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>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</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: justify"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</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>Cost of Sales</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">Cost of goods sold consists primarily of
raw materials, utility and supply costs consumed in the manufacturing process, manufacturing labor, depreciation expense and direct
overhead expenses necessary to manufacture finished goods as well as warehousing and distribution costs such as inbound freight
charges, shipping and handling costs, purchasing and receiving costs.</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>Income Taxes</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 Company accounts for income taxes under
the provisions of Section 740-10-30 of the FASB Accounting Standards Codification, which is an asset and liability approach that
requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been
recognized in its financial statements or tax returns.</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 is subject to the Enterprise
Income Tax law (&ldquo;EIT&rdquo;) of the People&rsquo;s Republic of China. The Company&rsquo;s operations in producing and selling
fertilizers are subject to the 25% enterprise income tax.</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>Related Parties</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">Parties are considered to be related to
the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under
common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate
families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls
or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties
might be prevented from fully pursuing its own separate interests. The Company discloses all related party 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"><B>Accumulated Other Comprehensive Income
(Loss)</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">Comprehensive income (loss) comprised of
net income (loss) and all changes to the statements of stockholders&rsquo; equity, except those due to investments by stockholders,
changes in paid-in capital and distributions to stockholders. The Company&rsquo;s comprehensive income (loss) consist of net income
(loss) and unrealized gains from foreign currency translation adjustments.</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>

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<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>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</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: justify"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</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>Foreign Currency Translation</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 Company&rsquo;s functional currency
is the Chinese Renminbi (&ldquo;RMB&rdquo;); however, the accompanying consolidated financial statements have been translated and
presented in United States Dollars (&ldquo;USD&rdquo;). Results of operations and cash flows are translated at average exchange
rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity
is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements
of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments
resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining
comprehensive income/loss. The translation adjustment for the years ended December&nbsp;31, 2018 and 2017 was gains of $105,755
and $147,936, respectively. Transactions denominated in foreign currencies are translated into the functional currency at the exchange
rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional
currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange
rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations
as incurred.</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">All of the Company&rsquo;s revenue transactions
are transacted in the functional currency. The Company does not enter into any material transaction in foreign currencies. Transaction
gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company.</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">Asset and liability accounts at December
31, 2018 and 2017 were translated at 6.8764 RMB to $1 USD and 6.5064 RMB to $1 USD, respectively, which were the exchange rates
on the balance sheet dates. The average translation rates applied to the statements of income for the years ended December 31,
2018 and 2017 were 6.6146 RMB and 6.7570 RMB to $1 USD, 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"><B>Earnings (Loss) per Share</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">Basic earnings per share is computed by
dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period,
excluding the effects of any potentially dilutive securities. Diluted earnings per share gives effect to all dilutive potential
of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by
using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock
options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Earnings per share excludes
all potential dilutive shares of common stock if their effect is anti-dilutive. There were no potential dilutive securities at
December 31, 2018 and 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"></P>

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<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>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</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: justify"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</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>Fair Value of Financial Instruments</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 Company adopted the guidance of ASC
Topic 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value,
and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:</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">Level 1-Inputs are unadjusted quoted prices
in active markets for identical assets or liabilities available at the measurement date.</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">Level 2-Inputs are unadjusted quoted prices
for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets
that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable
market data.</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">Level 3-Inputs are unobservable inputs
which reflect the reporting entity&rsquo;s own assumptions on what assumptions the market participants would use in pricing the
asset or liability based on the best available information.</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 carrying amounts reported in the balance
sheets for cash and cash equivalents, accounts receivable, inventories, advances to suppliers, prepaid expenses, short-term loans,
accounts payable, accrued expenses, advances from customers, VAT and service taxes payable and income taxes payable approximate
their fair market value based on the short-term maturity of these instruments.</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">ASC Topic 825-10 &ldquo;<I>Financial Instruments</I>&rdquo;
allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The
fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If
the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings
at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.</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">The following table summarizes the carrying values of the Company&rsquo;s
financial instruments:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><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="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">December&nbsp;31,<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="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December&nbsp;31, <BR> 2017</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>&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: justify">Short-term loan</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">150,515</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">159,074</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Current portion of long-term loan</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,453,435</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,998,033</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Long-term loan</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">3,454,543</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">5,102,668</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: justify; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">9,058,493</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">7,259,775</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"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Government Contribution Plan</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 laws applicable to PRC
law, the Company is required to participate in a government-mandated multi-employer defined contribution plan pursuant to which
certain retirement, medical and other welfare benefits are provided to employees. Chinese labor regulations require the Company
to pay to the local labor bureau a monthly contribution at a stated contribution rate based on the monthly basic compensation of
qualified employees. The relevant local labor bureau is responsible for meeting all retirement benefit obligations; the Company
has no further commitments beyond its monthly contribution.</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>

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    <!-- 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: center"><B>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</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: justify"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</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>Statutory Reserve&#9;</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">Pursuant to the laws applicable to the
PRC, the Company must make appropriations from after-tax profit to the non-distributable &ldquo;statutory surplus reserve fund&rdquo;.
Subject to certain cumulative limits, the &ldquo;statutory surplus reserve fund&rdquo; requires annual appropriations of 10% of
after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles
generally accepted in the PRC (&ldquo;PRC GAAP&rdquo;) at each year-end). For foreign invested enterprises and joint ventures in
the PRC, annual appropriations should be made to the &ldquo;reserve fund&rdquo;. For foreign invested enterprises, the annual appropriation
for the &ldquo;reserve fund&rdquo; cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of
the registered capital (as determined under PRC GAAP at each year-end). If the Company has accumulated loss from prior periods,
the Company is able to use the current period net income after tax to offset against the accumulate loss.</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>Segment 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">The standard, &ldquo;Disclosures about
Segments of an Enterprise and Related Information,&rdquo; codified with ASC-280, requires certain financial and supplementary information
to be disclosed on an annual and interim basis for each reportable segment of an enterprise. The Company believes that it operates
in two business segments and in one geographical segment (China), as all of the Company&rsquo;s current operations are carried
in China.</P>

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

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    <!-- 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: center"><B>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</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: justify"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</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>Recent Accounting Pronouncement</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">In June 2016, the FASB issued Accounting
Standards Update No. 2016-13 (ASU 2016-13) <I>&ldquo;Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses
on Financial Instruments&rdquo;</I> which requires the measurement and recognition of expected credit losses for financial assets
held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which
will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods
within those years beginning after December 15, 2019. The Company is currently in the process of evaluating the impact of the
adoption on its consolidated financial statements.</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 August 2016, the FASB issued ASU No.
2016-15, &ldquo;<I>Classification of Certain Cash Receipts and Cash Payments&rdquo;,</I> which is intended to reduce diversity
in practice in how certain cash receipts and payments are presented and classified in the statement of cash flows. The standard
provides guidance in a number of situations including, among others, settlement of zero-coupon bonds, contingent consideration
payments made after a business combination, proceeds from the settlement of insurance claims, and distributions received from
equity method investees. The ASU also provides guidance for classifying cash receipts and payments that have aspects of more than
one class of cash flows. The Company is currently in the process of evaluating the impact of the adoption on its consolidated
financial statements.</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>

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<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>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</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: justify"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</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">In January 2017, the Financial Accounting
Standard Board (&ldquo;FASB&rdquo;) issued guidance, which simplifies the accounting for goodwill impairment. The updated guidance
eliminates Step 2 of the impairment test, which requires entities to calculate the implied fair value of goodwill to measure a
goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit&rsquo;s
carrying amount over its fair value.</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 January 2017, the FASB issued guidance,
which amended the existing accounting standards for business combinations. The amendments clarify the definition of a business
with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions
(or disposals) of assets or businesses.</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 January 2017, the FASB issued ASU 2017-03, &ldquo;<I>Accounting
Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323)</I>&rdquo;. This pronouncement
amends the SEC&rsquo;s reporting requirements for public filers in regard to new accounting pronouncements or existing pronouncements
that have not yet been adopted. Companies are to provide qualitative disclosures if they have not yet implemented an accounting
standards update. Companies should disclose if they are unable to estimate the impact of a specific pronouncement, and provide
disclosures including a description of the effect on accounting policies that the registrant expects to apply. These provisions
apply to all pronouncements that have not yet been implemented by registrants. There are additional provisions that relate to corrections
to several other prior FASB pronouncements. The Company has incorporated language into other recently issued accounting pronouncement
notes, where relevant for the corrections in FASB ASU 2017-03. The Company is implementing the updated SEC requirements on not
yet adopted accounting pronouncements with these consolidated financial statements.</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 August 2017, the FASB issued guidance,
which amends the existing accounting standards for derivatives and hedging. The amendment improves the financial reporting of hedging
relationships to better represent the economic results of an entity&rsquo;s risk management activities in its financial statements
and made certain targeted improvements to simplify the application of the hedge accounting guidance in current U.S. GAAP.</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 August 2018, the FASB issued ASU 2018-13, &rdquo; <I>Fair
Value Measurement (Topic 820), &ndash; Disclosure Framework &ndash; Changes to the Disclosure Requirements for Fair Value Measurement</I>,&rdquo;
which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst
or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. The amendments in this Update modify the disclosure
requirements on fair value measurements based on the concepts in FASB Concepts Statement, Conceptual Framework for Financial Reporting&mdash;Chapter
8: Notes to Financial Statements, including the consideration of costs and benefits. The amendments on changes in unrealized gains
and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements,
and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual
period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods
presented upon their effective date. The amendments are effective for all entities for fiscal years beginning after December 15,
2019, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the potential
impacts of ASU 2018-13 on its consolidated financial statements.</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 believes that there were no
other accounting standards recently issued that had or are expected to have a material impact on our financial position or results
of operations.</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>

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<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>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</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: justify"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</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"><B><I>Recently adopted accounting pronouncements</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">In March 2016, the FASB issued ASU
2016-08, &ldquo;<I>Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting
Revenue Gross versus Net)</I>&rdquo;. The amendments in this ASU are intended to improve the operability and
understandability of the implementation guidance on principal versus agent considerations by amending certain existing
illustrative examples and adding additional illustrative examples to assist in the application of the guidance. The effective
date and transition of these amendments is the same as the effective date and transition of ASU 20140-9, &ldquo;Revenue from
Contracts with Customers (Topic 606)&rdquo;. Public entities should apply the amendments in ASU 2014-09 for annual reporting
periods beginning after December 15, 2017, including interim reporting periods 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"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2016, the FASB issued ASU 2016-12, &ldquo;<I>Revenue
from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients</I>&rdquo;. The amendments, among
other things: (1) clarify the objective of the collectability criterion for applying paragraph 606-10-25-7; (2) permit an entity
to exclude amounts collected from customers for all sales (and other similar) taxes from the transaction price; (3) specify that
the measurement date for noncash consideration is contract inception; (4) provide a practical expedient that permits an entity
to reflect the aggregate effect of all modifications that occur before the beginning of the earliest period presented when identifying
the satisfied and unsatisfied performance obligations, determining the transaction price, and allocating the transaction price
to the satisfied and unsatisfied performance obligations; (5) clarify that a completed contract for purposes of transition is a
contract for which all (or substantially all) of the revenue was recognized under legacy GAAP before the date of initial application,
and (6) clarify that an entity that retrospectively applies the guidance in Topic 606 to each prior reporting period is not required
to disclose the effect of the accounting change for the period of adoption. The effective date of these amendments is at the same
date that Topic 606 is effective. The Company adoptedASU 2016-12 from January 1, 2018.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In December 2016, the FASB issued ASU 2016-20,
<I>&ldquo;Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers&rdquo;</I>. The amendments
in ASU 2016-20 affect narrow aspects of the guidance issued in ASU 2014-09 including Loan Guarantee Fees, Contract Costs, Provisions
for Losses on Construction-Type and Production-Type Contracts, Disclosure of Remaining Performance Obligations, Disclosure of
Prior Period Performance Obligations, Contract Modifications, Contract Asset vs. Receivable, Refund Liabilities, Advertising Costs,
Fixed Odds Wagering Contracts in the Casino Industry, and Costs Capitalized for Advisors to Private Funds and Public Funds. The
effective date of these amendments are at the same date that Topic 606 is effective. Topic 606 is effective for public entities
for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein (i.e., January 1,
2018, for a calendar year entity). The Company adopted ASU 2016-20 from January 1, 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">The Company adopted the <I>Revenue from
Contracts with Customers (Topic 606)</I> from January 1, 2018.</P>

<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; text-align: justify"><B>NOTE 3 &ndash; ACCOUNTS RECEIVABLE</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">Accounts receivable consisted of the following:</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>&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">December&nbsp;31, <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="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December&nbsp;31, <BR> 2017</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">Accounts receivable</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">4,370,620</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">683,758</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">Less: Allowance for doubtful accounts</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">(279,733</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">(325,242</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: 4pt">Total, net</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">4,090,887</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">358,516</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;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company reviews the accounts receivable
on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances.
After evaluating the collectability of individual receivable balances, the Company recognized bad debt allowance of $279,733 and
$325,242 for the years ended December 31, 2018 and 2017.</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>

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<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: center"><B>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</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"><B>NOTE 4 &ndash; INVENTORIES</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">Inventories consisted of the following:</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>&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">December 31,<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="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<BR> 2017</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">Raw materials</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">124,069</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">118,198</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">Finished goods</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">322,561</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">294,450</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: 4pt">Total, net</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">446,630</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">412,648</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;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 5 &ndash; PREPAYMENT</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"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The prepayment balance of $1,491,102 as of
December 31, 2018 mainly represents the advanced payment for the construction of the black goat slaughtering and processing project
located in Shuangbai County, Chuxiong City, Yunnan Province, PRC. The remaining balance represents the advance to the suppliers
for business purpose.</P>

<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"><B>NOTE 6 &ndash; PROPERTY, PLANT AND EQUIPMENT</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">Property, plant and equipment at December 31, 2018 and 2017
consisted of:</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 STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">December&nbsp;31,</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">December&nbsp;31,</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; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%">Building</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">12,838,100</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">13,603,224</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Operating equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,754,463</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,968,880</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Vehicle</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">104,121</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">58,492</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Office equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">59,897</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,500</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">Apple Orchard</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,026,505</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,029,230</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">Construction in progress</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">341,173</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>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,124,259</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,678,326</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">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">(2,196,936</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">(1,461,897</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="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">14,927,323</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">16,216,429</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>

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    <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: center"><B>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</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"><B>NOTE 6 &ndash; PROPERTY, PLANT AND EQUIPMENT (CONTINUED)</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; text-align: justify">For the years ended December 31, 2018 and
2017, depreciation expense amounted to $788,881 and $575,190, respectively. Depreciation is not taken during the period of construction
or equipment installation. Upon completion of the installation of manufacturing equipment or any construction in progress, construction
in progress balances will be classified to their respective property and equipment category.</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 construction in progress of $341,173
represents the investment of a black goat processing plant located in Shuangbai County, Chuxiong City, Yunnan Province, PRC.</P>

<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; text-align: justify"><B>NOTE 7 &ndash; INTANGIBLE ASSETS</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">Intangible assets consisted of the following:</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>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">December&nbsp;31,</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">December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<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">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>&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: 76%; text-align: left">Land use rights</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">3,618,441</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">2,279,140</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">Non-patented technology</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">14,542</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">608,632</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>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,632,983</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,887,772</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">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">(419,853</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">(381,805</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="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,213,130</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,505,967</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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The total <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">cost
of $3,618,441 represents the three industrial land use rights located in Shanghai City, Weihai City, Shandong Province, and Chuxiong
City, Yunnan Province.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><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: justify">For the years ended December 31, 2018 and
2017, amortization of intangible assets amounted to $60,911 and $74,786, respectively.</P>

<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"><B>NOTE 8 &ndash; DEFERRED TAX ASSETS, NET</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 components of the deferred tax assets
are as follows:</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="padding-bottom: 1.5pt; white-space: nowrap">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; white-space: nowrap">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid; white-space: nowrap"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December
31,&nbsp;</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; white-space: nowrap">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; white-space: nowrap">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid; white-space: nowrap"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December
31,</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; white-space: nowrap">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Deferred tax assets, non-current</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: 76%; text-align: left; padding-left: 0.75pt">Deficit carried-forward</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">416,836</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</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; padding-left: 0.75pt">Allowance for doubtful accounts</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">37,915</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-left: 0.75pt">Deferred tax assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">454,751</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: 0.75pt">Less: valuation allowance</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: 4pt; padding-left: 0.75pt">Deferred tax assets, non-current</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">454,751</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</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">Deferred taxation is calculated under the liability method in
respect of taxation effect arising from all timing differences, which are expected with reasonable probability to realize in the
foreseeable future. The Company&rsquo;s subsidiary registered in the PRC is subject to income taxes within the PRC at the applicable
tax rate.</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>

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    <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">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</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>NOTE 9 &ndash; LOAN PAYABLE</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; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Short-term loan of $150,515 represents balance
due to Shanghai Jinshan Limin Micro Loan Co., Ltd., with annualized interest rate of 16%. This loan was borrowed on March 3, 2017
and due on March 2, 2018.&nbsp;The Company extended this loan twice until the end of June 2019 with the same terms.</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">Current portion of long-term loans amounted
to $5,453,435 representing balance due to Agricultural Bank of China, with an annual interest rate of 5.70% + (HongkongInterBank
Offered Rate (&ldquo;HIBOR&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">Long-term loans represent amounts due to
lenders that are due more than one year, whose balance was $3,454,543 and $7,538,787 as of December 31, 2018 and 2017, 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">Long -term loan and current portion of
long-term loan consisted of the following:<B>&nbsp;</B></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>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">December 31,</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">December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<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">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; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left; text-indent: -9pt; padding-left: 9pt">Loan payable to Agricultural Bank of China, annual interest rate of 5.70% + HIBOR, due by August&nbsp;25, 2019.</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">4,362,748</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">5,379,319</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: -9pt; padding-left: 9pt">Loan payable to Rushan City Rural Credit Union, annual interest 8.3125%, due by July&nbsp;25, 2019.</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,090,687</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,152,711</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">Long-term loans and interest payable to individuals and entities without 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">3,454,543</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">3,004,790</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">8,907,978</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,536,820</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">Less: Current portion of long-term loans payable</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">5,453,435</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">1,998,033</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: 4pt">Total, net</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,454,543</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">7,538,787</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">As of December 31, 2018, the Company&rsquo;s
future loan obligations according to the terms of the loan agreement are as follows:</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; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-align: justify">Year 1</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">5,603,950</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Year 2</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,454,543</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: justify; padding-bottom: 4pt">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">9,058,493</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;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The long-term bank loan with Agricultural
Bank of China was collateralized with land use rights and guaranteed by Mr. Lirong Wang, the CEO.&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">The Company recognized interest expenses
of $421,054 and $508,818 for the years ended December 31, 2018 and 2017, respectively.</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>

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<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>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</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>NOTE 10 &ndash; STOCKHOLDERS DEFICIT</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>Authorized 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">The Company has authorized 500,000,000
common shares with a par value of $0.0001 per share.&nbsp; Each common share entitles the holder to one vote, in person or proxy,
on any matter on which action of the stockholders of the corporation is sought.</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>Common Share Issuances</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"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 29, 2018, the outstanding amount $326,348
due to Mr. Wang, CEO and Chairman of the Company, were converted into 43,200 shares of Common Shares at $ 7.55 per share.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 29, 2018 the Company issued 298,518
common shares of the Company at $7.55 for proceeds of $2,255,111 to Mr.&nbsp;Wang, CEO and Chairman of the Company.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2018, the Company had 56,341,718
common shares outstanding.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 4, 2019, the Company&rsquo;s Board of Directors and majority shareholder approved a 5 to 1
reverse stock split of all of the issued and outstanding shares of the Company&rsquo;s common stock (the &ldquo;Stock Split&rdquo;).
The common shares outstanding have been retroactively restated to reflect the reverse stock split.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 11 &ndash; RELATED PARTY TRANSACTIONS</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">Ms. Hui Song was the Company&rsquo;s former
sales director. In 2013, Ms. Hui Song resigned, and she no longer has any significant control or influence over the Company, therefore
she was no longer considered a related party. Jilin Jiliang Zongbao Biological Technology Co., Ltd., an entity controlled by Ms.
Hui Song, and Yantai Zongbao Tele-Agriculture Service Co., Ltd., a related company of Ms. Hui Song, were also no longer considered
as related parties of the Company.</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><U>*Account receivable and sales to
Ms. Hui Song and its associated</U></I></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">For the year ended December 31, 2018, the
Company sold fertilizer manufacturing equipment to Jilin Jiliang Zongbao Biological Technology Co., Ltd., in the amount of $164,968,
with related cost of $103,371. This transaction was reflected in the revenue and cost of goods sold.</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 December 31, 2018 and December 31,
2017, the Company has account receivable balance of $185,665 and $0 from Jilin Jiliang Zongbao Biological Technology Co., Ltd.,
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">As of December 31, 2018 and December 31,
2017, the Company has account receivable balance of $61,082 and $64,555 from Yantai Zongbao Tele-Agriculture Service Co., Ltd.,
respectively.&nbsp;</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><U>*Account payable and purchase from
Ms. Hui Song and its associated</U></I></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"><FONT STYLE="background-color: white">For
the year ended December 31, 2018, the Company purchased fertilizer of $3,651,430 from </FONT>Jilin Jiliang Zongbao Biological Technology
Co., Ltd., an entity controlled by Ms. Hui Song<FONT STYLE="background-color: white">. </FONT>As of December 31, 2018, <FONT STYLE="background-color: white">account
payable to </FONT>Jilin Jiliang Zongbao Biological Technology Co., Ltd. was $72,712.</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 December 31, 2018, long-term
loan payable balances for Jilin Jiliang Zongbao Biological Technology Co., Ltd. and Ms.&nbsp;Hui Song were of $807,780 and
$266,855, 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"><I><U>* Account receivable and sales from
related parties</U></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 Company did not make sales to any related
party for the year ended December 31, 2018 and 2017. And the Company has no account receivable balance as of December 31, 2018
and December 31, 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><U>* Account payable and purchase from
related parties</U></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"><FONT STYLE="background-color: white">For
the year ended December 31, 2018, the Company purchased fertilizer manufacturing equipment of $120,945 from Shanghai Aoke Chemicals
Co., Ltd, an entity controlled by Mr. Lirong Wang, CEO and majority shareholder of the Company.&nbsp;As of December 31, 2018, account
payable to Shanghai Aoke Chemicals Co., Ltd. were $116,340.</FONT>&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"><FONT STYLE="background-color: white">The
Company did not purchase other material or service from related parties for the year ended December 31, 2018 and 2017.</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"><I><U>* Due from Related Parties</U></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 Company does not have balances due
from related parties as of December 31, 2018 and 2017, 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"></P>

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    <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"></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>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</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"><B>NOTE 11 &ndash; RELATED PARTY TRANSACTIONS (CONTINUED)</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: justify"><I><U>* Due to related party</U></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">Outstanding balance due to Mr. Lirong Wang
and Mr. Guihua Lin below are advances from related parties for working capital of the Company which are mainly due on demand, non-interest
bearing, and unsecured, unless further disclosed.</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">December&nbsp;31,</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">December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&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 STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Relationship</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 30%; text-align: left">Mr. Lirong Wang &#9312;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,442,751</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">4,025,356</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 45%; text-align: center">The CEO and Chairman of the Company</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Ms. Xueying Sheng&#9314;&#9315;&#9316;&#9317;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">169,743</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">230,730</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Controller/Accounting Manager of the Company</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Mr. Guohua Lin&#9313;</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">3,054</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">102,462</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">One of the Company&rsquo;s shareholders</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">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">1,615,547</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">4,441,087</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 4pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></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">&#9312;</TD><TD STYLE="text-align: justify">For the year ended December 31, 2018, the Company borrowed
$3,829,415 from Mr. Lirong Wang, and repaid $6,404,317. On June 29, 2018, the amount due to Mr. Wang of $326,348 was converted
into common shares.</TD>
</TR>
<TR STYLE="vertical-align: top; text-align: justify">
<TD>&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: justify">
<TD></TD><TD STYLE="text-align: left">&#9313;</TD><TD STYLE="text-align: justify">For the year ended December 31, 2018, the Company borrowed
$171,911 from Mr. Guohua Lin, and repaid $257,931.</TD>
</TR>
<TR STYLE="vertical-align: top; text-align: justify">
<TD>&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: justify">
<TD></TD><TD STYLE="text-align: left">&#9314;</TD><TD STYLE="text-align: justify">On November 8, 2017, the Company borrowed $31,993 from
Ms. Xueying Sheng. The loan is unsecured, without maturity, and bears an interest rate of 20%.</TD>
</TR>
<TR STYLE="vertical-align: top; text-align: justify">
<TD>&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: justify">
<TD></TD><TD STYLE="text-align: left">&#9315;</TD><TD STYLE="text-align: justify">On December 12, 2017, the Company borrowed $11,634 from
Ms. Xueying Sheng and repaid in March 2018. The loan is unsecured and bears an interest rate of 20%.</TD>
</TR>
<TR STYLE="vertical-align: top; text-align: justify">
<TD>&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: justify">
<TD></TD><TD STYLE="text-align: left">&#9316;</TD><TD STYLE="text-align: justify">For the year ended December 31, 2018, the Company borrowed $194,272 from Ms. Xueying Sheng. This <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">loan
is unsecured, without maturity and non-interest bearing.</FONT></TD>
</TR>               <TR STYLE="vertical-align: top; text-align: justify">
<TD>&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: justify">
<TD>&nbsp;</TD><TD STYLE="text-align: left">&#9317;</TD><TD STYLE="text-align: justify">For the year ended December 31, 2018, the Company repaid $245,653&nbsp;to Ms. Xueying,
                                                        Sheng.</TD></TR>
</TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 12 &ndash; DISPOSAL OF SUBSIDIARY</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; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">On October 12, 2017, the Company ceased operation of its 100% owned
subsidiary Ningling Fertilizer and deregistered Ningling Fertilizer with the Administration for Industry and Commerce. The Company
closed Ningling Fertilizer with net assets of $2,275 and accumulated deficit of $34,739 as of October 12, 2017. Ningling has historically
been reported as a component of the Company&rsquo;s operations and incurred $33,323 to loss before income taxes provisions for
the year ended December 31, 2017.&nbsp;The ceased operation does not constitute a strategic shift that will have a major effect
on the Company&rsquo;s operations or financial results and as such, the disposal is not classified as discontinued operations
in the Company&rsquo;s consolidated financial statements.&nbsp;The loss from the investment of the subsidiary has been recorded
in other expenses.</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>NOTE 13 &ndash; CONCENTRATIONS</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>Customers Concentrations</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 information
as to each customer that accounted for 10% or more of the Company&rsquo;s revenues for the years ended December 31, 2018 and 2017.</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>&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">For the year ended December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Customers</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">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="6" 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="text-align: right">&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><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%; text-align: center">A</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></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">358,710</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">48</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center">B</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</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-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">92,446</TD><TD STYLE="text-align: left">&nbsp;</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="text-align: center">C</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,096,121</TD><TD STYLE="text-align: left">&nbsp;</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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</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-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center">D</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,952,652</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</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-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<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: justify"></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 -->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: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 13 &ndash; CONCENTRATIONS (CONTINUED)</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></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Suppliers Concentrations</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 information
as to each supplier that accounted for 10% or more of the Company&rsquo;s purchase for the years ended December 31, 2018 and 2017.</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>&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">For the year ended December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Suppliers</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">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="6" 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="text-align: right">&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><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%; text-align: center">A</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">3,651,430</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">43</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"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">N/A</FONT></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"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">N/A</FONT></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center">B</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">N/A</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">N/A</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">212,453</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">46</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: center">C</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">N/A</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">N/A</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">49,578</TD><TD STYLE="text-align: left">&nbsp;</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: center">D</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">840,657</TD><TD STYLE="text-align: left">&nbsp;</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"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">N/A</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">N/A</FONT></TD><TD STYLE="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"><B><I>Credit Risks</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">The Company&rsquo;s operations are carried
out in the PRC. Accordingly, the Company&rsquo;s business, financial condition and results of operations may be influenced by the
political, economic and legal environment in the PRC, and by the general state of the PRC&rsquo;s economy. The Company&rsquo;s
operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North
America. The Company&rsquo;s results may be adversely affected by changes in governmental policies with respect to laws and regulations,
anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.</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">Financial instruments which potentially
subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. Substantially all
of the Company&rsquo;s cash is maintained with state-owned banks within the PRC, and none of these deposits are covered by insurance.
The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.
A significant portion of the Company&rsquo;s sales are credit sales which are primarily to customers whose ability to pay is dependent
upon the industry economics prevailing in these areas; however, concentrations of credit risk with respect to trade accounts receivables
is limited due to generally short payment terms. The Company also performs ongoing credit evaluations of its customers to help
further reduce credit risk. At December 31, 2018 and 2017, the Company&rsquo;s cash balances by geographic area were as follows:</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">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center">December 31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center">December 31,</TD><TD STYLE="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="6" 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="6" 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; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: justify">United States</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">0</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</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">0</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">China</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">12,778</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</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">9,051</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</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: justify; padding-bottom: 4pt">Total cash and cash equivalents</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">12,778</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">100</TD><TD STYLE="padding-bottom: 4pt; text-align: left">%</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">9,051</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">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">&nbsp;</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 14 &ndash; INCOME TAXES</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>United States</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">Muliang Agritech is established in the State
of Nevada in the United States and is subject to Nevada State and US Federal tax laws. Muliang Agritech has approximately $102,000
of unused net operating losses (&ldquo;NOLs&rdquo;) available for carrying forward to future years for U.S. federal income tax
reporting purposes. The benefit from the carry forward of such NOLs will begin expiring during the year ended December 31, 2034.
Because United States tax laws limit the time during which NOL carry forwards may be applied against future taxable income, the
Company may be unable to take full advantage of its NOLs for federal income tax purposes should the Company generate taxable income.
Further, the benefit from utilization of NOL carry forwards could be subject to limitations due to material ownership changes that
could occur in the Company as it continues to raise additional capital. Based on such limitations, the Company has significant
NOLs for which realization of tax benefits is uncertain.</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 22, 2017, the United States
enacted the Tax Cuts and Jobs Act (the &ldquo;Act&rdquo;) resulting in significant modifications to existing law. The Company has
considered the accounting impact of the effects of the Act during the year ended December 31, 2018 including a reduction in the
corporate tax rate from 34% to 21% among other changes.</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>Hong Kong</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">Muliang HK is established in Hong Kong
and its income is subject to a 16.5% profit tax rate for income sourced within the country. For the years ended December 31, 2018
and 2017, Muliang HK did not earn any income derived in Hong Kong, and therefore was not subject to Hong Kong Profits Tax.</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>China, PRC</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">Shanghai Mufeng and its subsidiaries Muliang
Industry, Zongbao, Zongbao Cangzhou, Muliang Sales, Fukang, Agritech Development, Zhongliang and Yunnan Muliang are established
in China and its income is subject to income tax rate of 25%.</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">The reconciliation of effective income tax rate as follows:</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>&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">For the Years Ended</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 STYLE="font-weight: bold; white-space: nowrap">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; white-space: nowrap">December 31,</TD><TD STYLE="font-weight: bold; white-space: nowrap">&nbsp;</TD><TD STYLE="font-weight: bold; white-space: nowrap">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; white-space: nowrap">December 31,</TD><TD STYLE="font-weight: bold; white-space: nowrap">&nbsp;</TD></TR>
<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">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap">&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; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">US Statutory income tax rate</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">21.00</TD><TD STYLE="width: 1%; text-align: left; white-space: nowrap">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">35.00</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">PRC income tax adjustment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.00</TD><TD STYLE="text-align: left; white-space: nowrap">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10.00</TD><TD STYLE="text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Valuation allowance</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12.51</TD><TD STYLE="text-align: left; white-space: nowrap">)%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(25.00</TD><TD STYLE="text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Effect of expenses not deductible for tax purpose</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.02</TD><TD STYLE="text-align: left; white-space: nowrap">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.00</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Effect of income tax exemptions and reliefs</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10.63</TD><TD STYLE="text-align: left; white-space: nowrap">)%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.00</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <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">(2.45</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left; white-space: nowrap">)%</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">0.00</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="padding-bottom: 4pt">Total</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">(0.57</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left; white-space: nowrap">)%</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">0.00</TD><TD STYLE="padding-bottom: 4pt; 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>

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    <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: 0pt 0">&nbsp;&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</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"><B>NOTE 14 &ndash; INCOME TAXES (CONTINUED)</B></P>

<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">The provision for income taxes consists of the following:</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 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="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>For the Years Ended</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31,</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<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">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; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; padding-left: 0.75pt">Current</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">447,207</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 0.75pt">Deferred</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">(472,749</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt; padding-left: 0.75pt">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(25,542</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</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"><I>Accounting for Uncertainty in Income Taxes</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; text-align: justify">The tax authority of the PRC government conducts periodic and
ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises complete their relevant tax filings.
Therefore, the Company&rsquo;s PRC entities&rsquo; tax filings results are subject to change. It is therefore uncertain as to whether
the PRC tax authority may take different views about the Company&rsquo;s PRC entities&rsquo; tax filings, which may lead to additional
tax liabilities.</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">ASC 740 requires recognition and measurement of uncertain income
tax positions using a &ldquo;more-likely-than-not&rdquo; approach. The management evaluated the Company&rsquo;s tax positions and
concluded that no provision for uncertainty in income taxes was necessary as of December&nbsp;31, 2018 and 2017.</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>NOTE 15 &ndash; BUSINESS SEGMENTS</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">The revenues and cost of goods sold from operation consist of
the following:</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>&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">Revenues</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">Cost of Sales</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<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">For the Years Ended</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">For the Years Ended</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 STYLE="font-weight: bold; white-space: nowrap">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; white-space: nowrap">December&nbsp;31,</TD><TD STYLE="font-weight: bold; white-space: nowrap">&nbsp;</TD><TD STYLE="font-weight: bold; white-space: nowrap">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; white-space: nowrap">December&nbsp;31,</TD><TD STYLE="font-weight: bold; white-space: nowrap">&nbsp;</TD><TD STYLE="font-weight: bold; white-space: nowrap">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; white-space: nowrap">December&nbsp;31,</TD><TD STYLE="font-weight: bold; white-space: nowrap">&nbsp;</TD><TD STYLE="font-weight: bold; white-space: nowrap">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; white-space: nowrap">December&nbsp;31,</TD><TD STYLE="font-weight: bold; white-space: nowrap">&nbsp;</TD></TR>
<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">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">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; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: left">Fertilizer and forage grass</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">12,054,335</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">731,512</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">6,577,557</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">492,385</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">Agricultural products (food) 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">1,150,689</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">6,501</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">1,082,469</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">98,851</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">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">13,205,024</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">737,563</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">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">7,660,026</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">591,236</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"><B>&nbsp;</B></P>


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

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    <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: 0pt 0">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONSOLIDATED FINANCIAL STATEMENTS</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"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 16&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">&ndash;
</FONT>COMMITMENTS AND CONTINGENCIES</B></P>

<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; text-align: justify">On October 18, 2018, the Company
signed a building construction agreement with Yunnan Junxiong Construction Engineering Co., Ltd. for the black goat
slaughtering and processing project located in Shuangbai County, Chuxiong City, Yunnan Province, PRC. The total contract
price is $1,599,674(RMB11,000,000), all of which is unpaid as of December 31, 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"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In addition, the Company signed a set of construction
agreements with third parties in 2018 for the black goat slaughtering and processing project, including surveying and mapping
contract, equipment installation contract, and electricity installation contract, etc. As of December 31, 2018, a total amount
of $436,275(RMB3,000,000) is unpaid.</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 has future minimum capital
expenditure&nbsp;obligations as of December 31, 2018&nbsp;as follows:</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 CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; font-size: 10pt; text-align: left">2019</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">1,221,570</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">2020</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">814,379</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-size: 10pt; text-align: left">2021</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">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">2022</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">-</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-size: 10pt; text-align: left">2023</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">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Thereafter</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right; border-bottom: Black 1.5pt solid">-</TD><TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 4pt">Total</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; border-bottom: Black 4pt double">$</TD><TD STYLE="font-size: 10pt; text-align: right; border-bottom: Black 4pt double">2,035,949</TD><TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 4pt">&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">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 17 &ndash; SUBSEQUENT EVENTS</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"></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">On April 4, 2019, the Company&rsquo;s Board of Directors and majority
shareholder approved a 5 to 1 reverse stock split of all of the issued and outstanding shares of the Company&rsquo;s common stock
(the &ldquo;Stock Split&rdquo;), &nbsp;No fractional shares of Common Stock will be issued as a result of the reverse stock split.The
Stock Split does not affect the par value or the number of authorized shares of common stock of the Company. The Stock Split will
become effective upon approval of Financial Industry Regulatory Authority.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As a result of this reverse stock split, all
references in the financial statements and notes thereto to the number of shares outstanding, per share amounts, of the Company&rsquo;s
Common Stock have been restated to reflect the effect of the stock split for all periods presented.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">On April 4, 2019, the Company&rsquo;s Board of Directors
and majority shareholder approved change of corporate name from &ldquo;Mullan Agritech Inc.&rdquo; to &ldquo;Muliang
Agritech Inc.&rdquo; (the &ldquo;Name Change&rdquo;). On April 5, 2019, Company filed a Certificate of Amendment to its
Articles of Incorporation with the Secretary of State of the State of Nevada to reflect the Name Change.</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; text-align: justify">Blank Check Preferred Stock</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On April 4, 2019,
the Company&rsquo;s Board of Directors and majority shareholder approved creation of one hundred million (100,000,000) shares of
Blank Check Preferred Stock, $0.0001 par value. To the fullest extent permitted by the laws of the State of Nevada, as the same
now exists or may hereafter be amended or supplemented, the Board of Directors may fix and determine the designations, rights,
preferences or other variations of each class or series within each class of preferred stock of the Company. The Company may issue
the shares of stock for such consideration as may be fixed by the Board of Directors.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 5, 2019, the Company filed a Certificate
of Amendment to our Articles of Incorporation with the Secretary of State of the State of Nevada to reflect the Name Change and
to authorize the creation of Blank Check Preferred Stock.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 4, 2019, the Company&rsquo;s Board
of Directors and majority shareholder approved that the capital stock shall consist of 500,000,000 shares of common stock, par
value $0.0001 per share.</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">&nbsp;</P>

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

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<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-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="s_01"></A>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CONDENSED CONSOLIDATED BALANCE SHEETS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>AS OF MARCH 31, 2019 AND DECEMBER 31
2018</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; text-align: center"><B></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>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">March&nbsp;31,</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">December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<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">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></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Audited</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-decoration: underline">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">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="width: 76%; text-align: left">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">6,317</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">12,778</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accounts receivable, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,057,060</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,090,887</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">789,051</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">446,630</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Prepayment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,519,834</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,491,102</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">Other receivables, net</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">187,701</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">102,733</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-left: 9pt">Total Current Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,559,963</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,144,130</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">Property, plant and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,142,871</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,927,323</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">Intangible assets, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,273,406</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,213,130</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other assets and deposits</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67,434</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">74,268</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">Deferred tax asset</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">465,952</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">454,751</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">&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: 4pt; padding-left: 0.25in">Total Assets</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">25,509,626</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">24,813,602</TD><TD STYLE="padding-bottom: 4pt; 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-decoration: underline; text-align: left">LIABILITIES AND STOCKHOLDERS&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>&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">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">Short-term loans</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">154,222</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">150,515</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">Current portion of long-term debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,572,857</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,453,435</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accounts payable and accrued payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,733,636</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,469,392</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">Accounts payable - related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">119,205</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">116,340</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Advances from customers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">242,087</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">211,114</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">Income tax payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">539,151</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">430,181</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">857,610</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">816,724</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">Due to related party</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">926,724</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">1,615,547</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-left: 9pt">Total Current Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,145,492</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,263,248</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; padding-bottom: 1.5pt">Long-term loans</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">3,602,640</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">3,454,543</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-left: 0.25in">Total Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,748,132</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,717,791</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Stockholders&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: 0.25in; text-indent: -0.125in">Common stock, $0.0001 par value, 500,000,000 shares authorized, 56,341,718&nbsp;shares issued
    and outstanding as of March 31, 2019 and December 31, 2018,&nbsp;respectively.</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,634</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,634</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">Additional paid in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,398,854</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,398,854</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accumulated deficit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,330,741</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,773,401</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">Accumulated other comprehensive loss</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">563,268</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">344,187</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">Stockholders&rsquo; Equity &ndash; Muliang Agritech, Inc. and Subsidiaries</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,637,015</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,975,274</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">Noncontrolling 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">124,479</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">120,537</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">Total Stockholders&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">8,761,494</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">8,095,811</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: 4pt">Total Liabilities and Stockholders&rsquo; Equity</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">25,509,626</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">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">24,813,602</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: center"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to consolidated financial
statements</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"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="s_02"></A>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>FOR THE THREE MONTHS ENDED MARCH 31,
2019 AND 2018</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><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>&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; white-space: nowrap">For the Three 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><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>2019</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>2018</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</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; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">2,225,368</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,188,020</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">Cost of goods sold</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">1,338,876</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">682,779</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-left: 0.125in">Gross profit (loss)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">886,492</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">505,241</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Operating expenses:</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">Selling expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">177,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,317</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">General and 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">341,556</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">392,510</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; padding-left: 0.125in">Total operating 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">518,556</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">415,827</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>&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: 1.5pt; padding-left: 0.125in">Income (Loss) from operations</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">367,936</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">89,414</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>&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 (expense):</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">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(94,596</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(108,081</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Subsidy income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">146,560</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,188</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">Rental income, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">122,960</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">73,526</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">Other income (expense), net</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">587</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">(9,176</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-left: 0.125in">Total other income (expense)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">175,511</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(41,543</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="font-weight: bold; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Income (Loss) before 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">543,447</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">47,871</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">&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">97,860</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>&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-bottom: 1.5pt; padding-left: 0.125in">Net 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">445,587</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">47,871</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">&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-bottom: 1.5pt">Net income (loss) attributable to Muliang Agritech, Inc. common stockholders</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">442,660</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">77,522</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">Net income (loss) attributable to noncontrolling 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">2,927</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">(29,651</TD><TD STYLE="padding-bottom: 1.5pt; 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">Other comprehensive income (loss):</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">Unrealized foreign currency translation adjustment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">219,081</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,289</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt; padding-left: 0.125in">Total Comprehensive loss</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">664,668</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">72,160</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">Total comprehensive (income) loss attributable to non-controlling interests</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,942</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(23,129</TD><TD STYLE="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-left: 0.125in; text-indent: -0.125in">Total comprehensive (income) loss attributable to Muliang Agritech Inc. common stockholders</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">660,726</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">95,289</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold">Earnings per common 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">Basic and diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.01</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.00</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="font-weight: bold">Weighted average common shares outstanding</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>Basic</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56,341,718</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56,341,718</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<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">See accompanying notes to consolidated financial
statements</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"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><A NAME="s_03"></A>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS&rsquo;
EQUITY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FOR THE YEAR ENDED DECEMBER 31, 2018 AND
THREE MONTHS ENDED MARCH 31, 2019 (Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><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="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">Common Stock</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">Additional Paid-in</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">Accumulated</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">Accumulated Other Comprehensive</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">Non-controlling</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">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&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">Shares</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">Capital</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">Deficit</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">Income (Loss)</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">Interest</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">Total</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: 16%; padding-left: 0.75pt">Balance, December 31, 2017</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">56,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">5,600</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">16,817,585</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(14,101,952</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">92,466</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(2,711</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">2,810,988</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-left: 0.75pt">Issuance of common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">341,718</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,581,269</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">2,581,303</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: 0.75pt">Net income</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">4,345,003</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">128,816</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,473,819</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.75pt">Foreign currency translation adjustment</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">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">103,785</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,624</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">110,409</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt; padding-left: 0.75pt">Balance, December 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">56,341,718</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">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">5,634</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">19,398,854</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">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(11,773,401</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">344,187</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">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">120,537</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">8,095,811</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt; padding-left: 0.75pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: right">&nbsp;</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; padding-left: 0.75pt">Net income</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">442,660</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,927</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">445,587</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; padding-left: 0.75pt">Foreign currency translation adjustment</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">219,081</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,015</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">220,096</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="padding-bottom: 4pt; padding-left: 0.75pt">Balance, 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">56,341,718</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">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">5,634</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">19,398,854</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">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(11,330,741</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">563,268</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">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">124,479</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">8,761,494</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">See accompanying notes to consolidated financial
statements</P>



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



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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="s_04"></A>MULIANG AGRITECH, INC. AND
SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>FOR THE THREE MONTHS ENDED MARCH 31,
2019 AND 2018</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&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">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; white-space: nowrap">For the Three Months Ended</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<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"> March&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<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">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></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">
    <TD STYLE="font-weight: bold">CASH FLOWS FROM 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; padding-left: 0.75pt">Net income (loss)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">445,587</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">47,871</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-left: 0.75pt">Adjustments to reconcile net income (loss) to net cash provided by (used in) 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: 0.75pt">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">291,069</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">223,491</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: 0.125in">Changes in assets and 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: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.75pt">Accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">133,884</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(568,309</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.75pt">Accounts receivable - related party</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">(377,045</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.75pt">Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(329,687</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">37,661</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.75pt">Prepayment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">149,975</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(60,136</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: 0.75pt">Other receivables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(82,007</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(45,676</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.75pt">Accounts payable and accrued payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">145,941</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(489,512</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: 0.75pt">Accounts payable - related party</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">125,853</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.75pt">Advances from customers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,638</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">540,560</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: 0.75pt">Income tax payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">97,860</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: 0.75pt">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">38,911</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">1,560,502</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: 0.125in">Net cash provided by operating 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">917,171</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">995,260</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: 0.75pt">&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: 0.75pt">CASH FLOWS FROM 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: White">
    <TD STYLE="text-align: left; padding-left: 0.75pt">Purchase of biological assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(18,508</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,313</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: 0.75pt">Investment in construction in progress</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">(228,458</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">(745,084</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; padding-bottom: 1.5pt; padding-left: 0.125in">Net cash used in investing 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">(246,966</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">(752,397</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="padding-left: 0.75pt">&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: 0.75pt">CASH FLOWS FROM 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-left: 0.75pt">Proceeds from third party individual</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">62,679</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">786,584</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.75pt">Proceeds from (Repayment to) related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(724,803</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(222,615</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: 0.75pt">Repayment of short-term loans</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">(14,823</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">(786,584</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; padding-bottom: 1.5pt; padding-left: 0.125in">Net 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">(676,947</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">(222,615</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="padding-left: 0.75pt">&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; padding-left: 0.75pt">EFFECT OF EXCHANGE RATE CHANGES ON CASH</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">281</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">570</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-left: 0.75pt">&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: 0.75pt">NET INCREASE (DECREASE) IN CASH</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,461</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,818</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; padding-left: 0.75pt">CASH, BEGINNING OF PERIOD</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">12,778</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">9,051</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; padding-left: 0.75pt">CASH, END OF PERIOD</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">6,317</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">29,869</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="padding-left: 0.75pt">&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></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 0.75pt">SUPPLEMENTAL DISCLOSURES:</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: 0.75pt">Cash paid during the period for:</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: 0.125in">Cash paid for interest expense, net of capitalized interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">23,110</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">108,081</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; padding-left: 0.125in">Cash paid for income tax</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.75pt">&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: 0.75pt">NON-CASH TRANSACTIONS OF INVESTING AND 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; padding-left: 0.75pt">Long term loan transfer to short term loan</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,101,218</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: 0.75pt">Property addition in connection with liability</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">7,411</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<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">See accompanying notes to consolidated financial
statements</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"></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="s_05"></A>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(Unaudited)</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: justify"><B>NOTE 1 &ndash; ORGANIZATION AND NATURE
OF OPERATIONS</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">Muliang Agritech, Inc. formerly known as
M &amp; A Holding Corporation. (&ldquo;Muliang Agritech&rdquo;) was incorporated under the laws of the State of Nevada on November
5, 2014. Muliang Agritech&rsquo;s core business activities of developing, manufacturing, and selling organic fertilizers and bio-organic
fertilizers for use in agricultural industry are conducted through several indirectly owned subsidiaries 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">On June 9, 2016, Muliang Agritech filed
a Certificate of Amendment to its Articles of Incorporation (the &ldquo;Amendment&rdquo;) with the Secretary of State of the State
of Nevada, changing its name from &ldquo;M &amp; A Holding Corporation,&rdquo; to &ldquo;Mullan Agritech, Inc.&rdquo; &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">On July 11, 2016, the Financial Industry
Regulatory Authority (FINRA) effected in the marketplace the change of the corporate name from &ldquo;M &amp; A Holding Corporation,&rdquo;
to &ldquo;Mullan Agritech, Inc.&rdquo;, and effective on such date.</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 April 4, 2019, the Company changed its
corporate name from &ldquo;Mullan Agritech Inc.&rdquo; to &ldquo;Muliang Agritech Inc.&rdquo; The name change took effect on May
7, 2019. In connection with the name change, our stock symbol changed to &ldquo;MULG&rdquo;. Muliang Agritech trades under its
new name, Muliang Agritech, Inc.</P>

<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; text-align: justify"><B>History</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">Shanghai Muliang Industry Co., Ltd. (referred
to herein as &ldquo;Muliang Industry&rdquo;) was incorporated in PRC on December 7, 2006 as a limited liability company, owned
95% by Lirong Wang and 5% by Zongfang Wang. Muliang Industry through its own operations and its subsidiaries is engaged in the
business of developing, manufacturing, and selling organic fertilizers and bio-organic fertilizers for use in the agricultural
industry.</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 May 27, 2013, Muliang Industry entered
into and consummated an equity purchase agreement whereby it acquired 99% of the outstanding equity of Weihai Fukang Bio-Fertilizer
Co., Ltd. (&ldquo;Fukang&rdquo;), a corporation organized under the laws of the People&rsquo;s Republic of China. Fukang was incorporated
in Weihai City, Shandong Province on January 6, 2009. Fukang is focused on the distribution of organic fertilizers and the development
of new bio-organic fertilizers. As a result of the completion of the transaction, Fukang became a 99% owned subsidiary of Muliang
Industry, with the remaining 1% equity interest owned by Mr. Hui Song.</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 July 11, 2013, Muliang Industry established
a wholly owned subsidiary, Shanghai Muliang Agritech Development Co., Ltd. (&ldquo;Agritech Development&rdquo;) in Shanghai, China.
On November 6, 2013, Muliang Industry sold 40% of the outstanding equity of Agritech Development to Mr. Jianping Zhang for consideration
of approximately $65,000 or RMB 400,000. Agritech Development does not currently conduct any operations.</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 July 17, 2013, Muliang Industry entered
into an equity purchase agreement to acquire 100% of the outstanding equity of Shanghai Zongbao Environmental Construction Co.,
Ltd. (&ldquo;Zongbao&rdquo;) with consideration of approximately $3.2 million or RMB 20 million, effectively becoming the wholly-owned
subsidiary of Muliang Industry. Zongbao was incorporated in Shanghai on January 25, 2008. Zongbao processes and distributes organic
fertilizers. Zongbao wholly owns, Shanghai Zongbao Environmental Construction Co., Ltd. Cangzhou Branch (&ldquo;Zongbao Cangzhou&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">On August 21, 2014, Muliang Agricultural
Limited (&ldquo;Muliang HK&rdquo;) was incorporated in Hong Kong as an investment holding company.</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>

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<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>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 1 &ndash; ORGANIZATION AND NATURE
OF OPERATIONS (CONTINUED)</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">January 27, 2015, Muliang HK incorporated
a wholly foreign-owned enterprise, Shanghai Mufeng Investment Consulting Co., Ltd (&ldquo;Shanghai Mufeng&rdquo;), in the People&rsquo;s
Republic of China (&ldquo;PRC&rdquo;).</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">On July 8, 2015, Muliang Agritech entered
into certain stock purchase agreement with Muliang Agriculture, Inc., pursuant to which Muliang Agritech, for a consideration of
$5,000, acquired 100% interest in Muliang HK and its wholly-owned subsidiary Shanghai Mufeng. Both Muliang HK and Shanghai Mufeng
are controlled by the Company&rsquo;s sole officer and director, Lirong Wang.</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 July 23, 2015, Muliang Industry established
a wholly owned subsidiary, Shanghai Muliang Agricultural Sales Co., Ltd. (&ldquo;Muliang Sales&rdquo;) in Shanghai, 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">On September 3, 2015, Muliang Agritech
effected a split of its outstanding common stock resulting in an aggregate of 150,525,000 shares outstanding of which 120,000,000
were owned by Chenxi Shi the founder of Muliang Agritech and its sole officer and director. The remaining 30,525,000 were held
by a total of 39 investors.</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 January 11, 2016, Muliang Agritech issued
129,475,000 shares of its common stock to Lirong Wang for an aggregate consideration of $64,737.50. On the same date, Chenxi Shi,
the sole officer and director of Muliang Agritech on that date, transferred 120,000,000 shares of the common stock of the Company
held by him to Lirong Wang for $800 pursuant to a transfer agreement.</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 February 10, 2016, Shanghai Mufeng entered
into a set of contractual agreements known as Variable Interest Entity (&ldquo;VIE&rdquo;) Agreements, including (1) Exclusive
Technical Consulting and Service Agreement, (2) Equity Pledge Agreement, and (3) Call Option Cooperation Agreement, with Muliang
Industry, and its Principal Shareholders. As a result of the Stock Purchase Agreement and the set of VIE Agreements, Shanghai Muliang
Industry Co., Ltd., along with its consolidated subsidiaries, became entities controlled by Muliang Agritech whereby Muliang Agritech
would derive all substantial economic benefit generated by Muliang Industry and its subsidiaries.</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 a result, Muliang Agritech has a direct
wholly-owned subsidiary, Muliang HK and an indirectly wholly owned subsidiary Shanghai Mufeng. Through its VIE Agreements, Muliang
Agritech exercises control over Muliang Industry. Muliang Industry has two wholly-owned subsidiaries (Zongbao and Muliang Sales),
one 99% owned subsidiary (Fukang), one 60% owned subsidiary (Agritech Development), and one indirectly wholly owned subsidiary
Zongbao Cangzhou.</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">On June 6, 2016, Muliang Industry established
a wholly-owned subsidiary, namely, Muliang (Ningling) Bio-chemical Fertilizer Co. Ltd (&ldquo;Ningling Fertilizer&rdquo;) in Henan
Province, the central plain of China. On October 12, 2017, the Company ceased operation of Ningling Fertilizer and deregistered
Ningling Fertilizer with the Administration for Industry and Commerce as the Land use right was not approved by the government.
The Company closed Ningling Fertilizer with net assets of $2,275 and accumulated deficit of $34,739 as of October 12, 2017. The
ceased operation does not constitute a strategic shift that will have a major effect on our operations or financial results and
as such, the disposal is not classified as discontinued operations in our consolidated financial statements.</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">On July 7, 2016, Muliang Industry established
a subsidiary, namely, Zhonglian Huinong (Beijing) Technology Co., Ltd (&ldquo;Zhonglian&rdquo;) in Beijing City, China. Muliang
Industry owns 65% shares of Zhonglian, and a third-party company, Zhongrui Huilian (Beijing) Technology Co., Ltd owns the other
35% shares. Zhonglian has no operating activity as of December 31, 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"></P>

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<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>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 1 &ndash; ORGANIZATION AND NATURE
OF OPERATIONS (CONTINUED)</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">On October 27, 2016, Muliang Industry established
a subsidiary, namely, Yunnan Muliang Animal Husbandry Development Co., Ltd (&ldquo;Yunnan Muliang&rdquo;) in Yunnan Province, China.
Muliang Industry owns 55% shares of Yunnan Muliang, and a third-party company, Shuangbai County Development Investment Co., Ltd.
owns the other 45% shares. On December 8, 2018, Muliang Industry acquired 25% shares of Yunnan Muliang with a consideration of
$727,125 (RMB5,000,000) from Shuangbai County Development Investment Co., Ltd. And the other 20% shares were acquired by Lirong
Wang. Yunnan Muliang was setup for goat slaughtering and processing project located in Shuangbai County, Chuxiong City, Yunnan
Province, 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 7.15pt 0pt 0; text-align: justify">On April 4, 2019, the Company&rsquo;s Board of Directors
and majority shareholder approved a 5 to 1 reverse stock split of all of the issued and outstanding shares of the Company&rsquo;s
common stock, change of corporate name from &ldquo;Mullan Agritech Inc.&rdquo; to &ldquo;Muliang Agritech Inc.&rdquo;, and creation
of one hundred million (100,000,000) shares of Blank Check Preferred Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 7.35pt 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 7.35pt 0pt 0; text-align: justify">On April 5, 2019, we filed a Certificate of Amendment
to our Articles of Incorporation with the Secretary of State of the State of Nevada to reflect the Name Change and to authorize
the creation of Blank Check Preferred Stock. As a result, the capital stock of the Company consists of 500,000,000 shares of common
stock, $0.0001 par value, and 100,000,000 shares of blank check preferred stock, $0.0001 par value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify">On April 16, 2019, we filed a Certificate of Change
to our Articles of Incorporation with the Secretary of State of the State of Nevada to reflect the reverse stock split. Any fractional
shares are to be rounded up to whole shares. The reverse stock split does not affect the par value or the number of authorized
shares of common stock of the Company.</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 reverse stock split and the name change took effect on May
7, 2019.</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">Muliang Agritech, Muliang HK, Shanghai
Mufeng, Muliang Industry, Zongbao, Zongbao Cangzhou, Muliang Sales, Fukang, Agritech Development, Yunnan Muliang, and Zhonglian
are referred to as subsidiaries the Company and its consolidated subsidiaries are collectively referred to herein as the &ldquo;Company&rdquo;,
&ldquo;we&rdquo; and &ldquo;us&rdquo;, unless specific reference is made to an entity.</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 were
prepared assuming that the Company has controlled Muliang HK and its intermediary holding companies, operating subsidiaries, and
variable interest entities: Shanghai Mufeng, Muliang Industry, Zongbao, Zongbao Cangzhou, Muliang Sales, Fukang, and Agritech Development,
from the first period presented. The transactions detailed above have been accounted for as reverse takeover transaction and a
recapitalization of the Company; accordingly, the Company (the legal acquirer) is considered the accounting acquiree and Muliang
HK (the legal acquiree) is considered the accounting acquirer. No goodwill has been recorded. As a result of this transaction,
the Company is deemed to be a continuation of the business of Muliang HK, Shanghai Mufeng, and Muliang Industry.</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 Going Concern</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">As reflected in the accompanying consolidated
financial statements, we had net accumulated deficit of $11,330,741 and $11,773,401 as of March 31, 2019 and December 31, 2018,
respectively. Our cash balances as of March 31, 2019 and December 31, 2018 were $6,317 and $12,778, respectively. We had current
liabilities of $13,145,493 at March 31, 2019 which would be due within the next 12 months. In addition, we had a working capital
deficit of $6,585,530 and $7,119,118 at March 31, 2019 and December 31, 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">The company plans to continue its expansion
and investments, which will require continued improvements in revenue, net income, and 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">The ability of the Company to continue
as a going concern is dependent on the Company&rsquo;s ability to further implement its business plan, raise additional capital,
and generate more revenues. The consolidated financial statements do not include any adjustments that might be necessary if the
Company is unable to continue as a going concern.</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>

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    <!-- Field: /Page -->

<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: center"><B>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES</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>Basis of Presentation</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">The accompanying consolidated financial
statements have been prepared in conformity with US GAAP. The basis of accounting differs from that used in the statutory accounts
of the Company, which are prepared in accordance with the accounting principles of the PRC (&ldquo;PRC GAAP&rdquo;). The differences
between US GAAP and PRC GAAP have been adjusted in these consolidated financial statements. The Company&rsquo;s functional currency
is the Chinese Renminbi (&ldquo;RMB&rdquo;); however, the accompanying consolidated financial statements have been translated and
presented in United States Dollars (&ldquo;USD&rdquo;).&nbsp;</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>Interim Financial Statements</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">The accompanying unaudited financial statements
have been prepared in accordance with generally accepted accounting principles (GAAP) applicable to interim financial information
and the requirements of Form 10-Q and Rule 8-03 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they
do not include all of the information and disclosure required by accounting principles generally accepted in the United States
of America for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the
opinion of management, all adjustments considered necessary for a fair presentation of the financial position and the results of
operations and cash flows for the interim periods have been included. These interim financial statements should be read in conjunction
with the audited financial statements for the year ended December 31, 2018, as not all disclosures required by generally accepted
accounting principles for annual financial statements are presented. The interim financial statements follow the same accounting
policies and methods of computations as the audited financial statements for the year ended December 31, 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>Use of Estimates</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">The preparation of these financial statements
in conformity with generally accepted accounting principles requires the Company to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of these
financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates
on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly,
actual results may differ from these estimates. Significant estimates include the useful lives of property and equipment, land
use rights, assumptions used in assessing collectability of receivables and impairment for long-term assets.</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>Principles of Consolidation</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">Muliang Agritech consolidates the following
entities, including wholly-owned subsidiaries, Muliang HK, Shanghai Mufeng, and its wholly controlled variable interest entities,
Muliang Industry, and Zhongbao, 60% controlled Agritech Development, 99% controlled Fukang, 65% controlled Zhonglian and 80% controlled
Yunnan Muliang. The 40% equity interest holder of Agritech Development, 1% equity interest holders in Fukang, 35% equity interest
holders in Zhonglian, and 20% interest in Yunnan Muliang are accounted as non-controlling interest in the Company&rsquo;s consolidated
financial statements.</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 variable interest entities consolidated
for which the Company is deemed the primary beneficiary. All significant inter-company accounts and transactions have been eliminated
in consolidation.</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"></P>

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    <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="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</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>Cash and Cash Equivalents</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">For purposes of the statements of cash
flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less and money market accounts
to be cash equivalents. The Company maintains cash with various financial institutions.</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>Accounts Receivable</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">Accounts receivable are presented net of
an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews
the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability
of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors,
including the age of the balance, a customer&rsquo;s historical payment history, its current credit-worthiness and current economic
trends. Accounts are written off after exhaustive efforts at collection.</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>Inventories</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">Inventories, consisting of raw materials,
work in process and finished goods related to the Company&rsquo;s products are stated at the lower of cost or market utilizing
the weighted average method.</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>Property, Plant and Equipment</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">Plant and equipment are carried at cost
and are depreciated on a straight-line basis over the estimated useful lives of the assets. The cost of repairs and maintenance
is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost
and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year
of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances
reflect the fact that their recorded value may not be recoverable.</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">Included in property and equipment is construction-in-progress
which consisted of factory improvements and machinery pending installation and includes the costs of construction, machinery and
equipment, and any interest charges arising from borrowings used to finance these assets during the period of construction or installation
of the assets. No provision for depreciation is made on construction-in-progress until such time as the relevant assets are completed
and ready for their intended use.</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: center"><B></B></P>

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    <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"><B>&nbsp;</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Estimated useful lives of the Company&rsquo;s
assets are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></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: 84%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 15%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Useful Life</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Building</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">20 years</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operating equipment</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5-10 years</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Vehicle</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3-5 years</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Electronic equipment</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3-20 years</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Office equipment</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3-20 years</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Apple orchard</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10 years</FONT></TD></TR>
</TABLE>
<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: 0; text-align: justify">The apple orchard includes rental for an apple
farm, labor cost, fertilizers, apple seeds, apple seedlings and others. The costs to purchase and cultivate apple trees and the
expenditures related to labor and materials to plant apple trees until they become commercially productive are capitalized, which
require a two-year period. The estimated production life for apple tree is 10 years, and the costs are depreciated without a residual
value. Expenses incurred maintaining apple trees during the growth cycle until seedling apple trees or grafted varieties are fruited
are capitalized into inventory and included in Work in Process&mdash;apple orchard, a component of inventories.</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">Depreciation expenses pertaining to apple
trees will be included in inventory costs for those apples to be sold and ultimately become a component of cost of goods sold.
Similar to other assets, the failure of our apple trees to be serviceable over the entirety of their anticipated useful lives or
to be sold at their anticipated residual value will negatively impact our operating results.</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>Intangible Assets</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">Included in the intangible assets are land
use rights. According to the laws of the PRC, the government owns all the land in the PRC. Companies or individuals are authorized
to possess and use the land only through land use rights granted by the Chinese government. Intangible assets are being amortized
using the straight-line method over their lease terms or estimated useful life.</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">Estimated useful lives of the Company&rsquo;s
intangible assets are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></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: 84%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 15%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Useful Life</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Land use rights</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">50 years</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-patented technology</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10 years</FONT></TD></TR>
</TABLE>
<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">The Company carries intangible assets at
cost less accumulated amortization. In accordance with US GAAP, the Company examines the possibility of decreases in the value
of intangible assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.
The Company computes amortization using the straight-line method over estimated useful life of 50 years for the land use rights.</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>Impairment of Long-lived Assets</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">In accordance with ASC Topic 360, the Company
reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets
may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted
future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between
the asset&rsquo;s estimated fair value and its book value. The Company recorded no impairment charge for the three months ended
March 31, 2019 and 2018.&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"></P>

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<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"><B>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Advances from Customers</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">Advances from customers consist of prepayments
from customers for merchandise that had not yet been shipped. The Company will recognize the deposits as revenue as customers take
delivery of the goods and title to the assets is transferred to customers in accordance with the Company&rsquo;s revenue recognition
policy.</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>Non-controlling Interest</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">Non-controlling interests in the Company&rsquo;s
subsidiaries are recorded in accordance with the provisions of ASC 810 and are reported as a component of equity, separate from
the parent&rsquo;s equity. Purchase or sale of equity interests that do not result in a change of control are accounted for as
equity transactions. Results of operations attributable to the non-controlling interest are included in our consolidated results
of operations and, upon loss of control, the interest sold, as well as interest retained, if any, will be reported at fair value
with any gain or loss recognized in earnings.</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>Revenue Recognition</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">On January 1, 2018, the Company adopted
ASC 606 using the modified retrospective method. Results for the reporting period beginning after January 1, 2018 are presented
under ASC 606, while prior period amounts have not been adjusted and continue to be reported in accordance with the Company&rsquo;s
historic accounting under Topic 605.</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 has determined that the adoption
of ASC 606 did not impact the Company&rsquo;s previously reported financial statements in any prior period nor did it result in
a cumulative effect adjustment to opening retained earnings.</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 for sale of products is derived
from contracts with customers, which primarily include the sale of fertilizer products and environmental protection equipment.
The Company&rsquo;s sales arrangements do not contain variable consideration. The Company recognizes revenue at a point in time
based on management&rsquo;s evaluation of when performance obligations under the terms of a contract with the customer are satisfied
and control of the products has been transferred to the customer. For vast majority of the Company&rsquo;s product sales, the performance
obligations and control of the products transfer to the customer when products are delivered, and customer acceptance is made.</P>

<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; text-align: justify">Pursuant to the guidance of ASC Topic 840,
rent shall be&nbsp;reported as income by lessors over the&nbsp;lease term&nbsp;as it becomes receivable. The Company currently
leased part of the building of the Shanghai new plant to third parties as warehouse. The Company recognizes building leasing revenue
over the beneficial period described by the agreement, as the revenue is realized or realizable and earned.&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">The Company recognized rental income from
leasing a portion of its manufacturing facility located in Shanghai to third parties. For the three months ended March 31, 2019
and 2018, rental income of $165,711 and $118,962 were recognized as other income.</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>Cost of Sales</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">Cost of goods sold consists primarily of
raw materials, utility and supply costs consumed in the manufacturing process, manufacturing labor, depreciation expense and direct
overhead expenses necessary to manufacture finished goods as well as warehousing and distribution costs such as inbound freight
charges, shipping and handling costs, purchasing and receiving costs.</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></B></P>

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<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>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</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>Income Taxes</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">The Company accounts for income taxes under
the provisions of Section 740-10-30 of the FASB Accounting Standards Codification, which is an asset and liability approach that
requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been
recognized in its financial statements or tax returns.</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 is subject to the Enterprise
Income Tax law (&ldquo;EIT&rdquo;) of the People&rsquo;s Republic of China. The Company&rsquo;s operations in producing and selling
fertilizers are subject to the 25% enterprise income tax.</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>Related Parties</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">Parties are related to the Company if the
parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with
the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of
principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can
significantly influence the management or operating policies of the other to an extent that one of the transacting parties might
be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions.</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>Accumulated Other Comprehensive Income
(Loss)</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">Comprehensive income (loss) comprised of
net income (loss) and all changes to the statements of stockholders&rsquo; equity, except those due to investments by stockholders,
changes in paid-in capital and distributions to stockholders. The Company&rsquo;s comprehensive income (loss) consist of net income
(loss) and unrealized gains from foreign currency translation adjustments.</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>Reclassification</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">Certain prior year balances have been reclassified
to conform to the current period presentation. These reclassifications had no impact on net earnings or financial position.</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>Foreign Currency Translation</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: 0; text-align: justify">The Company&rsquo;s functional currency is
the Chinese Renminbi (&ldquo;RMB&rdquo;); however, the accompanying consolidated financial statements have been translated and
presented in United States Dollars (&ldquo;USD&rdquo;). Results of operations and cash flows are translated at average exchange
rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity
is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements
of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments
resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining
comprehensive income/loss. The translation adjustment for three months ended March 31, 2019 and 2018 were gain of $219,080 and
gain of $24,289, respectively. Transactions denominated in foreign currencies are translated into the functional currency at the
exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into
the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that
arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included
in the results of operations as incurred.</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></B></P>

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<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: center"><B>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</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">All of the Company&rsquo;s revenue transactions
are transacted in the functional currency. The Company does not enter into any material transaction in foreign currencies. Transaction
gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company.</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">Asset and liability accounts at March 31,
2019 and December 31, 2018 were translated at 6.7111 RMB to $1 USD and 6.8764 RMB to $1 USD, respectively, which were the exchange
rates on the balance sheet dates. The average translation rates applied to the statements of income for the three months ended
March 31, 2019 and 2018 were 6.7464 RMB and 6.3566 RMB to $1 USD, respectively.</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>Earnings (Loss) per Share</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">Basic earnings per share is computed by
dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period,
excluding the effects of any potentially dilutive securities. Diluted earnings per share gives effect to all dilutive potential
of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by
using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock
options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Earnings per share excludes
all potential dilutive shares of common stock if their effect is anti-dilutive. There were no potential dilutive securities at
March 31, 2019 and December 31, 2018 and for the three months ended March 31, 2019 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>Fair Value of Financial Instruments</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">The Company adopted the guidance of ASC
Topic 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value,
and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:</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">Level 1-Inputs are unadjusted quoted prices
in active markets for identical assets or liabilities available at the measurement date.</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">Level 2-Inputs are unadjusted quoted prices
for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets
that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable
market data.</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">Level 3-Inputs are unobservable inputs
which reflect the reporting entity&rsquo;s own assumptions on what assumptions the market participants would use in pricing the
asset or liability based on the best available information.</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 carrying amounts reported in the balance
sheets for cash and cash equivalents, accounts receivable, inventories, advances to suppliers, prepaid expenses, short-term loans,
accounts payable, accrued expenses, advances from customers, VAT and service taxes payable and income taxes payable approximate
their fair market value based on the short-term maturity of these instruments.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">ASC Topic 825-10 &ldquo;<I>Financial Instruments</I>&rdquo;
allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The
fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If
the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings
at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.</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: center"></P>

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<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>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</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">The following table summarizes the carrying
values of the Company&rsquo;s financial instruments:<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><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="text-align: justify">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">March&nbsp;31,</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">December&nbsp;31,</TD><TD STYLE="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></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: justify; padding-left: 0.75pt">Short-term loan</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">154,222</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">150,515</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 0.75pt">Current portion of long-term debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,572,857</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,453,435</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-left: 0.75pt">Long-term loan</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,602,640</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,454,543</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<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>Government Contribution Plan</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">Pursuant to the laws applicable to PRC
law, the Company is required to participate in a government-mandated multi-employer defined contribution plan pursuant to which
certain retirement, medical and other welfare benefits are provided to employees. Chinese labor regulations require the Company
to pay to the local labor bureau a monthly contribution at a stated contribution rate based on the monthly basic compensation of
qualified employees. The relevant local labor bureau is responsible for meeting all retirement benefit obligations; the Company
has no further commitments beyond its monthly contribution.</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>Statutory Reserve</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">Pursuant to the laws applicable to the
PRC, the Company must make appropriations from after-tax profit to the non-distributable &ldquo;statutory surplus reserve fund&rdquo;.
Subject to certain cumulative limits, the &ldquo;statutory surplus reserve fund&rdquo; requires annual appropriations of 10% of
after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles
generally accepted in the PRC (&ldquo;PRC GAAP&rdquo;) at each year-end). For foreign invested enterprises and joint ventures in
the PRC, annual appropriations should be made to the &ldquo;reserve fund&rdquo;. For foreign invested enterprises, the annual appropriation
for the &ldquo;reserve fund&rdquo; cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of
the registered capital (as determined under PRC GAAP at each year-end). If the Company has accumulated loss from prior periods,
the Company is able to use the current period net income after tax to offset against the accumulate loss.</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>Segment Information</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">The standard, &ldquo;Disclosures about
Segments of an Enterprise and Related Information,&rdquo; codified with ASC-280, requires certain financial and supplementary information
to be disclosed on an annual and interim basis for each reportable segment of an enterprise. The Company believes that it operates
in two business segments and in one geographical segment (China), as all of the Company&rsquo;s current operations are carried
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: center"></P>

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<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>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</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>Recent Accounting Pronouncement </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">In January 2017, the Financial Accounting
Standard Board (&ldquo;FASB&rdquo;) issued guidance, which simplifies the accounting for goodwill impairment. The updated guidance
eliminates Step 2 of the impairment test, which requires entities to calculate the implied fair value of goodwill to measure a
goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit&rsquo;s
carrying amount over its fair value.</P>

<P STYLE="font: 8pt 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 January 2017, the FASB issued guidance,
which amended the existing accounting standards for business combinations. The amendments clarify the definition of a business
with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions
(or disposals) of assets or businesses.</P>

<P STYLE="font: 8pt 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 January 2017, the FASB issued ASU 2017-03,
&ldquo;<I>Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323)</I>&rdquo;.
This pronouncement amends the SEC&rsquo;s reporting requirements for public filers in regard to new accounting pronouncements or
existing pronouncements that have not yet been adopted. Companies are to provide qualitative disclosures if they have not yet implemented
an accounting standards update. Companies should disclose if they are unable to estimate the impact of a specific pronouncement,
and provide disclosures including a description of the effect on accounting policies that the registrant expects to apply. These
provisions apply to all pronouncements that have not yet been implemented by registrants. There are additional provisions that
relate to corrections to several other prior FASB pronouncements. The Company has incorporated language into other recently issued
accounting pronouncement notes, where relevant for the corrections in FASB ASU 2017-03. The Company is implementing the updated
SEC requirements on not yet adopted accounting pronouncements with these consolidated financial statements.</P>

<P STYLE="font: 8pt 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 August 2017, the FASB issued guidance,
which amends the existing accounting standards for derivatives and hedging. The amendment improves the financial reporting of hedging
relationships to better represent the economic results of an entity&rsquo;s risk management activities in its financial statements
and made certain targeted improvements to simplify the application of the hedge accounting guidance in current U.S. GAAP.</P>

<P STYLE="font: 8pt 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 August 2018, the FASB issued ASU 2018-13,
&rdquo; <I>Fair Value Measurement (Topic 820), &ndash; Disclosure Framework &ndash; Changes to the Disclosure Requirements for
Fair Value Measurement</I>,&rdquo; which makes a number of changes meant to add, modify or remove certain disclosure requirements
associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. The amendments
in this Update modify the disclosure requirements on fair value measurements based on the concepts in FASB Concepts Statement,
Conceptual Framework for Financial Reporting&mdash;Chapter 8: Notes to Financial Statements, including the consideration of costs
and benefits. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable
inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied
prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments
should be applied retrospectively to all periods presented upon their effective date. The amendments are effective for all entities
for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted.
The Company is currently evaluating the potential impacts of ASU 2018-13 on its consolidated financial statements.</P>

<P STYLE="font: 8pt 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 believes that there were no
other accounting standards recently issued that had or are expected to have a material impact on our financial position or results
of operations.</P>

<P STYLE="font: 8pt 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><I>Recently adopted accounting pronouncements</I></B></P>

<P STYLE="font: 8pt 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 May 2016, the FASB issued ASU 2016-12,
&ldquo;<I>Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients</I>&rdquo;. The
amendments, among other things: (1) clarify the objective of the collectability criterion for applying paragraph 606-10-25-7; (2)
permit an entity to exclude amounts collected from customers for all sales (and other similar) taxes from the transaction price;
(3) specify that the measurement date for noncash consideration is contract inception; (4) provide a practical expedient that permits
an entity to reflect the aggregate effect of all modifications that occur before the beginning of the earliest period presented
when identifying the satisfied and unsatisfied performance obligations, determining the transaction price, and allocating the transaction
price to the satisfied and unsatisfied performance obligations; (5) clarify that a completed contract for purposes of transition
is a contract for which all (or substantially all) of the revenue was recognized under legacy GAAP before the date of initial application,
and (6) clarify that an entity that retrospectively applies the guidance in Topic 606 to each prior reporting period is not required
to disclose the effect of the accounting change for the period of adoption. The effective date of these amendments is at the same
date that Topic 606 is effective. The Company adoptedASU 2016-12 from January 1, 2018.</P>

<P STYLE="font: 8pt 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 December 2016, the FASB issued ASU 2016-20,
<I>&ldquo;Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers&rdquo;</I>. The amendments
in ASU 2016-20 affect narrow aspects of the guidance issued in ASU 2014-09 including Loan Guarantee Fees, Contract Costs, Provisions
for Losses on Construction-Type and Production-Type Contracts, Disclosure of Remaining Performance Obligations, Disclosure of Prior
Period Performance Obligations, Contract Modifications, Contract Asset vs. Receivable, Refund Liabilities, Advertising Costs, Fixed
Odds Wagering Contracts in the Casino Industry, and Costs Capitalized for Advisors to Private Funds and Public Funds. The effective
date of these amendments are at the same date that Topic 606 is effective. Topic 606 is effective for public entities for annual
reporting periods beginning after December 15, 2017, including interim reporting periods therein (i.e., January 1, 2018, for a
calendar year entity). The Company adopted ASU 2016-20 from January 1, 2018.</P>

<P STYLE="font: 8pt 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 adopted the <I>Revenue from
Contracts with Customers (Topic 606)</I> from January 1, 2018.<B>&nbsp;</B></P>

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

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<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: center"><B>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 3 &ndash; ACCOUNTS RECEIVABLE</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">Accounts receivable consisted of the following:</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>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">March&nbsp;31,</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">December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<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">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></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; padding-left: 0.75pt">Accounts receivable</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">4,337,460</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">4,370,620</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; padding-left: 0.75pt"><U>Less</U>: Allowance for doubtful accounts</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">(280,400</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">(279,733</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: 4pt; padding-left: 0.75pt">Total, net</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">4,057,060</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">4,090,887</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"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company reviews the accounts receivable
on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances.
After evaluating the collectability of individual receivable balances, the Company recognized bad debt allowance expense of $0
and $0 for the three months ended March 31, 2019 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>NOTE 4 &ndash; INVENTORIES</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">Inventories consisted of the following:</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>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">March&nbsp;31,</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">December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<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">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></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; padding-left: 0.75pt">Raw materials</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">138,892</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">124,069</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; padding-left: 0.75pt">Finished goods</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">650,159</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">322,561</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: 4pt; padding-left: 0.75pt">Total, net</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">789,051</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">446,630</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"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company did not recognized loss from
inventory impairment for the three months ended March 31, 2019 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: center"></P>

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    <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"><B>&nbsp;</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 5 &ndash; PREPAYMENT</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">The prepayment balance of $1,519,834 as
of March 31, 2019 mainly represents the advanced payment for the construction of the black goat slaughtering and processing project
located in Shuangbai County, Chuxiong City, Yunnan Province, PRC. The remaining balance represents the advance to the suppliers
for business purpose.</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>NOTE 6 &ndash; PROPERTY, PLANT AND EQUIPMENT</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">Property, plant and equipment at March
31, 2019 and December 31, 2018 consisted of:</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">March&nbsp;31,</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">December&nbsp;31,</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">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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; padding-left: 0.75pt">Building</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">13,155,540</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">12,838,100</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-left: 0.75pt">Operating equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,896,937</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,754,463</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.75pt">Vehicle</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">82,547</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">104,121</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.75pt">Office equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,501</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">59,897</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: 0.75pt">Apple Orchard</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,070,395</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,026,505</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: 0.75pt">Construction in progress</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">384,529</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">341,173</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-left: 0.75pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,611,449</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,124,259</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: 0.75pt"><U>Less</U>: 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">(2,468,578</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">(2,196,936</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="padding-bottom: 4pt; padding-left: 0.75pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">15,142,871</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">14,927,323</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">For the three months ended March 31, 2019
and 2018, depreciation expense amounted to $272,302 and $208,051, respectively. Depreciation is not taken during the period of
construction or equipment installation. Upon completion of the installation of manufacturing equipment or any construction in progress,
construction in progress balances will be classified to their respective property and equipment category.</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 construction in progress of $384,529
represents the investment of a black goat processing plant located in Shuangbai County, Chuxiong City, Yunnan Province, 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"></P>

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    <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"><B>&nbsp;</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 7 &ndash; INTANGIBLE ASSETS</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">Intangible assets consisted of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&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">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">March&nbsp;31,</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">December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<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">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></TR>
<TR STYLE="vertical-align: bottom">
    <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: 76%; text-align: left; padding-left: 0.75pt">Land use rights</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">3,707,565</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">3,618,441</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; padding-left: 0.75pt">Non-patented technology</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">14,901</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">14,542</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-left: 0.75pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,722,466</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,632,983</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: 0.75pt"><U>Less</U>: 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">(449,060</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">(419,853</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="padding-bottom: 4pt; padding-left: 0.75pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,273,406</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,213,130</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">For the three months ended March 31, 2019
and 2018, amortization of intangible assets amounted to $18,767 and $15,440, 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"><B>NOTE 8 &ndash; DEFERRED TAX ASSETS, NET</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 components of the deferred tax assets
are as follows:</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>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">March&nbsp;31,</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">December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<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">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></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Deferred tax assets, non-current</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: 76%; text-align: left; padding-left: 0.75pt">Deficit carried-forward</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">427,103</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">416,836</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; padding-left: 0.75pt">Allowance for doubtful accounts</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">38,849</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">37,915</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-left: 0.75pt">Deferred tax assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">465,952</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">454,751</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: 0.75pt"><U>Less</U>: valuation allowance</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: 4pt; padding-left: 0.75pt">Deferred tax assets, non-current</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">465,952</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">454,751</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">Deferred taxation is calculated under
the liability method in respect of taxation effect arising from all timing differences, which are expected with reasonable probability
to realize in the foreseeable future. The Company&rsquo;s subsidiary registered in the PRC is subject to income taxes within the
PRC at the applicable tax rate.</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>

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    <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">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 9 &ndash; LOANS PAYABLE</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">Short-term loan of $154,222 represents
balance due to Shanghai Jinshan Limin Micro Loan Co., Ltd., with annualized interest rate of 16%. This loan was borrowed on March
3, 2017 and due on March 2, 2018.&nbsp;The Company extended this loan twice until the end of June 2019 with the same terms.</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">Current portion of long-term loans amounted
to $5,572,857 representing balance due to Agricultural Bank of China, with an annual interest rate of 5.70% + (HongkongInterBank
Offered Rate (&ldquo;HIBOR&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">Long-term loans represent amounts due to
lenders that are due in more than one year, whose balance was $3,602,640 and $3,454,543 as of March 31, 2019 and December 31, 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">Long-term loan and current portion of
long-term loan consisted of the following:<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><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>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">March&nbsp;31,</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">December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<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">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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Loan payable to Agricultural Bank of China, annual interest rate of 5.70% + HIBOR, due by August 25, 2019.</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">4,455,305</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">4,362,748</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-left: 0.125in; text-indent: -0.125in">Loan payable to Rushan City Rural Credit Union, annual interest 8.3125%, due by July&nbsp;25,&nbsp;2019.</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,117,552</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,090,687</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: 0.75pt">Long-term loans and interest payable to individuals and entities without 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">3,602,640</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">3,454,543</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: 0.75pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,175,497</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,907,978</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: 0.75pt"><U>Less</U>: Current portion of long-term loans
    payable</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">(5,572,857</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">(5,453,435</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; padding-bottom: 4pt; padding-left: 0.75pt">Total, net</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,602,640</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,454,543</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"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of March 31, 2019, the Company&rsquo;s
future loan obligations according to the terms of the loan agreement are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><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; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-align: justify">Year 1</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">5,727,079</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Year 2</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,602,640</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">9,329,719</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">The long-term bank loan with Agricultural
Bank of China was collateralized with land use rights and guaranteed by Mr. Lirong Wang, the CEO.&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">The Company recognized interest expenses
of $94,596 and $108,081 for the three months ended March 31, 2019 and 2018, respectively.</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"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<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"><B>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 10 &ndash; STOCKHOLDERS DEFICIT</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>Authorized Stock</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">The Company has authorized 500,000,000
common shares with a par value of $0.0001 per share.&nbsp; Each common share entitles the holder to one vote, in person or proxy,
on any matter on which action of the stockholders of the corporation is sought.</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 7.35pt 0pt 0; text-align: justify">On April 5, 2019, the Company filed a Certificate
of Amendment to our Articles of Incorporation with the Secretary of State of the State of Nevada to reflect the creation of Blank
Check Preferred Stock. As a result, the capital stock of the Company consists of 500,000,000 shares of common stock, $0.0001 par
value, and 100,000,000 shares of blank check preferred stock as of March 31, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 7.35pt 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Common Share Issuances</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">On June 29, 2018, the outstanding amount
$326,348 due to Mr. Wang, CEO and Chairman of the Company, were converted into 43,200 shares of Common Shares at $ 7.55 per share.</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 the Company issued 298,518
common shares of the Company at $7.55 for proceeds of $2,255,111 to Mr.&nbsp;Wang, CEO and Chairman of the Company.</P>

<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; text-align: justify">On April 4, 2019, the Company&rsquo;s Board
of Directors and majority shareholder approved a 5 to 1 reverse stock split of all of the issued and outstanding shares of the
Company&rsquo;s common stock (the &ldquo;Reverse Stock Split&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">On April 16, 2019, the Company filed a
Certificate of Change to our Articles of Incorporation with the Secretary of State of the State of Nevada to reflect the Reverse
stock Split. The common shares outstanding have been retroactively restated to reflect the reverse stock split.</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">As a result of the Reverse Stock Split, the total issued and
outstanding shares of common stock the Company is 56,341,953 as of March 31, 2019.</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"></P>

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    <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"><B>&nbsp;</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 11 &ndash; RELATED PARTY TRANSACTIONS</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">Ms. Hui Song was the Company&rsquo;s former
sales director. In 2013, Ms. Hui Song resigned and she no longer has any significant control or influence over the Company therefore
she was no longer considered a related party. Jilin Jiliang Zongbao Biological Technology Co., Ltd., an entity controlled by Ms.
Hui Song, and Yantai Zongbao Tele-Agriculture Service Co., Ltd., a related company of Ms. Hui Song, were also no longer considered
as related parties of the Company.</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><I><U>*Account receivable from and sales
to Ms. Hui Song and her associated</U></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">For the three months ended March 31, 2019,
the Company did not sell any products to <I><U>Ms. Hui Song and her associated.</U></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">The Company sold fertilizer manufacturing
equipment to Jilin Jiliang Zongbao Biological Technology Co., Ltd., in the amount of $171,664, with related cost of $107,567 for
the three months ended March 31, 2018. This transaction was reflected in the revenue and cost of goods sold.</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">As of March 31, 2019 and December 31, 2018,
the Company has account receivable balance of $190,238 and $185,665 from Jilin Jiliang Zongbao Biological Technology Co., Ltd.,
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">As of March 31, 2019 and December 31, 2018,
the Company has account receivable balance of $37,252 and $61,082 from Yantai Zongbao Tele-Agriculture Service Co., Ltd., respectively.&nbsp;</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><I><U>*Account payable to and purchase
from Ms. Hui Song and its associated</U></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"><FONT STYLE="background-color: white">For
the three months ended March 31, 2019 and 2018, the Company purchased fertilizer of $518,943 and $459,421 from </FONT>Jilin Jiliang
Zongbao Biological Technology Co., Ltd., respectively<FONT STYLE="background-color: white">. </FONT>As of March 31, 2019 and December
31, 2018, <FONT STYLE="background-color: white">account payable to </FONT>Jilin Jiliang Zongbao Biological Technology Co., Ltd.
was $596,176 and $72,712 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">As of March 31, 2019, long-term loan payable
balances for Jilin Jiliang Zongbao Biological Technology Co., Ltd. and Ms Hui Song were $827,676 and $273,428, 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">As of December 31, 2018, long-term loan
payable balances for Jilin Jiliang Zongbao Biological Technology Co., Ltd. and Ms.&nbsp;Hui Song were $807,780 and $266,855, 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></B></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<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: center"><B>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 11 &ndash; RELATED PARTY TRANSACTIONS
(CONTINUED)</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><U>*Account payable to and purchase
from related parties</U></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"><FONT STYLE="background-color: white">The
Company did not make any purchase from related parties for the three months ended March 31, 2019.</FONT></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"><FONT STYLE="background-color: white">The
Company purchased fertilizer manufacturing equipment of $107,567 from Shanghai Aoke Chemicals Co., Ltd. for the three months ended
March 31, 2018. Shanghai Aoke Chemicals Co., Ltd. was 95% controlled by Mr. Lirong Wang, CEO and majority shareholder of the Company.&nbsp;</FONT></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"><FONT STYLE="background-color: white">As
of March 31, 2019 and December 31, 2018, account payable to Shanghai Aoke Chemicals Co., Ltd. were $119,205 and $116,340.</FONT>&nbsp;&nbsp;</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><I><U>*Due to related party</U></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: 0; text-align: justify">Outstanding balance due to Mr. Lirong Wang
and Mr. Guohua Lin below are advances from related parties for working capital of the Company which are due on demand, non-interest
bearing, and unsecured, unless further disclosed.</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">March&nbsp;31,</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">December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&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">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 STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Relationship</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 25%; text-align: left">Mr. Lirong Wang</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">680,238</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">1,442,751</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 50%; text-align: center">The CEO and Chairman / Actual controlling person</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Ms. Xueying Sheng</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">161,403</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">169,743</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Controller/Accounting manager of the Company</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Mr. Guohua Lin</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">85,083</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">3,054</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">Senior management / One of the Company&rsquo;s shareholders</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">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">926,724</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">1,615,547</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 4pt">&nbsp;</TD></TR>
</TABLE>

<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">For the three months ended March 31, 2019,
the Company borrowed $574,295 from Mr. Lirong Wang, and repaid $1,114,501.</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 three months ended March 31, 2019,
the Company borrowed $83,742 from Mr. Guohua Lin, and repaid $271.&nbsp;&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">On November 8, 2017, the Company borrowed
$31,993 from Ms. Xueying Sheng. The loan is unsecured, without maturity, and bears an interest rate of 20%.</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 three months ended March 31, 2019,
the Company borrowed $25,976 from Ms. Xueying Sheng and repaid $38,431.</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">These loan are due on demand, non-interest bearing, and
unsecured.</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>

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    <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"><B>&nbsp;</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 12 &ndash; CONCENTRATIONS</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>Customers Concentrations</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; text-align: justify">The following table sets forth information
as to each customer that accounted for 10% or more of the Company&rsquo;s revenues for the three months ended March 31, 2019 and
2018.</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: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center">For the three months ended</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&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">March 31,</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 1.5pt solid">Customer</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">2019</TD><TD STYLE="font-weight: bold; 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">2018</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&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="font-weight: bold; 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="font-weight: bold; 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="font-weight: bold; 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="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: left; padding-left: 0.75pt">A</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">414,488</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">22</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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></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-left: 0.75pt">B</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">386,325</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</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-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</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-left: 0.75pt">C</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">266,809</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</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-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.75pt">D</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">222,341</TD><TD STYLE="text-align: left">&nbsp;</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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</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-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</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-left: 0.75pt">E</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</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-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">626,267</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.75pt">F</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</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-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">314,634</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26</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: 0.75pt">G</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</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-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">171,664</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<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>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Suppliers Concentrations</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; text-align: justify">The following table sets forth information
as to each supplier that accounted for 10% or more of the Company&rsquo;s purchase for the three months ended March 31, 2019 and
2018.</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: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center">For the three months ended</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&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">March 31,</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 1.5pt solid">Suppliers</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">2019</TD><TD STYLE="font-weight: bold; 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">2018</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&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="font-weight: bold; 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="font-weight: bold; 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="font-weight: bold; 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="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: left; padding-left: 0.75pt">A</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">401,440</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">34</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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></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-left: 0.75pt">B</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">142,476</TD><TD STYLE="text-align: left">&nbsp;</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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</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-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</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-left: 0.75pt">C</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">518,943</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">459,421</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">76</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.75pt">D</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A
</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-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">107,567</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<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></B></P>

<!-- Field: Page; Sequence: 119; 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 -->51<!-- 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"><B>&nbsp;</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 12 &ndash; CONCENTRATIONS (CONTINUED)</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"><B><I>Credit Risks</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">The Company&rsquo;s operations are carried
out in the PRC. Accordingly, the Company&rsquo;s business, financial condition and results of operations may be influenced by the
political, economic and legal environment in the PRC, and by the general state of the PRC&rsquo;s economy. The Company&rsquo;s
operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North
America. The Company&rsquo;s results may be adversely affected by changes in governmental policies with respect to laws and regulations,
anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.</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">Financial instruments which potentially
subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. Substantially all
of the Company&rsquo;s cash is maintained with state-owned banks within the PRC, and none of these deposits are covered by insurance.
The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.
A significant portion of the Company&rsquo;s sales are credit sales which are primarily to customers whose ability to pay is dependent
upon the industry economics prevailing in these areas; however, concentrations of credit risk with respect to trade accounts receivables
is limited due to generally short payment terms. The Company also performs ongoing credit evaluations of its customers to help
further reduce credit risk. At March 31, 2019 and December 31, 2018, the Company&rsquo;s cash balances by geographic area were
as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><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>&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">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="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December&nbsp;31,<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: 52%; text-align: justify; padding-bottom: 1.5pt">China</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">6,317</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">100</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">12,778</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">100</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">Total cash and cash equivalents</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">6,317</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">100</TD><TD STYLE="padding-bottom: 4pt; text-align: left">%</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">12,778</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">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; text-align: justify"><B>&nbsp;</B></P>

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

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    <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="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 13 &ndash; INCOME TAXES</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>United States</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">Muliang Agritech is established in the
State of Nevada in the United States and is subject to Nevada State and US Federal tax laws. Muliang Agritech has approximately
$102,000 of unused net operating losses (&ldquo;NOLs&rdquo;) available for carrying forward to future years for U.S. federal income
tax reporting purposes. The benefit from the carry forward of such NOLs will begin expiring during the year ended December 31,
2034. Because United States tax laws limit the time during which NOL carry forwards may be applied against future taxable income,
the Company may be unable to take full advantage of its NOLs for federal income tax purposes should the Company generate taxable
income. Further, the benefit from utilization of NOL carry forwards could be subject to limitations due to material ownership changes
that could occur in the Company as it continues to raise additional capital. Based on such limitations, the Company has significant
NOLs for which realization of tax benefits is uncertain.</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 22, 2017, the United States
enacted the Tax Cuts and Jobs Act (the &ldquo;Act&rdquo;) resulting in significant modifications to existing law. The Company has
considered the accounting impact of the effects of the Act during the year ended December 31, 2018 including a reduction in the
corporate tax rate from 34% to 21% among other changes.</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>Hong Kong</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">Muliang HK is established in Hong Kong
and its income is subject to a 16.5% profit tax rate for income sourced within the country. For the years ended December 31, 2018
and 2017, Muliang HK did not earn any income derived in Hong Kong, and therefore was not subject to Hong Kong Profits Tax.</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>China, PRC</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">Shanghai Mufeng and its subsidiaries Muliang
Industry, Zongbao, Zongbao Cangzhou, Muliang Sales, Fukang, Agritech Development, Zhongliang and Yunnan Muliang are established
in China and its income is subject to income tax rate of 25%.</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">The reconciliation of effective income tax rate as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><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>&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">For the Three Months Ended</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">March&nbsp;31,</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">March&nbsp;31,</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">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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">US Statutory income tax rate</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">21</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</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Lower rates in PRC, net</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-bottom: 1.5pt">Valuation allowance</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><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">Total</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></TR>
</TABLE>

<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"></P>

<!-- Field: Page; Sequence: 121; 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 -->53<!-- 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"><B>&nbsp;</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 13 &ndash; INCOME TAXES (CONTINUED)&nbsp;&nbsp;</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">The provision for income taxes consists of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><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>&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>For
the Three Months Ended <BR>
March&nbsp;31,</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<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">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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; padding-left: 0.75pt">Current</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">97,860</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 0.75pt">Deferred</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="padding-bottom: 4pt; padding-left: 0.75pt">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">97,860</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</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"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Accounting for Uncertainty in Income Taxes</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; text-align: justify">The tax authority of the PRC government
conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises complete their
relevant tax filings. Therefore, the Company&rsquo;s PRC entities&rsquo; tax filings results are subject to change. It is therefore
uncertain as to whether the PRC tax authority may take different views about the Company&rsquo;s PRC entities&rsquo; tax filings,
which may lead to additional tax liabilities.</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">ASC 740 requires recognition and measurement
of uncertain income tax positions using a &ldquo;more-likely-than-not&rdquo; approach. The management evaluated the Company&rsquo;s
tax positions and concluded that no provision for uncertainty in income taxes was necessary as of March&nbsp;31, 2019 and December
31, 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"><B>NOTE 14 &ndash; BUSINESS SEGMENTS</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">The revenues and cost of goods sold from operation consist of
the following:</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>&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">Revenues</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">Cost of Sales</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<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">For the Three Months Ended</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">For the Three Months Ended</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">March&nbsp;31,</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">March&nbsp;31,</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">March&nbsp;31,</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">March&nbsp;30,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<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">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">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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: left">Fertilizer sales</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,915,973</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,188,020</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,024,937</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">682,779</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">Agricultural products (food) 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">309,395</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">-</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">313,939</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: 4pt">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,225,368</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,188,020</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">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,338,876</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">682,779</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"><B>&nbsp;</B></P>

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

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<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"><B>MULIANG AGRITECH, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 15 &ndash; SUBSEQUENT EVENT</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"><I>Reverse Stock Split</I></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">On April 4, 2019, the Company&rsquo;s Board of Directors and
majority shareholder approved a 5 to 1 reverse stock split of all of the issued and outstanding shares of the Company&rsquo;s common
stock (the &ldquo;Reverse Stock Split&rdquo;), &nbsp;No fractional shares of Common Stock will be issued as a result of the reverse
stock split. The Stock Split does not affect the par value or the number of authorized shares of common stock of the Company.</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">On April 16, 2019, the Company filed a Certificate of Change
to the Articles of Incorporation with the Secretary of State of the State of Nevada to reflect the reverse stock split.</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 reverse stock split took effect on May 7, 2019</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 a result of this reverse stock split,
all references in the financial statements and notes thereto to the number of shares outstanding, per share amounts, of the Company&rsquo;s
Common Stock have been restated to reflect the effect of the stock split for all periods presented.</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>Name Change</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">On April 4, 2019, the Company&rsquo;s Board of Directors and
majority shareholder approved change of corporate name from &ldquo;Mullan Agritech Inc.&rdquo; to &ldquo;Muliang Agritech Inc.&rdquo;
(the &ldquo;Name Change&rdquo;). On April 5, 2019, Company filed a Certificate of Amendment to its Articles of Incorporation with
the Secretary of State of the State of Nevada to reflect the Name Change. The name change took effect on May 7, 2019</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"><I>Blank Check Preferred Stock</I></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">On April 4, 2019,
the Company&rsquo;s Board of Directors and majority shareholder approved creation of one hundred million (100,000,000) shares of
Blank Check Preferred Stock, $0.0001 par value. To the fullest extent permitted by the laws of the State of Nevada, as the same
now exists or may hereafter be amended or supplemented, the Board of Directors may fix and determine the designations, rights,
preferences or other variations of each class or series within each class of preferred stock of the Company. The Company may issue
the shares of stock for such consideration as may be fixed by the Board of Directors.</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 April 5, 2019, the Company filed a Certificate
of Amendment to the Articles of Incorporation with the Secretary of State of the State of Nevada to authorize the creation of Blank
Check Preferred Stock.</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></B></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Shares of Common Stock</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></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; text-align: center"><B>&nbsp;</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; text-align: center">&nbsp;</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"><IMG SRC="img_001.jpg" ALT="">&nbsp;</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>&nbsp;</B></P>

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

<!-- Field: Rule-Page --><DIV ALIGN="CENTER" STYLE="margin-top: 0; margin-bottom: 0"><DIV STYLE="font-size: 1pt; border-top: Black 1.5pt solid; width: 25%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<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>&nbsp;</B></P>

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

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

<!-- Field: Rule-Page --><DIV ALIGN="CENTER" STYLE="margin-top: 0; margin-bottom: 0"><DIV STYLE="font-size: 1pt; border-top: Black 1.5pt solid; width: 25%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<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">&nbsp;</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">&nbsp;</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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2019</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">&nbsp;</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: justify">Through and including <B>&#8199;&#8199;&#8199;&#8199;&#8199;&#8199;&#8199;&#8199;,</B>
2019 (the 25<SUP>th </SUP>day after the date of this offering), all dealers effecting transactions in these securities, whether
or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer&rsquo;s obligation
to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.</P>

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


<!-- Field: Page; Sequence: 124 -->
    <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"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PART II &mdash; INFORMATION NOT REQUIRED
IN THE PROSPECTUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 5pt"><B>&nbsp;</B></FONT></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"><FONT STYLE="font-size: 5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Set forth below is an itemization of the total expenses, excluding
underwriters&rsquo; discounts and commissions, that we expect to incur in connection with this offering. With the exception of
the SEC registration fee, the FINRA filing fee and the Nasdaq listing fee, all amounts are estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt"><B>&nbsp;</B></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: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Securities and Exchange Commission Registration Fee</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right"><P STYLE="margin: 0pt 0">&nbsp;2,000</P>


</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 88%; font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Nasdaq Listing Fee</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">50,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: -10pt; padding-left: 10pt">FINRA</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right"><P STYLE="margin: 0pt 0">&nbsp;3,000</P>


</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Legal Fees and Expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right"></TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Accounting Fees and Expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right"></TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Printing and Engraving Expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right"></TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 10pt">Miscellaneous Expenses</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right"></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; font-weight: bold; text-align: left; padding-bottom: 4pt; text-indent: -10pt; padding-left: 10pt">Total Expenses</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right"></TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All amounts are estimates other than the SEC&rsquo;s registration
fee. We are paying all expenses of the offering listed above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 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"><FONT STYLE="font-size: 5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the fullest extent permitted by the
laws of the State of Nevada, our Articles of Incorporation and Bylaws, we may indemnify an officer or director who is made a party
to any proceeding, including a lawsuit, because of his/her position, if he/she acted in good faith and in a manner he/she reasonably
believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer
or director is successful on the merits in a proceeding as to which he/she is to be indemnified, we must indemnify him/her against
all expenses incurred, including attorney&rsquo;s fees. With respect to a derivative action, indemnity may be made only for expenses
actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court
order.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-size: 5pt"><B>&nbsp;</B></FONT></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 theretofore unenforceable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 15. Recent Sales of Unregistered Securities.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt"><B>&nbsp;</B></FONT></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: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the past three years, we have issued and sold the securities described below without registering the securities under the Securities
Act. None of these transactions involved any underwriters&rsquo; underwriting discounts or commissions, or any public offering.
We believe that each of the following issuances was exempt from registration under the Securities Act in reliance on Regulation&nbsp;S
promulgated under the Securities Act regarding sales by an issuer in offshore transactions, Regulation&nbsp;D under the Securities
Act, Rule&nbsp;701 under the Securities Act or pursuant to Section&nbsp;4(a)(2) of the Securities Act regarding transactions not
involving a public offering.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 5pt"><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">We
completed a 5-for-1 reverse stock split on May&nbsp;7, 2019. All share and per share information in this Item&nbsp;15 has been
adjusted to reflect this reverse stock split.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 5pt"><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">On
June 29, 2018, the outstanding amount $326,348 due to Mr. Wang, CEO and Chairman of the Company, were converted into 43,200 shares
of common stock at $7.55 per share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On June
29, 2018, the Company issued 298,518 shares of common stock of the Company at $7.55 per share, to Mr.&nbsp;Wang, CEO and Chairman
of the Company</FONT>, for aggregate proceeds of $2,255,111.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 16. Exhibits.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt"><B>&nbsp;</B></FONT></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: 9%; border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Exhibit<BR>
 Number</B></FONT></TD>
    <TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 90%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Description</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">3.1 (1)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><A HREF="http://www.sec.gov/Archives/edgar/data/1629665/000152013815000003/mahc-s1ex3z1.htm"><FONT STYLE="font-size: 10pt">Certificate of Incorporation</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">3.2 (2)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><A HREF="http://www.sec.gov/Archives/edgar/data/1629665/000121390019008237/f8k050719ex3-2_muliangagri.htm"><FONT STYLE="font-size: 10pt">Certificate of Amendment filed with the Secretary of the State of Nevada on April 5, 2019</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">3.3 (2)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><A HREF="http://www.sec.gov/Archives/edgar/data/1629665/000121390019008237/f8k050719ex3-1_muliangagri.htm"><FONT STYLE="font-size: 10pt">Certificate of Change filed with the Secretary of the State of Nevada on April 16, 2019</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">3.4 (1)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1629665/000152013815000096/mahc_s1a1ex3z2.htm">Bylaws</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">4.1*</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Specimen Common Stock Certificate</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">5.1*</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Opinion of Ortoli Rosenstadt LLP, counsel to Mullan Agritech, Inc., as to the validity of the common stock</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">8.1*</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Opinion of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;regarding certain PRC tax matters (included in Exhibit 99.1)</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">14.1*</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Code of Business Conduct and Ethics of the Company</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">21.1&dagger; </FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt"><A HREF="fs12019ex21-1_muliang.htm">List of Subsidiaries</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">23.1&dagger;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt"><A HREF="fs12019ex23-1_muliang.htm">Consent of WWC, PC</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">23.2*</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Consent of Ortoli Rosenstadt LLP (included in Exhibit 5.1).</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">23.3*</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Consent of  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Law Firm</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">99.1*</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Audit Committee Charter</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">99.2*</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Compensation Committee Charter</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">99.3*</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Nominating Committee Charter</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt"><B>&nbsp;</B></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; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Incorporated by reference
to the Registration Statement on Form S-1 filed with the SEC on January 5, 2015.</FONT></TD>
</TR></TABLE>

<P STYLE="margin: 0"></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-size: 10pt">(2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Incorporated by reference
to the Annual Report on Form 8-K filed with the SEC on May 10, 2019.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></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">To be filed by amendment</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></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-size: 10pt">&dagger;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Filed herewith.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-indent: -24pt; text-align: justify"></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Item 17. Undertakings.</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 undersigned Registrant hereby undertakes to provide to the
underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such
names as required by the underwriters to permit prompt delivery to each purchaser.</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 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: 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 undersigned registrant hereby undertakes:</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: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -24pt; 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: 1in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt">(i)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -24pt; 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: 1in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt">(ii)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">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 Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the &ldquo;Calculation of Registration Fee&rdquo; table in the effective registration statement;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -24pt; 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: 1in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt">(iii)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">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;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -24pt; 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: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">That for the purpose of determining any liability under the Securities Act of 1933 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.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -24pt; 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: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt">(3)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">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.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -24pt; 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: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt">(4)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, 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.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -24pt; 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: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt">(5)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -24pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">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 0pt 48pt; 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: 1in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt">(i)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -24pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -24pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -24pt; 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: 1in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt">(ii)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">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;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -24pt; text-align: justify">&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: 1in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt">(iii)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">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</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -24pt; 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: 1in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt">(iv)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -24pt; 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: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt">(6)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -24pt; 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: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt">(7)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">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 provisions described in Item 14 above, 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.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -24pt; 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: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt">(8)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">The undersigned Registrant hereby undertakes:</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-indent: -24pt; 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: 1in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">That for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.</FONT></TD></TR>
</TABLE>
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    <TD STYLE="width: 1in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">That for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and this offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


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<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"><B>SIGNATURES</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; 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 June 26, 2019.</P>

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

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<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><B>MULLAN AGRITECH, INC.</B></FONT></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 STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt"><I>/s/ LirongWang</I></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">LirongWang</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Chief Executive Officer and<BR>
 Chief Financial Officer</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">(Principal Executive Officer and <BR>
Principal Financial Officer)</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; 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>

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    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 46%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Title</B></FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 18%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Date</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt"><I>/s/ Lirong Wang</I></FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Chairman of the Board &amp; Chief Executive Officer</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">June 26<FONT STYLE="font-size: 10pt">, 2019</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Lirong Wang</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">(Principal Executive Officer)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
</TABLE>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">II-4</P>

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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
MULIANG
AGRITECH, INC.
(Exact
name of registrant as specified in its charter)
Nevada
2870
90-1137640
(State
                                   or other jurisdiction of
incorporation or organization)
(Primary
                                   Standard Industrial
Classification Code Number)
(I.R.S.
                                   Employer
Identification Number)
2498
Wanfeng Highway, Lane 181
Fengjing
Town, Jinshan District
Shanghai,
China 201501
(86)
21-67355092
(Address,
including zip code, and telephone number, including area code, of registrant's principal executive offices)
Joseph
Smith
18124
Wedge Pwky, Ste 1050
Reno,
NV 89511
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
Copies
to:
William
                           S. Rosenstadt, Esq.
Mengyi
                           "Jason" Ye, Esq.
Ortoli
                           Rosenstadt LLP
366 Madison Avenue, 3
rd
Floor
New
York, NY 10017
+1-212-588-0022
- telephone
+1-212-826-9307
- facsimile
Fang
                           Liu Esq.
Mei
& Mark LLP
818
18th Street NW
Suite
410
Washington,
DC 20006
+1-888-860-5678
x 718 — telephone
+1-888-706-1173
— facsimile
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 Class of Securities to be Registered
Proposed Aggregate Offering Price
(1)
Amount of Registration Fee
Common stock, par value $0.0001 per share
$
15,000,000
$
1,818.00
Common stock underlying Underwriter's Warrants
(2)
$
1,500,000
$
181.80
Total
$
16,500,000
$
1,999.80
(1)
Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended, which represents the sale of shares at the maximum aggregate
price per share.
(2)
We have agreed to issue, on the closing date of this offering, warrants to our underwriter Network 1 Financial Securities, Inc. ("Underwriter") to purchase up to ten percentage (10%) of the aggregate number of shares of common stock sold by the Registrant (the "Underwriters' Warrants"). The Underwriter's Warrants may be exercisable at any time, and from time to time, in whole or in part, commencing six (6) months following the effective date of the offering and expiring five years from the effective date of the offering. The exercise price of the Underwriters Warrants is equal to 120% of the offering price of the common stock hereby.
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 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 June
26, 2019
MULIANG AGRITECH, INC.
Minimum Offering:                   Shares
of Common Stock
Maximum Offering:                  Shares of Common
Stock
Muliang
Agritech, Inc. is offering a minimum
of                  shares of our
common stock and a maximum
of                  shares of common
stock. The offering is being made on a "best efforts" basis without a firm commitment by the underwriter who has
no obligation or commitment to purchase any of our shares. The underwriter must sell the minimum number of shares offered,
if any are sold, and are only required to use their best efforts to sell the shares offered. See
"Underwriting." Prior to this offering, our stock is currently quoted on the OTCQB Venture Market
("OTCQB") under the symbol "MULG", however, there has been no established public trading market for
our common stock. As of June 26, 2019, the last reported sales price of our common share on the OTCQB was US$27.00 per share,
and on June 26, 2019 we had 56,341,953 shares of common stock outstanding. We expect the offering price of our common stock to
be $                   per share. We
intend to apply to list our common stock on the Nasdaq Capital Market under the symbol "MULG". We cannot assure
you that our application will be approved.
Per Common Stock
Minimum Offering
Maximum Offering
Assumed public offering price
$
$
6,000,000
$
15,000,000
Underwriter fees and commissions
(1)
$
$
390,000
$
975,000
Proceeds to us, before expenses
(1)(2)
$
$
5,610,000
$
14,025,000
(1)
We will pay the underwriter a commission equal to six and half percent (6.5%) of the public offering price
for the shares. In addition, our underwriter shall be entitled to a non-accountable expense equal to one and half percent (1.5%)
of the gross proceeds of the offering. We agree to pay our underwriter, the expenses relating to the offering, not to exceed $125,000
in the aggregate, including but not limited to (i) reasonable travel and out-of-pocket expenses, including clearing charges; (ii)
reasonable fees of legal counsel incurred by underwriter in connection with the Offering. See "Underwriting" in this
prospectus for more information regarding our arrangements with the underwriter.
(2)
The total estimated expenses related to this offering are set forth in the section entitled "Fees, Commission
and Expense Reimbursement."
In addition, we have agreed to issue to
the underwriter warrants to purchase up to a total of                  ordinary
shares (equal to ten percent (10%) of the maximum number of shares of common stock sold in this offering) and to register herein
such underlying shares. The warrants may be exercised at any time, and from time to time, in whole or in part, commencing six
(6) months following the effective date of this public offering and expiring five (5) years from the effective date of the offering.
The warrants are exercisable at a per share price equal to 120% of the offering price of this offering. The offering will close
or terminate, as the case may be, upon the earlier of: (i) a date mutually acceptable to us and the Underwriter after the minimum
offering amount of our offering is raised, or (ii) 180 days from the effective date (the "Effective Date") of this
prospectus (and for a period of up to 60 additional days if extended by agreement of the Company and the Underwriter) (the "Termination
Date"). Until we sell at least shares, all investor funds will be held in an escrow account at                  .
If we do not sell at least                  
shares by the Termination Date, all funds will be promptly returned to investors without interest or deduction. If we complete
this offering, then on the closing date, we will issue the shares to investors in the offering on the shares sold in this offering. One
of the conditions to our obligation to sell any securities through the Underwriter is that, upon the closing of the offering,
the shares of common stock would qualify for listing on the Nasdaq Capital Market.
INVESTING IN OUR
COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 7 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
Page
Prospectus Summary
1
Risk Factors
7
Special Note Regarding Forward-Looking Statements
25
Use of Proceeds
25
Dividend Policy
26
Capitalization
26
Dilution
27
Post-Offering Ownership
28
Management's Discussion and Analysis of Financial Condition and Results of Operations
29
Business
39
Management
52
Executive Compensation
53
Principal Shareholders
54
Related Party Transactions
55
Description of Securities
56
Market Price and Dividend on Our Common Stock and Related Stockholder Matters
57
Shares Eligible for Future Sale
57
Underwriting
59
Legal Matters
63
Experts
63
Interests of Named Experts and Counsel
63
Where You Can Find Additional Information
63
Index to Financial Statements
F-1
You should rely only
on the information contained in this prospectus or in any related free-writing prospectus. We have not authorized anyone to provide
you with information different from that contained in this prospectus or in any related free-writing prospectus. We are offering
to sell, and seeking offers to buy, the shares of common stock offered hereby, but only under circumstances and in jurisdictions
where offers and sales are permitted and lawful to do so. The information contained in this prospectus is current only as of the
date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the shares of common stock.
Neither we nor any
of the underwriters have taken any action that would permit a public offering of the shares of common stock outside the United
States or permit the possession or distribution of this prospectus or any related free-writing prospectus outside the United States.
Persons outside the United States who come into possession of this prospectus or any related free-writing prospectus must inform
themselves about and observe any restrictions relating to the offering of the shares of common stock and the distribution of the
prospectus outside the United States.
Until             ,
2019 (the 25
th
day after the date of this prospectus), all dealers that buy, sell or trade the shares of common stock,
whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the obligation of
dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
i
PROSPECTUS SUMMARY
This summary highlights
information contained in greater detail elsewhere in this prospectus. This summary is not complete and does not contain all of
the information you should consider in making your investment decision. You should read the entire prospectus carefully before
making an investment in our shares of common stock. You should carefully consider, among other things, our consolidated financial
statements and the related notes and the sections entitled "Risk Factors" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.
Prospectus Conventions
Except where the context
otherwise requires and for purposes of this prospectus only, "we", "us", "our company", "Company",
"our" and "Muliang Agritech" refer to:
Muliang Agritech, Inc. ("Muliang
Agritech" when individually referenced), a Nevada company;
Muliang Agricultural Limited ("Muliang
HK" when individually referenced), a Hong Kong company that is a wholly-owned subsidiary of Muliang Agritech;
Shanghai Mufeng Investment Consulting
Co., Ltd ("Shanghai Mufeng" when individually referenced), (also referred to as 上海牧枫投资咨询有限公司),
a wholly-owned subsidiary of Muliang HK and a wholly foreign-owned enterprise ("WFOE") formed under the laws of the
People's Republic of China (the "PRC");
Shanghai Muliang Industry Co., Ltd.
("Shanghai Muliang" when individually referenced), (also referred to as 上海牧粮实业有限公司),
a variable interest entity ("VIE") and a PRC company that is a wholly-owned subsidiary of Shanghai Mufeng;
Shanghai Zongbao Environmental Construction
Co., Ltd. ("Shanghai Zongbao" when individually referenced), (also referred to as 上海综宝环境工程有限公司),
a PRC company that is a wholly-owned subsidiary of Shanghai Muliang;
Shanghai Muliang Agritech Development
Co., Ltd. ("Agritech Development" when individually referenced), (also referred to as 上海牧粮农业科技发展有限公司),
a PRC Company that is a 60%-owned subsidiary of Shanghai Muliang;
Weihai Fukang Bio-Fertilizer Co.,
Ltd. ("Fukang" when individually referenced), (also referred to as 威海富康生物肥料有限公司),
a PRC Company that is a 99.9%-owned subsidiary of Shanghai Muliang;
Shanghai Muliang Agricultural Sales
Co., Ltd. ("Muliang Sales" when individually referenced), (also referred to as 上海牧粮农资销售有限公司),
a PRC company that is a wholly-owned subsidiary of Shanghai Muliang;
Zhonglian Huinong (Beijing) Technology
Co., Ltd. ("Zhonglian" when individually referenced), (also referred to as 中联慧农(北京)科技有限公司),
a PRC company that is a 65%-owned subsidiary of Shanghai Muliang;
Yunnan Muliang Animal Husbandry Development
Co., Ltd. ("Yunnan Muliang" when individually referenced), (also referred to as云南牧粮畜牧发展有限公司),
a PRC company that is an 80%-owned subsidiary of Shanghai Muliang;
Shanghai Zongbao Environmental Construction
Co., Ltd. Cangzhou Branch ("Zongbao Cangzhou" when individually referenced), (also referred to as上海综宝环境工程有限公司沧州分公司),
a PRC company that is a wholly-owned subsidiary of Shanghai Zongbao;
For the sake of clarity,
this prospectus follows the English naming convention of first name followed by 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 "Lirong Wang,"
even though, in Chinese, Mr. Wang's name is presented as "Wang Lirong."
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.
1
Overview
Muliang Agritech was
formed under the laws of the state of Nevada on November 5, 2014. We conduct business primarily through Shanghai Muliang, a variable
interest entity ("VIE") formed under the laws of People's Republic of China (the "PRC" or "China").
We primarily engage
in the manufacturing and distribution of organic fertilizer and the sales of agricultural products in the PRC. Our organic fertilizer
products are sold under our brand names "Zongbao," "Fukang," and "Muliang."
Through our patented
technology, we process crop straw (including corn, rice, wheat, cotton, and other crops) into high quality organic nutritious fertilizers
that are easily absorbed by crops in 3 hours. Straws are common agricultural by-product. In PRC, farmers usually remove the straw
stubble that are remains after grains by burning them in order to continue farming on the same land. These activities have resulted
in significant air pollution and damage the surface structure of the soil with loss of nutrients. We turn waste into treasure by
transforming the straws into organic fertilizer, which also effectively reduces air pollution. The straw organic fertilizer we
produce does not contain the heavy metals, antibiotics and harmful bacteria that are common in the traditional manure fertilizer.
Our fertilizers also provide optimum levels of primary plant nutrients which including multi-minerals, proteins and carbohydrates
that promote the healthiest soils capable of growing the healthy crops and vegetables. It can effectively reduce the use of chemical
fertilizers and pesticides as well as reduce the penetration of large chemical fertilizers and pesticides into the soil and thus
avoid water pollution. Therefore, our fertilizer can effectively improve fertility of soil, and the quality and safety of agricultural
products.
We generated our revenue
mainly from our organic fertilizers, which accounted for approximately 91.3% and 99.1% of our total revenue for the fiscal years
ended December 31, 2018 and 2017, respectively. We currently have two integrated factories in Weihai City, Shandong Province, PRC
to produce our organic fertilizers, which have been in operations since August 2015. We plan to improve the technology for our
existing straw organic fertilizer production lines in the following aspects: (i) adopt more advanced automatic control technology
for raw material feed to shorten the processing time of raw material, and (ii) manufacture powdered organic fertilizer instead
of granular organic fertilizer production in order to avoid the drying and cooling process, as such will increase our production
capacity.
With the focus of producing
organic fertilizers, we also engage in the business of selling agriculture food products including apples, and as sales agent for
other large agriculture companies in the PRC. In 2014, we rented 350 mu (about 57.66 acres) of mountainous land as apple orchard.
The sales of apples generated less than 1% of our total revenue for the fiscal years ended December 31, 2018 and 2017, respectively.
We expect to generate more revenues from the sales of apples as the apple orchards become more mature in the next few years.
In addition, we plan
to engage in the processing and distribution of black goat products business commencing the fourth quarter of 2019. We are currently
constructing a deep-processing slaughterhouse and processing plant which is expected to have the capacity of slaughtering 200,000
black goats per year in Chuxiong City, Yunnan Province, in China. Our black goat processing products including goat rib lets, goat
loin roast, goat loin chops, goat rack, goat leg, goat shoulder, goat leg shanks, ground goat, goat stew meat, whole goat, half
goat, lamb viscera, etc. We expect to start generate revenue from the black goat products in 2020.
Our assets mainly include:
(i) 42,895 square meters of industrial land and 28,549 square meters of factory and office space located in Jinshan District, Shanghai
City, (ii) 22,511 square meters of industrial land and 10,373 square meters of plant area and straw organic fertilizer production
line in Weihai City, Shandong Province, and (iii) more than $2 million investment of land use right and the black goat slaughtering
and processing plant located in Shuangbai County, Chuxiong City, Yunnan Province, in China.
As the factory area in Jinshan District, Shanghai City is too close to the urban area to produce straw
organic fertilizer, some factory buildings, office buildings and spare land in Jinshan District, Shanghai City, have been leased
to third parties.
Industry and Market Background
The straw
in China is in large quantity, has wide variety and broad distribution, and the annual output of straw of is more than 700 million
tons. The straw contains more than 3 million tons of nitrogen, more than 700,000 tons of phosphorus and nearly 7 million tons of
potassium, equivalent to more than a quarter of China's current fertilizer amount of use and equivalent to 300 million tons
of standard coal. However, nearly 100 million tons of straw are burned directly in the fields every year, which not only damages
the beneficial bacteria in the soil surface seriously, but also directly leads to severe air pollution and increases the greenhouse
effect. With the significant amount of production of straws in China, so long as part of the straw can be recycled every year,
it will bring huge sustainable recycling resources to the fertilizer industry. On November 25, 2015, the National Development and
Reform Commission, the Ministry of Finance, the Ministry of Agriculture and the Ministry of Environmental Protection jointly issued
a notice, requiring the utilization rate of straw to exceed 85% by 2020.
Market demand
in China for organic fertilizer is significant. In 2015, the China national sales volume of organic fertilizers was 90 million
tons. According to the current policy of encouraging less use of chemical fertilizer, improving the quality of agricultural products
and restoring land, it is estimated that the demand of organic fertilizers will increase to 180 million tons by 2020. At the same
time, according to a governmental advocate of increasing proportion of organic fertilizer to 50% of the total use of fertilizer,
the demand in China for organic fertilizer will reach more than 500 million tons.
Straw organic fertilizer
industry is an industry of ecological production and recycling economic.
2
Competitive Advantages
●
Quality
                                         Advantage: compared with the traditional compost manure fermented fertilizer, our product
                                         has high concentration of organic matter and small molecular organic nutrients that can
                                         be directly absorbed by crops rich in fulvic acid, polysaccharides and monosaccharides.
                                         The effective amount of our product is 50% of the amount of conventional organic fertilizer.
●
Safety
                                         advantage: compared with traditional livestock and poultry manure composting fermented
                                         fertilizer, our product generates less residue of heavy metals, antibiotics, toxic and
                                         harmful bacteria, avoids the pollution of soil, and ensures the quality and safety of
                                         agricultural products.
Implications
of Being an Emerging Growth Company
We
qualify as an "emerging growth company" as defined in the Jumpstart our Business Startups Act of 2012, or the JOBS
Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable
generally to public companies. These provisions include:
●
the
                                         ability to include only two years of audited financial statements and only two years
                                         of related management's discussion and analysis of financial condition and results
                                         of operations disclosure; and
●
an
                                         exemption from the auditor attestation requirement in the assessment of our internal
                                         control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002.
We may take advantage
of these provisions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease
to be an emerging growth company if we have more than $1.0 billion in annual revenue, have more than $700 million in market value
of our shares of common stock held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year
period.
Corporate Information
Our principal executive
office is located at 2498 Wanfeng Highway, Lane 181, Fengjing Town, Jinshan District, Shanghai, China. The telephone number of
our principal executive offices is (86) 21-67355092. The office space belongs to our President and Chief Executive Officer, Mr.
Lirong Wang, who allows us to use the space for free. Our registered agent in the United States is Joseph Smith.
Offering Summary
Following completion
of this offering, our ownership will be as follows, assuming completion of the minimum and maximum offerings, respectively. To
the extent we complete an offering between the minimum and maximum offerings, the percentage ownership of participants in this
offering will between the below amounts:
3
The Offering
Shares Offered by us:
Minimum:     shares of common stock
Maximum:      shares of common stock
Shares Outstanding Prior to Completion of Offering:
56,341,953 shares of common stock
Shares to be Outstanding after Offering*:
Minimum:      shares of common stock
Maximum:       shares of common stock
Assumed Offering Price per Share:
$
Gross Proceeds to Us Before Expenses:
Minimum: $6,000,000
Maximum: $15,000,000
Best efforts
The underwriters are selling our shares of common stock on a "best efforts, minimum/maximum" basis. Accordingly, the underwriter has no obligation or commitment to purchase any securities. The underwriters are not required to sell any specific number of dollar amount of shares of common stock but will use its best efforts to sell the shares of common stock offered.
We do not intend to close this offering unless we sell at least a minimum number of shares of common stock, at the price per share set forth on the cover page of this prospectus, to result in sufficient proceeds to list our shares of common stock on the Nasdaq Capital Market.
Escrow account
The gross proceeds from the sale of the shares of common stock in this offering will be deposited in a non-interest bearing escrow account maintained by the escrow agent,              (the "Escrow Agent"). All check will be deposited directly into the escrow account and all wire transfers will be wired directly to the escrow account. The funds will be held in escrow until the Escrow Agent has advised us and the escrow agent that it has received $6,000,000, the minimum offering, in cleared funds. If we do not receive the minimum of $6,000,000 by 180 days from the effective date of this prospectus (and for a period of up to 60 additional days if extended by agreement of the Company and the underwriter) (the "Termination Date")., all funds will be promptly returned to purchasers in this offering after the termination of the offering, without charge, deduction or interest. Prior to the Termination Date, in no event will funds be returned to you unless the offering is terminated. You will only be entitled to receive a refund of your subscription price if we do not raise a minimum of $6,000,000 by the Termination Date. No interest will be paid either to us or to you. See "Underwriting — Deposit of Offering Proceeds."
4
Proposed Nasdaq Capital Market Symbol:
"MULG"
Transfer Agent:
West Coast Stock Transfer Inc.
Transfer Agent
721 N. Vulcan Ave.
Suite 205
Encinitas, CA 92024
Risk Factors:
Investing in these securities involves a high degree of risk. As an investor, you should be able to bear a complete loss of your investment. You should carefully consider the information set forth in the "Risk Factors" section of this prospectus before deciding to invest in our shares of common stock.
Closing of Offering:
The offering contemplated by this prospectus will terminate upon the earlier of: (i) a date mutually acceptable to us and the Underwriter after the minimum offering is sold or (ii) 180 days from the effective date of this prospectus (and for a period of up to 60 additional days if extended by agreement of the Company and the underwriter) (the "Termination Date"). If we complete this offering, net proceeds will be delivered to us on the closing date (such closing date being the above mutually acceptable date on or before the Termination Date, provided the minimum offering has been sold). We will not complete this offering unless our application to list on the Nasdaq Capital Market is approved.
Use of Proceeds:
We intend to use the proceeds from this offering to for advertising and marketing, working capital and general corporate purposes, including the expansion of our business. To the extent that we are unable to raise the maximum proceeds in this offering, we may not be able to achieve all of our business objectives in a timely manner. See "Use of Proceeds" for more information.
Dividend Policy:
We have no present plans to declare dividends and plan to retain our earnings to continue to grow our business.
5
Summary Financial Information
In the table
below, we provide you with historical selected financial data for the three months ended March 31, 2019 and the years
ended December 31, 2018 and 2017 and for the three months ended March 31, 2019. This information is derived from our
consolidated financial statements included elsewhere in this prospectus. Historical results are not necessarily indicative of
the results that may be expected for any future period. When you read this historical selected financial data, it is
important that you read it along with the historical financial statements and related notes and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.
For the
Three Months Ended
March 31,
2019
For the Fiscal
Year Ended
December 31,
2018
For the Fiscal
Year Ended
December 31,
2017
US$
(Unaudited)
US$
(Audited)
US$
(Audited)
Statement of operation data:
Revenues
$
2,225,368
$
13,205,024
$
737,563
Operating expenses
$
518,556
$
1,632,042
$
1,674,061
Income/(Loss) from operations
$
367,936
$
3,912,956
$
(1,527,734
)
Provision for income taxes
$
97,860
$
(25,542
)
$
26,334
Net income/(Loss)
$
445,587
$
4,473,819
$
(2,034,858
)
Earnings per share, basic and diluted
(1)
$
0.01
$
0.08
$
(0.04
)
Weighted average ordinary shares outstanding
(1)
$
56,341,718
$
56,170,859
$
56,000,000
Balance sheet data
Current assets
$
6,559,963
$
6,144,130
$
870,888
Total assets
$
25,509,626
$
24,813,602
$
20,048,055
Current liabilities
$
13,145,492
$
13,263,248
$
11,578,988
Total liabilities
Total equity
$
8,637,015
$
8,095,811
$
930,280
6
RISK FACTORS
An investment in
our shares of common stock involves a high degree of risk. Before deciding whether to invest in our shares of common stock, you
should consider carefully the risks described below, together with all of the other information set forth in this prospectus,
including the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operation"
and our consolidated financial statements and related notes. If any of these risks actually occurs, our business, financial condition,
results of operations or cash flow could be materially and adversely affected, which could cause the trading price of our shares
of common stock to decline, resulting in a loss of all or part of your investment. The risks described below and in the sections
referenced above are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial
may also affect our business. You should only consider investing in our shares of common stock if you can bear the risk of loss
of your entire investment.
Risks Related
to Our Business and Industry
Our fertilizer
business is seasonal and affected by factors beyond our control, which may cause our sales and operating results to fluctuate
significantly.
The sale of products
from our fertilizer-related segments is partially dependent upon planting and growing seasons, which vary from year to year, and
are expected to result in both seasonal patterns and substantial fluctuations in quarterly sales and profitability. Different from
the traditional organic fertilizer that mostly be only used as starter fertilizer. Our products can be used as both the starter
fertilizer and regular fertilizer which can be applied during the all the periods through the crops' growth. Weather conditions
and natural disasters, such as heavy rains, hail, floods, freezing conditions, windstorms or fire, also affect decisions by our
distributors, direct customers and end users about the types and amounts of products to use and the timing of harvesting and planting.
As we increase our sales in our current markets and expand into new markets in different geographies, it is possible that we may
experience different seasonality patterns in our business.
Disruptions may lead
to delays in harvesting or planting by growers which can result in pushing orders to a future quarter, which could negatively affect
results for the quarter in question and cause fluctuations in our operating results. Seasonal variations may be especially pronounced
because our product lines are mainly sold in China. Planting and growing seasons, climatic conditions and other variables on which
sales of our products are dependent vary from year to year and quarter to quarter. As a result, we may experience substantial fluctuations
in quarterly sales.
The overall level of
seasonality in our business is difficult to evaluate as a result of our relatively early stage of development, our limited number
of commercialized products, our expansion into new geographical territories, the introduction of new products and the timing of
introductions of new products. Even though we have conducted protective methods, the Company does have insufficient inventory in
April, May, October and November. It is possible that our business may be more seasonal or experience seasonality in different
periods than anticipated. Other factors may also contribute to the unpredictability of our operating results, including the size
and timing of significant distributor transactions, the delay or deferral of use of our commercial technology or products and the
fiscal or quarterly budget cycles of our direct customers, distributors, licensees and end users. Customers may purchase large
quantities of our products in a particular quarter to store and use over long periods of time or time their purchases to manage
their inventories, which may cause significant fluctuations in our operating results for a particular quarter or year.
Unavoidable Insufficient Inventory
during busy seasons may cause us to lose some portion of our sales.
Traditional organic
fertilizers do have seasonal sales because their use can only be applied as starter fertilizers before the crops are planted. Our
organic fertilizers can be used as a starter fertilizer or as regular fertilizers which can be applied during the growing period
of the crops to supplement the nutrients needed for growth. The Company's inventory during the peak seasons (such as April to May,
and October to November) is insufficient. The Company's fertilizer production capacity has been upgraded from the original 50,000
tons to 70,000 tons, however, the seasonal inventory supply is still unavoidable. The inevitable selling shortage may cause us
to lose some portion our sales.
Competition in
fertilizer and agricultural industrial products is intense and requires continuous technological development.
We
currently face significant direct and indirect competition in the markets in which we operate. The markets for fertilizers are
intensely competitive and rapidly changing. Many companies engage in the development of fertilizers, and speed in commercializing
a new product can be a significant competitive advantage.
In most segments of
the fertilizer markets, the number of products
available
to
end customers is steadily increasing as new products are introduced. We may be unable to compete successfully against
our current and future competitors, which may result in price reductions, reduced margins and the inability to achieve market
acceptance for products containing our seed traits and technology. In addition, many of our competitors have substantially greater
financial, marketing, sales, distribution and technical resources than us and some of our competitors have more experience in
R&D, regulatory matters, manufacturing and marketing. We anticipate increased competition in the future as new companies enter
the market and new technologies become available. Programs to improve genetics and crop protection chemicals are generally concentrated
within a relatively small number of large companies, while non-genetic approaches are underway with broader set of companies.
Mergers and acquisitions in the plant science, specialty food ingredient and agricultural biotechnology seed and chemical industries
may result in even more resources being concentrated among a smaller number of our competitors.
7
Our
technology may be rendered obsolete or uneconomical by technological advances or entirely different approaches developed by one
or more of our competitors, which will prevent or limit our ability to generate revenues from the commercialization of our seed
traits and technology. At the same time, the expiration of patents covering existing products reduces the barriers to entry for
competitors. Our ability to compete effectively and to achieve commercial success depends, in part, on our ability to control manufacturing
and marketing costs; effectively price and market our products, successfully develop an effective marketing program and an
efficient supply chain, develop new products with properties attractive to food manufacturers or growers and commercialize our
products quickly without incurring major regulatory costs. We may not be successful in achieving these factors and any such failure
may adversely affect our business, results of operations and financial condition.
We may not be successful in developing marketable or
commercial technologies.
Through
our patented technology, we process crop straw (including corn, rice, wheat, cotton, and other crops) into high quality organic
nutritious fertilizer rich in small molecules, easily absorbed by crops in 3 hours. Our success depends in part on our ability
to identify and develop high value fertilizer and agriculture industrial technologies for use in commercial products. Through our
technology sourcing and product development collaborations we commit substantial efforts and other resources to accomplish this.
It may take several years, if at all, before many of our products complete the development process and become available for production
and commercialization.
As
of the date of this registration statement, many of our products have been commercialized by our patented technology. There can
be no assurance that our future fertilizer productivity and agriculture industrial technologies will be viable for commercial use,
or that we will be able to generate revenues from those technologies, in a significant manner or at all. If seeds or other products
that utilize our fertilizer or technology are unsuccessful in achieving their desired effect or otherwise fail to be commercialized,
we will not receive revenues from our customers or royalty payments from the commercialization of the fertilizer and technologies
we develop, which could materially and adversely affect our business, financial condition, results of operations and growth strategy.
Fertilizers
containing the following traits or biological treatments that we develop may be unsuccessful or fail to achiev
e
commercialization for any of the following reasons:
●
our
                                         fertilizers may not be successfully validated in the target crops;
●
our
                                         fertilizers may not have the desired effect on the relevant crop sought by our end market;
●
we
                                         or our joint ventures or collaborators may be unable to obtain the requisite regulatory
                                         approvals for the fertilizers;
●
our
                                         competitors may launch competing or more effective fertilizers;
●
we
                                         may be unable to patent and/or obtain breeders' rights or any other intellectual
                                         property rights on our traits and technologies in the necessary jurisdictions;
●
even
                                         if we obtain patent and/or breeders' rights or any other intellectual property
                                         rights on our fertilizers or processing technologies, such rights may be later challenged
                                         by competitors or other parties; and
●
even
                                         if we obtain patent and/or breeders' rights or any other intellectual property
                                         rights on our fertilizers, competitors may design competing products that do not infringe
                                         these intellectual property rights.
If
we are unable to compete successfully with our competitors, our financial condition and results of operations may be harmed.
We encounter intense
competition in each of our business segments on a national, regional and local level. Competition in the industry is primarily
based on quality of services, brand name recognition, geographic coverage and range of services. New and existing competitors may
offer competitive rates, greater convenience or superior services, which could attract customers away from us, resulting in lower
revenues for our operations. Competition among fertilizer companies may cause a decrease in price of sales to attract or retain
talented employees.
Our major competitors
are Shijiazhuang Xixing Fertilizer Science and Technology Limited,
Nanjing Ningliang Bio-chemistry Engineering Limited, Shijiazhuang Jintaiyang Biology Organic Fertilizer Limited, Beijing Wotu Tiandi
Biological Science Limited, Zhenzhou Yongfeng Biology Fertilizer Limited, Shandong Jianong Biological Enginerring Limited, Beijing
aeronautics Hengfeng Technology Limited, Beijing Century Armstrong Biological Technology Limited, GengLiduo Biological Techonology
Limited.
We do not have multinational competitors. Due to the high price of organic fertilizers from other countries,
China has little organic fertilizer imports. The fertilizers produced by international fertilizer companies entering the Chinese
organic fertilizer market are mainly special functional fertilizers such as foliar fertilizers. These functional fertilizers are
not sold well in the domestic market due to high price.
Some of our competitors
may have a broader national presence than us and may have a more established branding recognition than us in major markets, and
also may have more financial or other resources than us. Others may have smaller aggregate businesses than us, but may be more
established and have greater market presence and brand name recognition on a local or regional basis. We are also subject to competition
from other large national and international companies. These companies may have more financial or other resources than us. If we
fail to compete effectively, our business operations and financial condition will suffer.
The loss of any of our key suppliers
and/or customers could have a materially adverse effect on our results of operations.
We consider our major
suppliers in each period to be those suppliers that accounted for more than 10% of overall purchases in such period. For the years
ended December 31, 2018 and 2017, 57% and 53% of our supplies came from two key suppliers, respectively. Although we believe that
we can locate replacement suppliers readily on the market for prevailing prices and that we may not have significant difficulty
replacing a given supplier, any difficulty in replacing such a supplier could adversely affect our company's performance
to the extent it results in higher prices, slower supply chain and ultimately less desirable results of operations.
8
In addition, for the
years ended December 31, 2018 and 2017, two key customers accounted for 60% and 31% of our revenues, respectively. As the majority
of our revenues are driven by individual orders for organic fertilizers, there can be no assurance that we will maintain or improve
the relationships with customers who does not have long-term contracts with us. Our major customers often change each period based
on when a given order is placed. If we cannot maintain long-term relationships with major customers or replace major customers
from period to period with equivalent customers, the loss of such sales could have an adverse effect on our business, financial
condition and results of operations.
Our product development
cycle is lengthy and uncertain and we may never generate revenues or earn revenues on the sale of our products currently in development.
The research and development
in the crop productivity and agriculture biotech industries is expensive, complex, prolonged and uncertain. We may spend many years
and dedicate significant financial and other resources developing products that may never generate revenues or come to market.
Our process of developing and commercializing technologies involves several phases and can take several years from discovery to
commercialization of a product.
Development of new
or improved agricultural products involves risks of failure inherent in the development of product
s
based on innovative and complex technologies. These risks include the possibility that:
●
our
                                         products will fail to perform as expected in the field;
●
our
                                         products will not receive necessary regulatory permits and governmental clearances in
                                         the markets in which we intend to sell them;
●
our
                                         products may have adverse effects on consumers;
●
consumer
                                         preferences, which are unpredictable and can vary greatly, may change quickly, making
                                         our products no longer desirable;
●
our
                                         competitors develop new products that have other more appealing characteristics than
                                         our products;
●
our
                                         products will be viewed as too expensive by food companies or growers as compared to
                                         competitive products;
●
our
                                         products will be difficult to produce on a large scale or will not be economical to grow;
●
intellectual
                                         property and other proprietary rights of third parties will prevent us, our research
                                         and development partners, or our licensees from marketing and selling our products;
●
we
                                         may be unable to patent or otherwise obtain intellectual property protection for our
                                         discoveries in the necessary jurisdictions;
●
we
                                         or the customers that we sell our products to may be unable to fully develop or commercialize
                                         our products in a timely manner or at all; and
●
third
                                         parties may develop superior or equivalent products.
We intend to continue
to invest in research and development including additional and expanded field testing to validate potential products in real world
conditions. Because of the long product development cycle and the complexities and uncertainties associated with biotech and agricultural
industrial technologies, there can be no assurance that we will ever generate significant revenues from the technologies or products
that we are currently developing without significant delay, without the incurrence of unanticipated costs or at all.
We depend on our
key personnel and research employees and we may be adversely affected if we are unable to attract and retain qualified scientific
and business personnel.
Our business is dependent
on our ability to recruit and maintain highly skilled and educated individuals through direct employment or collaboration arrangements,
with expertise in a range of disciplines, including biology, chemistry, plant genetics, agronomics, mathematics programming and
other subjects relevant to our business. Our ability to recruit such a work force depends in part on our ability to maintain our
market leadership in agricultural biotech industry in China. Maintaining our ability to attract highly-skilled workers and leading
scientific institutions depends in part on our ability to maintain a strong technology platform and state-of-the-art facilities, as
well as our ability to consistently and successfully commercialize our technology. There can be no assurance that we will be able
to maintain leading scientific capabilities or continue to successfully maintain advanced technology in the market.
We do not enter
into non-compete agreements with our employees, and therefore we may be unable to prevent our competitors from benefiting from
the expertise of our former employees.
We do not enter into
non-compete agreements with our employees, which prevents us from limiting our key employees from joining our competitors or competing
directly against us. As a result, we may be unable to prevent our competitors from benefiting from the expertise of such employees.
Direct competition by a former employee could materially adversely affect our business, results of operations and ability to capitalize
on our proprietary information.
9
We have a limited operating history in our market, which
makes it difficult to evaluate our future prospects.
We started engaging in our business in the
last few years and have limited revenues to date. As our business develops or in response to competition, we may continue to introduce
new products and services or make adjustments to our existing offerings and business model. In connection with the introduction
of new products or in response to general economic conditions, we may impose more stringent borrower qualifications to ensure the
quality of loans facilitated by our companies, which may negatively affect the growth of our business. Any significant change to
our business model may not achieve expected results and may have a material and adverse impact on our financial conditions and
results of operations. It is therefore difficult to effectively assess our future prospects. The risks and challenges we encounter
or may encounter in this developing and rapidly evolving market may have impacts on our business and prospects. These risks and
challenges include our ability to, among other things:
●
navigate an evolving regulatory environment;
●
expand the base of borrowers and lenders;
●
broaden our loan product offerings;
●
enhance our risk management capabilities;
●
improve our operational efficiency;
●
cultivate a vibrant consumer finance ecosystem;
●
maintain the security of our IT infrastructure and the confidentiality of the information provided and utilized across our platform;
●
attract, retain and motivate talented employees; and
●
defend ourselves against litigation, regulatory, intellectual property, privacy or other claims.
If we fail to educate potential borrowers
and lenders about the value of our services, if the market for our services does not develop as we expect, or if we fail to address
the needs of our target market, or other risks and challenges, our business and results of operations will be harmed.
The loss of any of our key customers could reduce our
revenues and our profitability.
For the years ended
December 31, 2018 and 2017, purchases from two customers consisted 31% and 60% of our revenue, respectively. As the majority of
our revenues are driven by individual orders for fertilizer products, there can be no assurance that we will maintain or improve
the relationships with customers who does not have long-term contracts with us. Our major customers often change each period based
on when a given order is placed. If we cannot maintain long-term relationships with major customers or replace major customers
from period to period with equivalent customers, the loss of such sales could have an adverse effect on our business, financial
condition and results of operations.
Any failure of any of our key suppliers to deliver necessary materials could result in delays in our products development
or marketing schedules.
For the
years ended December 31, 2018 and 2017, two suppliers accounted 53% and 57% of our purchases, respectively. We are dependent on
our suppliers for our products. Our suppliers may fail to meet timelines or contractual obligations or provide us with sufficient
products, which may adversely affect our business. Certain of our contracts with key suppliers, can be terminated by the supplier
upon giving notice within a certain period and restrict us from using other suppliers. Failure to appropriately structure or adequately
manage our agreements with third parties may adversely affect our supply of products. We are also subject to credit risk with respect
to our third-party suppliers. If any such suppliers become insolvent, an appointed trustee could potentially ignore the service
contracts we have in place with such party, resulting in increased charges or the termination of the service contracts. We may
not be able to replace a service provider within a reasonable period of time, on as favorable terms or without disruption to our
operations. Any adverse changes to our relationships with third-party suppliers could have a material adverse effect on our image,
brand and reputation, as well as on our business, financial condition and results of operations.
In
addition, to the extent that our creditworthiness is impaired, or general economic conditions decline, certain of our key suppliers
may demand onerous payment terms that could materially adversely affect our working capital position, or such suppliers may refuse
to continue to supply to us. A number of our key suppliers have taken out trade credit insurance on our ability to pay them. To
the extent that such trade credit insurance becomes unobtainable or more expensive due to market conditions, we may face adverse
changes to payment terms by our key suppliers or they may refuse to continue to supply us.
If we do not compete effectively,
our results of operations could be harmed.
Our industry in China
is intensely competitive and evolving. Our competitors operate with different business models, have different cost structures
or participate selectively in different market segments. They may ultimately prove more successful or more adaptable to new regulatory,
technological and other developments. Some of our current and potential competitors have significantly more financial, technical,
marketing and other resources than we do and may be able to devote greater resources to the development, promotion, sale and support
of their services. Our competitors may also have longer operating histories, more extensive borrower or lender bases, greater
brand recognition and brand loyalty and broader partner relationships than us. Additionally, a current or potential competitor
may acquire one or more of our existing competitors or form a strategic alliance with one or more of our competitors. If we are
unable to compete with such companies and meet the need for innovation in our industry, the demand for our services could stagnate
or substantially decline, we could experience reduced revenues or our services could fail to achieve or maintain more widespread
market acceptance, any of which could harm our business and results of operations.
10
If we fail to promote and maintain
our brand in an effective and cost-efficient way, our business and results of operations may be harmed.
The continued development
and success of our business relies on the recognition of our brands. We believe that developing and maintaining awareness of our
brand effectively is critical to attracting new and retaining existing borrowers and lenders to our services. Successful promotion
of our brand and our ability to attract qualified borrowers and sufficient lenders depend largely on the effectiveness of our
marketing efforts and the success of the channels we use to promote our services. Our efforts to build our brand have caused us
to incur significant expenses, and it is likely that our future marketing efforts will require us to incur significant additional
expenses. These efforts may not result in increased revenues in the immediate future or at all and, even if they do, any increases
in revenues may not offset the expenses incurred. If we fail to successfully promote and maintain our brand while incurring substantial
expenses, our results of operations and financial condition would be adversely affected, which may impair our ability to grow
our business.
If we fail to develop and maintain
an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or
prevent fraud.
Our independent registered
public accounting firm has not conducted an audit of our internal control over financial reporting. We also have a history of not
filing our periodic reports on time due to uncontrollable reasons. As defined in the standards established by the Public Company
Accounting Oversight Board of the United States, or PCAOB, 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 the annual or interim financial statements will not be prevented or detected on a timely basis.
One material weakness
that has been identified related to our lack of sufficient financial reporting and accounting personnel with appropriate knowledge
of U.S. GAAP and SEC reporting requirements to properly address complex U.S. GAAP accounting issues and to prepare and review our
consolidated financial statements and related disclosures to fulfill U.S. GAAP and SEC financial reporting requirements. The other
material weakness that has been identified related to our lack of comprehensive accounting policies and procedures manual in accordance
with U.S. GAAP.
We have implemented
a number of measures to address the material weaknesses that have been identified in connection with the audits of our consolidated
financial statements as of and for the two years ended December 31, 2018 and 2017. However, there is no assurance that we will
not have any material weakness in the future. Failure to discover and address any control deficiencies could result in inaccuracies
in our financial statements and impair our ability to comply with applicable financial reporting requirements and related regulatory
filings on a timely basis. Moreover, ineffective internal control over financial reporting could significantly hinder our ability
to prevent fraud. Ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of
corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and
civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.
Failure to maintain effective internal
controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and operating
results.
If we fail to comply
with the requirements of Section 404 of the Sarbanes-Oxley Act regarding internal control over financial reporting or to remedy
any material weaknesses in our internal controls that we may identify, such failure could result in material misstatements in our
financial statements, cause investors to lose confidence in our reported financial information and have a negative effect on the
trading price of our common shares.
Pursuant to Section
404 of the Sarbanes-Oxley Act and current SEC regulations, we are required to prepare assessments regarding internal controls
over financial reporting. In connection with our on-going assessment of the effectiveness of our internal control over financial
reporting, we may discover "material weaknesses" in our internal controls as defined in standards established by the
Public Company Accounting Oversight Board, or the PCAOB. A material weakness is a significant deficiency, or combination of significant
deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements
will not be prevented or detected. The PCAOB defines "significant deficiency" as a deficiency that results in more
than a remote likelihood that a misstatement of the financial statements that is more than inconsequential will not be prevented
or detected. We determined that our disclosure controls and procedures over financial reporting are not effective and were not
effective as of December 31, 2018 and 2017.
The process of designing
and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our
business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls
that is adequate to satisfy our reporting obligations as a public company. We cannot assure you that we will implement and maintain
adequate controls over our financial process and reporting in the future or that the measures we will take will remediate any material
weaknesses that we may identify in the future.
11
Our business depends on the continued
efforts of our senior management. If one or more of our key executives were unable or unwilling to continue in their present positions,
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. While
we have provided different incentives to our management, we cannot assure you that we can continue to retain their services. We
currently do not carry a "key man" life insurance on the officers. Therefore, if one or more of our key executives
were unable or unwilling to continue in their present positions, we may incur substantial cost or may not be able to replace them
at all. Consequently, our future growth may be constrained, our business may be severely disrupted and our financial condition
and results of operations may be materially and adversely affected. If that's the case, we may incur additional expenses
to recruit, train and retain qualified personnel. In addition, although we have entered into confidentiality and non-competition
agreements with our management, there is no assurance that any member of our management team will not join our competitors or
form a competing business. If any dispute arises between our current or former 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.
Competition for employees is intense,
and we may not be able to attract and retain the qualified and skilled employees needed to support our business.
We believe our success
depends on the efforts and talent of our employees, including risk management, software engineering, financial and marketing personnel.
Our future success depends on our continued ability to attract, develop, motivate and retain qualified and skilled employees. Competition
for highly skilled technical, risk management and financial personnel is extremely intense. We may not be able to hire and retain
these personnel at compensation levels consistent with our existing compensation and salary structure. Some of the companies with
which we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of
employment.
In addition, we invest
significant time and expenses in training our employees, which increases their value to competitors who may seek to recruit them.
If we fail to retain our employees, we could incur significant expenses in hiring and training their replacements, and the quality
of our services and our ability to serve borrowers and lenders could diminish, resulting in a material adverse effect to our business.
Increases in labor costs in the PRC
may adversely affect our business and results of operations.
The economy in China
has experienced increases in inflation and labor costs in recent years. As a result, average wages in the PRC are expected to continue
to increase. In addition, we are required by PRC laws and regulations to pay various statutory employee benefits, including pension,
housing fund, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to designated government
agencies for the benefit of our employees. The relevant government agencies may examine whether an employer has made adequate payments
to the statutory employee benefits, and those employers who fail to make adequate payments may be subject to late payment fees,
fines and/or other penalties. We expect that our labor costs, including wages and employee benefits, will continue to increase.
Unless we are able to control our labor costs or pass on these increased labor costs to our users by increasing the fees of our
services, our financial condition and results of operations may be adversely affected.
We do not have any business insurance
coverage.
Insurance companies
in China currently do not offer as extensive an array of insurance products as insurance companies in more developed economies.
Currently, we do not have any business liability or disruption insurance to cover our operations. We have determined that the costs
of insuring for these risks and the difficulties associated with acquiring such insurance on commercially reasonable terms make
it impractical for us to have such insurance. Any uninsured business disruptions may result in our incurring substantial costs
and the diversion of resources, which could have an adverse effect on our results of operations and financial condition.
We face risks related to natural
disasters, health epidemics and other outbreaks, which could significantly disrupt our operations.
We are vulnerable to
natural disasters and other calamities. Fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins,
war, riots, terrorist attacks or similar events may give rise to server interruptions, breakdowns, system failures, technology
service failures or internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware
as well as adversely affect our ability to provide products and services on our service.
Our business could
also be adversely affected by the effects of virus, flu and other diseases. Our business operations could be disrupted if any of
our employees is suspected of having virus, flu and other diseases, since it could require our employees to be quarantined and/or
our offices to be disinfected. In addition, our results of operations could be adversely affected to the extent that any of these
epidemics harms the Chinese economy in general.
12
We may be subject
to the general risks underlying the agriculture industry in PRC market
.
The agriculture industry
in the PRC market has been mature. Particularly, we are principally engaged in the fertilizer processing and distribution business
in the People's Republic of China. Therefore, we need to be cautious in selecting our business focus and expansion strategy,
and we should be constantly aware of the innovation risk, technology risk and market risk in the industries. If we fail to make
an accurate judgment of the current market, our performance can be severely impacted.
We may be adversely
affected by global economic conditions.
Our ability to continue
to develop and grow our business, build proprietary distribution channels and generate revenues from product sales and royalty
payments may be adversely affected by global economic conditions in the future, including instability in credit markets, declining
consumer and business confidence, fluctuating commodity prices and interest rates, volatile exchange rates and other challenges
that could affect the global economy such as the changing financial regulatory environment. For example, our customers and licensees
may experience deterioration of their businesses, cash flow shortages or difficulties obtaining financing, which could adversely
affect the demand for our technologies, products and services. In addition, our earnings may be adversely affected by fluctuations
in the price of certain commodities, such as grains, milk, meat, biofuels and biomaterials. If commodity prices are negatively
impacted, the value of our products could be directly and negatively impacted. Additionally, growers' incomes have historically
been negatively affected by commodity prices. As a result, fluctuations in commodity prices could have an impact on growers'
purchasing decisions and negatively affect their ability and decisions to purchase our seeds or products that incorporate our proprietary
technology. We cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely
impact our business.
Changes in laws and regulations
to which we are subject, or to which we may become subject in the future, may materially increase our costs of operation, decrease
our operating revenues and disrupt our business.
Laws and
regulatory standards and procedures that impact our business are continuously changing. Respond
ing
to these changes and meeting existing and new requirements may be costly and burdensome. Changes in laws and regulations may occur
that could:
●
impair
                                         or eliminate our ability to source technology and develop our products, including validating
                                         our products through field trials and passing biosafety evaluations;
●
increase
                                         our compliance and other costs of doing business through increases in the cost to protect
                                         our intellectual property, including know-how, trade secrets and regulatory data, or increases
                                         in the cost to obtain the necessary regulatory approvals to commercialize and market
                                         the products we develop directly or jointly;
●
require
                                         significant product redesign or redevelopment;
●
render
                                         our seed traits and technology and products that incorporate them less profitable or
                                         less attractive compared to competing products;
●
reduce
                                         the amount of revenues we receive from government grants, licenses or other royalties;
                                         and
●
discourage
                                         us and other collaborators from offering, and end markets from purchasing, products that
                                         incorporate our seed traits and technology.
Any
of these events could have a material adverse effect on our business, results of operations and financial condition. Legislation
and
jurisprudence on intellectual property in the key markets where we seek protection, primarily in China, is evolving
and changes in laws could affect our ability to obtain or maintain intellectual property protection for our products. Any changes
to these existing laws and regulations may materially increase our costs, decrease our revenues and disrupt our business.
13
The overall agricultural
industry is susceptible to commodity price changes and we, along with our food manufacturing customers and grower customers, are
exposed to market risks from changes in commodity prices.
Changes in the prices
of certain commodity products could result in higher overall cost along the agricultural supply chain, which may negatively affect
our ability to commercialize our products We will be susceptible to changes in costs in the agricultural industry as a result of
factors beyond our control, such as general economic conditions, seasonal fluctuations, weather conditions, demand, food safety
concerns, product recalls and government regulations. As a result, we may not be able to anticipate or react to changing costs
by adjusting our practices, which could cause our operating results to deteriorate.
Our operations
are subject to various health and environmental risks associated with our use, handling and disposal of potentially toxic materials.
We are subject to numerous
federal, state, local and foreign environmental, health and safety laws and regulations, including those governing laboratory procedures,
the handling, use, storage, treatment, manufacture and disposal of wastes, discharge of pollutants into the environment and human
health and safety matters.
Although
there are no hazardous substances in the raw materials used by us that will affect and damage the company's employees, factory,
other property and the environment. The safety of raw materials is also one of the requirements when applying for the fertilizer
registration certificate.
We cannot completely eliminate the risk of contamination or discharge and any resultant injury
from these materials. If these risks were to materialize, we could be subject to fines, liability, reputational harm or otherwise
adverse effects on our business. We may be sued for any injury or contamination that results from our use or the use by third parties
of these materials, or may otherwise be required to remedy the contamination, and our liability may exceed any insurance coverage
and our total assets Furthermore, compliance with environmental, health and safety laws and regulations may be expensive and may
impair our Research &Development efforts. If we fail to comply with these requirements, we could incur substantial costs and
liabilities, including civil or criminal fines and penalties, clean-up costs or capital expenditures for control equipment or operational
changes necessary to achieve and maintain compliance In addition, we cannot predict the impact on our business of new or amended
environmental, health and safety laws or regulations or any changes in the way existing and future laws and regulations are interpreted
and enforced. These current or future laws and regulations may impair our research, development or production efforts.
Failure to maintain or enhance our brands
or image could have a material and adverse effect on our business and results of operations.
We believe our brands
are associated with a well-recognized, integrated fertilizers company in the local markets that it operates, with consistent high-quality
products end customers in China. Our brands are integral to our sales and marketing efforts. Our continued success in maintaining
and enhancing our brand and image depends to a large extent on our ability to satisfy customer needs by further developing and
maintaining quality of services across our operations, as well as our ability to respond to competitive pressures. If we are unable
to satisfy customer needs or if our public image or reputation were otherwise diminished, our business transactions with our customers
may decline, which could in turn adversely affect our results of operations.
Any failure to protect our trademarks
and other intellectual property rights could have a negative impact on our business.
We believe our intellectual
property rights are critical to our success. Any unauthorized use of our intellectual property rights could harm our competitive
advantages and business. Historically, China has not protected intellectual property rights to the same extent as the United States,
and infringement of intellectual property rights continues to pose a serious risk of doing business in China. Monitoring and preventing
unauthorized use is difficult. The measures we take to protect our intellectual property rights may not be adequate. Furthermore,
the application of laws governing intellectual property rights in China and abroad is uncertain and evolving, and could involve
substantial risks to us. If we are unable to adequately protect our brand, trademarks and other intellectual property rights, we
may lose these rights and our business may suffer materially.
14
Increases in labor costs in the PRC
may adversely affect our business and our profitability.
China's economy
has experienced increases in labor costs in recent years. China's overall economy and the average wage in China are expected
to continue to grow. The average wage level for our employees has also increased in recent years. We expect that our labor costs,
including wages and employee benefits, will continue to increase. Unless we are able to pass on these increased labor costs to
our customers by increasing prices for our products or services, our profitability and results of operations may be materially
and adversely affected.
In addition, we have
been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees and paying various
statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance
and childbearing insurance to designated government agencies for the benefit of our employees. Pursuant to the PRC Labor Contract
Law, or the Labor Contract Law, that became effective in January 2008 and its implementing rules that became effective in September
2008 and its amendments that became effective in July 2013, employers are subject to stricter requirements in terms of signing
labor contracts, minimum wages, paying remuneration, determining the term of employees' probation and unilaterally terminating
labor contracts. In the event that we decide to terminate some of our employees or otherwise change our employment or labor practices,
the Labor Contract Law and its implementation rules may limit our ability to effect those changes in a desirable or cost-effective
manner, which could adversely affect our business and results of operations. Besides, pursuant to the Labor Contract Law and its
amendments, dispatched employees are intended to be a supplementary form of employment and the fundamental form should be direct
employment by enterprises and organizations that require employees. Further, it is expressly stated in the Interim Provisions on
Labor Dispatch that became effective on March 1, 2014 that the number of seconded employees an employer uses may not exceed 10%
of its total labor force and the employer has a two-year transition period to comply with such requirement. Our VIE and its consolidated
subsidiaries and consolidated branch offices had used seconded employees for their principal business activities. The transition
period ended on February 29, 2016, and those PRC subsidiaries have taken steps to decrease the number of seconded employees. If
the relevant PRC subsidiaries are deemed to have violated the limitation on the use of seconded employees under the relevant labor
laws and regulations, we may be subject to fines and incur other costs to make required changes to our current employment practices.
As the interpretation
and implementation of labor-related laws and regulations are still evolving, we cannot assure you that our employment practice
does not and will not violate labor-related laws and regulations in China, which may subject us to labor disputes or government
investigations. If we are deemed to have violated relevant labor laws and regulations, we could be required to provide additional
compensation to our employees and our business, financial condition and results of operations could be materially and adversely
affected.
Risks Related to Our Corporate
Structure and Doing Business in the PRC
If the PRC government deems that
any of our contractual arrangements, do not comply with PRC regulatory restrictions on foreign investment in the relevant industries,
or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties
or be forced to relinquish our interests in those operations.
Foreign ownership of internet-based businesses,
such as distribution of online information, is subject to restrictions under current PRC laws and regulations. For example, foreign
investors are not allowed to own more than 50% of the equity interests in a value-added telecommunication service provider (except
e-commerce) and any such foreign investor must have experience in providing value-added telecommunications services overseas and
maintain a good track record in accordance with the Guidance Catalog of Industries for Foreign Investment promulgated in 2007,
as amended in 2011 and in 2015, respectively, and other applicable laws and regulations.
It is uncertain whether
any new PRC laws, rules or regulations relating to variable interest entity structures will be adopted or if adopted, what they
would provide. In particular, in January 2015, the Ministry of Commerce, or MOC, published a discussion draft of the proposed
Foreign Investment Law for public review and comments. Among other things, the draft Foreign Investment Law expands the definition
of foreign investment and introduces the principle of "actual control" in determining whether a company is considered
a foreign-invested enterprise, or an FIE. Under the draft Foreign Investment Law, variable interest entities would also be deemed
as FIEs, if they are ultimately "controlled" by foreign investors, and be subject to restrictions on foreign investments.
However, the draft law has not taken a position on what actions will be taken with respect to the existing companies with the
"variable interest entity" structure, whether or not these companies are controlled by Chinese parties. It is uncertain
when the draft would be signed into law and whether the final version would have any substantial changes from the draft. Substantial
uncertainties exist with respect to the enactment timetable, interpretation and implementation of draft PRC Foreign Investment
Law and how it may impact the viability of our current corporate structure, corporate governance and business operations"
below. If the ownership structure, contractual arrangements and business of our company, are found to be in violation of any existing
or future PRC laws or regulations, or we fail to obtain or maintain any of the required permits or approvals, the relevant governmental
authorities would have broad discretion in dealing with such violation, including levying fines, confiscating our income, shutting
down our servers, discontinuing or placing restrictions or onerous conditions on our operations, requiring us to undergo a costly
and disruptive restructuring, restricting or prohibiting our use of proceeds from this offering to finance our business and operations
in China, and taking other regulatory or enforcement actions that could be harmful to our business. Any of these actions could
cause significant disruption to our business operations and severely damage our reputation, which would in turn materially and
adversely affect our business, financial condition and results of operations.
15
PRC regulations
relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our
PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries or limit our PRC subsidiaries'
ability to increase their registered capital or distribute profits.
In July 2014, SAFE promulgated
the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents' Offshore Investment and Financing
and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, which replaces the previous SAFE Circular 75. SAFE
Circular 37 requires PRC residents, including PRC individuals and PRC corporate entities, to register with SAFE or its local branches
in connection with their direct or indirect offshore investment activities. SAFE Circular 37 is applicable to our shareholders
who are PRC residents and may be applicable to any offshore acquisitions that we may make in the future.
Under SAFE Circular
37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore
special purpose vehicles, or SPVs, are required to register such investments with SAFE or its local branches. In addition, any
PRC resident who is a direct or indirect shareholder of an SPV, is required to update its registration with the local branch of
SAFE with respect to that SPV, to reflect any material change. Moreover, any subsidiary of such SPV in China is required to urge
the PRC resident shareholders to update their registration with the local branch of SAFE to reflect any material change. If any
PRC resident shareholder of such SPV fails to make the required registration or to update the registration, the subsidiary of such
SPV in China may be prohibited from distributing its profits or the proceeds from any capital reduction, share transfer or liquidation
to the SPV, and the SPV may also be prohibited from making additional capital contributions into its subsidiaries in China. In
February, 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct
Investment, or SAFE Notice 13. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments
and outbound direct investments, including those required under SAFE Circular 37, must be filed with qualified banks instead of
SAFE. Qualified banks should examine the applications and accept registrations under the supervision of SAFE. We have used our
best efforts to notify PRC residents or entities who directly or indirectly hold shares in our holding company and who are known
to us as being PRC residents to complete the foreign exchange registrations. However, we may not be informed of the identities
of all the PRC residents or entities holding direct or indirect interest in our company, nor can we compel our beneficial owners
to comply with SAFE registration requirements. We cannot assure you that all other shareholders or beneficial owners of ours who
are PRC residents or entities have complied with, and will in the future make, obtain or update any applicable registrations or
approvals required by, SAFE regulations. Failure by such shareholders or beneficial owners to comply with SAFE regulations, or
failure by us to amend the foreign exchange registrations of our PRC subsidiaries, could subject us to fines or legal sanctions,
restrict our overseas or cross-border investment activities, limit our PRC subsidiaries' ability to make distributions or
pay dividends to us or affect our ownership structure, which could adversely affect our business and prospects.
Furthermore, as these
foreign exchange and outbound investment related regulations are relatively new and their interpretation and implementation has
been constantly evolving, it is unclear how these regulations, and any future regulation concerning offshore or cross-border investments
and transactions, will be interpreted, amended and implemented by the relevant government authorities. For example, we may be subject
to a more stringent review and approval process with respect to our foreign exchange activities, such as remittance of dividends
and foreign-currency-denominated borrowings, which may adversely affect our financial condition and results of operations. We cannot
assure you that we have complied or will be able to comply with all applicable foreign exchange and outbound investment related
regulations. In addition, if we decide to acquire a PRC domestic company, we cannot assure you that we or the owners of such company,
as the case may be, will be able to obtain the necessary approvals or complete the necessary filings and registrations required
by the foreign exchange regulations. This may restrict our ability to implement our acquisition strategy and could adversely affect
our business and prospects.
Changes in the
policies of the PRC government could have a significant impact upon our ability to operate profitably in the PRC.
We conduct all of our
operations and all of our revenue is generated in the PRC. Accordingly, economic, political and legal developments in the PRC will
significantly affect our business, financial condition, results of operations and prospects. Policies of the PRC government can
have significant effects on economic conditions in the PRC and the ability of businesses to operate profitably. Our ability to
operate profitably in the PRC may be adversely affected by changes in policies by the PRC government, including changes in laws,
regulations or their interpretation, particularly those dealing with the Internet, including censorship and other restriction on
material which can be transmitted over the Internet, security, intellectual property, money laundering, taxation and other laws
that affect our ability to operate our website.
Because our business
is dependent upon government policies that encourage a market-based economy, change in the political or economic climate in the
PRC may impair our ability to operate profitably, if at all.
Although the PRC government
has been pursuing a number of economic reform policies for more than two decades, the PRC government continues to exercise significant
control over economic growth in the PRC. Because of the nature of our business, we are dependent upon the PRC government pursuing
policies that encourage private ownership of businesses. Restrictions on private ownership of businesses would affect the securities
business in general and businesses using real estate service in particular. We cannot assure you that the PRC government will pursue
policies favoring a market-oriented economy or that existing policies will not be significantly altered, especially in the event
of a change in leadership, social or political disruption, or other circumstances affecting political, economic and social life
in the PRC.
16
PRC laws and regulations
governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may impair
our ability to operate profitable.
There are substantial
uncertainties regarding the interpretation and application of PRC laws and regulations including, but not limited to, the laws
and regulations governing our business and the enforcement and performance of our arrangements with customers in certain circumstances.
The laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement
may involve substantial uncertainty. The effectiveness and interpretation of newly enacted laws or regulations, including amendments
to existing laws and regulations, may be delayed, and our business may be affected if we rely on laws and regulations which are
subsequently adopted or interpreted in a manner different from our understanding of these laws and regulations. New laws and regulations
that affect existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation
of existing or new PRC laws or regulations may have on our business.
Because our business
is conducted in RMB and the price of our shares of common stock is quoted in United States dollars, changes in currency conversion
rates may affect the value of your investments.
Our business is conducted
in the PRC, our books and records are maintained in RMB, which is the currently of the PRC, and the financial statements that we
file with the SEC and provide to our shareholders are presented in United States dollars. Changes in the exchange rate between
the RMB and dollar affect the value of our assets and the results of our operations in United States dollars. The value of the
RMB against the United States dollar and other currencies may fluctuate and is affected by, among other things, changes in the
PRC's political and economic conditions and perceived changes in the economy of the PRC and the United States. Any significant
revaluation of the RMB may materially and adversely affect our cash flows, revenue and financial condition. Further, our shares
offered by this prospectus are offered in United States dollars, we will need to convert the net proceeds we receive into RMB in
order to use the funds for our business. Changes in the conversion rate between the United States dollar and the RMB will affect
that amount of proceeds we will have available for our business.
Under the PRC Enterprise
Income Tax Law, or the EIT Law, we may be classified as a "resident enterprise" of China, which could result in unfavorable
tax consequences to us and our non-PRC shareholders.
The EIT Law and its
implementing rules provide that enterprises established outside of China whose "de facto management bodies" are located
in China are considered "resident enterprises" under PRC tax laws. The implementing rules promulgated under the EIT
Law define the term "de facto management bodies" as a management body which substantially manages, or has control over
the business, personnel, finance and assets of an enterprise. In April 2009, the State Administration of Taxation, or SAT, issued
a circular, known as Circular 82, which provides certain specific criteria for determining whether the "de facto management
bodies" of a PRC-controlled enterprise that is incorporated offshore is located in China. However, there are no further detailed
rules or precedents governing the procedures and specific criteria for determining "de facto management body." Although
our board of directors and management are located in the PRC, it is unclear if the PRC tax authorities would determine that we
should be classified as a PRC "resident enterprise."
If we are deemed as
a PRC "resident enterprise," we will be subject to PRC enterprise income tax on our worldwide income at a uniform
tax rate of 25%, although dividends distributed to us from our existing PRC subsidiary and any other PRC subsidiaries which we
may establish from time to time could be exempt from the PRC dividend withholding tax due to our PRC "resident recipient"
status. This could have a material and adverse effect on our overall effective tax rate, our income tax expenses and our net income.
Furthermore, dividends, if any, paid to our shareholders may be decreased as a result of the decrease in distributable profits.
In addition, if we were considered a PRC "resident enterprise", any dividends we pay to our non-PRC investors, and
the gains realized from the transfer of our shares of common stock may be considered income derived from sources within the PRC
and be subject to PRC tax, at a rate of 10% in the case of non-PRC enterprises or 20% in the case of non-PRC individuals (in each
case, subject to the provisions of any applicable tax treaty). It is unclear whether holders of our shares of common stock would
be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are
treated as a PRC resident enterprise. This could have a material and adverse effect on the value of your investment in us and
the price of our shares of common stock.
There are significant
uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our
PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.
Under the PRC EIT Law
and its implementation rules, the profits of a foreign invested enterprise generated through operations, which are distributed
to its immediate holding company outside the PRC, will be subject to a withholding tax rate of 10%. Pursuant to a special arrangement
between Hong Kong and the PRC, such rate may be reduced to 5% if a Hong Kong resident enterprise owns more than 25% of the equity
interest in the PRC company. Our PRC subsidiary is wholly-owned by our Hong Kong subsidiary. Moreover, under the Notice of the
State Administration of Taxation on Issues regarding the Administration of the Dividend Provision in Tax Treaties promulgated on
February 20, 2009, the tax payer needs to satisfy certain conditions to enjoy the benefits under a tax treaty. These beneficial
owner of the relevant dividends, and (2) the corporate shareholder to receive dividends from the PRC subsidiary must have continuously
met the direct ownership thresholds during the 12 consecutive months preceding the receipt of the dividends. Further, the State
Administration of Taxation promulgated the Notice on How to Understand and Recognize the "Beneficial Owner" in Tax
Treaties on October 27, 2009, which limits the "beneficial owner" to individuals, projects or other organizations normally
engaged in substantive operations, and sets forth certain detailed factors in determining the "beneficial owner" status.
In current practice, a Hong Kong enterprise must obtain a tax resident certificate from the relevant Hong Kong tax authority to
apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a
case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong
tax authority. As of the date of this prospectus, we have not commenced the application process for a Hong Kong tax resident certificate
from the relevant Hong Kong tax authority, and there is no assurance that we will be granted such a Hong Kong tax resident certificate.
Even after we obtain
the Hong Kong tax resident certificate, we are required by applicable tax laws and regulations to file required forms and materials
with relevant PRC tax authorities to prove that we can enjoy 5% lower PRC withholding tax rate. We intends to obtain the required
materials and file with the relevant tax authorities when it plans to declare and pay dividends, but there is no assurance that
the PRC tax authorities will approve the 5% withholding tax rate.
17
If we become directly
subject to the 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, stock price and reputation.
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 on financial and accounting irregularities and mistakes, 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 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 us, our business and our stock price. 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 our company. This situation will be costly and time consuming and distract
our management from developing our growth. If such allegations are not proven to be groundless, we and our business operations
will be severely affected and you could sustain a significant decline in the value of our stock.
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.
We are regulated by
the SEC and 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 reports 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 China Securities Regulatory Commission, a PRC regulator that is responsible for 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 us, our SEC reports, other filings or any of our other public pronouncements.
Changes in China's economic,
political or social conditions or government policies could have a material adverse effect on our business and results of operations.
Substantially all of our operations are
located in China. Accordingly, our business, prospects, financial condition and results of operations may be influenced to a significant
degree by political, economic and social conditions in China generally and by continued economic growth in China as a whole.
The Chinese economy differs from the economies
of most developed countries in many respects, including the amount of government involvement, level of development, growth rate,
control of foreign exchange and allocation of resources. Although the Chinese government has implemented measures emphasizing the
utilization of market forces for economic reform, the reduction of state ownership of productive assets and the establishment of
improved corporate governance in business enterprises, a substantial portion of productive assets in China is still owned by the
government. In addition, the Chinese government continues to play a significant role in regulating industry development by imposing
industrial policies. The Chinese government also exercises significant control over China's economic growth through allocating
resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, and providing preferential
treatment to particular industries or companies.
While the Chinese economy has experienced
significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy.
The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some
of these measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition
and results of operations may be adversely affected by government control over capital investments or changes in tax regulations.
In addition, in the past the Chinese government has implemented certain measures, including interest rate increases, to control
the pace of economic growth. These measures may cause decreased economic activity in China, and since 2012, China's economic
growth has slowed down. Any prolonged slowdown in the Chinese economy may reduce the demand for our products and services and materially
and adversely affect our business and results of operations.
Uncertainties in the interpretation
and enforcement of Chinese laws and regulations could limit the legal protections available to us.
The PRC legal system is based on written
statutes and prior court decisions have limited value as precedents. Since these laws and regulations are relatively new and the
PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and
enforcement of these laws, regulations and rules involves uncertainties.
Although we have taken measures to comply
with the laws and regulations that are applicable to our business operations, including the regulatory principles raised by the
CBRC, and avoid conducting any activities that may be deemed as illegal fund-raising, forming capital pool or providing guarantee
to investors under the current applicable laws and regulations, the PRC government authority may promulgate new laws and regulations
regulating the direct lending service industry in the future. We cannot assure you that our practices would not be deemed to violate
any PRC laws or regulations relating to illegal fund-raising, forming capital pools or the provision of credit enhancement services.
Moreover, we cannot rule out the possibility that the PRC government will institute a license requirement covering our industry
at some point in the future. If such a licensing regime were introduced, we cannot assure you that we would be able to obtain any
newly required license in a timely manner, or at all, which could materially and adversely affect our business and impede our ability
to continue our operations.
18
From time to time, we may have to resort
to administrative and court proceedings to enforce our legal rights. However, since PRC administrative and court authorities have
significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the
outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems.
Furthermore, the PRC legal system is based in part on government policies and internal rules (some of which are not published in
a timely manner or at all) that may have retroactive effect. As a result, we may not be aware of our violation of these policies
and rules until sometime after the violation. Such uncertainties, including uncertainty over the scope and effect of our contractual,
property (including intellectual property) and procedural rights, could materially and adversely affect our business and impede
our ability to continue our operations.
Substantial uncertainties exist with
respect to the enactment timetable, interpretation and implementation of draft PRC Foreign Investment Law and how it may impact
the viability of our current corporate structure, corporate governance and business operations.
The MOC published a discussion draft of
the proposed Foreign Investment Law in January 2015 aiming to, upon its enactment, replace the trio of existing laws regulating
foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture
Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations.
The draft Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime
in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign
and domestic investments. The MOC is currently soliciting comments on this draft and substantial uncertainties exist with respect
to its enactment timetable, interpretation and implementation. The draft Foreign Investment Law, if enacted as proposed, may materially
impact the viability of our current corporate structure, corporate governance and business operations in many aspects.
Among other things, the draft Foreign Investment
Law expands the definition of foreign investment and introduces the principle of "actual control" in determining whether
a company is considered a foreign-invested enterprise, or an FIE. The draft Foreign Investment Law specifically provides that entities
established in China but "controlled" by foreign investors will be treated as FIEs. Once an entity is considered to
be an FIE, it may be subject to the foreign investment restrictions or prohibitions set forth in a "negative list"
to be separately issued by the State Council later. If an FIE proposes to conduct business in an industry subject to foreign investment
"restrictions" in the "negative list," the FIE must go through a market entry clearance by the MOC before
being established. If an FIE proposes to conduct business in an industry subject to foreign investment "prohibitions"
in the "negative list," it must not engage in the business. However, an FIE that is subject to foreign investment "restrictions,"
upon market entry clearance, may apply in writing for being treated as a PRC domestic investment if it is ultimately "controlled"
by PRC government authorities and its affiliates and/or PRC citizens. In this connection, "control" is broadly defined
in the draft law to cover the following summarized categories: (i) holding 50% or more of the voting rights of the subject entity;
(ii) holding less than 50% of the voting rights of the subject entity but having the power to secure at least 50% of the seats
on the board or other equivalent decision making bodies, or having the voting power to exert material influence on the board, the
shareholders' meeting or other equivalent decision making bodies; or (iii) having the power to exert decisive influence,
via contractual or trust arrangements, over the subject entity's operations, financial matters or other key aspects of business
operations. Once an entity is determined to be an FIE, it will be subject to the foreign investment restrictions or prohibitions
set forth in a "negative list," to be separately issued by the State Council at a later date, if the FIE is engaged
in an industry listed in the negative list. Unless the underlying business of the FIE falls within the negative list, which calls
for market entry clearance by the MOC, prior approval from the government authorities as mandated by the existing foreign investment
legal regime would no longer be required for establishment of the FIE.
The "variable interest entity"
structure, or VIE structure, has been adopted by many PRC-based companies, including us, to obtain necessary licenses and permits
in the industries that are currently subject to foreign investment restrictions in China. Under the draft Foreign Investment Law,
variable interest entities that are controlled via contractual arrangement would also be deemed as FIEs, if they are ultimately
"controlled" by foreign investors. Therefore, for any companies with a VIE structure in an industry category that is
included in the "negative list" as restricted industry, the VIE structure may be deemed legitimate only if the ultimate
controlling person(s) is/are of PRC nationality (either PRC companies or PRC citizens). Conversely, if the actual controlling
person(s) is/are of foreign nationalities, then the variable interest entities will be treated as FIEs and any operation in the
industry category on the "negative list" without market entry clearance may be considered as illegal.
f the enacted version of the Foreign Investment
Law and the final "negative list" mandate further actions, such as MOC market entry clearance or certain restructuring
of our corporate structure and operations, to be completed by companies with existing VIE structure like us, there may be substantial
uncertainties as to whether we can complete these actions in a timely manner, or at all, and our business and financial condition
may be materially and adversely affected.
The draft Foreign Investment Law, if enacted
as proposed, may also materially impact our corporate governance practice and increase our compliance costs. For instance, the
draft Foreign Investment Law imposes stringent ad hoc and periodic information reporting requirements on foreign investors and
the applicable FIEs. Aside from an investment implementation report and an investment amendment report that are required for each
investment and alteration of investment specifics, an annual report is mandatory, and large foreign investors meeting certain criteria
are required to report on a quarterly basis. Any company found to be non-compliant with these information reporting obligations
may potentially be subject to fines and/or administrative or criminal liabilities, and the persons directly responsible may be
subject to criminal liabilities.
19
We may be adversely affected by the
complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite
approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.
The PRC government extensively regulates
the internet industry, including foreign ownership of, and the licensing and permit requirements pertaining to, companies in the
internet industry. These internet-related laws and regulations are relatively new and evolving, and their interpretation and enforcement
involve significant uncertainties. As a result, in certain circumstances it may be difficult to determine what actions or omissions
may be deemed to be in violation of applicable laws and regulations.
The evolving PRC regulatory system for
the internet industry may lead to the establishment of new regulatory agencies. For example, in May 2011, the State Council announced
the establishment of a new department, the State Internet Information Office (with the involvement of the State Council Information
Office, the MITT, and the Ministry of Public Security). The primary role of this new agency is to facilitate the policy-making
and legislative development in this field, to direct and coordinate with the relevant departments in connection with online content
administration and to deal with cross-ministry regulatory matters in relation to the internet industry.
The Circular on Strengthening the Administration
of Foreign Investment in and Operation of Value-added Telecommunications Business, issued by the MITT in July 2006, prohibits domestic
telecommunication service providers from leasing, transferring or selling telecommunications business operating licenses to any
foreign investor in any form, or providing any resources, sites or facilities to any foreign investor for their illegal operation
of a telecommunications business in China. According to this circular, either the holder of a value-added telecommunication services
operation permit or its shareholders must directly own the domain names and trademarks used by such license holders in their provision
of value-added telecommunication services. The circular also requires each license holder to have the necessary facilities, including
servers, for its approved business operations and to maintain such facilities in the regions covered by its license. If an ICP
License holder fails to comply with the requirements and also fails to remedy such non-compliance within a specified period of
time, the MITT or its local counterparts have the discretion to take administrative measures against such license holder, including
revoking its ICP License.
The interpretation and application of existing
PRC laws, regulations and policies and possible new laws, regulations or policies relating to the internet industry have created
substantial uncertainties regarding the legality of existing and future foreign investments in, and the businesses and activities
of, internet businesses in China, including our business. We cannot assure you that we have obtained all the permits or licenses
required for conducting our business in China or will be able to maintain our existing licenses or obtain new ones. 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 adverse effect on our business and results of operations.
PRC regulation of loans to and direct
investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent
us from using the proceeds of our offering to make loans to or make additional capital contributions to our PRC subsidiary, which
could materially and adversely affect our liquidity and our ability to fund and expand our business.
Under PRC laws and
regulations, we are permitted to utilize the proceeds from our offering to fund our PRC subsidiary by making loans to or additional
capital contributions to our PRC subsidiary, subject to applicable government registration and approval requirements.
Any loans to our PRC subsidiary, which
are treated as foreign-invested enterprises under PRC laws, are subject to PRC regulations and foreign exchange loan registrations.
For example, loans by us to our PRC subsidiary to finance their activities cannot exceed statutory limits and must be registered
with the local counterpart of the State Administration of Foreign Exchange, or SAFE. The statutory limit for the total amount of
foreign debts of a foreign-invested company is the difference between the amount of total investment as approved by the MOC or
its local counterpart and the amount of registered capital of such foreign-invested company.
We may also decide to finance our PRC subsidiary
by means of capital contributions. These capital contributions must be approved by the MOC or its local counterpart. On March 30,
2015, SAFE promulgated Circular 19, which expands a pilot reform of the administration of the settlement of the foreign exchange
capitals of foreign-invested enterprises nationwide. Circular 19 came into force and replaced both previous Circular 142 and Circular
36 on June 1, 2015. Circular 19 allows all foreign-invested enterprises established in the PRC to use their foreign exchange capitals
to make equity investment and removes certain other restrictions provided in Circular 142. However, Circular 19 continues to prohibit
foreign-invested enterprises from, among other things, using RMB fund converted from its foreign exchange capitals for expenditure
beyond its business scope, providing entrusted loans or repaying loans between non-financial enterprises. In addition, SAFE strengthened
its oversight of the flow and use of the RMB capital converted from foreign currency registered capital of a foreign-invested company.
The use of such RMB capital may not be altered without SAFE's approval, and such RMB capital may not in any case be used
to repay RMB loans if the proceeds of such loans have not been used. Violations of Circular 19 could result in severe monetary
or other penalties. These circulars may significantly limit our ability to use RMB converted from the cash provided by our offshore
financing activities to fund the establishment of new entities in China by our PRC subsidiary, to invest in or acquire any other
PRC companies through our PRC subsidiary, or to establish new variable interest entities in the PRC.
20
In light of the various
requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot
assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals
on a timely basis, if at all, with respect to future loans to our PRC subsidiary or future capital contributions by us to our
PRC subsidiary. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds we expect
to receive from our offering and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially
and adversely affect our liquidity and our ability to fund and expand our business.
Failure to make adequate contributions
to various employee benefit plans as required by PRC regulations may subject us to penalties.
We are required under PRC laws and regulations
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 our employees up to a maximum amount specified by the local government from time to time at locations
where we operate our businesses. 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. We have not made adequate employee benefit
payments. We may be required to make up the contributions for these plans as well as to pay late fees and fines. If we are subject
to late fees or fines in relation to the underpaid employee benefits, our financial condition and results of operations may be
adversely affected.
The M&A Rules and certain other
PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make
it more difficult for us to pursue growth through acquisitions in China.
The Regulations on Mergers and Acquisitions
of Domestic Companies by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in August 2006 and amended
in 2009, and some other regulations and rules concerning mergers and acquisitions established additional procedures and requirements
that could make merger and acquisition activities by foreign investors more time consuming and complex, including requirements
in some instances that the MOC be notified in advance of any change-of-control transaction in which a foreign investor takes control
of a PRC domestic enterprise. Moreover, the Anti-Monopoly Law requires that the MOC shall be notified in advance of any concentration
of undertaking if certain thresholds are triggered. In addition, the security review rules issued by the MOC that became effective
in September 2011 specify that mergers and acquisitions by foreign investors that raise "national defense and security"
concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that
raise "national security" concerns are subject to strict review by the MOC, and the rules prohibit any activities attempting
to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement. In the
future, we may grow our business by acquiring complementary businesses. Complying with the requirements of the above-mentioned
regulations and other relevant rules to complete such transactions could be time consuming, and any required approval processes,
including obtaining approval from the MOC or its local counterparts may delay or inhibit our ability to complete such transactions,
which could affect our ability to expand our business or maintain our market share.
Any failure to comply with PRC regulations
regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines
and other legal or administrative sanctions.
In February 2012, SAFE promulgated the
Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan
of Overseas Publicly-Listed Company, replacing earlier rules promulgated in March 2007. Pursuant to these rules, PRC citizens and
non-PRC citizens who reside in China for a continuous period of not less than one year who participate in any stock incentive plan
of an overseas publicly listed company, subject to a few exceptions, are required to register with SAFE through a domestic qualified
agent, which could be the PRC subsidiary of such overseas listed company, and complete certain other procedures. In addition, an
overseas entrusted institution must be retained to handle matters in connection with the exercise or sale of stock options and
the purchase or sale of shares and interests. We and our executive officers and other employees who are PRC citizens or who have
resided in the PRC for a continuous period of not less than one year and who have been granted options or other awards are subject
to these regulations. Failure to complete the SAFE registrations may subject them to fines and legal sanctions and may also limit
our ability to contribute additional capital into our PRC subsidiary and limit our PRC subsidiary' ability to distribute
dividends to us. We also face regulatory uncertainties that could restrict our ability to adopt additional incentive plans for
our directors, executive officers and employees under PRC law.
Regulatory bodies of the United States
may be limited in their ability to conduct investigations or inspections of our operations in China.
From time to time, the Company may receive
requests from certain U.S. agencies to investigate or inspect the Company's operations, or to otherwise provide information.
While the Company will be compliant with these requests from these regulators, there is no guarantee that such requests will be
honored by those entities who provide services to us or with whom we associate, especially as those entities are located in China.
Furthermore, an on-site inspection of our facilities by any of these regulators may be limited or entirely prohibited. Such inspections,
though permitted by the Company and its affiliates, are subject to the capricious nature of Chinese enforcers, and may therefore
be impossible to facilitate.
21
The
laws and regulations governing the online consumer finance industry in China are evolving rapidly. If any of our business practices
is deemed to violate any PRC laws or regulations, or if our arrangements with financing partners are adjusted, we may have to change
our business model, and our business, financial condition and results of operations would be materially and adversely affected.
On December 1, 2017, the Internet Finance
Rectification Office and the Online Lending Rectification Office jointly issued the Notice on Regulating and Rectifying "Cash
Loan" Business, or Circular 141, outlining general requirements on the "cash loan" business conducted by network
microcredit companies, banking financial institutions and online lending information intermediaries. Circular 141 specifies the
features of "cash loans" as not relying on consumption scenarios, with no specified use of loan proceeds, no qualification
requirement on customers and unsecured etc. Circular 141 sets forth several general requirements with respect to "cash loan"
business, including, without limitation: (i) no organizations or individuals may conduct the lending business without obtaining
approvals for the lending business; (ii) the aggregated borrowing costs of borrowers charged by institutions in the forms of interest
and various fees should be annualized and subject to the limit on interest rate of private lending set forth in the Private Lending
Judicial Interpretations issued by the Supreme People's Court; (iii) all relevant institutions shall follow the "know-your-customer"
principle and prudentially assess and determine the borrower's eligibility, credit limit and cooling-off period, etc. Loans
to any borrower without income sources are prohibited; and (iv) all relevant institutions shall enhance the internal risk control
and prudentially use the "data-driven" risk management model. In additions, Circular 141 emphasizes several requirements
on the online lending information intermediaries. For instance, such intermediaries are prohibited from facilitating any loans
to students or other persons without repayment source or repayment capacity, or loans with no designated use of proceeds. Also,
such intermediaries are not permitted to deduct interest, handling fee, management fee or deposit from the principal of loans provided
to the borrowers in advance. Any violation of Circular 141 may result in penalties, including but not limited to suspension of
operation, orders to make rectification, condemnation, disapproval of recordation, revocation of license, order to cease business
operation, and criminal liabilities.
Given that the loans we select qualified
car dealerships borrowers based on their historical sales volume generated through credit card transactions using UnionPay's
system and our loans are based on real consumption scenarios with specified use, we believe they should not be deemed as "cash
loans" under Circular 141, and thus our microfinancing business is not subject to the regulation of Circular 141.
However, as the Circular 141 has been
issued fairly recently and the laws and regulations governing the online consumer finance industry in China are evolving rapidly,
there are substantial uncertainties regarding the interpretation and application of the regulations. Accordingly, we cannot rule
out the possibility that the PRC regulatory authorities may take a view that is contrary to ours and view the microfinancing business
as "cash loans." Therefore, in the event that the loans are deemed as "cash loans" under the Circular 141,
we may have to significantly change our business model, which would materially and adversely affect our results of operations and
financial condition.
Risks Relating
to this Offering
Our common stock has limited public
trading market
There is a limited established public trading
marketing for our common stock and there can be no assurance that one will ever develop. Market liquidity will depend on the perception
of our operating business and any steps that our management might take to bring us to the awareness of investors. There can be
no assurance given that there will be any awareness generated. Consequently, investors may not be able to liquidate their investment
or liquidate it at a price that reflects the value of the business. As a result holders of our securities may not find purchasers
for our securities should they to sell securities held by them. Consequently, our securities should be purchased only by investors
having no need for liquidity in their investment and who can hold our securities for an indefinite period of time.
We are not likely to pay dividends
in the foreseeable future.
We currently intend to retain any future
earnings for use in the operation and expansion of our business. Accordingly, we do not expect to pay any dividends in the foreseeable
future, but will review this policy as circumstances dictate.
Our common stock may be subject now
and in the future to the SEC's "Penny Stock"
We may be subject now and in the future
to the SEC's "penny stock" rules if our shares of common stock sell below $5.00 per share. Penny stocks generally
are equity securities with a price of less than $5.00. The penny stock rules require broker-dealers to deliver a standardized risk
disclosure document prepared by the SEC which provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson, and monthly account statements showing the market value of each penny
stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information
must be given to the customer orally or in writing prior to completing the transaction and must be given to the customer in writing
before or with the customer's confirmation.
In addition, the penny stock rules require
that prior to a transaction; the broker dealer must make a special written determination that the penny stock is a suitable investment
for the purchaser and receive the purchaser's written agreement to the transaction. The penny stock rules are burdensome
and may reduce purchases of any offerings and reduce the trading activity for shares of our common stock. As long as our shares
of common stock are subject to the penny stock rules, the holders of such shares of common stock may find it more difficult to
sell their securities.
22
The offering price for our shares
of common stock may not be indicative of prices that will prevail in the trading market and such market prices may be volatile.
The offering price
for our shares of common stock will be determined by negotiations between us and the underwriter, and does not bear any relationship
to our earnings, book value or any other indicia of value. We cannot assure you that the market price of our shares of common stock
will not decline significantly below the offering price. The financial markets in the United States and other countries have experienced
significant price and volume fluctuations in the last few years. Volatility in the price of our shares of common stock may be caused
by factors outside of our control and may be unrelated or disproportionate to changes in our results of operations.
You will experience immediate and
substantial dilution in the net tangible book value of our shares of common stock purchased.
The offering price
of our shares of common stock is substantially higher than the net tangible book value per share of our common stock. Consequently,
when you purchase our shares of common stock in the offering and upon completion of the offering, you will incur immediate dilution
of US$              per share, based on an assumed offering price of US$             . In addition, you may experience further dilution to the extent that
additional shares of common stock are issued upon exercise of outstanding warrants or options we may grant from time to time.
We do not intend to pay dividends
for the foreseeable future.
We currently intend
to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any
dividends in the foreseeable future. As a result, you may only receive a return on your investment in our shares of common stock
if the market price of our shares of common stock increases.
If securities or industry analysts
do not publish research or reports about our business, or if the publish a negative report regarding our shares of common stock,
the price of our shares of common stock and trading volume could decline.
The trading market
for our shares of common stock may depend in part on the research and reports that industry or securities analysts publish about
us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the
price of our shares of common stock would likely decline. If one or more of these analysts cease coverage of our company or fail
to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our shares
of common stock and the trading volume to decline.
The market price of our shares of
common stock may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares
at or above the offering price.
The offering price
for our shares of common stock will be determined through negotiations between the underwriter and us and may vary from the market
price of our shares of common stock following our offering. If you purchase our shares of common stock in this offering, you may
not be able to resell those shares at or above the offering price. The market price of our shares of common stock may fluctuate
significantly in response to numerous factors, many of which are beyond our control, including:
●
actual
                                         or anticipated fluctuations in our revenue and other operating results;
●
the
                                         financial projections we may provide to the public, any changes in these projections
                                         or our failure to meet these projections;
●
actions
                                         of securities analysts who initiate or maintain coverage of us, changes in financial
                                         estimates by any securities analysts who follow our company, or our failure to meet these
                                         estimates or the expectations of investors;
●
announcements
                                         by us or our competitors of significant products or features, technical innovations,
                                         acquisitions, strategic partnerships, joint ventures, or capital commitments;
●
price
                                         and volume fluctuations in the overall stock market, including as a result of trends
                                         in the economy as a whole;
23
●
lawsuits
                                         threatened or filed against us; and
●
other
                                         events or factors, including those resulting from war or incidents of terrorism, or responses
                                         to these events.
In addition, the stock
markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity
securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating
performance of those companies. In the past, stockholders have filed securities class action litigation following periods of market
volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources
and the attention of management from our business, and adversely affect our business.
Our management
has broad discretion to determine how to use the funds raised in the offering and may use them in ways that may not enhance our
results of operations or the price of our shares of common stock.
We anticipate that
we will use the net proceeds from this offering for working capital and other corporate purposes. Our management will have significant
discretion as to the use of the net proceeds to us from this offering and could spend the proceeds in ways that do not improve
our results of operations or enhance the market price of our shares of common stock.
24
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.
USE OF PROCEEDS
We estimate that our
net proceeds from the sale of the shares of common stock that we are offering will be approximately $             assuming a public offering
price of $             per share, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable
by us.
We plan to use the
net proceeds of this offering for working capital needs, including devoting further resources to the below use of proceeds. which
may include investment in product development, sales and marketing activities, acquisition of other companies, technology infrastructure,
team development, capital expenditures, improvement of corporate facilities and other general and administrative matters. The foregoing
represents our current intentions based upon our present plans and business conditions to use and allocate the net proceeds of
this offering. Our management, however, will have significant flexibility and discretion to apply the net proceeds of this offering.
If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as described
in this prospectus.
We intend to use
the net proceeds of this offering as follows after we complete the remittance process, and we have ordered the specific uses of
proceeds in order of priority.
Description of Use
Minimum Offering
Estimated Amount of Net Proceeds
Maximum Offering
Estimated Amount of Net Proceeds
Construction of organic fertilizer plant
$
$
Construction of black goat food processing plant
Technology research and development
General working capital
Total
$
$
Pending other uses, we intend to invest
the proceeds to us in investment-grade, interest-bearing securities such as money market funds, certificates of deposit, or direct
or guaranteed obligations of the U.S. government, or hold as cash. We cannot predict whether the proceeds invested will yield a
favorable return. Our management will have broad discretion in the application of the net proceeds we receive from this offering,
and investors will be relying on the judgment of our management regarding the application of the net proceeds.
In using the proceeds of this offering,
we are permitted under PRC laws and regulations as an offshore holding company to provide funding to our wholly foreign-owned subsidiary
in China only through loans or capital contributions and to our consolidated variable interest entity only through loans, subject
to the filings with government authorities and limit on the amount of capital contributions and loans. Subject to completion of
applicable government filing and registration requirements, we may extend inter-company loans to our wholly foreign-owned subsidiary
in China or make additional capital contributions to our wholly-foreign-owned subsidiary to fund its capital expenditures or working
capital. If we provide funding to our wholly foreign-owned subsidiary through loans, the total amount of such loans may not exceed
the difference between the entity's total investment as approved by the foreign investment authorities and its registered
capital. Such loans must be registered with SAFE or its local branches, which usually takes up to 20 working days to complete.
We cannot assure you that we will be able to obtain these government registrations or approvals on a timely basis, if at all.
25
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.
CAPITALIZATION
The following
tables set forth our capitalization as of March 31, 2019 on a pro forma as adjusted basis giving effect to the sale
of the offering at an assumed public offering price of $
              per share and to reflect the application
of the proceeds after deducting the estimated underwriter fees. You should read this table in conjunction with our financial
statements and related notes appearing elsewhere in this prospectus and "Use of Proceeds" and "Description
of Securities."
●
On an actual basis;
●
On a pro forma basis to give effect to the sale of the offering at an assumed public offering price of $              per share
Minimum Offering (                  shares of common
stock)
U.S. Dollars
As of
March 31, 2019
Actual
Pro forma
(1)
Assets:
Current Assets
6,559,963
Intangible assets
3,273,406
Property
15,142,871
Other Assets
533,386
Total Assets
25,509,626
Liabilities:
Current Liabilities
13,145,492
Other Liabilities
3,602,640
Total Liabilities
16,748,132
Shareholder's Equity:
Common stock (56,341,718 shares issued and outstanding with par value of $0.0001)
5,634
Additional paid-in capital
(2)
19,38,854
Accumulated deficit
(11,330,741
)
Accumulated other comprehensive income (loss)
563,268
Noncontrolling interest
124,479
Total shareholders' equity
8,761,494
Total Liabilities and Shareholders' Equity
25,509,626
(1)
Gives effect to the sale of the minimum offering at an assumed public offering price of $              
per share and reflects the application of the proceeds after deducting the estimated underwriting discounts and our estimated offering
expense.
(2)
In the minimum offering, pro forma
adjusted for additional paid in capital reflects the net proceeds of approximately $                 we expect to receive, after deducting underwriting
discount of $390,000, underwriter non-accountable expense allowance of $90,000, up to $125,000 in other underwriting expenses,
and approximately $                  in issuer offering expenses.
26
Maximum Offering (
shares
of common stock)
U.S. Dollars
As of
March 31, 2019
Actual
Pro forma
(1)
Assets:
Current Assets
6,559,963
Intangible assets
3,273,406
Property
15,142,871
Other Assets
533,386
Total Assets
25,509,626
Liabilities:
Current Liabilities
13,145,492
Other Liabilities
3,602,640
Total Liabilities
16,748,132
Shareholder's Equity:
Common stock (56,341,718shares issued and outstanding with par value of $0.0001)
5,634
Additional paid-in capital
(2)
19,38,854
Accumulated deficit
(11,330,741
)
Accumulated other comprehensive income (loss)
563,268
Noncontrolling inteest
124,479
Total shareholders' equity
8,761,494
Total Liabilities and Shareholders' Equity
25,509626
(1)
Gives effect to the sale of the maximum offering, as applicable, at an assumed public
                                                           offering price of $ per share and reflects the application of the proceeds after deducting the estimated underwriting
                                                           discounts and our estimated offering expenses.
(2)
In the maximum offering, pro forma adjusted for additional paid in capital reflects the net proceeds of approximately $           we expect to receive, after deducting underwriting discount of $975,000, underwriter non-accountable expense allowance of $225,000, up to $125,000 in other underwriting expenses, and approximately $           in issuer offering expenses.
DILUTION
If you invest in our
shares of common stock, your interest will be diluted to the extent of the difference between the offering price per share and
the pro forma net tangible book value per share after the offering. Dilution results from the fact that the per share offering
price is substantially in excess of the book value per share attributable to the existing shareholders for our presently outstanding
shares of common stock. Our net tangible book value attributable to shareholders at March 31, 2019 was $                  or approximately $                   per
share. Net tangible book value per share as of March 31, 2019 represents the amount of total assets less intangible assets and
total liabilities, divided by the number of shares outstanding.
If the minimum offering
is sold, we will have                   shares of common stock outstanding upon completion of the offering. Our post offering pro forma net tangible
book value, which gives effect to receipt of the net proceeds from the offering and issuance of additional shares in the offering,
but does not take into consideration any other changes in our net tangible book value after March 31, 2019, will be approximately
$ or approximately $ per share. This would result in dilution to investors in this offering of approximately $                   per share or approximately
% from the assumed offering price of $                   per share. Net tangible book value per share would increase to the benefit of present shareholders
by $ per share attributable to the purchase of the shares by investors in this offering.
If the maximum offering
is sold, we will have                   shares of common stock outstanding upon completion of the offering. Our post offering pro forma net tangible
book value, which gives effect to receipt of the net proceeds from the offering and issuance of additional shares in the offering,
but does not take into consideration any other changes in our net tangible book value after March 31, 2019, will be approximately
$                   or approximately $                   per share. This would result in dilution to investors in this offering of approximately $                   per share or approximately
      % from the assumed offering price of $ per share. Net tangible book value per share would increase to the benefit of present shareholders
by $                   per share attributable to the purchase of the shares by investors in this offering.
The following table
sets forth the estimated net tangible book value per share after the offering and the dilution to persons purchasing shares based
on the foregoing minimum and maximum offering assumptions.
Minimum
Offering
(1)
Maximum
Offering
(2)
Assumed offering price per share
$
$
Net tangible book value per share as of March 31, 2019
$
$
Increase in net tangible book value per share after this offering
$
$
Net tangible book value per share after the offering
$
$
Dilution per share to new investors
$
$
(1)
Assumes gross proceeds from offering of                    Ordinary Shares.
(2)
Assumes gross proceeds from offering of                    Ordinary Shares.
27
POST-OFFERING OWNERSHIP
The following chart
illustrates our pro forma proportionate ownership, upon completion of the offering under alternative minimum and maximum offering
assumptions, by present shareholders and investors in this offering, compared to the relative amounts paid by each. The charts
reflect payment by present shareholders as of the date the consideration was received and by investors in this offering at the
offering price without deduction of commissions or expenses. The charts further assume no changes in net tangible book value other
than those resulting from the offering.
Shares Purchased
Total Consideration
Average Price
Amount
Percent
Amount
Percent
Per Share
MINIMUM OFFERING
Existing shareholders
56,341,953
%
New investors
Total
Shares Purchased
Total Consideration
Average Price
Amount
Percent
Amount
Percent
Per Share
MAXIMUM OFFERING
Existing shareholders
56,341,953
%
New investors
Total
28
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The information set forth
in this section contains
certain "forward-looking statements", including, among others (i) expected changes in our revenue and profitability,
(ii) prospective business opportunities and (iii) our strategy for financing our business. Forward-looking statements are statements
other than historical information or statements of current condition. Some forward-looking statements may be identified by use
of terms such as "believes", "anticipates", "intends" or "expects". These forward-looking
statements relate to our plans, liquidity, ability to complete financing and purchase capital expenditures, growth of our business
including entering into future agreements with companies, and plans to successfully develop and obtain approval to market our product.
We have based these forward-looking statements largely on our current expectations and projections about future events and financial
trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.
Although we believe that
our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our
knowledge of our business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion
of forward-looking statements in this Annual Report should not be regarded as a representation by us or any other person that our
objectives or plans will be achieved.
We assume no obligation
to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting forward-looking
statements.
Our revenues and results
of operations could differ materially from those projected in the forward-looking statements as a result of numerous factors, including,
but not limited to, the following: the risk of significant natural disaster, the inability of the our company to insure against
certain risks, inflationary and deflationary conditions and cycles, currency exchange rates, and changing government regulations
domestically and internationally affecting our products and businesses.
You should read the following
discussion and analysis in conjunction with the Financial Statements and Notes attached hereto, and the other financial data appearing
elsewhere in this Annual Report.
US Dollars are denoted herein
by "USD", "$" and "dollars".
Overview
We primarily engage
in the manufacturing and distribution of organic fertilizer and the sales of agricultural products in the PRC. Our organic fertilizer
products are sold under our brand names "Zongbao," "Fukang," and "Muliang."
Through our patented
technology, we process crop straw (including corn, rice, wheat, cotton, and other crops) into high quality organic nutritious fertilizers
that are easily absorbed by crops in 3 hours. Straws are common agricultural by-product. In PRC, farmers usually remove the straw
stubble that are remains after grains by burning them in order to continue farming on the same land. These activities have resulted
in significant air pollution and damage the surface structure of the soil with loss of nutrients. We turn waste into treasure by
transforming the straws into organic fertilizer, which also effectively reduces air pollution. The straw organic fertilizer we
produce does not contain the heavy metals, antibiotics and harmful bacteria that are common in the traditional manure fertilizer.
Our fertilizers also provide optimum levels of primary plant nutrients which including multi-minerals, proteins and carbohydrates
that promote the healthiest soils capable of growing the healthy crops and vegetables. It can effectively reduce the use of chemical
fertilizers and pesticides as well as reduce the penetration of large chemical fertilizers and pesticides into the soil and thus
avoid water pollution. Therefore, our fertilizer can effectively improve fertility of soil, and the quality and safety of agricultural
products.
We generated our revenue
mainly from our organic fertilizers, which accounted for approximately 91.3% and 99.1% of our total revenue for the fiscal years
ended December 31, 2018 and 2017, respectively. We currently have two integrated factories in Weihai City, Shandong Province, PRC
to produce our organic fertilizers, which have been in operations since August 2015. We plan to improve the technology for our
existing straw organic fertilizer production lines in the following aspects: (i) adopt more advanced automatic control technology
for raw material feed to shorten the processing time of raw material, and (ii) manufacture powdered organic fertilizer instead
of granular organic fertilizer production in order to avoid the drying and cooling process, as such will increase our production
capacity.
With the focus of producing
organic fertilizers, we also engage in the business of selling agriculture food products including apples, and as sales agent for
other large agriculture companies in the PRC. In 2014, we rented 350 mu (about 57.66 acres) of mountainous land as apple orchard.
The sales of apples generated less than 1% of our total revenue for the fiscal years ended December 31, 2018 and 2017, respectively.
We expect to generate more revenues from the sales of apples as the apple orchards become more mature in the next few years.
In addition, we plan
to engage in the processing and distribution of black goat products business commencing the fourth quarter of 2019. We are currently
constructing a deep-processing slaughterhouse and processing plant which is expected to have the capacity of slaughtering 200,000
black goats per year in Chuxiong City, Yunnan Province, in China. Our black goat processing products including goat rib lets, goat
loin roast, goat loin chops, goat rack, goat leg, goat shoulder, goat leg shanks, ground goat, goat stew meat, whole goat, half
goat, lamb viscera, etc. We expect to start generate revenue from the black goat products in 2020.
Our assets mainly include:
(i) 42,895 square meters of industrial land and 28,549 square meters of factory and office space located in Jinshan District, Shanghai
City, (ii) 22,511 square meters of industrial land and 10,373 square meters of plant area and straw organic fertilizer production
line in Weihai City, Shandong Province, and (iii) more than $2 million investment of land use right and the black goat slaughtering
and processing plant located in Shuangbai County, Chuxiong City, Yunnan Province, in China.
As the factory area in Jinshan District, Shanghai City is too close to the urban area to produce straw
organic fertilizer, some factory buildings, office buildings and spare land in Jinshan District, Shanghai City, have been leased
to third parties.
29
Recent Development
On April
4, 2019, the Company's Board of Directors and majority shareholder approved a 5 to 1 reverse stock split of all of the issued
and outstanding shares of the Company's common stock, change of corporate name from "Mullan Agritech Inc." to
"Muliang Agritech Inc.", and creation of one hundred million (100,000,000) shares of Blank Check Preferred Stock.
On April 5,
2019, we filed a Certificate of Amendment to our Articles of Incorporation with the Secretary of State of the State of Nevada
to reflect the Name Change and to authorize the creation of Blank Check Preferred Stock. As a result, the capital stock of
the Company consists of 500,000,000 shares of common stock, $0.0001 par value, and 100,000,000 shares of blank check
preferred stock, $0.0001 par value. To the fullest extent permitted by the laws of the State of Nevada, as the same now
exists or may hereafter be amended or supplemented, the Board of Directors may fix and determine the designations, rights,
preferences or other variations of each class or series within each class of preferred stock of the Company. The Company may
issue the shares of stock for such consideration as may be fixed by the Board of Directors.
On April
16, 2019, we filed a Certificate of Change to our Articles of Incorporation with the Secretary of State of the State of Nevada
to reflect the reverse stock split. Any fractional shares are to be rounded up to whole shares. The reverse stock split does not
affect the par value or the number of authorized shares of common stock of the Company.
The reverse
stock split and the name change took effect on May 7, 2019. In connection with the name change, our stock symbol changed to "MULG".
Critical Accounting Policies
Our discussion
and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have
been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires
us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We evaluate,
on an on-going basis, our estimates for reasonableness as changes occur in our business environment. We base our estimates on experience,
the use of independent third-party specialists, and various other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Critical
accounting policies are defined as those that are reflective of significant judgments, estimates and uncertainties, and potentially
result in materially different results under different assumptions and conditions. We believe the following are our critical accounting
policies:
Basis of Presentation
Our consolidated financial statements
are prepared in accordance with generally accepted accounting principles in the United States, or
U.S. GAAP.
Going Concern
As reflected in the accompanying consolidated financial statements,
we had net accumulated deficit of $11,330,741 and $11,773,401 as of March 31, 2019 and December 31, 2018, respectively. Our cash
balances as of March 31, 2019 and December 31, 2018 were $6,317 and $12,778, respectively. We had current liability of $13,145,492
at March 31, 2019 which would be due within the next 12 months. In addition, we had a working capital deficit of $6,585,529 and
$7,119,118 at March 31, 2019 and December 31, 2018, respectively.
The company plans to continue its expansion and investments,
which will require continued improvements in revenue, net income, and cash flows.
The ability of the Company to continue as a going concern is
dependent on the Company's ability to further implement its business plan, raise additional capital, and generate more revenues.
The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue
as a going concern.
Principles of Consolidation
Muliang Agritech consolidates the following entities, including
wholly-owned subsidiaries, Muliang HK, Shanghai Mufeng, and its wholly controlled variable interest entities, Muliang Industry,
and Zhongbao, 60% controlled Agritech Development, 99% controlled Fukang, 65% controlled Zhonglian and 80% controlled Yunnan Muliang.
The 40% equity interest holder of Agritech Development, 1% equity interest holders in Fukang, 35% equity interest holders in Zhonglian,
and 20% interest in Yunnan Muliang are accounted as non-controlling interest in the Company's consolidated financial statements.
The variable interest entities consolidated for which the Company
is deemed the primary beneficiary. All significant inter-company accounts and transactions have been eliminated in consolidation.
30
Use of Estimates
In preparing financial statements
in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts
of revenues and expenses during the reporting period. Significant estimates, required by management, include the recoverability
of long-lived assets and the valuation of inventories. Actual results could differ from those estimates.
Accounts Receivable
We state accounts receivable
at cost, net of allowance for doubtful accounts. Based on our past experience and current practice in the PRC, management provides
for an 100% allowance for doubtful accounts equivalent to those accounts that are not collected within one year, and 50% for receivables
outstanding for longer than six months. It is management's belief that the current bad debt allowance adequately reflects
an appropriate estimate based on management's judgment.
Inventory Valuation
We value our fertilizer inventories
at the lower of cost, determined on a weighted average basis, and net realizable value (the estimated market price). Substantially
all inventory expenses, packaging and supplies are valued by the weighted average method.
Apple Orchard
Apple Orchard
consists primarily of rent for an apple farm, labor cost, fertilizers, apple seeds, apple seedlings and others. The costs to
purchase and cultivate apple trees and the expenditures related to labor and materials to plant apple trees until they become
commercially productive are capitalized, which require a 2-year period. The estimated production life for apple tree is 10
years, and the costs are amortized without a residual value. Expenses incurred maintaining apple trees during the growth
cycle until seedling apple trees or grafted varieties are fruited are capitalized into inventory and included in Work In
Process—apple orchard, a component of inventories.
Amortized expenses pertaining
to apple orchard are included in inventory costs for those apples to be sold and ultimately become a component of cost of goods
sold. Similar to other assets, the failure of our apple orchard to be serviceable over the entirety of their anticipated useful
lives or to be sold at their anticipated residual value will negatively impact our operating results.
Revenue Recognition
On January 1, 2018, the Company adopted ASC 606 using the modified
retrospective method. Results for the reporting period beginning after January 1, 2018 are presented under ASC 606, while prior
period amounts have not been adjusted and continue to be reported in accordance with the Company's historic accounting under
Topic 605.
Management has determined that the adoption of ASC 606 did not
impact the Company's previously reported financial statements in any prior period nor did it result in a cumulative effect
adjustment to opening retained earnings.
Revenue for sale of products is derived from contracts with
customers, which primarily include the sale of fertilizer products and environmental protection equipment. The Company's
sales arrangements do not contain variable consideration. The Company recognizes revenue at a point in time based on management's
evaluation of when performance obligations under the terms of a contract with the customer are satisfied and control of the products
has been transferred to the customer. For vast majority of the Company's product sales, the performance obligations and control
of the products transfer to the customer when products are delivered, and customer acceptance is made.
Pursuant to the guidance of ASC Topic 840, rent shall be reported
as income by lessors over the lease term as it becomes receivable. The Company currently leased part of the building
of the Shanghai new plant to third parties as warehouse. The Company recognizes building leasing revenue over the beneficial period
described by the agreement, as the revenue is realized or realizable and earned.
The Company recognized rental income from leasing a portion
of its manufacturing facility located in Shanghai to third parties. For the three months ended March 31, 2019 and 2018, rental
income of $165,711 and $118,962 were recognized as other income.
Income Taxes
The Company accounts for income
taxes under the provision of FASB ASC 740-10, which requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred
income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities
and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods
in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce
deferred tax assets to the amount expected to be realized.
31
New Accounting Standards
In October 2016, the FASB issued ASU 2016-17,
"Consolidation
(Topic 810): Interests Held through Related Parties That Are under Common Control"
. These amendments change the evaluation
of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that
is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that
are under common control with the reporting entity. If a reporting entity satisfies the first characteristic of a primary beneficiary
(such that it is the single decision maker of a variable interest entity), the amendments require that reporting entity, in determining
whether it satisfies the second characteristic of a primary beneficiary, to include all of its direct variable interests in a variable
interest entity and, on a proportionate basis, its indirect variable interests in a variable interest entity held through related
parties, including related parties that are under common control with the reporting entity. The amendments in this ASU are effective
for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal
years. Early adoption is permitted, including adoption in an interim period. If an entity adopts the pending content that links
to this paragraph in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes
that interim period. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial
statements.
In February 2016, the FASB issued ASU 2016-02, "
Leases
(Topic 842)
". ASU 2016-02 specifies the accounting for leases. For operating leases, ASU 2016-02 requires a lessee to
recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, on its balance
sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated
over the lease term, generally on a straight-line basis. In addition, this standard requires both lessees and lessors to disclose
certain key information about lease transactions. ASU 2016-02 is effective for publicly-traded companies for annual reporting periods,
and interim periods within those years, beginning after December 15, 2018. Lessees (for capital and operating leases) and lessors
(for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing
at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified
retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period
presented. Lessees may not apply a full retrospective transition approach.
In July 2018, the FASB issued ASU 2018-10, "
Codification
Improvements to Topic 842, Leases
". The amendments in ASU 2018-10 affect narrow aspects of the guidance issued in the
amendments in ASU 2016-02 including those regarding residual value guarantees, rate implicit in the lease, lessee reassessment
of lease classification, lessor reassessment of lease term and purchase option, variable lease payments that depend on an index
or a rate, investment tax credits, lease term and purchase option, transition guidance for amounts previously recognized in business
combinations, certain transition adjustments, transition guidance for leases previously classified as capital leases under Topic
840, transition guidance for modifications to leases previously classified as direct financing or sales-type leases under Topic
840, transition guidance for sale and leaseback transactions, impairment of net investment in the lease, unguaranteed residual
asset, effect of initial direct costs on rate implicit in the lease, and failed sale and leaseback transactions. In July 2018,
the FASB issued ASU 2018-11, "
Leases (Topic 842): Targeted Improvements
". The amendments in ASU 2018-11 affect
the guidance issued in ASU 2016-02, "Leases (Topic 842)", which is not yet effective. The amendments provide entities
with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity
initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance
of retained earnings in the period of adoption. The amendments also provide lessors with a practical expedient to not separate
non-lease components from the associated lease component and, instead, to account for those components as a single component in
certain circumstances. In December 2018, the FASB issued ASU 2018-20, "
Leases (Topic 842) – Narrow-Scope Improvements
for Lessors.
" ASU 2018-20 allow lessors to make an accounting policy election not to evaluate whether sales taxes and
similar taxes imposed by a governmental authority on a specific lease revenue-producing transaction are the primary obligation
of the lessor as owner of the underlying leased asset. The amendments also require a lessor to exclude lessor costs paid directly
by a lessee to third parties on the lessor's behalf from variable payments and include lessor costs that are paid by the
lessor and reimbursed by the lessee in the measurement of variable lease revenue and the associated expense. In addition, the amendments
clarify that when lessors allocate variable payments to lease and non-lease components, they are required to follow the recognition
guidance in the new lease standard for the lease component and other applicable guidance, such as the new revenue standard, for
the non-lease component. For entities that early adopted Topic 842, the amendments are effective upon issuance of ASU 2018-10,
AUS 2018-11and ASU 2018-20, and the transition requirements are the same as those in Topic 842. For entities that have not adopted
Topic 842, the effective date and transition requirements will be the same as the effective date and transition requirements in
Topic 842.
In January 2017, the FASB issued ASU 2017-03, "
Accounting
Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323)
". This pronouncement
amends the SEC's reporting requirements for public filers regarding new accounting pronouncements or existing pronouncements
that have not yet been adopted. Companies are to provide qualitative disclosures if they have not yet implemented an accounting
standards update. Companies should disclose if they are unable to estimate the impact of a specific pronouncement, and provide
disclosures including a description of the effect on accounting policies that the registrant expects to apply. These provisions
apply to all pronouncements that have not yet been implemented by registrants. There are additional provisions that relate to corrections
to several other prior FASB pronouncements. The Company has incorporated language into other recently issued accounting pronouncement
notes, where relevant for the corrections in FASB ASU 2017-03. The Company is implementing the updated SEC requirements on not
yet adopted accounting pronouncements with these consolidated financial statements.
32
In January 2017, the FASB issued ASU 2017-03, "
Accounting
Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323)
". This pronouncement
amends the SEC's reporting requirements for public filers regarding new accounting pronouncements or existing pronouncements
that have not yet been adopted. Companies are to provide qualitative disclosures if they have not yet implemented an accounting
standards update. Companies should disclose if they are unable to estimate the impact of a specific pronouncement, and provide
disclosures including a description of the effect on accounting policies that the registrant expects to apply. These provisions
apply to all pronouncements that have not yet been implemented by registrants. There are additional provisions that relate to corrections
to several other prior FASB pronouncements. The Company has incorporated language into other recently issued accounting pronouncement
notes, where relevant for the corrections in FASB ASU 2017-03. The Company is implementing the updated SEC requirements on not
yet adopted accounting pronouncements with these consolidated financial statements.
In January 2017, the FASB issued ASU 2017-03, "
Accounting
Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323)
". This pronouncement
amends the SEC's reporting requirements for public filers regarding new accounting pronouncements or existing pronouncements
that have not yet been adopted. Companies are to provide qualitative disclosures if they have not yet implemented an accounting
standards update. Companies should disclose if they are unable to estimate the impact of a specific pronouncement, and provide
disclosures including a description of the effect on accounting policies that the registrant expects to apply. These provisions
apply to all pronouncements that have not yet been implemented by registrants. There are additional provisions that relate to corrections
to several other prior FASB pronouncements. The Company has incorporated language into other recently issued accounting pronouncement
notes, where relevant for the corrections in FASB ASU 2017-03. The Company is implementing the updated SEC requirements on not
yet adopted accounting pronouncements with these consolidated financial statements.
In August 2017, the FASB issued guidance, which amends the existing
accounting standards for derivatives and hedging. The amendment improves the financial reporting of hedging relationships to better
represent the economic results of an entity's risk management activities in its financial statements and made certain targeted
improvements to simplify the application of the hedge accounting guidance in current U.S. GAAP.
In August 2018, the FASB issued ASU 2018-13,
"Fair
Value Measurement (Topic 820), – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement
,"
which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst
or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. The amendments in this Update modify the disclosure
requirements on fair value measurements based on the concepts in FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter
8: Notes to Financial Statements, including the consideration of costs and benefits. The amendments on changes in unrealized gains
and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements,
and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual
period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods
presented upon their effective date. The amendments are effective for all entities for fiscal years beginning after December 15,
2019, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the potential
impacts of ASU 2018-13 on its consolidated financial statements.
The Company believes that there were no other accounting standards
recently issued that had or are expected to have a material impact on our financial position or results of operations.
Results of Operations
We are principally engaged in the organic fertilizer manufacture
and distribution business in the PRC, which account for 86% of our total revenue for the three months ended March 31, 2019.
Currently, almost all of our revenue is derived from powdered
organic fertilizer product, as it is easier to absorb for soil and plants, compared with the granular organic fertilizer.
We are principally
engaged in the organic fertilizer manufacture and distribution business in the PRC, which account for 91% of our total revenue
of 2018.
Currently,
majority of our revenue is derived from powdered organic fertilizer product, as it is easier to absorb for soil and plants, compared
with the granular organic fertilizer.
During the
year ended December 31, 2018, Management also started to develop the sales of agricultural products (food). Sales from agricultural
products (food) accounted for around 9% and 16% of our total sales for the year ended December 31, 2018 and for the three months ended March 31, 2019, respectively.
33
For the
year ended December 31, 2018, we received capital contribution of approximately $2.7 million from our shareholder. We also generated
a significant net income instead of suffering a loss. All of which improved the Company's financial position significantly
as of December 31, 2018.
Operation Result for the Years
Ended December 31, 2018 and 2017 and for the Three Months Ended March 31, 2019
For
                                         the Three Months Ended
For
                                         the Years
March 31,
Ended December 31
2019
2018
2017
Fluctuation
$
$
$
%
Revenues
1,915,973
13,205,024
737,563
12,467,461
1,690
%
Cost of goods sold
309,395
7,660,026
591,236
7,068,790
1,196
%
Gross profit
2,225,368
5,544,998
146,327
5,398,671
3,689
%
Operating expenses:
General and administrative expenses
341,556
1,100,271
1,511,019
(410,748
)
-27
%
Selling expenses
177,000
531,771
163,042
368,729
226
%
Total operating expenses
518,556
1,632,042
1,674,061
(42,019
)
-3
%
Income (Loss) from operations
367,936
3,912,956
(1,527,734
)
5,440,690
Other
    income (expense):
Interest expense
(94,596
)
(421,054
)
(508,818
)
87,764
Subsidy income
146,560
756,197
-
756,197
N/A
Rental income, net
122,960
228,208
-
228,208
N/A
Other income (expense), net
587
(28,030
)
28,028
(56,058
)
N/A
Total other income (expense)
175,511
535,321
(480,790
)
1,016,111
-211
%
Income (Loss) before income taxes
543,447
4,448,277
(2,008,524
)
6,456,801
-321
%
Income taxes
97,860
(25,542
)
26,334
(51,876
)
-197
%
Net income (loss)
445,587
4,473,819
(2,034,858
)
6,508,677
-320
%
Revenue
Total revenue increased from $1,188,020
for the three months ended March 31, 2018 to $2,225,368 for the three months ended March 31, 2019, which represented an increase
of $1,037,348, or approximately 87.32%. The significant increase in revenue was mainly due to a larger demand for our organic fertilizer
products from large scale agricultural companies and farmer professional cooperatives for the three months ended March 31, 2019.
We have developed more customers, such as Huizhou Sijilv Agricultural Products Co., Ltd., Jilin Jijie Farmers' Professional
Union, and Guangzhou Lvxing Organic Agricultural Products Co., Ltd., who are buying a large quantity of our products. We are continuing
to obtain more stable customers in 2019.
Our high-quality agriculture food
products sales also increased significantly for the three months ended March 31, 2019 and it was expected to continue to increase
throughout the 2019.
Total revenue
increased from $737,563 for the year ended December 31, 2017 to $13,205,024 for the year ended December 31, 2018, which represented
an increase of $12,467,461, or approximately 1,690%. The significant increase in revenue was mainly due to a larger demand for
our organic fertilizer products from large scale agricultural companies and farmer professional cooperatives for the year ended
December 31, 2018. We have developed more customers, such as Huizhou Sijilv Agricultural Products Co., Ltd., Jilin Jijie Farmers'
Professional Union, and Guangzhou Lvxing Organic Agricultural Products Co., Ltd., who are buying a large quantity of our products.
We are continuing to obtain more stable customers in 2019.
We also
started to sell high quality agriculture food products for the year ended December 31, 2018 and expect to increase the sales of
this business segment significantly in the near future.
Cost of sales
Cost of sales for increased from
$682,779 for the three months ended March 31, 2018 to $1,338,876 for the three months ended March 31, 2019, which represented an
increase of approximately $656,097, or 96.09%. The significant increase in cost of sales was in line with the significant increase
in our revenue from fertilizer sales and agriculture product sales for the same period.
Cost of sales
for organic fertilizer increased from $591,236 for the year ended December 31, 2017 to $7,660,026 for the year ended December 31,
2018, which represented an increase of approximately $7,068,790, or 12 times. The significant increase in cost of sales was in
line with the significant increase in our revenue from fertilizer sales and agriculture product sales for the same period.
34
Gross Profit (Loss)
The gross profit for organic fertilizer
increased significantly from $505,241 for the three months ended March 31, 2018 to gross profit of $891,036 for the three months
ended March 31, 2019. The gross margin increased from 43% for the three months ended March 31, 2018 to 47% for the three months
ended March 31, 2019. The gross margin of around 45% represents our normal operation result of sales to final customers. The significant
increase in gross margin was mainly due to the advantage from economies of scale for our organic fertilizer production.
The agriculture food products sales
incurred a slight gross loss of $4,545 for the three months ended March 31, 2019. We expected to generate gross profit with the
increase of sales scale in 2019.
The gross
profit for organic fertilizer increased significantly from $146,327 for the year ended December 31, 2017 to gross profit of $5,476,778
for the year ended December 31, 2018. The gross margin increased from 20% for the year ended December 31, 2017 to 45% for the year
ended December 31, 2018. The gross margin of 45% represents our normal operation result of sales to final customers. The significant
increase in gross margin was mainly due to a small quantity of depreciation for some idle equipment was recorded as the cost of
goods sold for the year ended December 31, 2017. We turned to selling powdered organic fertilizer instead of granular organic fertilizer
for the year ended December 31, 2018, as powdered organic fertilizer has a higher gross margin than granular organic fertilizer.
The gross
profit for agriculture food products was $1,148,203, and gross margin was approximately 6% for the year ended December 31, 2018.
Expenses
We incurred
$177,000 in selling expenses for the three months ended March 31, 2019, compared to $23,317 for the three months ended March 31,
2018. We incurred $341,556 in general and administrative expenses for the three months ended March 31, 2019, compared to $392,510
for the three months ended March 31, 2018. Total selling, general and administrative expenses increased by $102,729, or 24.70%
for the three months ended March 31, 2019 as compared to the same period in 2018. Our selling expenses increased by $153,683 and
our general and administrative expenses decreased by $50,954. The increase in our selling expenses was mainly due to the increase
in salaries expense, travelling expense, etc., for selling department. The decrease in general and administrative expenses was
because some employees and resource in administrative department transferred to support the selling department for the three months
ended March 31, 2019.
We incurred
$531,771 in selling expenses for the year ended December 31, 2018, compared to $163,042 for the year ended December 31, 2017. We
incurred $1,100,271 in general and administrative expenses for the year ended December 31, 2018, compared to $1,511,019 for the
year ended December 31, 2017. Total selling, general and administrative expenses slightly decreased by $42,019, or 3% for the year
ended December 31, 2018 as compared to the same period in 2017. Our selling expenses increased by $368,729 and our general and
administrative expenses decreased by $410,748. The increase in our selling expenses was mainly due to the increase in salaries
expense, travelling expense, etc., for selling department. The decrease in general and administrative expenses was due to more
depreciation expense for idle building reclassified from general and administrative expense to rental cost as more idle building
was leased in 2018. However, we expect to increase our general and administrative expense for the next year, as our sales continued
to grow.
Interest income (expense)
We incurred $94,596 in interest expense
during the three months ended March 31, 2019, compared with interest expense of $108,081 for the three months ended March 31, 2018.
We incurred $421,054
in interest expense during the year ended December 31, 2018, compared with interest expense of $508,818 for the year ended
December 31, 2017. The decrease in interest expense was mainly due to the repayment of $754,422 interest bearing bank loan
for the year ended December 31, 2018.
Net Income (loss)
Our net income was $445,587 for the
three months ended March 31, 2019, compared with net income of $47,871 for the three months ended March 31, 2018, representing
an increase of $397,716, or 830.81%.
The significant increase of $397,716 in
net income was mainly due to (1) the increase of 381,251 in gross profit; (2) the increase of $144,372 and $49,434 in government
grant and net rental income;(3)in spite of the increase of $12,729 in operating expense.
Our net
income was $4,473,819 for the year ended December 31, 2018, compared with net loss of $2,034,858 for the year ended December 31,
2017. We ceased to incur net losses and began to generate a profit because we increased our revenue and gross profit significantly
for the year ended December 31, 2018. We expanded our organic fertilizers business significantly, received a government subsidy
of $756,197 and generated more net rental income in 2018.
35
Liquidity and Capital Resources
Liquidity
is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and otherwise
operate on an ongoing basis. At March 31, 2019 and December 31, 2018 our working capital deficit was $6,585,529 and $7,119,118,
respectively. At December 31, 2018 and December 31, 2017 our working capital deficit was $7,119,118 and $10,708,100, respectively.
The significant improvement in our working capital deficit was reflecting greater increase in our current assets.
We have
financed our operations over the three months ended March 31, 2019 and 2018 primarily through proceeds from net cash inflow in
operation, and advances from related parties. And we have financed our operations over the years ended December 31, 2018 and 2017
primarily through proceeds from stock issuance and advances from related parties, and net cash inflow from operation.
The components of cash flows are discussed below:
For the
Three Months Ended
March 31,
2019
2018
Net cash provided by (used in) operating activities
$
917,171
$
995,260
Net cash provided by (used in) investing activities
(246,966
)
(752,397
)
Net cash used in financing activities
(676,947
)
(222,615
)
Exchange rate effect on cash
281
570
Net cash inflow (outflow)
$
(6,461
)
$
20,818
For the
Years Ended
December 31,
2018
2017
Net cash provided by (used in) operating activities
$
1,823,544
$
(1,715,588
)
Net cash provided by (used in) investing activities
(2,469,701
)
(651
)
Net cash provided by financing activities
548,337
1,708,331
Exchange rate effect on cash
101,547
(254
)
Net cash inflow (outflow)
$
3,727
$
(8,162
)
Cash provided by (used in) Operating Activities
Net cash provided by operating activities
was $917,171 for the three months ended March 31, 2019. The net cash inflow consisted primarily of net income of $445,587 which
was adjusted by depreciation and amortization of $291,069. The Company had an increase of $38,911 in other payable, an increase
of $25,638 in our advance from customers, an increase of $145,941 in account payable, a decrease of $149,975 in prepayment, and
a decrease of $133,884 in account receivable, which were offset by an increase of $82,007 in other receivable, and an increase
of $329,687 in inventory.
Net cash provided by operating activities
was $995,260 for the three months ended March 31, 2018. The net cash inflow consisted primarily of net income of $47,871 which
was adjusted by depreciation and amortization of $223,491. The Company had an increase of $1,560,502 in other payable, an increase
of $540,560 in our advance from customers, an increase of $125,853 in account payable-related party, a decrease of $37,661 in inventory
which were offset by an increase of $568,309 in accounts, receivable, an increase of $377,045 in account receivable - related party,
and a decrease of $489,512 in account payable and accrued payable.
Net cash provided by operating
activities was $1,823,544 for the year ended December 31, 2018. Cash provided by operating activities for the year ended December
31, 2018 consisted primarily of net income of $4,473,819, which was adjusted by depreciation and amortization of $849,792, and
deferred income tax assets of $472,749. The Company had an increase of $270,176 in other payables, an increase of $447,207 in income
tax payable, which were offset by an increase of $3,893,269 in accounts receivable, and an increase of $58,409 in inventory.
Net cash used in operating activities
was $1,715,588 for the year ended December 31, 2017. Cash used in operating activities for the year ended December 31, 2017 consisted
primarily of net loss of $2,034,858 which was adjusted by depreciation and amortization of $649,976. The Company had a decrease
of $1,339,649 in account payable, an increase of $268,096 in prepaid expense, an increase of $46,077 in other receivable, which
were offset by an increase of $1,042,996 in other payable, a decrease of $ 143,989 in inventory.
36
Cash provided by (used in) Investing Activities
Net cash used in investing activities was $246,966
for the three months ended March 31, 2019. The activities consisted of purchase of biological assets of $18,508, and investment
in construction in progress of $228,458. Net cash used in investing activities was $2,469,701 for the year ended December 31, 2018.
The activities consisted of our investments of $1,514,586 in the construction for black goat slaughtering and processing project
in Yunnan province; purchase of land use right of $936,238 for black goat slaughtering and processing project; and additional
investment of apple orchard of $18,877.
Net cash used in investing activities was $752,397 for
the three months ended March 31, 2018. The activities primarily consisted of purchase of biological assets of $7,313, and investment
in construction in progress of $745,084. Net cash used in investing activities was $651 for the year ended December 31, 2017. The
investments included purchase of biological assets of $651.
Cash Provided by Financing Activities
Net cash used in financing activities was $676,947 for the three
months ended March 31, 2019. During the period, cash used in financing activities consisted of the repayment to related parties
of $724,803, repayment of short-term loan of $14,823, and offset by proceeds from third party individual of $62,679.
Net cash used in financing activities was $222,615 for the three
months ended March 31, 2018. During the period, cash used in financing activities consisted of the repayment to related parties
of $222,615, repayment of short-term loans of $786,584 offset by proceeds from notes payable of $786,584.
Net cash provided by financing activities was $548,337 for the
year ended December 31, 2018. During the period, cash provided by financing activities consisted of the proceeds from notes payable
of $1,812,718, proceeds of $2,599,413 in capital contribution from shareholders, offset by repayment of $3,109,372 to related parties
and repayment of $754,422 in short term loans.
Net cash provided by financing
activities was $1,708,331 for the year ended December 31, 2017. During the year, cash provided by financing activities included
capital borrowed from related parties of $2,191,534, and Proceeds from short-term loans of $547,580, which were partly offset by
repayments of $1,030,783 in our short-term loans.
We anticipate that our current
cash reserves plus cash from our operating activities will not be sufficient to meet our ongoing obligations and fund our operations
for the next twelve months. As a result, we will need to seek additional funding in the near future. We currently do not have a
specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity
financing from the sale of shares of our common stock or renewing our current obligations with loaners. We may also seek to obtain
short-term loans from our directors or unrelated parties. Additional funding may not be available, or at acceptable terms, to us
at this time. If we are unable to obtain additional financing, we may be required to reduce the scope of our business development
activities, which could harm our business plans, financial condition and operating results.
Contractual Commitments
and Commitments for Capital Expenditure
Contractual Commitments
The following table summarizes our contractual obligations at
March 31, 2019 and the effect those obligations are expected to have on our liquidity and cash flow in future periods.
Payments Due by Period as of March 31, 2019
Total
Less than
1 Year
1 – 3
Years
3 – 5
Years
Over
5 Years
Contractual obligations
Loans
$
9,329,719
$
5,727,079
$
3,602,640
$
-
$
-
Others
-
-
-
-
-
$
9,329,719
$
5,727,079
$
3,602,640
$
-
$
-
37
The following table summarizes
our contractual obligations at December 31, 2018 and the effect those obligations are expected to have on our liquidity and cash
flow in future periods.
Payments Due by Period as of December 31, 2018
Total
Less than
1 Year
1 – 3
Years
3 – 5
Years
Over 5
Years
Contractual obligations
Loans
$
9,058,493
$
5,603,950
$
3,454,543
$
—
$
—
Others
—
—
—
—
—
$
9,058,493
$
5,603,950
$
3,454,543
$
—
$
—
Commitments for Capital Expenditure
On October 18, 2018, the
Company signed a building construction agreement with Yunnan Junxiong Construction Engineering Co., Ltd. for the black goat slaughtering
and processing project located in Shuangbai County, Chuxiong City, Yunnan Province, PRC. The total contract price is $1,599,674
(RMB 11,000,000), all of which is unpaid as of December 31, 2018.
In addition,
the Company signed a set of construction agreements with third parties in 2018 for the black goat slaughtering and processing project,
including surveying and mapping contract, equipment installation contract, and electricity installation contract, etc. As of December
31, 2018, a total amount of $436,275 (RMB3,000,000) is unpaid
Off Balance Sheet Items
Under SEC
regulations, we are required to disclose off-balance sheet arrangements that have or are reasonably likely to have a current or
future effect on our financial condition, such as changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to investors. An off-balance sheet arrangement means a transaction,
agreement or contractual arrangement to which any entity that is not consolidated with us is a party, under which we have:
●
any obligation under certain guarantee contracts,
●
any retained or contingent interest in assets transferred to an unconsolidated entity or similar
arrangement that serves as credit, liquidity or market risk support to that entity for such assets,
●
any obligation under a contract that would be accounted for as a derivative instrument, except
that it is both indexed to our stock and classified in shareholder equity in our statement of financial position, and
●
any obligation arising out of a material variable interest held by us in an unconsolidated entity
that provides financing, liquidity, market risk or credit risk support to us, or engages in leasing, hedging or research and development
services with us.
We do not have any off-balance
sheet arrangements that we are required to disclose pursuant to these regulations. In the ordinary course of business, we enter
into operating lease commitments, purchase commitments and other contractual obligations. These transactions are recognized in
our financial statements in accordance with generally accepted accounting principles in the United States.
38
BUSINESS
Overview
We primarily engage
in the manufacturing and distribution of organic fertilizer and the sales of agricultural products in the PRC. Our organic fertilizer
products are sold under our brand names "Zongbao," "Fukang," and "Muliang."
Through our patented
technology, we process crop straw (including corn, rice, wheat, cotton, and other crops) into high quality organic nutritious fertilizers
that are easily absorbed by crops in 3 hours. Straws are common agricultural by-product. In PRC, farmers usually remove the straw
stubble that are remains after grains by burning them in order to continue farming on the same land. These activities have resulted
in significant air pollution and damage the surface structure of the soil with loss of nutrients. We turn waste into treasure by
transforming the straws into organic fertilizer, which also effectively reduces air pollution. The straw organic fertilizer we
produce does not contain the heavy metals, antibiotics and harmful bacteria that are common in the traditional manure fertilizer.
Our fertilizers also provide optimum levels of primary plant nutrients which including multi-minerals, proteins and carbohydrates
that promote the healthiest soils capable of growing the healthy crops and vegetables. It can effectively reduce the use of chemical
fertilizers and pesticides as well as reduce the penetration of large chemical fertilizers and pesticides into the soil and thus
avoid water pollution. Therefore, our fertilizer can effectively improve fertility of soil, and the quality and safety of agricultural
products.
We generated our revenue
mainly from our organic fertilizers, which accounted for approximately 91.3% and 99.1% of our total revenue for the fiscal years
ended December 31, 2018 and 2017, respectively. We currently have two integrated factories in Weihai City, Shandong Province, PRC
to produce our organic fertilizers, which have been in operations since August 2015. We plan to improve the technology for our
existing straw organic fertilizer production lines in the following aspects: (i) adopt more advanced automatic control technology
for raw material feed to shorten the processing time of raw material, and (ii) manufacture powdered organic fertilizer instead
of granular organic fertilizer production in order to avoid the drying and cooling process, as such will increase our production
capacity.
With the focus of producing
organic fertilizers, we also engage in the business of selling agriculture food products including apples, and as sales agent for
other large agriculture companies in the PRC. In 2014, we rented 350 mu (about 57.66 acres) of mountainous land as apple orchard.
The sales of apples generated less than 1% of our total revenue for the fiscal years ended December 31, 2018 and 2017, respectively.
We expect to generate more revenues from the sales of apples as the apple orchards become more mature in the next few years.
In addition, we plan
to engage in the processing and distribution of black goat products business commencing the fourth quarter of 2019. We are currently
constructing a deep-processing slaughterhouse and processing plant which is expected to have the capacity of slaughtering 200,000
black goats per year in Chuxiong City, Yunnan Province, in China. Our black goat processing products including goat rib lets, goat
loin roast, goat loin chops, goat rack, goat leg, goat shoulder, goat leg shanks, ground goat, goat stew meat, whole goat, half
goat, lamb viscera, etc. We expect to start generate revenue from the black goat products in 2020.
Our assets mainly include:
(i) 42,895 square meters of industrial land and 28,549 square meters of factory and office space located in Jinshan District, Shanghai
City, (ii) 22,511 square meters of industrial land and 10,373 square meters of plant area and straw organic fertilizer production
line in Weihai City, Shandong Province, and (iii) more than $2 million investment of land use right and the black goat slaughtering
and processing plant located in Shuangbai County, Chuxiong City, Yunnan Province, in China.
As the factory area
in Jinshan District, Shanghai City is too close to the urban area to produce straw organic fertilizer, some factory buildings,
office buildings and spare land in Jinshan District, Shanghai City, have been leased to third parties.
39
Corporation History and Structure
The following diagram
illustrates and assumes the completion of the Reorganization, including consolidation of our subsidiaries and VIEs:
Shanghai Muliang Industry
Co., Ltd. (referred to herein as "Muliang Industry") was incorporated in PRC on December 7, 2006 as a limited liability
company, owned 95% by Lirong Wang and 5% by Zongfang Wang. Muliang Industry through its own operations and its subsidiaries is
engaged in the business of developing, manufacturing, and selling organic fertilizers and bio-organic fertilizers for use in the
agricultural industry.
On May 27, 2013, Muliang
Industry entered into and consummated an equity purchase agreement whereby it acquired 99% of the outstanding equity of Weihai
Fukang Bio-Fertilizer Co., Ltd. ("Fukang"), a corporation organized under the laws of the People's Republic of
China. Fukang was incorporated in Weihai City, Shandong Province on January 6, 2009. Fukang is focused on the distribution of organic
fertilizers and the development of new bio-organic fertilizers. As a result of the completion of the transaction, Fukang became
a 99% owned subsidiary of Muliang Industry, with the remaining 1% equity interest owned by Mr. Hui Song.
On July 11, 2013, Muliang
Industry established a wholly owned subsidiary, Shanghai Muliang Agritech Development Co., Ltd. ("Agritech Development")
in Shanghai, China. On November 6, 2013, Muliang Industry sold 40% of the outstanding equity of Agritech Development to Mr. Jianping
Zhang for consideration of approximately $65,000 or RMB 400,000. Agritech Development does not currently conduct any operations.
On July 17, 2013, Muliang
Industry entered into an equity purchase agreement to acquire 100% of the outstanding equity of Shanghai Zongbao Environmental
Construction Co., Ltd. ("Zongbao") with consideration of approximately $3.2 million or RMB 20 million, effectively
becoming the wholly-owned subsidiary of Muliang Industry. Zongbao was incorporated in Shanghai on January 25, 2008. Zongbao processes
and distributes organic fertilizers. Zongbao wholly owns, Shanghai Zongbao Environmental Construction Co., Ltd. Cangzhou Branch
("Zongbao Cangzhou").
On August 21, 2014,
Muliang Agricultural Limited ("Muliang HK") was incorporated in Hong Kong as an investment holding company.
40
January 27, 2015, Muliang
HK incorporated a wholly foreign-owned enterprise, Shanghai Mufeng Investment Consulting Co., Ltd ("Shanghai Mufeng"),
in China
On July 8, 2015, Mullan
Agritech entered into certain stock purchase agreement with Muliang Agriculture, Inc., pursuant to which Mullan Agritech, for a
consideration of $5,000, acquired 100% interest in Muliang HK and its wholly-owned subsidiary Shanghai Mufeng. Both Muliang HK
and Shanghai Mufeng are controlled by the Company's sole officer and director, Lirong Wang.
On July 23, 2015, Muliang
Industry established a wholly owned subsidiary, Shanghai Muliang Agricultural Sales Co., Ltd. ("Muliang Sales") in
Shanghai, China.
On September 3, 2015,
Mullan Agritech effected a split of its outstanding common stock resulting in an aggregate of 150,525,000 shares outstanding of
which 120,000,000 were owned by Chenxi Shi the founder of Mullan Agritech and its sole officer and director. The remaining 30,525,000
were held by a total of 39 investors.
On January 11, 2016,
Mullan Agritech issued 129,475,000 shares of its common stock to Lirong Wang for an aggregate consideration of $64,737.50. On the
same date, Chenxi Shi, the sole officer and director of Mullan Agritech on that date, transferred 120,000,000 shares of common
stock of the Company held by him to Lirong Wang for $800 pursuant to a transfer agreement.
On February 10, 2016,
Shanghai Mufeng entered into a set of contractual agreements known as Variable Interest Entity ("VIE") Agreements,
including (1) Exclusive Technical Consulting and Service Agreement, (2) Equity Pledge Agreement, and (3) Call Option Cooperation
Agreement, with Muliang Industry, and its Principal Shareholders. As a result of the Stock Purchase Agreement and the set of VIE
Agreements, Shanghai Muliang Industry Co., Ltd., along with its consolidated subsidiaries, became entities controlled by Mullan
Agritech whereby Mullan Agritech would derive all substantial economic benefit generated by Muliang Industry and its subsidiaries.
As a result, Mullan
Agritech has a direct wholly-owned subsidiary, Muliang HK and an indirectly wholly owned subsidiary Shanghai Mufeng. Through its
VIE Agreements, Mullan Agritech exercises control over Muliang Industry. Muliang Industry has two wholly-owned subsidiaries (Zongbao
and Muliang Sales), one 99% owned subsidiary (Fukang), one 60% owned subsidiary (Agritech Development), and one indirectly wholly
owned subsidiary Zongbao Cangzhou.
On June 6, 2016, Muliang
Industry established a wholly-owned subsidiary, namely, Muliang (Ningling) Bio-chemical Fertilizer Co. Ltd ("Ningling Fertilizer")
in Henan Province, the central plain of China. Ningling Fertilizer is setup for a new production line of bio-chemical fertilizer
and has not begun any operation yet.
On July 7, 2016, Muliang
Industry established a subsidiary, namely, Zhonglian Huinong (Beijing) Technology Co., Ltd ("Zhonglian") in Beijing
City, China. Muliang Industry owns 65% shares of Zhonglian, and a third-party company, Zhongrui Huilian (Beijing) Technology Co.,
Ltd owns the other 35% shares. Zhonglian is to develop and operate online agricultural products trading platform.
On October 27, 2016,
Muliang Industry established a subsidiary, namely, Yunnan Muliang Animal Husbandry Development Co., Ltd ("Yunnan Muliang")
in Yunnan Province, China. Muliang Industry owns 55% shares of Yunnan Muliang, and a third-party company, Shuangbai County Development
Investment Co., Ltd. owns the other 45% shares. Yunnan Muliang was setup for the sales development of West China.
On October 12, 2017,
the Company canceled the registration of Ningling with the administration authorities for Industry and Commerce. Ningling has historically
been reported as a component of our operations and incurred $33,323 to loss before income taxes provisions for the year ended December
31, 2017. The termination does not constitute a strategic shift that will have a major effect on our operations or financial results
and as such, the termination is not classified as discontinued operations in our consolidated financial statements.
Mullan Agritech, Muliang
HK, Shanghai Mufeng, Muliang Industry, Zongbao, Zongbao Cangzhou, Muliang Sales, Fukang, Agritech Development, Ningling Fertilizer,
Yunnan Muliang, and Zhonglian are referred to as subsidiaries the Company and its consolidated subsidiaries are collectively referred
to herein as the "Company", "we" and "us", unless specific reference is made to an entity.
41
On April 4, 2019, the
Company's Board of Directors and majority shareholder approved a 5 to 1 reverse stock split of all of the issued and outstanding
shares of the Company's common stock, change of corporate name from "Mullan Agritech Inc." to "Muliang
Agritech Inc.", and creation of one hundred million (100,000,000) shares of Blank Check Preferred Stock.
On April 5, 2019, we
filed a Certificate of Amendment to our Articles of Incorporation with the Secretary of State of the State of Nevada to reflect
the Name Change and to authorize the creation of Blank Check Preferred Stock. As a result, the capital stock of the Company consists
of 500,000,000 shares of common stock, $0.0001 par value, and 100,000,000 shares of blank check preferred stock, $0.0001 par value.
To the fullest extent permitted by the laws of the State of Nevada, as the same now exists or may hereafter be amended or supplemented,
the Board of Directors may fix and determine the designations, rights, preferences or other variations of each class or series
within each class of preferred stock of the Company. The Company may issue the shares of stock for such consideration as may be
fixed by the Board of Directors.
On April 16, 2019,
we filed a Certificate of Change to our Articles of Incorporation with the Secretary of State of the State of Nevada to reflect
the reverse stock split. Any fractional shares are to be rounded up to whole shares. The reverse stock split does not affect the
par value or the number of authorized shares of common stock of the Company.
The reverse stock split
and the name change took effect on May 7, 2019. In connection with the name change, our stock symbol changed to "MULG".
Our Industry
The Status and Market Demand of Straw Organic Fertilizer
Industry in China
The straw in China
is in large quantity, has wide variety and broad distribution, and the annual output of straw of is more than 700 million tons.
The straw contains more than 3 million tons of nitrogen, more than 700,000 tons of phosphorus and nearly 7 million tons of potassium,
equivalent to more than a quarter of China's current fertilizer amount of use and equivalent to 300 million tons of standard
coal. However, nearly 100 million tons of straw are burned directly in the fields every year, which not only damages the beneficial
bacteria in the soil surface seriously, but also directly leads to severe air pollution and increases the greenhouse effect. With
the significant amount of production of straws in China, so long as part of the straw can be recycled every year, it will bring
huge sustainable recycling resources to the fertilizer industry. On November 25, 2015, the National Development and Reform Commission,
the Ministry of Finance, the Ministry of Agriculture and the Ministry of Environmental Protection jointly issued a notice, requiring
the utilization rate of straw to exceed 85% by 2020.
Market demand in China
for organic fertilizer is significant. In 2015, the China national sales volume of organic fertilizers was 90 million tons. According
to the current policy of encouraging less use of chemical fertilizer, improving the quality of agricultural products and restoring
land, it is estimated that the demand of organic fertilizers will increase to 180 million tons by 2020. At the same time, according
to a governmental advocate of increasing proportion of organic fertilizer to 50% of the total use of fertilizer, the demand in
China for organic fertilizer will reach more than 500 million tons.
Straw organic fertilizer
industry is an industry of ecological production and recycling economic.
The Environmental Considerations of Promoting Straw Organic
Fertilizer
Less Air Pollution.
Even if each county area builds a 100,000 tons of straw disposal factory, 100 counties in total can approximately reduce 10 million
tons of straw burning, reduce carbon dioxide emissions by 15 million tons, and reduce a large number of carbon monoxide, volatile
organic particles (PM), nitrogen oxides, benzene, polycyclic aromatic hydrocarbons and other harmful gases.
42
Less soil pollution,
more environment restoration. Straw is a circulating agricultural resource and the best organic fertilizer resource. Straw organic
fertilizer is also the main measure to convert wasteland, tidal flat and saline-alkali land into arable land, transform barren
land into medium-low yield field and upgrade medium-low yield field to high-quality fertile field.
Less water pollution.
The utilization rate of traditional chemical fertilizers is generally below 30%, and 70% of the dissolved chemical fertilizers
directly enter the underground water bodies and flow into rivers, resulting in eutrophication of water bodies. Increasing the application
of organic fertilizer is one of the important methods to reduce water pollution.
Our Products
We are committed to
ensuring the quality of agricultural products. We aim to provide high-quality and environmental friendly straw organic fertilizer
for our customers. Our organic fertilizers are the products of natural decomposition and are easy for plants to absorb and digest.
While we are primarily engaged in producing organic fertilizers, we also sell agriculture food products such as apples. We generated
our revenue mainly from our organic fertilizers, which constituted approximately 91.3% and 99.1% of our total revenue for the fiscal
years ended December 31, 2018 and 2017, respectively. The sales of apples generated less than 1% of our total revenue for the fiscal
years ended December 31, 2018 and 2017, respectively. In addition, we invested in the construction of a deep-processing slaughterhouse
which is expected to have the capacity of slaughtering 200,000 black goats per year in Chuxiong City, Yunnan Province, in China.
We expect to complete the construction in the fourth quarter of 2019 and start generating revenues from the black goat processing
products in 2010. The rest of our revenues for the last two fiscal years comes from the sales of agricultural foods as an intermediate
sales agent for large diary companies in China such as Bright Dairy & Food Co., Ltd., and Mengniu Dairy industry Limited, etc.
Organic Fertilizer
Our fertilizer products
are sold under our brand names "Zongbao," "Fukang," and "Muliang." There are seven lines of
our organic fertilizers including:
●
Soil improvement and preparation fertilizer,
which including compound micros, probiotics that can supplement microorganisms and trace elements of soil. It can be used as bother
starter fertilizer and regular fertilizer;
●
Root protection fertilizer, which is an
organic nutrient water-soluble fertilizer that can help the growth of crops' roots;
●
Foliar nutrition fertilizer, which is
a biological growth promoter to help customers take care of the foliar of their plants;
●
Lower pesticide residue fertilizer, which
can help our customers reduce the usage of pesticide and enhance the resistance ability for plants;
●
Fruit special fertilizer which contains
enhanced nutrient availability to increase plant performance;
●
Fruit tree fertilizer that promotes healthy
roots and fruit growth and are ideal for all fruit trees and berries;
●
Corn and peanuts fertilizer that are specially
used for corns and peanuts.
Our organic fertilizer
contains all-purpose nutrition that can be used in the different stages of plan growth. It aims to increase soil fertility, improve
soil aggregate structure, provide nutrient absorption ability for crop, improve water maintain capacity and improve fertilizer
utilization, thus creating a sustaining environment and healthy soil.
43
Agricultural Products (Food)
While concentrating on the development
of organic fertilizers, we are actively developing the agricultural food business.
Apple orchard
In 2014, we leased
350 mu (about 57.66 acres) of mountainous land as apple farm and, for the purpose of using our own fertilizer to demonstrate the
advantages of our straw organic fertilizer. Selling of apples generated less than 1% of our total revenue for the fiscal years
ended December 31, 2018 and 2017, respectively. As the apple trees become more mature, we expect to generate more revenues from
the sales of apples in the future.
Other Agricultural products
We are also acting
as intermediate sales agent for the agricultural products from large agricultural products companies, such as Bright Dairy &
Food Co., Ltd., Mengniu Dairy industry Limited, Haitian Flavoring & Food Co., Ltd., and Hangzhou Wahaha Group, etc.
Future Products
Black Goat Processing Products
Currently we invested
in a goat slaughtering and processing factory located in Shuangbai County, Chuxiong City, Yunnan Province, PRC starting in 2018.
This factory is expected to be completed in the fourth quarter of 2019 with a capacity of deep processing of 200,000 black goats
per year. Our products will include goat rib lets, goat loin roast, goat loin chops, goat rack, goat leg, goat shoulder, goat leg
shanks, ground goat, goat stew meat, whole goat, half goat, and lamb viscera, etc. We expect to commence the sales of black goat
processing products and generate revenue in 2020.
Forage Grass
We are exploring the
options to use forage grass as an alternative for traditional feed for live-stocks. We currently have several research and development
projects with schools and institutions. See "Research and Development" below.
Our
Technology and Manufacturing Process
We
utilize our patented technologies to process crop straws into organic fertilizer.
Crop
straws include the stems, roots, leaves, pods and vines of crops. The main ingredients are cellulose, hemicellulose and lignin,
as well as a small amount of minerals. Straw is a crude fiber material and is waxy and lignified, the fermentation cycle
is long for the straw to be processed into organic fertilizer. It takes 15 days to 60 days for the microbial
action. This is a common challenge for large-scale and timely manufacture of straw fertilizer.
The
crop straws will be processed into a nutrient-rich organic fertilizer in a closed container by low-pressure, medium-temperature
acid hydrolysis technology (with 9-to-13-kg pressure and at 150-to-180-degree temperature). The basic principle is as follows:
We
utilize cellulose hydrolysis, hemicellulose hydrolysis and lignin hydrolysis methods to process cellulose, hemicellulose and lignin
into short-chain cellulose, polysaccharide, monosaccharide, oligomer, etc. Based on the demand for our organic fertilizers and
the controlled processing conditions, on average our methods produce a mix with a majority of short-chain cellulose, some polysaccharides
and a small amount of monosaccharides.
The
straws are stored in our warehouse after compacting the straws in a briquetting machine. The straw compacts are easy to transfer
and occupy less storage space. The straw compacts will be first crushed to 3 cm to 5 cm in length. The straws are then processed
in the hydrothermal degradation tank for 2 to 3 hours. We pump steam generated by a boiler into the hydrothermal degradation tank,
so that the temperature in the hydrothermal degradation tank is maintained between 150°C and 180°C and the pressure is
maintained at 0.9-1.3MPa. After 2-3 hours of thermal degradation, we release the pressure to 0.2~0.4MPa. By releasing the pressure,
the straws explode to the storage tank, resulting in a mechanical treatment of the explosion impinging stream, breaking the cellulose,
hemicellulose and lignin in the straw, breaking the hydrogen bonds, degrading fiber crystallization regions into an amorphous stage
and degrading macromolecules into micromolecules. After that, we add different auxiliary materials through an automatic batching
system to make different organic fertilizers suitably for difference crops. We then repeat a process of crushing, granulating,
cooling and screening before packaging the fertilizers into products.
44
Sales and Marketing
We believe that
our sales services, combined with the quality and reputation of our products will help us retain and attract new customers.
We distribute and sell
our products to our end-customers through several different channels, including professional markets, sales department of our company
and distributors:
●
Professional Market
: we built long-term
cooperation relationship with private agricultural companies and agricultural cooperative associations for sales;
●
Sales Department:
we have sixteen
sales representatives with our sales department that are professionally trained to efficiently promote and deliver products to
our customers;
●
Third-party
Agent and Distributors
:
we utilize various third-party agents and distributors to sell and distribute our products; and
●
E-commerce
:
                                         we are designing and setting up online trading platform to sell our products which is
                                         expected to be completed in 2020.
By using various channels
to sell and distribute our products to customers, we can directly serve our customers and end-customers by providing customer service
and support.
Suppliers and Customers
Suppliers
Most of our suppliers
are local suppliers from Qingdao city, Shandong province. The main raw materials for organic fees include: (i) hydrolysed crop
straw, which are chemically decayed wheat straw, corn straw and other kinds of crop straw, accounting for about 54% of the total
raw materials; (ii) plant ash (Potassium carbonate, K
2
CO
3
), accounting for estimated 4% of the total raw
materials; and (iii) Humic acid, accounting for about 3% of the total raw materials. Other auxiliary materials include monoammonium
phosphate, urea, etc.
The following table
sets forth information as to each supplier that accounted for 10% or more of the Company's purchase for the years ended December
31, 2018 and 2017.
For the year ended December 31,
Suppliers
2018
2017
Amount
%
Amount
%
A
3,651,430
43
%
N/A
N/A
B
N/A
N/A
212,453
46
%
C
N/A
N/A
49,578
11
%
D
840,657
10
%
N/A
N/A
45
Customers
Our customers are mainly
located in provinces of Guangdong, Jilin and Shandong.
The following table
sets forth information as to each customer that accounted for 10% or more of the Company's revenues for the years ended December
31, 2018 and 2017.
For the year ended December 31,
Customers
2018
2017
Amount
%
Amount
%
A
N/A
N/A
358,710
48
%
B
N/A
N/A
92,446
12
%
C
2,096,121
16
%
N/A
N/A
D
1,952,652
15
%
N/A
N/A
Our Growth Strategy
We
intend to build upon our proven ability to produce high-quality organic fertilizer and increase our presence and market share in
the agriculture industry. We have begun to implement the growth strategies described below and expect to continue to do so over
the several years following this offering. Although the net proceeds of this offering will be available to assist us to implement
our growth strategies, we cannot estimate the ultimate amount of capital needed to achieve our expected growth. We may need additional
capital to implement these strategies, particularly in the event we pursue acquisitions of complementary businesses or technologies.
Scale Up Production of Organic Fertilizer
and Accelerate Penetration in Local and Regional Markets
We plan to construct
a new organic fertilizer factory in Heilongjiang Province, China. We have entered into a strategic cooperation agreement with Suihua
City of Heilongjiang Province to produce a total of 1 million tons of organic fertilizer. We expect to produce 100,000 tons of
organic fertilizer in 2019 and the remaining within the next 5 years. In addition, we will establish warehouse and distribution
center in Heilongjiang Province, which is expected to accelerate penetration in the local and regional market.
Increase Sources of Revenue by Expanding
Our Current Business
We have a slaughtering
and processing plant for black goats under construction in Yunnan Province, China. We expect the plant to begin operations in the
fourth quarter of 2019 and start generating revenue in 2020. Demand for lamb in China as an alternative to pork is increasing due
to growing concern on swine disease and pork quality. We plan to offer lamb and lamb products to consumers via a subscription program
available on our website and mobile app in the future.
Continue to Invest in Research and Development
and Expand Our Product Portfolio
We have invested significant
capital in the development and improvement of our products. One of the R&D results introduced us to a type of forage grass
that contains 30% more protein than other crops. We plan to work with the forage grass farmers in Xinjiang Province and produce
plant protein powder from the forage grass to be used in food and beverages in 2020.
Competitive Advantages
Competitive Advantage of Our Technology
●
Quick disposal: straw can be disposed into powder in 3 hours.
●
Continuous operation: the production line is formed with connecting hydrolysis tanks, which allows the full use of steam heat and continuous charging, hydrolysis and discharge.
●
Environmental protection: all the disposal devices are closed containers and pipelines to avoid gas and material leakage.
46
●
High fertilizer efficiency: the organic fertilizer matrix after straw disposal has a higher content of organic matter than the compost products of livestock and poultry manure, and has a comprehensive organic nutritional composition. It also avoids pesticide, insect pest returning to the field, excessive loose soil and hidden trouble of fermenting and burning seedlings in the field.
●
Less space: 80,000 tons of straw disposal plant only need 6.6 – 8.2 acres of land.
●
Strong replicability: our technology and production line can be reproduced in different countries.
Competitive Advantage of Our Products
●
Quality Advantage. Compared with the traditional compost manure fermented fertilizer, our product has high concentration of organic matter and small molecular organic nutrients that can be directly absorbed by crops rich in fulvic acid, polysaccharides and monosaccharides. The effective amount of our product is 50% of the amount of conventional organic fertilizer.
●
Safety advantage. Compared with traditional livestock and poultry manure composting fermented fertilizer, our product generates less residue of heavy metals, antibiotics, toxic and harmful bacteria, avoids the pollution of soil, and ensures the quality and safety of agricultural products.
Research and Development
Forage Grass Production Capacity
In July 2014, we entered
into a Technology Transfer Agreement and a Consulting Agreement with the Chinese Academy of Agricultural Sciences in connection
with forage grass. We seek to increase the production capacity of forage grass through this collaboration.
Food Product Development
In October 2015, we
entered into a Food Development Agreement with Shanghai Food Science and Technology School. The goal of this project is to explore
the technology and product application of forage grass seeds for plant protein, dietary fiber and food and beverage.
Animal Waste Disposal
In January 2019, we
entered into a Technology Development Agreement with Shanghai Academy of Agricultural Sciences to research ways to dispose and
utilize animal waste from our black goat slaughtering and processing plant. We aim to minimize environmental impact and avoid any
water pollution.
Intellectual Property
We rely on certain
intellectual property to protect our domestic business interests and ensure our competitive position in our industry.
We have 12 patents
and 5 registered trademarks on sludge and straw technology, and we are a pilot company of technology in Jinshan District, Shanghai.
Among the patents we now own, "microwave induced catalytic hydrolysis treatment sludge" was reviewed by Chinese Academy
of Sciences Shanghai Technology Chaxin Consulting Centre (report no. 200921C0703709, 200821C0701507). According to the review by
the Centre, there is no public report of the same kind of research, and therefore, the project is innovative and is advanced at
the international level.
47
Patents
We own the following
patents through our subsidiaries and/or VIE entities:
No.
Patent Name
Patent Number
Certificate Number
1
Pressure relief material discharge and storage device
ZL2009200705204
130427
2
Chemical catalytic hydrolysis tank
ZL2009200705219
1370181
3
Material storage bin with crusher
ZL2009200706156
1370214
4
Pneumatic check valve type tank cap
ZL2009200706160
1370180
5
Regenerative heat exchanger
ZL2009200705223
1419186
6
Method for preparing novel material by catalyzing and hydrolyzing mud through microwave inducing
ZL2008100346358
814191
7
Method for removing heavy metals from activated sludge
ZL2009100494481
1224500
8
Method for comprehensively treating grating garbage and activated sludge in sewage plant
ZL2009100494462
1276553
9
Method for preparing water soluble quick-acting organic fertilizer from activated sludge
ZL2009100494458
1311657
10
Mechanical force chemical treating method for organic solid wastes
ZL2009100494477
1372950
11
Method for preparing fuel oil by activated sludge in pipe bundle cracking furnace
ZL2011100405076
1513772
12
Method for directly flashing treated water into superheated steam and application
ZL2011100405127
Trademarks
We own several trademarks
through our subsidiaries and/or VIE entities, including muliang, zongbao, xiutubao, yijifeng, jingletu, and huangdicao. Muliang
and zongbao are our company's brand names.
Our Property, Plant and Equipment
Our principal executive
office is located at 2498 Wanfeng Highway, Lane 181, Fengjing Town, Jinshan District, Shanghai, China, and our telephone number
is (86) 21-67355092. The office space belongs to our President and Chief Executive Officer, Mr. Lirong Wang, who allows us to use
the space for free.
Property, plant and
equipment at December 31, 2018 and 2017 consisted of:
December 31,
December 31,
2018
2017
Building
$
12,838,100
$
13,603,224
Operating equipment
2,754,463
2,968,880
Vehicle
104,121
58,492
Office equipment
59,897
18,500
Apple Orchard
1,026,505
1,029,230
Construction in progress
341,173
-
17,124,259
17,678,326
Less: Accumulated depreciation
(2,196,936
)
(1,461,897
)
$
14,927,323
$
16,216,429
Our Employees
As of the date of this prospectus, we have
106 full-time employees. The following table sets forth the number of our employees by function:
Functional Area
Number of Employees
Senior management
8
Sales and Procurement
16
Accounting
5
Human resources and administrative personnel
7
Warehouse
5
Factory
65
Total
106
We provide social insurance
for each employee in accordance with Chinese law, including pension insurance, medical insurance, unemployment insurance, work
injury insurance and maternity insurance, and housing provident fund.
48
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.
PRC Regulations
Our operation in China
is subject to a number of PRC laws and regulations. This section summarizes all material PRC laws and regulations relevant to our
business and operations in China and the key provisions of such regulations.
Fertilizer
License
The
examination and approval of fertilizer license is based on Article 25 of the Agricultural Law of the People's Republic of China,
the Management for the Administration of Fertilizer Registration (Order No. 32 and No. 38 by the Ministry of Agriculture), and
the Requirements for Fertilizer Registration Materials (Publication No. 161 from the Ministry of Agriculture). Organic fertilizers
are required to be registered with provincial agricultural department.
There
are four examination and approval requirements for obtaining a fertilizer license (1) A valid business license issued by Administration
for Industry and Commerce, whose business scope shall cover the industry of fertilizer; (2) Products must comply with the relevant
requirements of laws, regulations and relevant national policies (such as safety and environmental protection); (3) The product
quality must comply with national standards, industry standards, local standards or enterprise standards approved by the quality
supervision department; and (4) The application materials must be true, legal, complete and effective.
All
of our fertilizer products currently have valid five-year fertilizer licenses that are renewable upon the expiration date in the
year of 2022.
Corporate Laws and Industry Catalogue
Relating to Foreign Investment
The establishment,
operation, and management of corporate entities in China are governed by the Company Law of the PRC, or the Company Law, effective
in 1994, as amended in 1999, 2004, and 2005, respectively. The Company Law is applicable to our PRC subsidiaries and affiliated
PRC entity unless the PRC laws on foreign investment have stipulated otherwise.
The establishment,
approval, registered capital requirement, and day-to-day operational matters of wholly foreign-owned enterprises ("WFOE"),
are regulated by the WFOE Law of the PRC effective in 1986, as amended in 2000, and the Implementation Rules of the WFOE Law of
the PRC effective in 1990, as amended in 2001.
Investment activities
in the PRC by foreign investors are principally governed by the Guidance Catalogue of Industries for Foreign Investment, or the
Catalogue, which was promulgated and is amended from time to time by the Ministry of Commerce and the National Development and
Reform Commission. The Catalogue divides industries into three categories: encouraged, restricted, and prohibited. Industries not
listed in the Catalogue are generally open to foreign investment unless specifically restricted by other PRC regulations.
Establishment of WFOEs
is generally permitted in encouraged industries. Some restricted industries are limited to equity or contractual joint ventures,
while in some cases Chinese partners are required to hold the majority interests in such joint ventures.
For example, sales
and distribution of audio and video products are among the restricted categories, and only contractual joint ventures in which
Chinese partners holding majority interests can engage in the distribution of audio and video products in China.
In addition, restricted
category projects are also subject to higher-level government approvals. Foreign investors are not allowed to invest in industries
in the prohibited category.
49
Regulations Relating to Taxation
In January 2008, the
PRC Enterprise Income Tax Law (The "EIT" Law) took effect. The EIT applies a uniform 25% enterprise income tax rate
to both foreign-invested enterprises and domestic enterprises, unless where tax incentives are granted to special industries and
projects. Under the EIT Law and its implementation regulations, dividends generated from the business of a PRC subsidiary after
January 1, 2008 and payable to its foreign investor may be subject to a withholding tax rate of 10% if the PRC tax authorities
determine that the foreign investor is a non-resident enterprise, unless there is a tax treaty with China that provides for a preferential
withholding tax rate. Distributions of earnings generated before January 1, 2008 are exempt from PRC withholding tax.
Under the EIT Law,
an enterprise established outside China with "de facto management bodies" within China is considered a "resident
enterprise" for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on
its worldwide income. A circular issued by the State Administration of Taxation in April 2009 regarding the standards used to classify
certain Chinese-invested enterprises controlled by Chinese enterprises or Chinese enterprise groups and established outside of
China as "resident enterprises" clarified that dividends and other income paid by such PRC "resident enterprises"
will be considered PRC-source income and subject to PRC withholding tax, currently at a rate of 10%, when paid to non-PRC enterprise
shareholders. This circular also subjects such PRC "resident enterprises" to various reporting requirements with the
PRC tax authorities.
Under the implementation
regulations to the EIT Law, a "de facto management body" is defined as a body that has material and overall management
and control over the manufacturing and business operations, personnel and human resources, finances, and properties of an enterprise.
In addition, the tax circular mentioned above specifies that certain PRC-invested overseas enterprises controlled by a Chinese
enterprise or a Chinese enterprise group in the PRC will be classified as PRC resident enterprises if the following are located
or residence in the PRC: senior management personnel and departments that are responsible for daily production, operation, and
management; financial and personnel decision making bodies; key properties, accounting books, the company seal, and minutes of
board meetings and shareholders' meetings; and half or more of the senior management or directors having voting rights.
Regulations Relating to Foreign Exchange
Pursuant to the Regulations
on the Administration of Foreign Exchange issued by the State Council and effective in 1996, as amended in January 1997 and August
2008, current account transactions, such as sale or purchase of goods, are not subject to PRC governmental control or restrictions.
Certain organizations in the PRC, including foreign-invested enterprises, may purchase, sell, and/or remit foreign currencies at
certain banks authorized to conduct foreign exchange business upon providing valid commercial documents. Approval of the PRC State
Administration of Foreign Exchange ("SAFE"), however, is required for capital account transactions.
In August 2008, SAFE
issued a circular on the conversion of foreign currency into Renminbi by a foreign-invested company that regulates how the converted
Renminbi may be used. The circular requires that the registered capital of a foreign-invested enterprise converted into Renminbi
from foreign currencies may only be utilized for purposes within its business scope. For example, such converted amounts may not
be used for investments in or acquisitions of other PRC companies, unless specifically provided otherwise, which can inhibit the
ability of companies to consummate such transactions. In addition, SAFE strengthened its oversight of the flow and use of the Renminbi
registered capital of foreign-invested enterprises converted from foreign currencies. The use of such Renminbi capital may not
be changed without SAFE's approval, and may not in any case be used to repay Renminbi loans if the proceeds of such loans
have not been utilized. Violations may result in severe penalties, such as heavy fines.
Regulations Relating to Labor
Pursuant to the PRC
Labor Law effective in 1995 and the PRC Labor Contract Law effective in 2008, a written labor contract is required when an employment
relationship is established between an employer and an employee. Other labor-related regulations and rules of the PRC stipulate
the maximum number of working hours per day and per week as well as the minimum wages. An employer is required to set up occupational
safety and sanitation systems, implement the national occupational safety and sanitation rules and standards, educate employees
on occupational safety and sanitation, prevent accidents at work, and reduce occupational hazards.
In the PRC, workers
dispatched by an employment agency are normally engaged in temporary, auxiliary, or substitute work. Pursuant to the PRC Labor
Contract Law, an employment agency is the employer for workers dispatched by it and must perform an employer's obligations
toward them. The employment contract between the employment agency and the dispatched workers, and the placement agreement between
the employment agency and the company that receives the dispatched workers must be in writing. Also, the company that accepts the
dispatched workers must bear joint and several liabilities for any violation of the Labor Contract Law by the employment agencies
arising from their contracts with dispatched workers. An employer is obligated to sign an indefinite term labor contract with an
employee if the employer continues to employ the employee after two consecutive fixed-term labor contracts. The employer also has
to pay compensation to the employee if the employer terminates an indefinite term labor contract. Except where the employer proposes
to renew a labor contract by maintaining or raising the conditions of the labor contract and the employee is not agreeable to the
renewal, an employer is required to compensate the employee when a definite term labor contract expires. Furthermore, under the
Regulations on Paid Annual Leave for Employees issued by the State Council in December 2007 and effective as of January 2008, employees
who have served an employer for more than one (1) year and less than ten years are entitled to a 5-day paid vacation, those whose
service period ranges from 10 to 20 years are entitled to a 10-day paid vacation, and those who have served for more than 20 years
are entitled to a 15-day paid vacation. An employee who does not use such vacation time at the request of the employer shall be
compensated at three times their normal salaries for each waived vacation day.
50
Pursuant to the Regulations
on Occupational Injury Insurance effective in 2004 and the Interim Measures concerning the Maternity Insurance for Enterprise Employees
effective in 1995, PRC companies must pay occupational injury insurance premiums and maternity insurance premiums for their employees.
Pursuant to the Interim Regulations on the Collection and Payment of Social Insurance Premiums effective in 1999 and the Interim
Measures concerning the Administration of the Registration of Social Insurance effective in 1999, basic pension insurance, medical
insurance, and unemployment insurance are collectively referred to as social insurance. Both PRC companies and their employees
are required to contribute to the social insurance plans. Pursuant to the Regulations on the Administration of Housing Fund effective
in 1999, as amended in 2002, PRC companies must register with applicable housing fund management centers and establish a special
housing fund account in an entrusted bank. Both PRC companies and their employees are required to contribute to the housing funds.
Regulations on Dividend Distribution
Wholly foreign-owned
companies in the PRC may pay dividends only out of their accumulated profits after tax as determined in accordance with PRC accounting
standards. Remittance of dividends by a wholly foreign-owned enterprise out of China is subject to examination by the banks designated
by SAFE. Wholly foreign-owned companies may not pay dividends unless they set aside at least 10% of their respective accumulated
profits after tax each year, if any, to fund certain reserve funds, until such time as the accumulative amount of such fund reaches
50% of the wholly foreign-owned company's registered capital. In addition, these companies also may allocate a portion of
their after-tax profits based on PRC accounting standards to staff welfare and bonus funds at their discretion. These reserve funds
and staff welfare and bonus funds are not distributable as cash dividends.
Safe Regulations on Offshore Special
Purpose Companies Held by PRC Residents or Citizens
Pursuant to the Notice
on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents to Engage in Financing and Inbound Investment via
Overseas Special Purpose Vehicles, or Circular No. 75, issued in October 2005 by SAFE and its supplemental notices, PRC citizens
or residents are required to register with SAFE or its local branch in connection with their establishment or control of an offshore
entity established for the purpose of overseas equity financing involving a roundtrip investment whereby the offshore entity acquires
or controls onshore assets or equity interests held by the PRC citizens or residents. In addition, such PRC citizens or residents
must update their SAFE registrations when the offshore special purpose vehicle undergoes material events relating to increases
or decreases in investment amount, transfers or exchanges of shares, mergers or divisions, long-term equity or debt investments,
external guarantees, or other material events that do not involve roundtrip investments. Subsequent regulations further clarified
that PRC subsidiaries of an offshore company governed by the SAFE regulations are required to coordinate and supervise the filing
of SAFE registrations in a timely manner by the offshore holding company's shareholders who are PRC citizens or residents.
If these shareholders fail to comply, the PRC subsidiaries are required to report to the local SAFE branches. If the shareholders
of the offshore holding company who are PRC citizens or residents do not complete their registration with the local SAFE branches,
the PRC subsidiaries may be prohibited from distributing their profits and proceeds from any reduction in capital, share transfer
or liquidation to the offshore company, and the offshore company may be restricted in its ability to contribute additional capital
to its PRC subsidiaries. Moreover, failure to comply with the SAFE registration and amendment requirements described above could
result in liability under PRC law for evasion of applicable foreign exchange restrictions.
M&A Rules
On August 8, 2006,
six PRC regulatory agencies, including China Securities Regulatory Commission ("CSRC"), promulgated a rule entitled
Provisions Regarding Mergers and Acquisitions of Domestic Enterprises by Foreign Investors ("the M&A Rules") to
regulate foreign investment in PRC domestic enterprises. The M&A rules, among other things, requires an overseas special purpose
vehicle ("SPV"), formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies
or individuals, to obtain the approval of CSRC prior to publicly listing their securities on an overseas stock exchange.. There
remains some uncertainty as to how this regulation will be interpreted or implemented in the context of an overseas offering. If
the CSRC or another PRC regulatory agency subsequently determines that approval is required for this offering, we may face sanctions
by the CSRC or another PRC regulatory agency.
The M&A Rules also
establish procedures and requirements that could make some acquisitions of Chinese companies by foreign investors more time-consuming
and complex, including requirements in some instances that the Ministry of Commerce be notified in advance of any change-of-control
transaction in which a foreign investor takes control of a Chinese domestic enterprise.
SAFE Regulations on Employee Share
Options
On March 28, 2007, SAFE
promulgated the Application Procedure of Foreign Exchange Administration for Domestic Individuals Participating in Employee Share
Holding Plan or Share Option Plan of Overseas Listed Company, or the Share Option Rule. Pursuant to the Share Option Rule, Chinese
citizens who are granted share options by an overseas publicly listed company are required to register with SAFE through a Chinese
agent or Chinese subsidiary of the overseas publicly listed company and complete certain other procedures. Our PRC employees who
have been granted share options will be subject to these regulations. Failure of our PRC share option holders to complete their
SAFE registrations may subject these PRC employees to fines and legal sanctions and may also limit our ability to contribute additional
capital into our PRC subsidiaries and limit our PRC subsidiaries' ability to distribute dividends to us.
51
MANAGEMENT
Directors, Executive Officers and Corporate Governance.
The following table sets forth certain information with
respect to our directors, executive officers and significant employees:
Name
Age
Position
Lirong Wang
45
President, Chief Executive Officer, Chief Financial Officer, and Director
Lirong Wang
Mr. Wang has been the sole
officer and director of the Company since January 11, 2016. Mr. Wang has also been the Chairman and CEO of Shanghai Muliang Industries
Co., Ltd. since December 2006. From November 2002 to November 2006, Mr. Wang was general manager of Shanghai Aoke Chemical Products
Co., Ltd. Mr. Wang received his bachelor's degree in storage management from Harbin University of Commerce in 1996.
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.
Family Relationships
There are no family relationships between any of our
directors or executive officers.
Certain Legal Proceedings
To our knowledge, no director, nominee for director,
or executive officer of the Company has been a party in any legal proceeding material to an evaluation of his ability or integrity
during the past ten years.
Code of Ethics
The company has not adopted a Code of Ethics applicable
to its Principal Executive Officer and Principal Financial Officer.
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 presently do not have an audit
committee, compensation committee or nominating committee or committee performing similar functions, as our management believes
that until this point it has been premature at the early stage of our management and business development to form an audit, compensation
or nominating committee. Until these committees are established, these decisions will continue to be made by our Board of Directors.
The Company expects to create committees which are compliant with the rules of Nasdaq in connection with its application to the
Nasdaq Capital Market.
Board Leadership Structure and Role in
Risk Oversight
Our Board 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.
52
Executive Compensation.
The following summary compensation table sets forth
the compensation earned by our named executive officers for the years ended December 31, 2018 and 2017.
Summary Compensation
Table
Salary
Bonus
Stock
    Awards
All
    Other Compensation
Total
Name
    and Principal Position
Fiscal
    Year
($)
($)
($)
($)
($)
Lirong
    Wang
2018
17,450
0
0
0
17,450
President, Chief
    Executive Officer,
Chief Financial Officer, Secretary, and Treasurer
2017
18,443
0
0
0
18,443
Compensation of Directors
Directors are permitted
to receive fixed fees and other compensation for their services as directors. The Board of Directors (which currently consists
solely of Lirong Wang) has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, directors
in such capacity.
Employment Agreements
Currently, we do not have an employment
agreement in place with our officers and directors.
Option Grants
We had no outstanding equity awards as of
the end of fiscal years ended December 31, 2018 and 2017.
Option Exercises and Fiscal Year-End Option
Value Table
There were no stock options exercised during
fiscal years ended December 31, 2018 and 2017 by the executive officers.
Outstanding Equity Awards at Fiscal Year-End
Table
We had no outstanding equity awards as of
the end of fiscal years ended December 31, 2018 and 2017.
Long-Term Incentive Plans and Awards
There were no awards made to a named executive
officer in fiscal 2018 and 2017 under any long-term incentive plan.
Director Compensation
Directors are permitted to receive fixed fees and other
compensation for their services as directors. The Board of Directors has the authority to fix the compensation of directors.
Our directors did not receive any compensation for their services as directors for the years ended December
31, 2018 and 2017.
53
PRINCIPAL SHAREHOLDERS
The following table provides
information as to shares of common stock beneficially owned as of June 26, 2019, by:
●
each director;
●
each named executive officer;
●
each person known by us to beneficially own at least 5% of our common stock; and
●
all directors and executive officers as a group.
Beneficial ownership is determined
in accordance with the rules of the SEC. Unless otherwise indicated below, to our knowledge, the persons and entities named in
the table have sole voting and sole investment power with respect to all shares beneficially owned (subject to community property
laws where applicable). Unless otherwise indicated, the address of each beneficial owner listed below is 1958 Qianming East Road,
Fengjing, Jinshan District, Shanghai, China.
Name of Beneficial Owners
Amount and Nature of Beneficial Ownership
Percent of Common Stock
Lirong Wang
36,322,973
64.862
%
All officers and directors as a group (1 persons)
36,322,973
64.862
%
Other 5% shareholders:
None.
(1)
Applicable
    percentages are based on 56,341,953 shares outstanding as of June 26, 2019 adjusted as required by rules of the SEC.
    Beneficial     ownership is determined under the rules of the SEC and generally includes voting or investment power with
    respect to     securities. Shares of common stock subject to options, warrants and convertible notes currently exercisable or
    convertible,     or exercisable or convertible within 60 days are deemed outstanding for computing the percentage of the
    person holding such     securities but are not deemed outstanding for computing the percentage of any other person. Unless
    otherwise indicated in the     footnotes to this table, Company believes that each of the shareholders named in the table has
    sole voting and investment     power with respect to the shares of common stock indicated as beneficially owned by
    them.
54
RELATED PARTY TRANSACTIONS
Account receivable and sales from related
parties
The Company did not
make sales to any related party for the year ended December 31, 2018 and 2017 and for the three months ended March 31, 2019 and
2018. And the Company has no account receivable balance as of March 31, 2019 and 2018.
Account pa
y
able and
purchase
f
rom related parties
For the year
ended December 31, 2018, the Company purchased fertilizer manufacturing equipment of $120,945 from Shanghai Aoke Chemicals
Co., Ltd, an entity controlled by Mr. Lirong Wang, CEO and majority shareholder of the Company.
As
of March 31, 2019 and December 31, 2018, account payable to Shanghai Aoke Chemicals Co., Ltd. were $119,205 and
$116,340.
The Company did not
purchase other material or service from related parties for the year ended December 31, 2018 and 2017.
The
Company did not make any purchase from related parties for the three months ended March 31, 2019.
Due from Related Parties
The Company does not
have balances due from related parties as of March 31, 2019, December 31, 2018 and 2017, respectively.
Due to related party
Outstanding
balance due to Mr. Lirong Wang and Mr. Guohua Lin below are advances from related parties for working capital of the Company which
are due on demand, non-interest bearing, and unsecured, unless further disclosed.
March 31,
December 31,
2019
2018
Relationship
Mr.
    Lirong Wang
680,238
1,442,751
The
    CEO and Chairman / Actual controlling person
Ms. Xueying Sheng
161,403
169,743
Controller/Accounting
    manager of the Company
Mr. Guohua Lin
85,083
3,054
Senior
    management / One of the Company's shareholders
Total
926,724
1,615,547
For
the three months ended March 31, 2019, the Company borrowed $574,295 from Mr. Lirong Wang, and repaid $1,114,501.
For
the three months ended March 31, 2019, the Company borrowed $83,742 from Mr. Guohua Lin, and repaid $271.
On
November 8, 2017, the Company borrowed $31,993 from Ms. Xueying Sheng. The loan is unsecured, without maturity, and bears an interest
rate of 20%.
For
the three months ended March 31, 2019, the Company borrowed $25,976 from Ms. Xueying Sheng and repaid $38,431.
These
loans are due on demand, non-interest bearing, and unsecured.
Independence of the Board of Directors
For a director to be "independent"
under these standards, the Board must affirmatively determine that the director has no material relationship with us, either directly
or as a partner, shareholder, or officer of an organization that has a relationship with us. Applying corporate governance standards,
and all other applicable laws, rules and regulations, the Board of Directors has determined that none of our directors are independent.
This does not constitute an independent board of directors.
55
DESCRIPTION OF SECURITIES
Authorized Capital Stock
Our capital stock shall
consist of 500,000,000 shares of common stock, $0.0001 par value, and 100,000,000 shares of blank check preferred stock, $0.0001
par value. To the fullest extent permitted by the laws of the State of Nevada, as the same now exists or may hereafter be amended
or supplemented, the Board of Directors may fix and determine the designations, rights, preferences or other variations of each
class or series within each class of preferred stock of the Company. We may issue the shares of stock for such consideration as
may be fixed by the Board of Directors.
As of
June 26, 2019, there were 56,341,953 shares of common stock issued and outstanding. There are no shares
of our preferred stock issued and outstanding.
Common Stock
Each share of our common stock entitles its holder to one vote
in the election of each director and on all other matters voted on generally by our stockholders, other than any matter that (1)
solely relates to the terms of any outstanding series of preferred stock or the number of shares of that series and (2) does not
affect the number of authorized shares of preferred stock or the powers, privileges and rights pertaining to the common stock.
No share of our common stock affords any cumulative voting rights. This means that the holders of a majority of the voting power
of the shares voting for the election of directors can elect all directors to be elected if they choose to do so.
Holders of our common stock will be entitled to dividends in
such amounts and at such times as our Board of Directors in its discretion may declare out of funds legally available for the payment
of dividends. We currently intend to retain our entire available discretionary cash flow to finance the growth, development and
expansion of our business and do not anticipate paying any cash dividends on the common stock in the foreseeable future. Any future
dividends will be paid at the discretion of our Board of Directors after taking into account various factors, including:
●
general business conditions;
●
industry practice;
●
our financial condition and performance;
●
our future prospects;
●
our cash needs and capital investment plans;
●
our obligations to holders of any preferred stock we may issue;
●
income tax consequences; and
●
the restrictions Delaware and other applicable laws and our credit arrangements then impose.
If we liquidate or dissolve our business,
the holders of our common stock will share ratably in all our assets that are available for distribution to our stockholders after
our creditors are paid in full and the holders of all series of our outstanding preferred stock, if any, receive their liquidation
preferences in full.
Our common stock has no preemptive rights
and is not convertible or redeemable or entitled to the benefits of any sinking or repurchase fund.
Preferred Stock
We do not have any preferred shares outstanding
as of the date of this prospectus. However, preferred shares may be issued from time to time in one or more series, each consisting
of a number of preferred shares as determined by our Board of Directors, who also may fix the designations, rights, privileges,
restrictions and conditions attached to the shares of each series of preferred shares. The preferred shares of each series shall,
with respect to payment of dividends and distributions of assets in the event of liquidation, dissolution or winding-up of our
company, whether voluntary or involuntary, or any other distribution of our assets among our shareholders for the purpose of winding-up
our affairs, rank on a preference over shares of our common stock and the shares of any other class ranking junior to the preferred
shares.
Transfer Agent and Registrar
The Transfer Agent
for our common stock is West Coast Stock Transfer Co., located at 721 N. Vulcan Ave., Suite 205, Encinitas, CA 92024.
56
MARKET PRICE AND DIVIDENDS ON OUR COMMON
STOCK AND
RELATED STOCKHOLDER MATTERS
Our common stock is currently quoted
on OTCQB under the symbol "MULG'", however, there has been no established public trading market for our
common stock. As of June 26, 2019, the last reported sale price of our shares of common stock on the OTCQB was US$27.00 per
share, and on June 26, 2019 we had 56,341,953 shares of common stock outstanding.
Holders of Capital Stock
As of the date of this prospectus, we had
1,022 holders of our common stock.
Stock Option Grants
We do not have a stock option plan in place and have not granted any stock options at this time.
Dividends
To date, we have not declared
or paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on
our common stock. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our
Board of Directors has the discretion to declare and pay dividends in the future.
Payment of dividends in the future will depend
upon our earnings, capital requirements, and any other factors that our Board of Directors deems relevant.
SHARES ELIGIBLE FOR FUTURE
SALE
Immediately prior
to this offering, there was little to no trading activity in our common stock. Future sales of substantial amounts of common stock
in the public market, or the perception that such sales may occur, could adversely affect the market price of our common stock.
Immediately prior to the offering, there are 56,341,953 shares of common stock outstanding. Upon the completion of the offering,
we will have an aggregate of                   shares of common stock (for the maximum offering amount) or            (for minimum offering amount) shares outstanding
immediately.
All shares sold
in this offering will be freely tradable without restriction or further registration under the Securities Act, except for any shares
purchased by our "affiliates," as that term is defined in Rule 144 under the Securities Act, whose sales would be subject
to the Rule 144 resale restrictions described below, other than the holding period requirement. The remaining shares of common
stock, representing approximately % or % of our outstanding shares, following the maximum offering or minimum offering, respectively,
will be held by our existing shareholders. Many of these shares are "restricted securities" as that phrase is defined
in Rule 144 under the Securities Act. Subject to certain contractual restrictions, including the lock-up agreements described
below, holders of restricted shares will be entitled to sell those shares in the public market pursuant to an effective registration
statement under the Securities Act or if they qualify for an exemption from registration under Rule 144. Sales of these shares
in the public market after the restrictions under the lock-up agreements lapse, or the perception that those sales may occur, could
cause the prevailing market price to decrease or to be lower than it might be in the absence of those sales or perceptions. As
a result of lock-up agreements described below, and the provisions of Rules 144 under the Securities Act, the restricted securities
will be available for sale in the public market.
We, all of our directors and officers and
certain shareholders have agreed with the underwriter, subject to certain exceptions, not to sell, transfer or dispose of, directly
or indirectly, any of our shares of common stock or any securities convertible into or exercisable or exchangeable for shares of
our common stock for a period of 180-days after the date of this prospectus without the prior written consent of the underwriter.
This consent may be given at any time without public notice. Upon expiration of the lock-up period, these shares will
be available for sale in the public market, subject in some cases to applicable volume limitations under Rule 144.
We also agreed to register shares underlying
the Underwriter's Warrants. Once exercised, of which there can be no guarantee, subject to the relative lock up period described
elsewhere in this prospectus, those shares shall be freely tradable without restriction or further registration under the Securities
Act.
57
Rule 144
Some of our stockholders will be forced
to hold their shares of our common stock for at least a six-month period before they are eligible to sell those shares,
and even after that six-month period, sales may not be made under Rule 144 promulgated under the Securities Act unless
we and such stockholders are in compliance with other requirements of Rule 144.
In general, Rule 144 provides that (i) any
of our non-affiliates that has held restricted common stock for at least six months is thereafter entitled to sell its
restricted stock freely and without restriction, provided that we remain compliant and current with our SEC reporting obligations,
and (ii) any of our affiliates, which includes our directors, executive officers and other person in control of us, that has
held restricted common stock for at least six months is thereafter entitled to sell its restricted stock subject to the following
restrictions: (a) we are compliant and current with our SEC reporting obligations, (b) certain manner of sale provisions
are satisfied, (c) a Form 144 is filed with the SEC, and (d) certain volume limitations are satisfied, which limit the
sale of shares within any three-month period to a number of shares that does not exceed the greater of 1% of the total number of
outstanding shares. A person who has ceased to be an affiliate at least three months immediately preceding the sale and who has
owned such shares of common stock for at least one year is entitled to sell the shares under Rule 144 without regard to any of
the limitations described above.
Summary of Shares Available for Future
Sale
The following table summarizes the total
shares potentially available for future sale. To the extent we sell a number of shares of common stock between the minimum and
maximum offering, the below tables will be adjusted proportionately as to numbers of shares available for sale and dates on which
such shares may be sold (as to currently outstanding shares).
Minimum Offering Shares
Date Available for Sale
Currently Outstanding Shares of Common Stock Subject to Lock-up Agreement:
(1)
After 180-day from the date of effectiveness or commencement of sales of the public offering.
Shares Offered in this Offering:
After the completion of this offering, these shares will be freely tradable.
Maximum Offering Shares
Date Available for Sale
Currently Outstanding Shares of Common Stock Subject to Lock-up Agreement:
(1)
After 180-days from the date of effectiveness or commencement of sales of the public offering.
Shares Offered in this Offering:
After the completion of this offering, these shares will be freely tradable.
(1)
The
number of shares of common stock outstanding as of June 26, 2019.
58
UNDERWRITING
In connection with
this offering, we will enter into an underwriting agreement with Network 1 Financial Securities, Inc., which we sometimes refer
to herein as the Underwriter. The Underwriter is not purchasing or selling any securities offered by this prospectus but will assist
us in this offering on a "best efforts" basis. The Underwriter has no obligation to buy any of the common stock from
us nor are they required to arrange the purchase or sale of any specific number or dollar amount of the common stock, but have
agreed to use their "best efforts" to arrange for the sale of a minimum of [ ] shares of common stock and a maximum
of [ ] shares of common stock. The Underwriter may retain other brokers or dealers to act as sub-agents on its behalf in connection
with this offering and may pay any sub-agent a solicitation fee with respect to any securities placed by it. Affiliates of the
company and affiliates and associated persons of the Underwriter may invest in this offering on the same terms and conditions as
the public investors participating in this offering, and any common stock purchased will make up a portion of the minimum offering
needed to complete this offering.
The shares of common
stock are being offered on a "best efforts" basis, meaning that the Underwriter is not obligated to purchase any common
stock. No common stock will be sold unless at least a minimum of [ ] shares of common stock have been sold no later than [ ], 20[
], unless extended until [ ], 20[ ] with the consent of our board of directors. All monies collected for subscriptions will be
held in a separate escrowed bank account at [ ]. [ ] shall serve as escrow agent. The monies shall remain in the bank account until
the total amount of [ ] shares of common stock have been sold. Any checks for the purchase of shares should be made payable to
"[ ] Escrow Account" The Underwriter will instruct their customers to transfer funds from their respective accounts
directly to the escrow agent by wire transfer and will instruct other purchasers of the shares to make checks payable to "[
] Escrow Account". Upon receipt, the Escrow Agent shall promptly deposit funds in the escrowed bank account. Upon receipt
of funds sufficient for the sale of [ ] shares and satisfaction of all other closing conditions, the funds may be transferred to
our business account. In the event the minimum total of [ ] shares is not sold prior to [ ], unless extended until [ ] with the
consent of our board of directors, all monies will be returned to investors, without interest or deduction, within one business
day.
Fees and Expenses
The following table
shows the public offering price, Underwriter commissions and proceeds, before expenses, to us.
Price
per Share
Commission
per Share
Proceeds to
Company
Minimum Offering ($6,000,000)
$
$
$
Maximum Offering ($15,000,000)
$
$
$
We and the Underwriter
have agreed to pay commissions of 6.5% per share (or $[ ] per share) on the offering proceeds. We have agreed to pay to the Underwriter
upon the consummation of the offering, a non-accountable expense allowance equal to 1.5% of the gross proceeds of the offering.
We have also agreed to pay the Underwriter reasonable out-of-pocket expenses including but not limited to, (i) reasonable travel
and out-of-pocket expenses, including clearing charges; (ii) reasonable fees of legal counsel incurred by the Underwriter in connection
with the offering. The total accountable expenses shall not exceed $125,000. We have paid an advance of $75,000 to the Underwriter
to be applied to the Underwriter' anticipated out-of-pocket expenses. The advance will be returned to us to the extent such
out-of-pocket accountable expenses are not actually incurred in accordance with FINRA Rule 5110(f)(2)(C).
Underwriter Warrants
We have also agreed
to grant to the Underwriter a warrant covering a number of shares equal to 10% of the aggregate number of the Shares sold in the
offering. The Underwriter warrants will be exercisable, in whole or in part, during a period commencing on the effective date
of the registration statement and will expire on the five-year anniversary of the effective date of the offering. The Underwriter
warrants will be exercisable at a price equal to 120% of the offering price and shall not be redeemable. We have registered the
shares underlying the Underwriter warrants in the registration statement. The Underwriter warrants may not be sold, transferred,
assigned, pledged or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would
result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the
effective date of the registration statement , of which this prospectus forms a part (in accordance with FINRA Rule 5110), except
that they may be assigned, in whole or in part, to any successor, officer, manager, member, or partner of the underwriter, and
to members of the syndicate or selling group and their respective officers, managers, members or partners. The Underwriter warrants
may be exercised as to all or a lesser number of shares, and will provide for cashless exercise. The Underwriter warrants shall
further provide for adjustment in the number and price of such warrants (and the share of the common stock underlying such warrants)
in the event of recapitalization, merger or other structural transaction to prevent dilution.
Terms of the Offering
We are offering, on
a best efforts basis, a minimum of US$6,000,000 and a maximum of US$15,000,000. The offering is being made without a firm commitment
by the Underwriter, which has no obligation or commitment to purchase any securities. The Underwriter is not required to sell
any specific number of dollar amount of the common stock but will use its best efforts to sell of the common stock offered. The
common stock is being offered for a period through and including [   ], unless extended until [   ] with the
consent of our board of directors. If the minimum offering amount is not raised prior to [   ], or [   ] if
the offering is extended, all subscription funds from the escrow account will be returned to investors promptly without interest
(since the funds are being held in a non-interest bearing account) or deduction of fees. The offering may terminate on the earlier
of (i) any time after the minimum offering amount of our common stock is raised, or (ii) [ ], unless extended by our board of
directors until [   ]. Reasons the board may consider in determining whether to extend or terminate the offering may
include, but are not limited to: amount of funds raised, potential to raise additional capital, and response to the offering as
of that date. If we can successfully raise the minimum offering amount within the offering period, the proceeds from the offering
will be released to us.
59
Escrow Agent and Deposit of Offering Proceeds
The Underwriter and
the Company have agreed in accordance with the provisions of SEC Rule 15c2-4 to cause all funds received by the Underwriter for
the sale of the common stock to be promptly deposited in a non-interest bearing escrow account ("Escrow Account") maintained
by [   ] (the "Escrow Agent") as escrow agent for the investors in the offering, who will deposit the funds received
in the Escrow Account into a special bank account established by [  ]. The purpose of the Escrow Account is for (i) the deposit
of all subscription monies (checks or wire transfers) which are received by the underwriter from prospective purchasers of our
offered common stock and are delivered by the underwriter to the Escrow Agent, (ii) the holding of amounts of subscription monies
which are collected through the banking system, and (iii) the disbursement of collected funds. The Escrow Agent will exercise signature
control on the escrow account and will act based on joint instructions from our Company and the Underwriter. On the closing date
for the offering, and presuming that all conditions to closing have been satisfied (such as NASDAQ approval and other conditions
described herein), proceeds in the bank account maintained will be delivered to our company.
The Underwriter shall
promptly deliver to the Escrow Agent all funds in the form of checks or wire transfers which it receives from prospective purchasers
of our common stock by noon of the next business day following receipt where internal supervisory review is conducted at the same
location at which subscription documents and funds are received. Simultaneously with each deposit to the Escrow Account, the Underwriter
shall inform the Escrow Agent about the subscription information for each prospective purchaser. Upon the Escrow Agent's
receipt of such monies, they shall be credited to the Escrow Account and then deposited to the bank account at [ ]. All checks
delivered to the Escrow Agent shall be made payable to "[   ] Escrow Account". The Escrow Agent shall not be required
to accept for credit to the Escrow Account or for deposit into the Escrow Account checks which are not accompanied by the appropriate
subscription information. Wire transfers representing payments by prospective purchasers shall not be deemed deposited in the Escrow
Account until the Escrow Agent has received in writing the subscription information required with respect to such payments.
No interest will be
available for payment to either us or the investors (since the funds are being held in a non-interest bearing account). All subscription
funds will be held in trust pending the raising of the minimum offering amount and no funds will be released to us until the completion
of the offering. Release of the funds to us is based upon the Escrow Agent reviewing the records of the depository institution
holding the escrow to verify that the funds received have cleared the banking system prior to releasing the funds to us. All subscription
information and subscription funds through checks or wire transfers should be delivered to the Escrow Agent. Failure to do so will
result in subscription funds being returned to the investor. In event that the offering is terminated, all subscription funds from
the escrow account will be returned to investors.
If we terminate this
offering, all amounts will be promptly returned to the investors as described below. In the event of any dispute between us and
the Underwriter, including whether and how funds are to be reimbursed, the Escrow Agent is entitled to petition a court of competent
jurisdiction to resolve any such dispute.
Investors must pay in
full for the common stock at the time of investment. Payment for the shares may be made (i) by check, bank draft or money order
made payable to "[   ] Escrow Account" and delivered to the Underwriter no less than four business days before the date
of closing, or (ii) by wire made payable to "[ ] Escrow Account". The checks, bank drafts and money orders will be
forwarded/returned by the Underwriter and their dealers to the Escrow Agent by noon of the following business day. The Underwriter
will inform prospective purchasers of the anticipated date of closing.
Proceeds deposited in
escrow with the Escrow Agent may not be withdrawn by investors prior to the earlier of the closing of the offering or the date
the offering is terminated. If the offering is withdrawn or canceled or terminated and proceeds therefrom are not received by us
on or prior to the date the offering is terminated, all proceeds will be promptly returned by the Escrow Agent without interest
or deduction to the persons from which they are received (within one business day) in accordance with applicable securities laws.
All such proceeds will be placed in a non-interest bearing account pending such time.
Electronic Offer, Sale and Distribution of Ordinary Shares
A prospectus in electronic
format may be made available on the websites maintained by the Underwriter. In addition, the common stock may be sold by the Underwriter
to securities dealers who resell the common stock to online brokerage account holders. Other than the prospectus in electronic
format, the information on the Underwriter's website and any information contained in any other website maintained by the
Underwriter is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved
and/or endorsed by us or the Underwriter in its capacity as Underwriter and should not be relied upon by investors.
60
Lock-up Agreements
We, each of our directors
and officers and holders of ten percent or more of our common stock on a fully diluted basis immediately prior to the consummation
of this offering have agreed or are otherwise contractually restricted for a period of 180 days after the date of this prospectus,
without the prior written consent of the Underwriter not to directly or indirectly:
●
issue (in the case of us), offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any shares of our common stock or other capital stock or any securities convertible into or exercisable or exchangeable for our common stock or other capital stock;
●
in the case of us, file or cause the filing of any registration statement under the Securities Act with respect to any shares of our common stock or other capital stock or any securities convertible into or exercisable or exchangeable for our common stock or other capital stock, other than registration statements on Form S-8 filed with the SEC after the closing date of this offering; or
●
enter into any swap or other agreement, arrangement, hedge or transaction that transfers to another, in whole or in part, directly or indirectly, any of the economic consequences of ownership of our common stock or other capital stock or any securities convertible into or exercisable or exchangeable for our common stock or other capital stock,
whether any transaction described in any
of the foregoing bullet points is to be settled by delivery of our common stock or other capital stock, other securities, in cash
or otherwise, or publicly announce an intention to do any of the foregoing.
There are no existing
agreements between the Underwriter and any person who will execute a lock-up agreement in connection with this offering providing
consent to the sale of shares prior to the expiration of the lock-up period. The lock up does not apply to the issuance of shares
upon the exercise of rights to acquire shares of common stock pursuant to any existing stock option or the conversion of any of
our preferred convertible stock.
Procedures and Requirements for Subscription
If you decide to subscribe for any shares
in this offering, you must:
●
execute and deliver a subscription agreement; and
●
deliver the subscription price to the Company by cashier's check or wire transfer of immediately available funds.
The subscription agreement
requires you to disclose your name, address, social security number, telephone number, email address, number of shares you are
purchasing, and the price you are paying for your shares.
Upon the Company's
acceptance of a subscription and receipt of full payment, and subject to the timing qualification set forth above, the Company
shall countersign the subscription agreement and issue a stock certificate along with a copy of the subscription agreement.
We have the right to
accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will
be returned immediately by us to the subscriber, without interest or deductions. Subscriptions for securities will be accepted
or rejected within three (3) business days after we receive them.
Offer Restrictions outside the United States
Other than in the United
States, no action has been taken by us or the Underwriter that would permit a public offering of the securities offered by this
prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be
offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection
with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that
will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus
comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this
prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by
this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.
Australia.
This
                                                               prospectus is not a product disclosure statement, prospectus or other type of disclosure document for the purposes of
                                                               Corporations Act 2001 (Commonwealth of Australia) (the "Act") and does not purport to include the information
                                                               required of a product disclosure statement, prospectus or other disclosure document under Chapter 6D.2 of the Act. No product
                                                               disclosure statement, prospectus, disclosure document, offering material or advertisement in relation to the offer of the
                                                               shares has been or will be lodged with the Australian Securities and Investments Commission or the Australian Securities
                                                               Exchange.
Accordingly,
(1) the offer of the shares under this prospectus may only be made to persons: (i) to whom it is lawful to offer the shares without
disclosure to investors under Chapter 6D.2 of the Act under one or more exemptions set out in Section 708 of the Act, and (ii)
who are "wholesale clients" as that term is defined in section 761G of the Act, (2) this prospectus may only be made
available in Australia to persons as set forth in clause (1) above, and (3) by accepting this offer, the offeree represents that
the offeree is such a person as set forth in clause (1) above, and the offeree agrees not to sell or offer for sale any of the
shares sold to the offeree within 12 months after their issue except as otherwise permitted under the Act.
Canada.
The shares may not be offered, sold or distributed, directly or indirectly, in any province or territory of Canada other than
the provinces of Ontario and Quebec or to or for the benefit of any resident of any province or territory of Canada other than
the provinces of Ontario and Quebec, and only on a basis that is pursuant to an exemption from the requirement to file a prospectus
in such province, and only through a dealer duly registered under the applicable securities laws of such province or in accordance
with an exemption from the applicable registered dealer requirements.
61
Cayman
Islands.
This prospectus does not constitute a public offer of the shares, whether by way of sale or subscription, in the
Cayman Islands. Each underwriter has represented and agreed that it has not offered or sold, and will not offer or sell, directly
or indirectly, any shares to any member of the public in the Cayman Islands.
European
Economic Area.
In relation to each Member State of the European Economic Area that has implemented the Prospectus
Directive, or a Relevant Member State, from and including the date on which the Prospectus Directive is implemented in that
Relevant Member State, or the Relevant Implementation Date, an offer of the shares to the public may not be made in that
Relevant Member State prior to the publication of a prospectus in relation to the shares that has been approved by the
competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and the
competent authority in that Relevant Member State has been notified, all in accordance with the Prospectus Directive, except
that it may, with effect from and including the Relevant Implementation Date, make an offer of the shares to the public in
that Relevant Member State at any time,
●
to
legal entities that are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose
corporate purpose is solely to invest in securities;
●
to
any legal entity that has two or more of (1) an average of at least 250 employees during the last financial year, (2) a total
balance sheet of more than €43,000,000, and (3) an annual net turnover of more than €50,000,000, as shown in its last
annual or consolidated accounts;
●
to
fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive; or
●
in
any other circumstances that do not require the publication by the company of a prospectus pursuant to Article 3 of the Prospectus
Directive;
provided
that no such offer of shares shall result in a requirement for the publication by the company of a prospectus pursuant to Article
3 of the Prospectus Directive.
For
purposes of the above provision, the expression "an offer of shares to the public" in relation to any shares in any
Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer
and the shares to be offered so as to enable an investor to decide to purchase or subscribe the shares, as the same may be varied
in that Member State by any measure implementing the Prospectus Directive in that Member State, and the expression "Prospectus
Directive" means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.
Hong
Kong.
The shares may not be offered or sold by means of this document or any other document other than (i) in circumstances
that do not constitute an offer or invitation to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong
Kong) or the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong), or (ii) to "professional investors" within
the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other
circumstances that do not result in the document being a "prospectus" within the meaning of the Companies Ordinance
(Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the shares may be issued or may be in the
possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), that is directed at, or the
contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of
Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or
only to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong
Kong) and any rules made thereunder.
Malaysia
The shares have not been and
may not be approved by the securities commission Malaysia, or SC, and this document has not been and will not be registered as
a prospectus with the SC under the Malaysian capital markets and services act of 2007, or CMSA. Accordingly, no securities or
offer for subscription or purchase of securities or invitation to subscribe for or purchase securities are being made to any person
in or from within Malaysia under this document except to persons falling within any of paragraphs 2(g)(i) to (xi) of schedule
5 of the CMSA and distributed only by a holder of a capital markets services license who carries on the business of dealing in
securities and subject to the issuer having lodged this prospectus with the SC within seven days from the date of the distribution
of this prospectus in Malaysia. The distribution in Malaysia of this document is subject to Malaysian laws. Save as aforementioned,
no action has been taken in Malaysia under its securities laws in respect of this document. This document does not constitute
and may not be used for the purpose of a public offering or an issue, offer for subscription or purchase, invitation to subscribe
for or purchase any securities requiring the approval of the sc or the registration of a prospectus with the SC under the CMSA.
People's
Republic of China.
This prospectus may not be circulated or distributed in the PRC and the shares may
not be offered or sold, and will not offer or sell to any person for re-offering or resale directly or indirectly to any resident
of the PRC except pursuant to applicable laws and regulations of the PRC. For the purpose of this paragraph, PRC does not include
Taiwan and the special administrative regions of Hong Kong and Macau.
62
Singapore
The
securities represented may not be offered or sold, nor may any document or other material in connect with such securities be distributed,
either directly or indirectly, (i) to persons in Singapore other than under circumstances in which such offer or sale does not
constitute an offer or sale of such securities to the public in Singapore or (ii) to the public or any member of the public in
Singapore other than pursuant to, and in accordance with the conditions of, an exemption invoked under division 5a or part iv
of the companies act, chapter 50 of Singapore and to persons to whom the securities may be offered or sold under such exemption.
United
Kingdom.
An offer of the shares may not be made to the public in the United Kingdom within the meaning
of Section 102B of the Financial Services and Markets Act 2000, as amended, or the FSMA, except to legal entities that are authorized
or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest
in securities or otherwise in circumstances that do not require the publication by the company of a prospectus pursuant to the
Prospectus Rules of the Financial Services Authority, or the FSA.
An
invitation or inducement to engage in investment activity (within the meaning of Section 21 of FSMA) may only be communicated
to persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services
and Markets Act 2000 (Financial Promotion) Order 2005 or in circumstances in which Section 21 of FSMA does not apply to the company.
All
applicable provisions of the FSMA with respect to anything done by the underwriter in relation to the shares must be complied
with in, from or otherwise involving the United Kingdom.
LEGAL MATTERS
The validity of the common
shares offered hereby will be passed upon for us by Ortoli Rosenstadt LLP. Certain legal matters as to PRC law will be passed
upon for us by                      . Ortoli Rosenstadt LLP may rely upon                     with respect to matters governed by PRC law.
The current address of Ortoli Rosenstadt LLP is 366 Madison Avenue, 3rd Floor, New York, NY 10017. The
current address of                     is                 .
EXPERT
The consolidated
financial statements for each of the years ended December 31, 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 WWC, PC, an independent registered public
accounting firm, given on their authority as experts in accounting and auditing. The current address of WWC, PC is located is
2010 Pioneer Court, San Mateo, CA 94403.
The consolidated financial statements for
the years ended December 31, 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 WWC, PC, given on their authority as experts in accounting and auditing.
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, managing or principal underwriter, 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
. Those filings are also available to the public on our corporate website at
www.ccmus.com
. 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.
63
INDEX TO FINANCIAL STATEMENTS
PAGE
Report of Independent Registered Accounting Firm
F-2
Consolidated Balance Sheets as of December 31, 2018 and 2017
F-3
Consolidated Statements of
    Operations and Comprehensive Loss for the years ended December 31, 2018 and 2017
F-4
Consolidated Statements of
    Stockholders' Equity for the years ended December 31, 2018 and 2017
F-5
Consolidated Statements of Cash
    Flows for the years ended December 31, 2018 and 2017
F-6
Notes to Consolidated Financial Statements
F-7 – F-28
Consolidated Balance Sheets as of March 31, 2019 (Unaudited) and December 31, 2018 (Audited)
F-29
Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2019 and 2018
F-30
Condensed Statements of Changes in Stockholders' Equity for the year ended December 31, 2018 and three months ended March 31, 2019
F-31
Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018
F-32
Notes to Consolidated Financial Statements
F-33
–
    F-55
F-
1
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To:
The Board of Directors and Stockholders of
Muliang Agritech, Inc.
Opinion on the Financial Statements
We have audited the accompanying
consolidated balance sheets of Muliang Agritech, Inc. (the Company) as of December 31, 2018 and 2017, and the related
consolidated statements of operations and comprehensive loss, stockholders' equity, and cash flows for each of the
years in the two-year period ended December 31, 2018, and the related notes (collectively referred to as the financial
statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the two years
ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the
Company had incurred substantial losses during the year, and has a working capital deficit, which raises substantial doubt about
its ability to continue as a going concern. Management's plan in regards to this matters are described in Note 1. These financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's 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 audits 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 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 financial statements. We believe that our audits provide a
reasonable basis for our opinion.
WWC, P.C.
Certified Public Accountants
San Mateo, CA
April 16, 2019
We have served as the Company's auditor since March 15,
2016.
F-
2
MULIANG AGRITECH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
December 31,
2018
2017
Audited
Audited
ASSETS
Current Assets:
Cash and cash equivalents
$
12,778
$
9,051
Accounts receivable, net
4,090,887
358,516
Inventories
446,630
412,648
Prepayment
1,491,102
23,076
Other receivables, net
102,733
67,597
Total Current Assets
6,144,130
870,888
Property, plant and equipment, net
14,927,323
16,216,429
Intangible assets, net
3,213,130
2,505,967
Other assets and deposits
74,268
454,771
Deferred tax asset
454,751
-
Total Assets
$
24,813,602
$
20,048,055
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term loans
$
150,515
$
159,074
Current portion of long-term debt
5,453,435
1,998,033
Accounts payable and accrued payables
4,585,732
3,975,899
Advances from customers
211,114
21,986
Income tax payable
430,181
-
Other payables
816,724
982,909
Due to related party
1,615,547
4,441,087
Total Current Liabilities
13,263,248
11,578,988
Long-term loans
3,454,543
7,538,787
Total Liabilities
16,717,791
19,117,775
Stockholders' Equity:
Common stock, $0.0001 par value, 500,000,000 shares authorized, 56,341,718 and 56,000,000 shares issued and outstanding as of December 31, 2018 and 2017, respectively.
5,634
5,600
Additional paid in capital
19,398,854
16,817,585
Accumulated deficit
(11,773,401
)
(16,118,404
)
Accumulated other comprehensive gain
344,187
240,402
Stockholders' Equity  - Muliang Agritech, Inc. and Subsidiaries
7,975,274
945,183
Noncontrolling interest
120,537
(14,903
)
Total Stockholders' Equity
8,095,811
930,280
Total Liabilities and Stockholders' Equity
$
24,813,602
$
20,048,055
See accompanying notes to consolidated financial
statements
F-
3
MULIANG AGRITECH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
For the Years Ended
December 31,
2018
2017
Revenues
$
13,205,024
$
737,563
Cost of goods sold
7,660,026
591,236
Gross profit
5,544,998
146,327
Operating expenses:
General and administrative expenses
1,100,271
1,511,019
Selling expenses
531,771
163,042
Total operating expenses
1,632,042
1,674,061
Income (Loss) from operations
3,912,956
(1,527,734
)
Other income (expense):
Interest expense
(421,054
)
(508,818
)
Subsidy income
756,197
-
Rental income, net
228,208
98,418
Other income (expense), net
(28,030
)
(70,390
)
Total other income (expense)
535,321
(480,790
)
Income (Loss) before income taxes
4,448,277
(2,008,524
)
Income taxes
(25,542
)
26,334
Net income (loss)
4,473,819
(2,034,858
)
Net income (loss) attributable to non-controlling interest
128,816
(18,406
)
Net income (loss) attributable to Muliang Agritech, Inc. common stockholders
$
4,345,003
$
(2,016,452
)
Other comprehensive income (loss):
Unrealized foreign currency translation adjustment
103,785
147,936
Total Comprehensive loss
$
4,577,604
$
(1,886,922
)
Total comprehensive (income) loss attributable to non-controlling interests
135,440
6,214
Total comprehensive (income) loss attributable to Muliang Agritech, Inc. common stockholders
4,442,164
(1,893,136
)
Earnings per common share
Basic and diluted
0.08
(0.04
)
Weighted average common shares outstanding
Basic
56,170,859
56,000,000
Diluted
56,170,859
56,000,000
See accompanying notes to consolidated financial
statements
F-
4
MULIANG
AGRITECH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY
Common Stock
Additional
Paid-in
Accumulated
Accumulated
Other
Comprehensive
Non-
controlling
Shares
Amount
Capital
Deficit
Income (Loss)
Interest
Total
Balance, December 31, 2016
56,000,000
$
5,600
$
16,817,585
$
(14,101,952
)
$
92,466
$
(2,711
)
$
2,810,988
Net income
-
-
-
(2,016,452
)
(18,406
)
(2,034,858
)
Foreign currency translation adjustment
-
-
-
-
147,936
6,214
154,150
Balance, December 31, 2017
56,000,000
$
5,600
$
16,817,585
$
(16,118,404
)
$
240,402
$
(14,903
)
$
930,280
Issuance of common stock
341,718
34
2,581,269
-
-
-
2,581,303
Net income
-
-
-
4,345,003
-
128,816
4,473,819
Foreign currency translation adjustment
-
-
-
-
103,785
6,624
110,409
Balance, December 31, 2018
56,341,718
$
5,634
$
19,398,854
$
(11,773,401
)
$
344,187
$
120,537
$
8,095,811
See accompanying notes to consolidated financial
statements
F-
5
MULIANG AGRITECH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year  Ended
December 31,
2018
2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)
$
4,473,819
$
(2,034,858
)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization
849,792
649,976
Bad debt expense(reverse)
(6,880
)
104,888
Deferred income tax assets
(472,749
)
Changes in assets and liabilities:
Restricted cash
-
1,063
Accounts receivable
(3,893,269
)
17,859
Inventories
(58,409
)
143,989
Prepayment
20,319
(268,096
)
Other receivables
(40,308
)
(46,077
)
Accounts payable and accrued payables
36,002
(1,339,649
)
Advances from customers
197,844
12,321
Income tax payable
447,207
-
Other payables
270,176
1,042,996
Net cash provided by (used in) operating activities
1,823,544
(1,715,588
)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangible assets
(936,238
)
(651
)
Purchase of biological assets
(18,877
)
-
Investment in construction in progress
(1,514,586
)
-
Net cash used in investing activities
(2,469,701
)
(648
)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowing  of short-term loans
-
547,580
Proceeds from third party individual
1,812,718
-
Proceeds from (Repayment to) related party
(3,109,372
)
2,191,534
Repayment of short-term loans
(754,422
)
(1,030,783
)
Capital contribution from shareholders
2,599,413
-
Net cash provided by financing activities
548,337
1,708,331
EFFECT OF EXCHANGE RATE CHANGES ON CASH
101,547
(254
)
NET INCREASE (DECREASE) IN CASH
3,727
(8,162
)
CASH, BEGINNING OF YEAR
9,051
17,213
CASH, END OF YEAR
12,778
9,051
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Cash paid for interest expense, net of capitalized interest
$
1,579,634
$
589,163
Cash paid for income tax
$
-
$
-
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES
Long term loan transfer to short term loan
$
4,459,831
$
-
Debt to stock
$
326,550
$
-
See accompanying notes to consolidated financial
statements
F-
6
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS
Muliang Agritech, Inc. formerly known as Mullan
Agritech, Inc and previously M&A Holding Corporation. ("Muliang Agritech") was incorporated under the laws of the
State of Nevada on November 5, 2014. Muliang Agritech's core business activities of developing, manufacturing, and selling
organic fertilizers and bio-organic fertilizers for use in agricultural industry are conducted through several indirectly owned
subsidiaries in China.
On June 9, 2016, Mullan Agritech filed a Certificate
of Amendment to its Articles of Incorporation (the "Amendment") with the Secretary of State of the State of Nevada,
changing its name from "M & A Holding Corporation," to "Mullan Agritech, Inc." On April 5, 2019, Company
filed another Certificate of Amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada, changing
its name from "Mullan Agritech, Inc." to "Muliang Agritech, Inc."
On July 11, 2016, the Financial Industry
Regulatory Authority (FINRA) effected in the marketplace the change of the corporate name from "M & A Holding Corporation,"
to "Mullan Agritech, Inc.", and effective on such date. Mullan Agritech trades under its new name, Mullan Agritech,
Inc.
History
Shanghai Muliang Industry Co., Ltd. (referred
to herein as "Muliang Industry") was incorporated in PRC on December 7, 2006 as a limited liability company, owned
95% by Lirong Wang and 5% by Zongfang Wang. Muliang Industry through its own operations and its subsidiaries is engaged in the
business of developing, manufacturing, and selling organic fertilizers and bio-organic fertilizers for use in the agricultural
industry.
On May 27, 2013, Muliang Industry entered
into and consummated an equity purchase agreement whereby it acquired 99% of the outstanding equity of Weihai Fukang Bio-Fertilizer
Co., Ltd. ("Fukang"), a corporation organized under the laws of the People's Republic of China. Fukang was incorporated
in Weihai City, Shandong Province on January 6, 2009. Fukang is focused on the distribution of organic fertilizers and the development
of new bio-organic fertilizers. As a result of the completion of the transaction, Fukang became a 99% owned subsidiary of Muliang
Industry, with the remaining 1% equity interest owned by Ms. Hui Song.
On July 11, 2013, Muliang Industry
established a wholly owned subsidiary, Shanghai Muliang Agritech Development Co., Ltd. ("Agritech Development")
in Shanghai, China. On November 6, 2013, Muliang Industry sold 40% of the outstanding equity of Agritech Development to Mr.
Jianping Zhang for consideration of approximately $65,000 or RMB 400,000. Agritech Development does not currently conduct any
operations.
On July 17, 2013, Muliang Industry entered
into an equity purchase agreement to acquire 100% of the outstanding equity of Shanghai Zongbao Environmental Construction Co.,
Ltd. ("Zongbao") with consideration of approximately $3.2 million or RMB 20 million, effectively becoming the wholly-owned
subsidiary of Muliang Industry. Zongbao was incorporated in Shanghai on January 25, 2008. Zongbao processes and distributes organic
fertilizers. Zongbao wholly owns, Shanghai Zongbao Environmental Construction Co., Ltd. Cangzhou Branch ("Zongbao Cangzhou").
On August 21, 2014, Muliang Agricultural
Limited ("Muliang HK") was incorporated in Hong Kong as an investment holding company.
January 27, 2015, Muliang HK incorporated
a wholly foreign-owned enterprise, Shanghai Mufeng Investment Consulting Co., Ltd ("Shanghai Mufeng"), in the People's
Republic of China ("PRC").
F-
7
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS (CONTINUED)
On July 8, 2015, Mullan Agritech entered
into certain stock purchase agreement with Muliang Agriculture, Inc., pursuant to which Mullan Agritech, for a consideration of
$5,000, acquired 100% interest in Muliang HK and its wholly-owned subsidiary Shanghai Mufeng. Both Muliang HK and Shanghai Mufeng
are controlled by the Company's sole officer and director, Lirong Wang.
On July 23, 2015, Muliang Industry established
a wholly owned subsidiary, Shanghai Muliang Agricultural Sales Co., Ltd. ("Muliang Sales") in Shanghai, China.
On September 3, 2015, Muliang Agritech effected
a split of its outstanding common stock resulting in an aggregate of 30,105,000 shares outstanding of which 24,000,000 were owned
by Chenxi Shi the founder of Muliang Agritech and its sole officer and director. The remaining 6,105,000 were held by a total of
39 investors.
On January 11, 2016, Muliang Agritech issued
25,895,000 shares of its common stock to Lirong Wang for an aggregate consideration of $64,737.50. On the same date, Chenxi Shi,
the sole officer and director of Muliang Agritech on that date, transferred 24,000,000 shares of the common stock of the Company
held by him to Lirong Wang for $800 pursuant to a transfer agreement.
On February 10, 2016, Shanghai Mufeng entered
into a set of contractual agreements known as Variable Interest Entity ("VIE") Agreements, including (1) Exclusive
Technical Consulting and Service Agreement, (2) Equity Pledge Agreement, and (3) Call Option Cooperation Agreement, with Muliang
Industry, and its Principal Shareholders. As a result of the Stock Purchase Agreement and the set of VIE Agreements, Shanghai Muliang
Industry Co., Ltd., along with its consolidated subsidiaries, became entities controlled by Muliang Agritech whereby Muliang Agritech
would derive all substantial economic benefit generated by Muliang Industry and its subsidiaries.
As a result, Muliang Agritech has a direct
wholly-owned subsidiary, Muliang HK and an indirectly wholly owned subsidiary Shanghai Mufeng. Through its VIE Agreements, Muliang
Agritech exercises control over Muliang Industry. Muliang Industry has two wholly-owned subsidiaries (Zongbao and Muliang Sales),
one 99% owned subsidiary (Fukang), one 60% owned subsidiary (Agritech Development), and one indirectly wholly owned subsidiary
Zongbao Cangzhou.
On June 6, 2016, Muliang Industry established
a wholly-owned subsidiary, namely, Muliang (Ningling) Bio-chemical Fertilizer Co. Ltd ("Ningling Fertilizer") in Henan
Province, the central plain of China. Ningling Fertilizer, with registered capital of RMB 20,000,000, is setup for a new production
line of bio-chemical fertilizer and has not begun any operation yet. Ningling Fertilizer was subsequently deregistered as the Company
had no further plans to begin operations.
On July 7, 2016, Muliang Industry established
a subsidiary, namely, Zhonglian Huinong (Beijing) Technology Co., Ltd. ("Zhonglian") in Beijing, China. Muliang Industry
owns 65% shares of Zhonglian, and a third-party company, Zhongrui Huilian (Beijing) Technology Co., Ltd. owns the other 35% shares.
Zhonglian, with registered capital of RMB 10,000,000, was established to develop and operate an online agricultural products trading
platform.
On October 27, 2016, Muliang Industry
established a wholly-owned subsidiary, Yunnan Muliang Animal Husbandry Development Co., Ltd. ("Yunnan Muliang")
in Yunnan Province, China. Muliang Industry owns 55% shares of Yunnan Muliang, and a third-party company, Shuangbai County
Development Investment Co., Ltd. owns the other 45% shares. On December 8, 2018, Muliang Industry acquired 25% shares of
Yunnan Muliang with a consideration of $727,125(RMB5,000,000) from Shuangbai County Development Investment Co., Ltd. And the
other 20% shares were acquired by Lirong Wang. Yunnan Muliang, with registered capital of RMB 20,000,000, was established for
the development of sales in the western region of China.
F-
8
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS (CONTINUED)
Muliang HK, Shanghai Mufeng, Muliang Industry,
Zongbao, Zongbao Cangzhou, Muliang Sales, Fukang, Agritech Development, Muliang Agritech, Zhonglian, and Yunnan Muliang are referred
to as subsidiaries the Company and its consolidated subsidiaries are collectively referred to herein as the "Company",
"we" and "us", unless specific reference is made to an entity.
The consolidated financial statements were
prepared assuming that the Company has controlled Muliang HK and its intermediary holding companies, operating subsidiaries, and
variable interest entities: Shanghai Mufeng, Muliang Industry, Zongbao, Zongbao Cangzhou, Muliang Sales, Fukang, and Agritech Development,
from the first period presented. The transactions detailed above have been accounted for as reverse takeover transaction and a
recapitalization of the Company; accordingly, the Company (the legal acquirer) is considered the accounting acquiree and Muliang
HK (the legal acquiree) is considered the accounting acquirer. No goodwill has been recorded. As a result of this transaction,
the Company is deemed to be a continuation of the business of Muliang HK, Shanghai Mufeng, and Muliang Industry.
Liquidity and Going Concern
The accompanying financial statements have been prepared in conformity with generally accepted accounting
principles which contemplate continuation of the Company as a going-concern basis. The going-concern basis assumes that assets
are realized
, and liabilities are extinguished in the
ordinary course of business at amounts disclosed in the financial statements. The Company's ability to continue as a going
concern depends upon the liquidation of current assets. For the years ended December 31, 2018 and 2017, the Company reported net
income of $4,473,819 and net loss of $2,034,858, respectively. The Company had working capital deficit of approximately $7.12 million
and $10.71 million as of December 31, 2018 and December 31, 2017. Although the Company had net cash inflow of $1,823,544 and net
cash outflow of $1,715,588 from its operating activities during the years ended December 31, 2018 and 2017. The Company generated
income from operation of $3,912,956 and incurred interest expense of $421,054 for the year ended December 31, 2018. The overall
situation of the Company still raises doubt as to whether the Company may continue as a going concern.
In an effort to improve its financial position,
the Company is working to obtain new loans from banks and related parties, renew its current loans, and to improve its operations
upon its modified fertilizer factories. The Company obtained capital contribution of approximately $16 million in 2015 and $2.7
in the first half of 2018 from its shareholders. The Company expects to have more capital contribution from its shareholders in
the near future.
Basis of Presentation
The accompanying consolidated financial
statements have been prepared in conformity with US GAAP. The basis of accounting differs from that used in the statutory accounts
of the Company, which are prepared in accordance with the accounting principles of the PRC ("PRC GAAP"). The differences
between US GAAP and PRC GAAP have been adjusted in these consolidated financial statements. The Company's functional currency
is the Chinese Renminbi ("RMB"); however, the accompanying consolidated financial statements have been translated and
presented in United States Dollars ("USD").
F-
9
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Use of Estimates
The preparation of these financial statements
in conformity with generally accepted accounting principles requires the Company to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of these
financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates
on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly,
actual results may differ from these estimates. Significant estimates include the useful lives of property and equipment, land
use rights, assumptions used in assessing collectability of receivables and impairment for long-term assets.
Principles of Consolidation
Muliang Agritech consolidates the following
entities, including wholly-owned subsidiaries, Muliang HK, Shanghai Mufeng, and its wholly controlled variable interest entities,
Muliang Industry, and Zhongbao, 60% controlled Agritech Development, 99% controlled Fukang, 65% controlled Zhonglian and 80% controlled
Yunnan Muliang. The 40% equity interest holder of Agritech Development, 1% equity interest holders in Fukang, 35% equity interest
holders in Zhonglian, and 20% interest in Yunnan Muliang are accounted as non-controlling interest in the Company's consolidated
financial statements.
The variable interest entities consolidated
for which the Company is deemed the primary beneficiary. All significant inter-company accounts and transactions have been eliminated
in consolidation.
Control by Principal Stockholders
The Company's directors and executive
officers and their affiliates or related parties own, beneficially and in the aggregate, the majority of the voting power of the
outstanding shares of our common stock. Accordingly, if our directors and executive officers and their affiliates or related parties
vote their shares uniformly, they would have the ability to control the approval of most corporate actions, including increasing
our authorized capital stock and the dissolution or merger of our company or the sale of our assets.
Cash and Cash Equivalents
For purposes of the statements of cash
flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less and money market accounts
to be cash equivalents. The Company maintains cash with various financial institutions.
Accounts Receivable
Accounts receivable are presented net of
an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews
the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability
of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors,
including the age of the balance, a customer's historical payment history, its current credit-worthiness and current economic
trends. Accounts are written off after exhaustive efforts at collection.
F-
10
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
Inventories
Inventories, consisting of raw materials,
work in process, and finished goods related to the Company's products are stated at the lower of cost or market utilizing
the weighted average method.
Property, Plant and Equipment
Plant and equipment are carried at cost
and are depreciated on a straight-line basis over the estimated useful lives of the assets. The cost of repairs and maintenance
is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost
and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year
of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances
reflect the fact that their recorded value may not be recoverable.
Included in property and equipment is construction-in-progress
which consisted of factory improvements and machinery pending installation and includes the costs of construction, machinery and
equipment, and any interest charges arising from borrowings used to finance these assets during the period of construction or installation
of the assets. No provision for depreciation is made on construction-in-progress until such time as the relevant assets are completed
and ready for their intended use.
Estimated useful lives of the Company's
assets are as follows:
Useful Life
Building
20 years
Operating equipment
5-10 years
Vehicle
3-5 years
Electronic equipment
3-20 years
Office equipment
3-20 years
Apple orchard
10 years
The apple orchard includes rental for an
apple farm, labor cost, fertilizers, apple seeds, apple seedlings and others. The costs to purchase and cultivate apple trees and
the expenditures related to labor and materials to plant apple trees until they become commercially productive are capitalized,
which require a two-year period. The estimated production life for apple tree is 10 years, and the costs are depreciated without
a residual value. Expenses incurred maintaining apple trees during the growth cycle until seedling apple trees or grafted varieties
are fruited are capitalized into inventory and included in Work In Process—apple orchard, a component of inventories.
Depreciation expenses pertaining to apple
trees will be included in inventory costs for those apples to be sold and ultimately become a component of cost of goods sold.
Similar to other assets, the failure of our apple trees to be serviceable over the entirety of their anticipated useful lives or
to be sold at their anticipated residual value will negatively impact our operating results.
F-
11
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
Intangible Assets
Included in the intangible assets are land
use rights and non-patented technology. According to the laws of the PRC, the government owns all the land in the PRC. Companies
or individuals are authorized to possess and use the land only through land use rights granted by the Chinese government. Useful
life for non-patented technology refers to the period during which economic benefits can be generated. Intangible assets are being
amortized using the straight-line method over their lease terms or estimated useful life.
Estimated useful lives of the Company's
intangible assets are as follows:
Useful Life
Land use rights
50 years
Non-patented technology
10 years
The Company carries intangible assets at
cost less accumulated amortization. In accordance with US GAAP, the Company examines the possibility of decreases in the value
of intangible assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.
The Company computes amortization using the straight-line method over estimated useful life of 50 years for the land use rights.
Impairment of Long-lived Assets
In accordance with ASC Topic 360, the Company
reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets
may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted
future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between
the asset's estimated fair value and its book value. The Company recorded no impairment charge for the years ended December
31, 2018 and 2017.
Advances from Customers
Advances from customers consist of prepayments
from customers for merchandise that had not yet been shipped. The Company will recognize the deposits as revenue as customers take
delivery of the goods and title to the assets is transferred to customers in accordance with the Company's revenue recognition
policy.
Non-controlling Interest
Non-controlling interests in the Company's
subsidiaries are recorded in accordance with the provisions of ASC 810 and are reported as a component of equity, separate from
the parent's equity. Purchase or sale of equity interests that do not result in a change of control are accounted for as
equity transactions. Results of operations attributable to the non-controlling interest are included in our consolidated results
of operations and, upon loss of control, the interest sold, as well as interest retained, if any, will be reported at fair value
with any gain or loss recognized in earnings.
Revenue Recognition
On January 1, 2018, the Company adopted ASC 606 using the modified
retrospective method. Results for the reporting period beginning after January 1, 2018 are presented under ASC 606, while prior
period amounts have not been adjusted and continue to be reported in accordance with the Company's historic accounting under Topic
605.
Management has determined that the adoption of ASC 606 did not
impact the Company's previously reported financial statements in any prior period nor did it result in a cumulative effect
adjustment to opening retained earnings.
Revenue for sale of products is derived from contracts with
customers, which primarily include the sale of fertilizer products and environmental protection equipment. The Company's
sales arrangements do not contain variable consideration. The Company recognizes revenue at a point in time based on management's
evaluation of when performance obligations under the terms of a contract with the customer are satisfied and control of the products
has been transferred to the customer. For vast majority of the Company's product sales, the performance obligations and control
of the products transfer to the customer when products are delivered, and customer acceptance is made.
Pursuant to the guidance of ASC Topic 840,
rent shall be reported as income by lessors over the lease term as it becomes receivable. The Company currently
leased part of the building of the Shanghai new plant to third parties as warehouse. The Company recognizes building leasing revenue
over the beneficial period described by the agreement, as the revenue is realized or realizable and earned.
The Company recognized rental income from
leasing a portion of its manufacturing facility located in Shanghai to third parties. For the years ended December 31, 2018 and
2017, rental income of $388,309 and $248,431 were recognized as other income.
F-
12
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
Cost of Sales
Cost of goods sold consists primarily of
raw materials, utility and supply costs consumed in the manufacturing process, manufacturing labor, depreciation expense and direct
overhead expenses necessary to manufacture finished goods as well as warehousing and distribution costs such as inbound freight
charges, shipping and handling costs, purchasing and receiving costs.
Income Taxes
The Company accounts for income taxes under
the provisions of Section 740-10-30 of the FASB Accounting Standards Codification, which is an asset and liability approach that
requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been
recognized in its financial statements or tax returns.
The Company is subject to the Enterprise
Income Tax law ("EIT") of the People's Republic of China. The Company's operations in producing and selling
fertilizers are subject to the 25% enterprise income tax.
Related Parties
Parties are considered to be related to
the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under
common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate
families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls
or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties
might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions.
Accumulated Other Comprehensive Income
(Loss)
Comprehensive income (loss) comprised of
net income (loss) and all changes to the statements of stockholders' equity, except those due to investments by stockholders,
changes in paid-in capital and distributions to stockholders. The Company's comprehensive income (loss) consist of net income
(loss) and unrealized gains from foreign currency translation adjustments.
F-
13
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
Foreign Currency Translation
The Company's functional currency
is the Chinese Renminbi ("RMB"); however, the accompanying consolidated financial statements have been translated and
presented in United States Dollars ("USD"). Results of operations and cash flows are translated at average exchange
rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity
is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements
of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments
resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining
comprehensive income/loss. The translation adjustment for the years ended December 31, 2018 and 2017 was gains of $105,755
and $147,936, respectively. Transactions denominated in foreign currencies are translated into the functional currency at the exchange
rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional
currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange
rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations
as incurred.
All of the Company's revenue transactions
are transacted in the functional currency. The Company does not enter into any material transaction in foreign currencies. Transaction
gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company.
Asset and liability accounts at December
31, 2018 and 2017 were translated at 6.8764 RMB to $1 USD and 6.5064 RMB to $1 USD, respectively, which were the exchange rates
on the balance sheet dates. The average translation rates applied to the statements of income for the years ended December 31,
2018 and 2017 were 6.6146 RMB and 6.7570 RMB to $1 USD, respectively.
Earnings (Loss) per Share
Basic earnings per share is computed by
dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period,
excluding the effects of any potentially dilutive securities. Diluted earnings per share gives effect to all dilutive potential
of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by
using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock
options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Earnings per share excludes
all potential dilutive shares of common stock if their effect is anti-dilutive. There were no potential dilutive securities at
December 31, 2018 and 2017.
F-
14
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
Fair Value of Financial Instruments
The Company adopted the guidance of ASC
Topic 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value,
and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:
Level 1-Inputs are unadjusted quoted prices
in active markets for identical assets or liabilities available at the measurement date.
Level 2-Inputs are unadjusted quoted prices
for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets
that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable
market data.
Level 3-Inputs are unobservable inputs
which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the
asset or liability based on the best available information.
The carrying amounts reported in the balance
sheets for cash and cash equivalents, accounts receivable, inventories, advances to suppliers, prepaid expenses, short-term loans,
accounts payable, accrued expenses, advances from customers, VAT and service taxes payable and income taxes payable approximate
their fair market value based on the short-term maturity of these instruments.
ASC Topic 825-10 "
Financial Instruments
"
allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The
fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If
the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings
at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.
The following table summarizes the carrying values of the Company's
financial instruments:
December 31,
2018
December 31,
2017
Short-term loan
$
150,515
$
159,074
Current portion of long-term loan
5,453,435
1,998,033
Long-term loan
3,454,543
5,102,668
$
9,058,493
$
7,259,775
Government Contribution Plan
Pursuant to the laws applicable to PRC
law, the Company is required to participate in a government-mandated multi-employer defined contribution plan pursuant to which
certain retirement, medical and other welfare benefits are provided to employees. Chinese labor regulations require the Company
to pay to the local labor bureau a monthly contribution at a stated contribution rate based on the monthly basic compensation of
qualified employees. The relevant local labor bureau is responsible for meeting all retirement benefit obligations; the Company
has no further commitments beyond its monthly contribution.
F-
15
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
Statutory Reserve
Pursuant to the laws applicable to the
PRC, the Company must make appropriations from after-tax profit to the non-distributable "statutory surplus reserve fund".
Subject to certain cumulative limits, the "statutory surplus reserve fund" requires annual appropriations of 10% of
after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles
generally accepted in the PRC ("PRC GAAP") at each year-end). For foreign invested enterprises and joint ventures in
the PRC, annual appropriations should be made to the "reserve fund". For foreign invested enterprises, the annual appropriation
for the "reserve fund" cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of
the registered capital (as determined under PRC GAAP at each year-end). If the Company has accumulated loss from prior periods,
the Company is able to use the current period net income after tax to offset against the accumulate loss.
Segment Information
The standard, "Disclosures about
Segments of an Enterprise and Related Information," codified with ASC-280, requires certain financial and supplementary information
to be disclosed on an annual and interim basis for each reportable segment of an enterprise. The Company believes that it operates
in two business segments and in one geographical segment (China), as all of the Company's current operations are carried
in China.
F-
16
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
Recent Accounting Pronouncement
In June 2016, the FASB issued Accounting
Standards Update No. 2016-13 (ASU 2016-13)
"Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses
on Financial Instruments"
which requires the measurement and recognition of expected credit losses for financial assets
held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which
will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods
within those years beginning after December 15, 2019. The Company is currently in the process of evaluating the impact of the
adoption on its consolidated financial statements.
In August 2016, the FASB issued ASU No.
2016-15, "
Classification of Certain Cash Receipts and Cash Payments",
which is intended to reduce diversity
in practice in how certain cash receipts and payments are presented and classified in the statement of cash flows. The standard
provides guidance in a number of situations including, among others, settlement of zero-coupon bonds, contingent consideration
payments made after a business combination, proceeds from the settlement of insurance claims, and distributions received from
equity method investees. The ASU also provides guidance for classifying cash receipts and payments that have aspects of more than
one class of cash flows. The Company is currently in the process of evaluating the impact of the adoption on its consolidated
financial statements.
F-
17
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
In January 2017, the Financial Accounting
Standard Board ("FASB") issued guidance, which simplifies the accounting for goodwill impairment. The updated guidance
eliminates Step 2 of the impairment test, which requires entities to calculate the implied fair value of goodwill to measure a
goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit's
carrying amount over its fair value.
In January 2017, the FASB issued guidance,
which amended the existing accounting standards for business combinations. The amendments clarify the definition of a business
with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions
(or disposals) of assets or businesses.
In January 2017, the FASB issued ASU 2017-03, "
Accounting
Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323)
". This pronouncement
amends the SEC's reporting requirements for public filers in regard to new accounting pronouncements or existing pronouncements
that have not yet been adopted. Companies are to provide qualitative disclosures if they have not yet implemented an accounting
standards update. Companies should disclose if they are unable to estimate the impact of a specific pronouncement, and provide
disclosures including a description of the effect on accounting policies that the registrant expects to apply. These provisions
apply to all pronouncements that have not yet been implemented by registrants. There are additional provisions that relate to corrections
to several other prior FASB pronouncements. The Company has incorporated language into other recently issued accounting pronouncement
notes, where relevant for the corrections in FASB ASU 2017-03. The Company is implementing the updated SEC requirements on not
yet adopted accounting pronouncements with these consolidated financial statements.
In August 2017, the FASB issued guidance,
which amends the existing accounting standards for derivatives and hedging. The amendment improves the financial reporting of hedging
relationships to better represent the economic results of an entity's risk management activities in its financial statements
and made certain targeted improvements to simplify the application of the hedge accounting guidance in current U.S. GAAP.
In August 2018, the FASB issued ASU 2018-13, "
Fair
Value Measurement (Topic 820), – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement
,"
which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst
or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. The amendments in this Update modify the disclosure
requirements on fair value measurements based on the concepts in FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter
8: Notes to Financial Statements, including the consideration of costs and benefits. The amendments on changes in unrealized gains
and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements,
and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual
period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods
presented upon their effective date. The amendments are effective for all entities for fiscal years beginning after December 15,
2019, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the potential
impacts of ASU 2018-13 on its consolidated financial statements.
The Company believes that there were no
other accounting standards recently issued that had or are expected to have a material impact on our financial position or results
of operations.
F-
18
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
Recently adopted accounting pronouncements
In March 2016, the FASB issued ASU
2016-08, "
Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting
Revenue Gross versus Net)
". The amendments in this ASU are intended to improve the operability and
understandability of the implementation guidance on principal versus agent considerations by amending certain existing
illustrative examples and adding additional illustrative examples to assist in the application of the guidance. The effective
date and transition of these amendments is the same as the effective date and transition of ASU 20140-9, "Revenue from
Contracts with Customers (Topic 606)". Public entities should apply the amendments in ASU 2014-09 for annual reporting
periods beginning after December 15, 2017, including interim reporting periods therein.
In May 2016, the FASB issued ASU 2016-12, "
Revenue
from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients
". The amendments, among
other things: (1) clarify the objective of the collectability criterion for applying paragraph 606-10-25-7; (2) permit an entity
to exclude amounts collected from customers for all sales (and other similar) taxes from the transaction price; (3) specify that
the measurement date for noncash consideration is contract inception; (4) provide a practical expedient that permits an entity
to reflect the aggregate effect of all modifications that occur before the beginning of the earliest period presented when identifying
the satisfied and unsatisfied performance obligations, determining the transaction price, and allocating the transaction price
to the satisfied and unsatisfied performance obligations; (5) clarify that a completed contract for purposes of transition is a
contract for which all (or substantially all) of the revenue was recognized under legacy GAAP before the date of initial application,
and (6) clarify that an entity that retrospectively applies the guidance in Topic 606 to each prior reporting period is not required
to disclose the effect of the accounting change for the period of adoption. The effective date of these amendments is at the same
date that Topic 606 is effective. The Company adoptedASU 2016-12 from January 1, 2018.
In December 2016, the FASB issued ASU 2016-20,
"Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers"
. The amendments
in ASU 2016-20 affect narrow aspects of the guidance issued in ASU 2014-09 including Loan Guarantee Fees, Contract Costs, Provisions
for Losses on Construction-Type and Production-Type Contracts, Disclosure of Remaining Performance Obligations, Disclosure of
Prior Period Performance Obligations, Contract Modifications, Contract Asset vs. Receivable, Refund Liabilities, Advertising Costs,
Fixed Odds Wagering Contracts in the Casino Industry, and Costs Capitalized for Advisors to Private Funds and Public Funds. The
effective date of these amendments are at the same date that Topic 606 is effective. Topic 606 is effective for public entities
for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein (i.e., January 1,
2018, for a calendar year entity). The Company adopted ASU 2016-20 from January 1, 2018.
The Company adopted the
Revenue from
Contracts with Customers (Topic 606)
from January 1, 2018.
NOTE 3 – ACCOUNTS RECEIVABLE
Accounts receivable consisted of the following:
December 31,
2018
December 31,
2017
Accounts receivable
$
4,370,620
$
683,758
Less: Allowance for doubtful accounts
(279,733
)
(325,242
)
Total, net
$
4,090,887
$
358,516
The Company reviews the accounts receivable
on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances.
After evaluating the collectability of individual receivable balances, the Company recognized bad debt allowance of $279,733 and
$325,242 for the years ended December 31, 2018 and 2017.
F-
19
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 – INVENTORIES
Inventories consisted of the following:
December 31,
2018
December 31,
2017
Raw materials
$
124,069
$
118,198
Finished goods
322,561
294,450
Total, net
$
446,630
$
412,648
NOTE 5 – PREPAYMENT
The prepayment balance of $1,491,102 as of
December 31, 2018 mainly represents the advanced payment for the construction of the black goat slaughtering and processing project
located in Shuangbai County, Chuxiong City, Yunnan Province, PRC. The remaining balance represents the advance to the suppliers
for business purpose.
NOTE 6 – PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at December 31, 2018 and 2017
consisted of:
December 31,
December 31,
2018
2017
Building
$
12,838,100
$
13,603,224
Operating equipment
2,754,463
2,968,880
Vehicle
104,121
58,492
Office equipment
59,897
18,500
Apple Orchard
1,026,505
1,029,230
Construction in progress
341,173
-
17,124,259
17,678,326
Less: Accumulated depreciation
(2,196,936
)
(1,461,897
)
$
14,927,323
$
16,216,429
F-
20
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 – PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
For the years ended December 31, 2018 and
2017, depreciation expense amounted to $788,881 and $575,190, respectively. Depreciation is not taken during the period of construction
or equipment installation. Upon completion of the installation of manufacturing equipment or any construction in progress, construction
in progress balances will be classified to their respective property and equipment category.
The construction in progress of $341,173
represents the investment of a black goat processing plant located in Shuangbai County, Chuxiong City, Yunnan Province, PRC.
NOTE 7 – INTANGIBLE ASSETS
Intangible assets consisted of the following:
December 31,
December 31,
2018
2017
Land use rights
$
3,618,441
$
2,279,140
Non-patented technology
14,542
608,632
3,632,983
2,887,772
Less: Accumulated amortization
(419,853
)
(381,805
)
$
3,213,130
$
2,505,967
The total
cost
of $3,618,441 represents the three industrial land use rights located in Shanghai City, Weihai City, Shandong Province, and Chuxiong
City, Yunnan Province.
For the years ended December 31, 2018 and
2017, amortization of intangible assets amounted to $60,911 and $74,786, respectively.
NOTE 8 – DEFERRED TAX ASSETS, NET
The components of the deferred tax assets
are as follows:
December
31,
2018
December
31,
2017
Deferred tax assets, non-current
Deficit carried-forward
$
416,836
$
-
Allowance for doubtful accounts
37,915
-
Deferred tax assets
454,751
-
Less: valuation allowance
-
-
Deferred tax assets, non-current
$
454,751
$
-
Deferred taxation is calculated under the liability method in
respect of taxation effect arising from all timing differences, which are expected with reasonable probability to realize in the
foreseeable future. The Company's subsidiary registered in the PRC is subject to income taxes within the PRC at the applicable
tax rate.
F-
21
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 – LOAN PAYABLE
Short-term loan of $150,515 represents balance
due to Shanghai Jinshan Limin Micro Loan Co., Ltd., with annualized interest rate of 16%. This loan was borrowed on March 3, 2017
and due on March 2, 2018. The Company extended this loan twice until the end of June 2019 with the same terms.
Current portion of long-term loans amounted
to $5,453,435 representing balance due to Agricultural Bank of China, with an annual interest rate of 5.70% + (HongkongInterBank
Offered Rate ("HIBOR")).
Long-term loans represent amounts due to
lenders that are due more than one year, whose balance was $3,454,543 and $7,538,787 as of December 31, 2018 and 2017, respectively.
Long -term loan and current portion of
long-term loan consisted of the following:
December 31,
December 31,
2018
2017
Loan payable to Agricultural Bank of China, annual interest rate of 5.70% + HIBOR, due by August 25, 2019.
$
4,362,748
$
5,379,319
Loan payable to Rushan City Rural Credit Union, annual interest 8.3125%, due by July 25, 2019.
1,090,687
1,152,711
Long-term loans and interest payable to individuals and entities without interest
3,454,543
3,004,790
8,907,978
9,536,820
Less: Current portion of long-term loans payable
5,453,435
1,998,033
Total, net
$
3,454,543
$
7,538,787
As of December 31, 2018, the Company's
future loan obligations according to the terms of the loan agreement are as follows:
Year 1
$
5,603,950
Year 2
3,454,543
Total
$
9,058,493
The long-term bank loan with Agricultural
Bank of China was collateralized with land use rights and guaranteed by Mr. Lirong Wang, the CEO.
The Company recognized interest expenses
of $421,054 and $508,818 for the years ended December 31, 2018 and 2017, respectively.
F-
22
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 – STOCKHOLDERS DEFICIT
Authorized Stock
The Company has authorized 500,000,000
common shares with a par value of $0.0001 per share.  Each common share entitles the holder to one vote, in person or proxy,
on any matter on which action of the stockholders of the corporation is sought.
Common Share Issuances
On June 29, 2018, the outstanding amount $326,348
due to Mr. Wang, CEO and Chairman of the Company, were converted into 43,200 shares of Common Shares at $ 7.55 per share.
On June 29, 2018 the Company issued 298,518
common shares of the Company at $7.55 for proceeds of $2,255,111 to Mr. Wang, CEO and Chairman of the Company.
As of December 31, 2018, the Company had 56,341,718
common shares outstanding.
On April 4, 2019, the Company's Board of Directors and majority shareholder approved a 5 to 1
reverse stock split of all of the issued and outstanding shares of the Company's common stock (the "Stock Split").
The common shares outstanding have been retroactively restated to reflect the reverse stock split.
NOTE 11 – RELATED PARTY TRANSACTIONS
Ms. Hui Song was the Company's former
sales director. In 2013, Ms. Hui Song resigned, and she no longer has any significant control or influence over the Company, therefore
she was no longer considered a related party. Jilin Jiliang Zongbao Biological Technology Co., Ltd., an entity controlled by Ms.
Hui Song, and Yantai Zongbao Tele-Agriculture Service Co., Ltd., a related company of Ms. Hui Song, were also no longer considered
as related parties of the Company.
*Account receivable and sales to
Ms. Hui Song and its associated
For the year ended December 31, 2018, the
Company sold fertilizer manufacturing equipment to Jilin Jiliang Zongbao Biological Technology Co., Ltd., in the amount of $164,968,
with related cost of $103,371. This transaction was reflected in the revenue and cost of goods sold.
As of December 31, 2018 and December 31,
2017, the Company has account receivable balance of $185,665 and $0 from Jilin Jiliang Zongbao Biological Technology Co., Ltd.,
respectively.
As of December 31, 2018 and December 31,
2017, the Company has account receivable balance of $61,082 and $64,555 from Yantai Zongbao Tele-Agriculture Service Co., Ltd.,
respectively.
*Account payable and purchase from
Ms. Hui Song and its associated
For
the year ended December 31, 2018, the Company purchased fertilizer of $3,651,430 from
Jilin Jiliang Zongbao Biological Technology
Co., Ltd., an entity controlled by Ms. Hui Song
.
As of December 31, 2018,
account
payable to
Jilin Jiliang Zongbao Biological Technology Co., Ltd. was $72,712.
As of December 31, 2018, long-term
loan payable balances for Jilin Jiliang Zongbao Biological Technology Co., Ltd. and Ms. Hui Song were of $807,780 and
$266,855, respectively.
* Account receivable and sales from
related parties
The Company did not make sales to any related
party for the year ended December 31, 2018 and 2017. And the Company has no account receivable balance as of December 31, 2018
and December 31, 2017.
* Account payable and purchase from
related parties
For
the year ended December 31, 2018, the Company purchased fertilizer manufacturing equipment of $120,945 from Shanghai Aoke Chemicals
Co., Ltd, an entity controlled by Mr. Lirong Wang, CEO and majority shareholder of the Company. As of December 31, 2018, account
payable to Shanghai Aoke Chemicals Co., Ltd. were $116,340.
The
Company did not purchase other material or service from related parties for the year ended December 31, 2018 and 2017.
* Due from Related Parties
The Company does not have balances due
from related parties as of December 31, 2018 and 2017, respectively.
F-
23
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 – RELATED PARTY TRANSACTIONS (CONTINUED)
* Due to related party
Outstanding balance due to Mr. Lirong Wang
and Mr. Guihua Lin below are advances from related parties for working capital of the Company which are mainly due on demand, non-interest
bearing, and unsecured, unless further disclosed.
December 31,
December 31,
2018
2017
Relationship
Mr. Lirong Wang ①
1,442,751
4,025,356
The CEO and Chairman of the Company
Ms. Xueying Sheng③④⑤⑥
169,743
230,730
Controller/Accounting Manager of the Company
Mr. Guohua Lin②
3,054
102,462
One of the Company's shareholders
Total
1,615,547
4,441,087
①
For the year ended December 31, 2018, the Company borrowed
$3,829,415 from Mr. Lirong Wang, and repaid $6,404,317. On June 29, 2018, the amount due to Mr. Wang of $326,348 was converted
into common shares.
②
For the year ended December 31, 2018, the Company borrowed
$171,911 from Mr. Guohua Lin, and repaid $257,931.
③
On November 8, 2017, the Company borrowed $31,993 from
Ms. Xueying Sheng. The loan is unsecured, without maturity, and bears an interest rate of 20%.
④
On December 12, 2017, the Company borrowed $11,634 from
Ms. Xueying Sheng and repaid in March 2018. The loan is unsecured and bears an interest rate of 20%.
⑤
For the year ended December 31, 2018, the Company borrowed $194,272 from Ms. Xueying Sheng. This
loan
is unsecured, without maturity and non-interest bearing.
⑥
For the year ended December 31, 2018, the Company repaid $245,653 to Ms. Xueying,
                                                        Sheng.
NOTE 12 – DISPOSAL OF SUBSIDIARY
On October 12, 2017, the Company ceased operation of its 100% owned
subsidiary Ningling Fertilizer and deregistered Ningling Fertilizer with the Administration for Industry and Commerce. The Company
closed Ningling Fertilizer with net assets of $2,275 and accumulated deficit of $34,739 as of October 12, 2017. Ningling has historically
been reported as a component of the Company's operations and incurred $33,323 to loss before income taxes provisions for
the year ended December 31, 2017. The ceased operation does not constitute a strategic shift that will have a major effect
on the Company's operations or financial results and as such, the disposal is not classified as discontinued operations
in the Company's consolidated financial statements. The loss from the investment of the subsidiary has been recorded
in other expenses.
NOTE 13 – CONCENTRATIONS
Customers Concentrations
The following table sets forth information
as to each customer that accounted for 10% or more of the Company's revenues for the years ended December 31, 2018 and 2017.
For the year ended December 31,
Customers
2018
2017
Amount
%
Amount
%
A
N/A
N/A
358,710
48
%
B
N/A
N/A
92,446
12
%
C
2,096,121
16
%
N/A
N/A
D
1,952,652
15
%
N/A
N/A
F-
24
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 – CONCENTRATIONS (CONTINUED)
Suppliers Concentrations
The following table sets forth information
as to each supplier that accounted for 10% or more of the Company's purchase for the years ended December 31, 2018 and 2017.
For the year ended December 31,
Suppliers
2018
2017
Amount
%
Amount
%
A
3,651,430
43
%
N/A
N/A
B
N/A
N/A
212,453
46
%
C
N/A
N/A
49,578
11
%
D
840,657
10
%
N/A
N/A
Credit Risks
The Company's operations are carried
out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the
political, economic and legal environment in the PRC, and by the general state of the PRC's economy. The Company's
operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North
America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations,
anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.
Financial instruments which potentially
subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. Substantially all
of the Company's cash is maintained with state-owned banks within the PRC, and none of these deposits are covered by insurance.
The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.
A significant portion of the Company's sales are credit sales which are primarily to customers whose ability to pay is dependent
upon the industry economics prevailing in these areas; however, concentrations of credit risk with respect to trade accounts receivables
is limited due to generally short payment terms. The Company also performs ongoing credit evaluations of its customers to help
further reduce credit risk. At December 31, 2018 and 2017, the Company's cash balances by geographic area were as follows:
December 31,
December 31,
2018
2017
United States
$
-
0
%
$
-
0
%
China
12,778
100
%
9,051
100
%
Total cash and cash equivalents
$
12,778
100
%
$
9,051
100
%
F-
25
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 – INCOME TAXES
United States
Muliang Agritech is established in the State
of Nevada in the United States and is subject to Nevada State and US Federal tax laws. Muliang Agritech has approximately $102,000
of unused net operating losses ("NOLs") available for carrying forward to future years for U.S. federal income tax
reporting purposes. The benefit from the carry forward of such NOLs will begin expiring during the year ended December 31, 2034.
Because United States tax laws limit the time during which NOL carry forwards may be applied against future taxable income, the
Company may be unable to take full advantage of its NOLs for federal income tax purposes should the Company generate taxable income.
Further, the benefit from utilization of NOL carry forwards could be subject to limitations due to material ownership changes that
could occur in the Company as it continues to raise additional capital. Based on such limitations, the Company has significant
NOLs for which realization of tax benefits is uncertain.
On December 22, 2017, the United States
enacted the Tax Cuts and Jobs Act (the "Act") resulting in significant modifications to existing law. The Company has
considered the accounting impact of the effects of the Act during the year ended December 31, 2018 including a reduction in the
corporate tax rate from 34% to 21% among other changes.
Hong Kong
Muliang HK is established in Hong Kong
and its income is subject to a 16.5% profit tax rate for income sourced within the country. For the years ended December 31, 2018
and 2017, Muliang HK did not earn any income derived in Hong Kong, and therefore was not subject to Hong Kong Profits Tax.
China, PRC
Shanghai Mufeng and its subsidiaries Muliang
Industry, Zongbao, Zongbao Cangzhou, Muliang Sales, Fukang, Agritech Development, Zhongliang and Yunnan Muliang are established
in China and its income is subject to income tax rate of 25%.
The reconciliation of effective income tax rate as follows:
For the Years Ended
December 31,
December 31,
2018
2017
US Statutory income tax rate
21.00
%
35.00
%
PRC income tax adjustment
4.00
%
(10.00
)%
Valuation allowance
(12.51
)%
(25.00
)%
Effect of expenses not deductible for tax purpose
0.02
%
0.00
%
Effect of income tax exemptions and reliefs
(10.63
)%
0.00
%
Others
(2.45
)%
0.00
%
Total
(0.57
)%
0.00
%
F-
26
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 – INCOME TAXES (CONTINUED)
The provision for income taxes consists of the following:
For the Years Ended
December 31,
2018
2017
Current
$
447,207
$
-
Deferred
(472,749
)
-
Total
$
(25,542
)
$
-
Accounting for Uncertainty in Income Taxes
The tax authority of the PRC government conducts periodic and
ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises complete their relevant tax filings.
Therefore, the Company's PRC entities' tax filings results are subject to change. It is therefore uncertain as to whether
the PRC tax authority may take different views about the Company's PRC entities' tax filings, which may lead to additional
tax liabilities.
ASC 740 requires recognition and measurement of uncertain income
tax positions using a "more-likely-than-not" approach. The management evaluated the Company's tax positions and
concluded that no provision for uncertainty in income taxes was necessary as of December 31, 2018 and 2017.
NOTE 15 – BUSINESS SEGMENTS
The revenues and cost of goods sold from operation consist of
the following:
Revenues
Cost of Sales
For the Years Ended
For the Years Ended
December 31,
December 31,
December 31,
December 31,
2018
2017
2018
2017
Fertilizer and forage grass
$
12,054,335
$
731,512
$
6,577,557
$
492,385
Agricultural products (food) sales
1,150,689
6,501
1,082,469
98,851
Total
$
13,205,024
$
737,563
$
7,660,026
$
591,236
F-
27
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16
–
COMMITMENTS AND CONTINGENCIES
On October 18, 2018, the Company
signed a building construction agreement with Yunnan Junxiong Construction Engineering Co., Ltd. for the black goat
slaughtering and processing project located in Shuangbai County, Chuxiong City, Yunnan Province, PRC. The total contract
price is $1,599,674(RMB11,000,000), all of which is unpaid as of December 31, 2018.
In addition, the Company signed a set of construction
agreements with third parties in 2018 for the black goat slaughtering and processing project, including surveying and mapping
contract, equipment installation contract, and electricity installation contract, etc. As of December 31, 2018, a total amount
of $436,275(RMB3,000,000) is unpaid.
The Company has future minimum capital
expenditure obligations as of December 31, 2018 as follows:
2019
1,221,570
2020
814,379
2021
-
2022
-
2023
-
Thereafter
-
Total
$
2,035,949
NOTE 17 – SUBSEQUENT EVENTS
Reverse Stock Split
On April 4, 2019, the Company's Board of Directors and majority
shareholder approved a 5 to 1 reverse stock split of all of the issued and outstanding shares of the Company's common stock
(the "Stock Split"),  No fractional shares of Common Stock will be issued as a result of the reverse stock split.The
Stock Split does not affect the par value or the number of authorized shares of common stock of the Company. The Stock Split will
become effective upon approval of Financial Industry Regulatory Authority.
As a result of this reverse stock split, all
references in the financial statements and notes thereto to the number of shares outstanding, per share amounts, of the Company's
Common Stock have been restated to reflect the effect of the stock split for all periods presented.
Name Change
On April 4, 2019, the Company's Board of Directors
and majority shareholder approved change of corporate name from "Mullan Agritech Inc." to "Muliang
Agritech Inc." (the "Name Change"). On April 5, 2019, Company filed a Certificate of Amendment to its
Articles of Incorporation with the Secretary of State of the State of Nevada to reflect the Name Change.
Blank Check Preferred Stock
On April 4, 2019,
the Company's Board of Directors and majority shareholder approved creation of one hundred million (100,000,000) shares of
Blank Check Preferred Stock, $0.0001 par value. To the fullest extent permitted by the laws of the State of Nevada, as the same
now exists or may hereafter be amended or supplemented, the Board of Directors may fix and determine the designations, rights,
preferences or other variations of each class or series within each class of preferred stock of the Company. The Company may issue
the shares of stock for such consideration as may be fixed by the Board of Directors.
On April 5, 2019, the Company filed a Certificate
of Amendment to our Articles of Incorporation with the Secretary of State of the State of Nevada to reflect the Name Change and
to authorize the creation of Blank Check Preferred Stock.
Common stock authorized
On April 4, 2019, the Company's Board
of Directors and majority shareholder approved that the capital stock shall consist of 500,000,000 shares of common stock, par
value $0.0001 per share.
F-
28
MULIANG AGRITECH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2019 AND DECEMBER 31
2018
March 31,
December 31,
2019
2018
Audited
ASSETS
Current Assets:
Cash and cash equivalents
$
6,317
$
12,778
Accounts receivable, net
4,057,060
4,090,887
Inventories
789,051
446,630
Prepayment
1,519,834
1,491,102
Other receivables, net
187,701
102,733
Total Current Assets
6,559,963
6,144,130
Property, plant and equipment, net
15,142,871
14,927,323
Intangible assets, net
3,273,406
3,213,130
Other assets and deposits
67,434
74,268
Deferred tax asset
465,952
454,751
Total Assets
$
25,509,626
$
24,813,602
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term loans
$
154,222
$
150,515
Current portion of long-term debt
5,572,857
5,453,435
Accounts payable and accrued payables
4,733,636
4,469,392
Accounts payable - related party
119,205
116,340
Advances from customers
242,087
211,114
Income tax payable
539,151
430,181
Other payables
857,610
816,724
Due to related party
926,724
1,615,547
Total Current Liabilities
13,145,492
13,263,248
Long-term loans
3,602,640
3,454,543
Total Liabilities
16,748,132
16,717,791
Stockholders' Equity:
Common stock, $0.0001 par value, 500,000,000 shares authorized, 56,341,718 shares issued
    and outstanding as of March 31, 2019 and December 31, 2018, respectively.
5,634
5,634
Additional paid in capital
19,398,854
19,398,854
Accumulated deficit
(11,330,741
)
(11,773,401
)
Accumulated other comprehensive loss
563,268
344,187
Stockholders' Equity – Muliang Agritech, Inc. and Subsidiaries
8,637,015
7,975,274
Noncontrolling interest
124,479
120,537
Total Stockholders' Equity
8,761,494
8,095,811
Total Liabilities and Stockholders' Equity
$
25,509,626
$
24,813,602
See accompanying notes to consolidated financial
statements
F-
29
MULIANG AGRITECH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED MARCH 31,
2019 AND 2018
(Unaudited)
For the Three Months Ended
March 31,
2019
2018
Revenues
$
2,225,368
$
1,188,020
Cost of goods sold
1,338,876
682,779
Gross profit (loss)
886,492
505,241
Operating expenses:
Selling expenses
177,000
23,317
General and administrative expenses
341,556
392,510
Total operating expenses
518,556
415,827
Income (Loss) from operations
367,936
89,414
Other income (expense):
Interest expense
(94,596
)
(108,081
)
Subsidy income
146,560
2,188
Rental income, net
122,960
73,526
Other income (expense), net
587
(9,176
)
Total other income (expense)
175,511
(41,543
)
Income (Loss) before income taxes
543,447
47,871
Income taxes
97,860
-
Net income
445,587
47,871
Net income (loss) attributable to Muliang Agritech, Inc. common stockholders
442,660
77,522
Net income (loss) attributable to noncontrolling interest
2,927
(29,651
)
Other comprehensive income (loss):
Unrealized foreign currency translation adjustment
219,081
24,289
Total Comprehensive loss
664,668
72,160
Total comprehensive (income) loss attributable to non-controlling interests
3,942
(23,129
)
Total comprehensive (income) loss attributable to Muliang Agritech Inc. common stockholders
$
660,726
$
95,289
Earnings per common share
Basic and diluted
0.01
0.00
Weighted average common shares outstanding
Basic
56,341,718
56,000,000
Diluted
56,341,718
56,000,000
See accompanying notes to consolidated financial
statements
F-
30
MULIANG AGRITECH, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2018 AND
THREE MONTHS ENDED MARCH 31, 2019 (Unaudited)
Common Stock
Additional Paid-in
Accumulated
Accumulated Other Comprehensive
Non-controlling
Shares
Amount
Capital
Deficit
Income (Loss)
Interest
Total
Balance, December 31, 2017
56,000,000
$
5,600
$
16,817,585
$
(14,101,952
)
$
92,466
$
(2,711
)
$
2,810,988
Issuance of common stock
341,718
34
2,581,269
-
-
-
2,581,303
Net income
-
-
-
4,345,003
-
128,816
4,473,819
Foreign currency translation adjustment
-
-
-
-
103,785
6,624
110,409
Balance, December 31, 2018
56,341,718
$
5,634
$
19,398,854
$
(11,773,401
)
$
344,187
$
120,537
$
8,095,811
Net income
-
-
-
442,660
-
2,927
445,587
Foreign currency translation adjustment
-
-
-
-
219,081
1,015
220,096
Balance, March 31, 2019
56,341,718
$
5,634
$
19,398,854
$
(11,330,741
)
$
563,268
$
124,479
$
8,761,494
See accompanying notes to consolidated financial
statements
F-
31
MULIANG AGRITECH, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31,
2019 AND 2018
(Unaudited)
For the Three Months Ended
March 31,
2019
2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)
$
445,587
$
47,871
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization
291,069
223,491
Changes in assets and liabilities:
Accounts receivable
133,884
(568,309
)
Accounts receivable - related party
-
(377,045
)
Inventories
(329,687
)
37,661
Prepayment
149,975
(60,136
)
Other receivables
(82,007
)
(45,676
)
Accounts payable and accrued payables
145,941
(489,512
)
Accounts payable - related party
-
125,853
Advances from customers
25,638
540,560
Income tax payable
97,860
-
Other payables
38,911
1,560,502
Net cash provided by operating activities
917,171
995,260
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of biological assets
(18,508
)
(7,313
)
Investment in construction in progress
(228,458
)
(745,084
)
Net cash used in investing activities
(246,966
)
(752,397
)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from third party individual
62,679
786,584
Proceeds from (Repayment to) related party
(724,803
)
(222,615
)
Repayment of short-term loans
(14,823
)
(786,584
)
Net cash used in financing activities
(676,947
)
(222,615
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
281
570
NET INCREASE (DECREASE) IN CASH
(6,461
)
20,818
CASH, BEGINNING OF PERIOD
12,778
9,051
CASH, END OF PERIOD
$
6,317
$
29,869
-
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Cash paid for interest expense, net of capitalized interest
$
23,110
$
108,081
Cash paid for income tax
$
-
$
-
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES
Long term loan transfer to short term loan
$
-
$
1,101,218
Property addition in connection with liability
$
7,411
$
-
See accompanying notes to consolidated financial
statements
F-
32
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 1 – ORGANIZATION AND NATURE
OF OPERATIONS
Muliang Agritech, Inc. formerly known as
M & A Holding Corporation. ("Muliang Agritech") was incorporated under the laws of the State of Nevada on November
5, 2014. Muliang Agritech's core business activities of developing, manufacturing, and selling organic fertilizers and bio-organic
fertilizers for use in agricultural industry are conducted through several indirectly owned subsidiaries in China.
On June 9, 2016, Muliang Agritech filed
a Certificate of Amendment to its Articles of Incorporation (the "Amendment") with the Secretary of State of the State
of Nevada, changing its name from "M & A Holding Corporation," to "Mullan Agritech, Inc."
On July 11, 2016, the Financial Industry
Regulatory Authority (FINRA) effected in the marketplace the change of the corporate name from "M & A Holding Corporation,"
to "Mullan Agritech, Inc.", and effective on such date.
On April 4, 2019, the Company changed its
corporate name from "Mullan Agritech Inc." to "Muliang Agritech Inc." The name change took effect on May
7, 2019. In connection with the name change, our stock symbol changed to "MULG". Muliang Agritech trades under its
new name, Muliang Agritech, Inc.
History
Shanghai Muliang Industry Co., Ltd. (referred
to herein as "Muliang Industry") was incorporated in PRC on December 7, 2006 as a limited liability company, owned
95% by Lirong Wang and 5% by Zongfang Wang. Muliang Industry through its own operations and its subsidiaries is engaged in the
business of developing, manufacturing, and selling organic fertilizers and bio-organic fertilizers for use in the agricultural
industry.
On May 27, 2013, Muliang Industry entered
into and consummated an equity purchase agreement whereby it acquired 99% of the outstanding equity of Weihai Fukang Bio-Fertilizer
Co., Ltd. ("Fukang"), a corporation organized under the laws of the People's Republic of China. Fukang was incorporated
in Weihai City, Shandong Province on January 6, 2009. Fukang is focused on the distribution of organic fertilizers and the development
of new bio-organic fertilizers. As a result of the completion of the transaction, Fukang became a 99% owned subsidiary of Muliang
Industry, with the remaining 1% equity interest owned by Mr. Hui Song.
On July 11, 2013, Muliang Industry established
a wholly owned subsidiary, Shanghai Muliang Agritech Development Co., Ltd. ("Agritech Development") in Shanghai, China.
On November 6, 2013, Muliang Industry sold 40% of the outstanding equity of Agritech Development to Mr. Jianping Zhang for consideration
of approximately $65,000 or RMB 400,000. Agritech Development does not currently conduct any operations.
On July 17, 2013, Muliang Industry entered
into an equity purchase agreement to acquire 100% of the outstanding equity of Shanghai Zongbao Environmental Construction Co.,
Ltd. ("Zongbao") with consideration of approximately $3.2 million or RMB 20 million, effectively becoming the wholly-owned
subsidiary of Muliang Industry. Zongbao was incorporated in Shanghai on January 25, 2008. Zongbao processes and distributes organic
fertilizers. Zongbao wholly owns, Shanghai Zongbao Environmental Construction Co., Ltd. Cangzhou Branch ("Zongbao Cangzhou").
On August 21, 2014, Muliang Agricultural
Limited ("Muliang HK") was incorporated in Hong Kong as an investment holding company.
F-
33
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 1 – ORGANIZATION AND NATURE
OF OPERATIONS (CONTINUED)
January 27, 2015, Muliang HK incorporated
a wholly foreign-owned enterprise, Shanghai Mufeng Investment Consulting Co., Ltd ("Shanghai Mufeng"), in the People's
Republic of China ("PRC").
On July 8, 2015, Muliang Agritech entered
into certain stock purchase agreement with Muliang Agriculture, Inc., pursuant to which Muliang Agritech, for a consideration of
$5,000, acquired 100% interest in Muliang HK and its wholly-owned subsidiary Shanghai Mufeng. Both Muliang HK and Shanghai Mufeng
are controlled by the Company's sole officer and director, Lirong Wang.
On July 23, 2015, Muliang Industry established
a wholly owned subsidiary, Shanghai Muliang Agricultural Sales Co., Ltd. ("Muliang Sales") in Shanghai, China.
On September 3, 2015, Muliang Agritech
effected a split of its outstanding common stock resulting in an aggregate of 150,525,000 shares outstanding of which 120,000,000
were owned by Chenxi Shi the founder of Muliang Agritech and its sole officer and director. The remaining 30,525,000 were held
by a total of 39 investors.
On January 11, 2016, Muliang Agritech issued
129,475,000 shares of its common stock to Lirong Wang for an aggregate consideration of $64,737.50. On the same date, Chenxi Shi,
the sole officer and director of Muliang Agritech on that date, transferred 120,000,000 shares of the common stock of the Company
held by him to Lirong Wang for $800 pursuant to a transfer agreement.
On February 10, 2016, Shanghai Mufeng entered
into a set of contractual agreements known as Variable Interest Entity ("VIE") Agreements, including (1) Exclusive
Technical Consulting and Service Agreement, (2) Equity Pledge Agreement, and (3) Call Option Cooperation Agreement, with Muliang
Industry, and its Principal Shareholders. As a result of the Stock Purchase Agreement and the set of VIE Agreements, Shanghai Muliang
Industry Co., Ltd., along with its consolidated subsidiaries, became entities controlled by Muliang Agritech whereby Muliang Agritech
would derive all substantial economic benefit generated by Muliang Industry and its subsidiaries.
As a result, Muliang Agritech has a direct
wholly-owned subsidiary, Muliang HK and an indirectly wholly owned subsidiary Shanghai Mufeng. Through its VIE Agreements, Muliang
Agritech exercises control over Muliang Industry. Muliang Industry has two wholly-owned subsidiaries (Zongbao and Muliang Sales),
one 99% owned subsidiary (Fukang), one 60% owned subsidiary (Agritech Development), and one indirectly wholly owned subsidiary
Zongbao Cangzhou.
On June 6, 2016, Muliang Industry established
a wholly-owned subsidiary, namely, Muliang (Ningling) Bio-chemical Fertilizer Co. Ltd ("Ningling Fertilizer") in Henan
Province, the central plain of China. On October 12, 2017, the Company ceased operation of Ningling Fertilizer and deregistered
Ningling Fertilizer with the Administration for Industry and Commerce as the Land use right was not approved by the government.
The Company closed Ningling Fertilizer with net assets of $2,275 and accumulated deficit of $34,739 as of October 12, 2017. The
ceased operation does not constitute a strategic shift that will have a major effect on our operations or financial results and
as such, the disposal is not classified as discontinued operations in our consolidated financial statements.
On July 7, 2016, Muliang Industry established
a subsidiary, namely, Zhonglian Huinong (Beijing) Technology Co., Ltd ("Zhonglian") in Beijing City, China. Muliang
Industry owns 65% shares of Zhonglian, and a third-party company, Zhongrui Huilian (Beijing) Technology Co., Ltd owns the other
35% shares. Zhonglian has no operating activity as of December 31, 2018.
F-
34
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 1 – ORGANIZATION AND NATURE
OF OPERATIONS (CONTINUED)
On October 27, 2016, Muliang Industry established
a subsidiary, namely, Yunnan Muliang Animal Husbandry Development Co., Ltd ("Yunnan Muliang") in Yunnan Province, China.
Muliang Industry owns 55% shares of Yunnan Muliang, and a third-party company, Shuangbai County Development Investment Co., Ltd.
owns the other 45% shares. On December 8, 2018, Muliang Industry acquired 25% shares of Yunnan Muliang with a consideration of
$727,125 (RMB5,000,000) from Shuangbai County Development Investment Co., Ltd. And the other 20% shares were acquired by Lirong
Wang. Yunnan Muliang was setup for goat slaughtering and processing project located in Shuangbai County, Chuxiong City, Yunnan
Province, PRC.
On April 4, 2019, the Company's Board of Directors
and majority shareholder approved a 5 to 1 reverse stock split of all of the issued and outstanding shares of the Company's
common stock, change of corporate name from "Mullan Agritech Inc." to "Muliang Agritech Inc.", and creation
of one hundred million (100,000,000) shares of Blank Check Preferred Stock.
On April 5, 2019, we filed a Certificate of Amendment
to our Articles of Incorporation with the Secretary of State of the State of Nevada to reflect the Name Change and to authorize
the creation of Blank Check Preferred Stock. As a result, the capital stock of the Company consists of 500,000,000 shares of common
stock, $0.0001 par value, and 100,000,000 shares of blank check preferred stock, $0.0001 par value.
On April 16, 2019, we filed a Certificate of Change
to our Articles of Incorporation with the Secretary of State of the State of Nevada to reflect the reverse stock split. Any fractional
shares are to be rounded up to whole shares. The reverse stock split does not affect the par value or the number of authorized
shares of common stock of the Company.
The reverse stock split and the name change took effect on May
7, 2019.
Muliang Agritech, Muliang HK, Shanghai
Mufeng, Muliang Industry, Zongbao, Zongbao Cangzhou, Muliang Sales, Fukang, Agritech Development, Yunnan Muliang, and Zhonglian
are referred to as subsidiaries the Company and its consolidated subsidiaries are collectively referred to herein as the "Company",
"we" and "us", unless specific reference is made to an entity.
The consolidated financial statements were
prepared assuming that the Company has controlled Muliang HK and its intermediary holding companies, operating subsidiaries, and
variable interest entities: Shanghai Mufeng, Muliang Industry, Zongbao, Zongbao Cangzhou, Muliang Sales, Fukang, and Agritech Development,
from the first period presented. The transactions detailed above have been accounted for as reverse takeover transaction and a
recapitalization of the Company; accordingly, the Company (the legal acquirer) is considered the accounting acquiree and Muliang
HK (the legal acquiree) is considered the accounting acquirer. No goodwill has been recorded. As a result of this transaction,
the Company is deemed to be a continuation of the business of Muliang HK, Shanghai Mufeng, and Muliang Industry.
Liquidity and Going Concern
As reflected in the accompanying consolidated
financial statements, we had net accumulated deficit of $11,330,741 and $11,773,401 as of March 31, 2019 and December 31, 2018,
respectively. Our cash balances as of March 31, 2019 and December 31, 2018 were $6,317 and $12,778, respectively. We had current
liabilities of $13,145,493 at March 31, 2019 which would be due within the next 12 months. In addition, we had a working capital
deficit of $6,585,530 and $7,119,118 at March 31, 2019 and December 31, 2018, respectively.
The company plans to continue its expansion
and investments, which will require continued improvements in revenue, net income, and cash flows.
The ability of the Company to continue
as a going concern is dependent on the Company's ability to further implement its business plan, raise additional capital,
and generate more revenues. The consolidated financial statements do not include any adjustments that might be necessary if the
Company is unable to continue as a going concern.
F-
35
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial
statements have been prepared in conformity with US GAAP. The basis of accounting differs from that used in the statutory accounts
of the Company, which are prepared in accordance with the accounting principles of the PRC ("PRC GAAP"). The differences
between US GAAP and PRC GAAP have been adjusted in these consolidated financial statements. The Company's functional currency
is the Chinese Renminbi ("RMB"); however, the accompanying consolidated financial statements have been translated and
presented in United States Dollars ("USD").
Interim Financial Statements
The accompanying unaudited financial statements
have been prepared in accordance with generally accepted accounting principles (GAAP) applicable to interim financial information
and the requirements of Form 10-Q and Rule 8-03 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they
do not include all of the information and disclosure required by accounting principles generally accepted in the United States
of America for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the
opinion of management, all adjustments considered necessary for a fair presentation of the financial position and the results of
operations and cash flows for the interim periods have been included. These interim financial statements should be read in conjunction
with the audited financial statements for the year ended December 31, 2018, as not all disclosures required by generally accepted
accounting principles for annual financial statements are presented. The interim financial statements follow the same accounting
policies and methods of computations as the audited financial statements for the year ended December 31, 2018.
Use of Estimates
The preparation of these financial statements
in conformity with generally accepted accounting principles requires the Company to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of these
financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates
on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly,
actual results may differ from these estimates. Significant estimates include the useful lives of property and equipment, land
use rights, assumptions used in assessing collectability of receivables and impairment for long-term assets.
Principles of Consolidation
Muliang Agritech consolidates the following
entities, including wholly-owned subsidiaries, Muliang HK, Shanghai Mufeng, and its wholly controlled variable interest entities,
Muliang Industry, and Zhongbao, 60% controlled Agritech Development, 99% controlled Fukang, 65% controlled Zhonglian and 80% controlled
Yunnan Muliang. The 40% equity interest holder of Agritech Development, 1% equity interest holders in Fukang, 35% equity interest
holders in Zhonglian, and 20% interest in Yunnan Muliang are accounted as non-controlling interest in the Company's consolidated
financial statements.
The variable interest entities consolidated
for which the Company is deemed the primary beneficiary. All significant inter-company accounts and transactions have been eliminated
in consolidation.
F-
36
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
Cash and Cash Equivalents
For purposes of the statements of cash
flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less and money market accounts
to be cash equivalents. The Company maintains cash with various financial institutions.
Accounts Receivable
Accounts receivable are presented net of
an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews
the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability
of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors,
including the age of the balance, a customer's historical payment history, its current credit-worthiness and current economic
trends. Accounts are written off after exhaustive efforts at collection.
Inventories
Inventories, consisting of raw materials,
work in process and finished goods related to the Company's products are stated at the lower of cost or market utilizing
the weighted average method.
Property, Plant and Equipment
Plant and equipment are carried at cost
and are depreciated on a straight-line basis over the estimated useful lives of the assets. The cost of repairs and maintenance
is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost
and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year
of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances
reflect the fact that their recorded value may not be recoverable.
Included in property and equipment is construction-in-progress
which consisted of factory improvements and machinery pending installation and includes the costs of construction, machinery and
equipment, and any interest charges arising from borrowings used to finance these assets during the period of construction or installation
of the assets. No provision for depreciation is made on construction-in-progress until such time as the relevant assets are completed
and ready for their intended use.
F-
37
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
Estimated useful lives of the Company's
assets are as follows:
Useful Life
Building
20 years
Operating equipment
5-10 years
Vehicle
3-5 years
Electronic equipment
3-20 years
Office equipment
3-20 years
Apple orchard
10 years
The apple orchard includes rental for an apple
farm, labor cost, fertilizers, apple seeds, apple seedlings and others. The costs to purchase and cultivate apple trees and the
expenditures related to labor and materials to plant apple trees until they become commercially productive are capitalized, which
require a two-year period. The estimated production life for apple tree is 10 years, and the costs are depreciated without a residual
value. Expenses incurred maintaining apple trees during the growth cycle until seedling apple trees or grafted varieties are fruited
are capitalized into inventory and included in Work in Process—apple orchard, a component of inventories.
Depreciation expenses pertaining to apple
trees will be included in inventory costs for those apples to be sold and ultimately become a component of cost of goods sold.
Similar to other assets, the failure of our apple trees to be serviceable over the entirety of their anticipated useful lives or
to be sold at their anticipated residual value will negatively impact our operating results.
Intangible Assets
Included in the intangible assets are land
use rights. According to the laws of the PRC, the government owns all the land in the PRC. Companies or individuals are authorized
to possess and use the land only through land use rights granted by the Chinese government. Intangible assets are being amortized
using the straight-line method over their lease terms or estimated useful life.
Estimated useful lives of the Company's
intangible assets are as follows:
Useful Life
Land use rights
50 years
Non-patented technology
10 years
The Company carries intangible assets at
cost less accumulated amortization. In accordance with US GAAP, the Company examines the possibility of decreases in the value
of intangible assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.
The Company computes amortization using the straight-line method over estimated useful life of 50 years for the land use rights.
Impairment of Long-lived Assets
In accordance with ASC Topic 360, the Company
reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets
may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted
future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between
the asset's estimated fair value and its book value. The Company recorded no impairment charge for the three months ended
March 31, 2019 and 2018.
F-
38
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
Advances from Customers
Advances from customers consist of prepayments
from customers for merchandise that had not yet been shipped. The Company will recognize the deposits as revenue as customers take
delivery of the goods and title to the assets is transferred to customers in accordance with the Company's revenue recognition
policy.
Non-controlling Interest
Non-controlling interests in the Company's
subsidiaries are recorded in accordance with the provisions of ASC 810 and are reported as a component of equity, separate from
the parent's equity. Purchase or sale of equity interests that do not result in a change of control are accounted for as
equity transactions. Results of operations attributable to the non-controlling interest are included in our consolidated results
of operations and, upon loss of control, the interest sold, as well as interest retained, if any, will be reported at fair value
with any gain or loss recognized in earnings.
Revenue Recognition
On January 1, 2018, the Company adopted
ASC 606 using the modified retrospective method. Results for the reporting period beginning after January 1, 2018 are presented
under ASC 606, while prior period amounts have not been adjusted and continue to be reported in accordance with the Company's
historic accounting under Topic 605.
Management has determined that the adoption
of ASC 606 did not impact the Company's previously reported financial statements in any prior period nor did it result in
a cumulative effect adjustment to opening retained earnings.
Revenue for sale of products is derived
from contracts with customers, which primarily include the sale of fertilizer products and environmental protection equipment.
The Company's sales arrangements do not contain variable consideration. The Company recognizes revenue at a point in time
based on management's evaluation of when performance obligations under the terms of a contract with the customer are satisfied
and control of the products has been transferred to the customer. For vast majority of the Company's product sales, the performance
obligations and control of the products transfer to the customer when products are delivered, and customer acceptance is made.
Pursuant to the guidance of ASC Topic 840,
rent shall be reported as income by lessors over the lease term as it becomes receivable. The Company currently
leased part of the building of the Shanghai new plant to third parties as warehouse. The Company recognizes building leasing revenue
over the beneficial period described by the agreement, as the revenue is realized or realizable and earned.
The Company recognized rental income from
leasing a portion of its manufacturing facility located in Shanghai to third parties. For the three months ended March 31, 2019
and 2018, rental income of $165,711 and $118,962 were recognized as other income.
Cost of Sales
Cost of goods sold consists primarily of
raw materials, utility and supply costs consumed in the manufacturing process, manufacturing labor, depreciation expense and direct
overhead expenses necessary to manufacture finished goods as well as warehousing and distribution costs such as inbound freight
charges, shipping and handling costs, purchasing and receiving costs.
F-
39
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
Income Taxes
The Company accounts for income taxes under
the provisions of Section 740-10-30 of the FASB Accounting Standards Codification, which is an asset and liability approach that
requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been
recognized in its financial statements or tax returns.
The Company is subject to the Enterprise
Income Tax law ("EIT") of the People's Republic of China. The Company's operations in producing and selling
fertilizers are subject to the 25% enterprise income tax.
Related Parties
Parties are related to the Company if the
parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with
the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of
principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can
significantly influence the management or operating policies of the other to an extent that one of the transacting parties might
be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions.
Accumulated Other Comprehensive Income
(Loss)
Comprehensive income (loss) comprised of
net income (loss) and all changes to the statements of stockholders' equity, except those due to investments by stockholders,
changes in paid-in capital and distributions to stockholders. The Company's comprehensive income (loss) consist of net income
(loss) and unrealized gains from foreign currency translation adjustments.
Reclassification
Certain prior year balances have been reclassified
to conform to the current period presentation. These reclassifications had no impact on net earnings or financial position.
Foreign Currency Translation
The Company's functional currency is
the Chinese Renminbi ("RMB"); however, the accompanying consolidated financial statements have been translated and
presented in United States Dollars ("USD"). Results of operations and cash flows are translated at average exchange
rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity
is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements
of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments
resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining
comprehensive income/loss. The translation adjustment for three months ended March 31, 2019 and 2018 were gain of $219,080 and
gain of $24,289, respectively. Transactions denominated in foreign currencies are translated into the functional currency at the
exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into
the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that
arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included
in the results of operations as incurred.
F-
40
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
All of the Company's revenue transactions
are transacted in the functional currency. The Company does not enter into any material transaction in foreign currencies. Transaction
gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company.
Asset and liability accounts at March 31,
2019 and December 31, 2018 were translated at 6.7111 RMB to $1 USD and 6.8764 RMB to $1 USD, respectively, which were the exchange
rates on the balance sheet dates. The average translation rates applied to the statements of income for the three months ended
March 31, 2019 and 2018 were 6.7464 RMB and 6.3566 RMB to $1 USD, respectively.
Earnings (Loss) per Share
Basic earnings per share is computed by
dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period,
excluding the effects of any potentially dilutive securities. Diluted earnings per share gives effect to all dilutive potential
of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by
using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock
options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Earnings per share excludes
all potential dilutive shares of common stock if their effect is anti-dilutive. There were no potential dilutive securities at
March 31, 2019 and December 31, 2018 and for the three months ended March 31, 2019 and 2018.
Fair Value of Financial Instruments
The Company adopted the guidance of ASC
Topic 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value,
and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:
Level 1-Inputs are unadjusted quoted prices
in active markets for identical assets or liabilities available at the measurement date.
Level 2-Inputs are unadjusted quoted prices
for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets
that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable
market data.
Level 3-Inputs are unobservable inputs
which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the
asset or liability based on the best available information.
The carrying amounts reported in the balance
sheets for cash and cash equivalents, accounts receivable, inventories, advances to suppliers, prepaid expenses, short-term loans,
accounts payable, accrued expenses, advances from customers, VAT and service taxes payable and income taxes payable approximate
their fair market value based on the short-term maturity of these instruments.
ASC Topic 825-10 "
Financial Instruments
"
allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The
fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If
the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings
at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.
F-
41
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
The following table summarizes the carrying
values of the Company's financial instruments:
March 31,
December 31,
2019
2018
Short-term loan
154,222
150,515
Current portion of long-term debt
5,572,857
5,453,435
Long-term loan
3,602,640
3,454,543
Government Contribution Plan
Pursuant to the laws applicable to PRC
law, the Company is required to participate in a government-mandated multi-employer defined contribution plan pursuant to which
certain retirement, medical and other welfare benefits are provided to employees. Chinese labor regulations require the Company
to pay to the local labor bureau a monthly contribution at a stated contribution rate based on the monthly basic compensation of
qualified employees. The relevant local labor bureau is responsible for meeting all retirement benefit obligations; the Company
has no further commitments beyond its monthly contribution.
Statutory Reserve
Pursuant to the laws applicable to the
PRC, the Company must make appropriations from after-tax profit to the non-distributable "statutory surplus reserve fund".
Subject to certain cumulative limits, the "statutory surplus reserve fund" requires annual appropriations of 10% of
after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles
generally accepted in the PRC ("PRC GAAP") at each year-end). For foreign invested enterprises and joint ventures in
the PRC, annual appropriations should be made to the "reserve fund". For foreign invested enterprises, the annual appropriation
for the "reserve fund" cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of
the registered capital (as determined under PRC GAAP at each year-end). If the Company has accumulated loss from prior periods,
the Company is able to use the current period net income after tax to offset against the accumulate loss.
Segment Information
The standard, "Disclosures about
Segments of an Enterprise and Related Information," codified with ASC-280, requires certain financial and supplementary information
to be disclosed on an annual and interim basis for each reportable segment of an enterprise. The Company believes that it operates
in two business segments and in one geographical segment (China), as all of the Company's current operations are carried
in China.
F-
42
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
Recent Accounting Pronouncement
In January 2017, the Financial Accounting
Standard Board ("FASB") issued guidance, which simplifies the accounting for goodwill impairment. The updated guidance
eliminates Step 2 of the impairment test, which requires entities to calculate the implied fair value of goodwill to measure a
goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit's
carrying amount over its fair value.
In January 2017, the FASB issued guidance,
which amended the existing accounting standards for business combinations. The amendments clarify the definition of a business
with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions
(or disposals) of assets or businesses.
In January 2017, the FASB issued ASU 2017-03,
"
Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323)
".
This pronouncement amends the SEC's reporting requirements for public filers in regard to new accounting pronouncements or
existing pronouncements that have not yet been adopted. Companies are to provide qualitative disclosures if they have not yet implemented
an accounting standards update. Companies should disclose if they are unable to estimate the impact of a specific pronouncement,
and provide disclosures including a description of the effect on accounting policies that the registrant expects to apply. These
provisions apply to all pronouncements that have not yet been implemented by registrants. There are additional provisions that
relate to corrections to several other prior FASB pronouncements. The Company has incorporated language into other recently issued
accounting pronouncement notes, where relevant for the corrections in FASB ASU 2017-03. The Company is implementing the updated
SEC requirements on not yet adopted accounting pronouncements with these consolidated financial statements.
In August 2017, the FASB issued guidance,
which amends the existing accounting standards for derivatives and hedging. The amendment improves the financial reporting of hedging
relationships to better represent the economic results of an entity's risk management activities in its financial statements
and made certain targeted improvements to simplify the application of the hedge accounting guidance in current U.S. GAAP.
In August 2018, the FASB issued ASU 2018-13,
"
Fair Value Measurement (Topic 820), – Disclosure Framework – Changes to the Disclosure Requirements for
Fair Value Measurement
," which makes a number of changes meant to add, modify or remove certain disclosure requirements
associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. The amendments
in this Update modify the disclosure requirements on fair value measurements based on the concepts in FASB Concepts Statement,
Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements, including the consideration of costs
and benefits. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable
inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied
prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments
should be applied retrospectively to all periods presented upon their effective date. The amendments are effective for all entities
for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted.
The Company is currently evaluating the potential impacts of ASU 2018-13 on its consolidated financial statements.
The Company believes that there were no
other accounting standards recently issued that had or are expected to have a material impact on our financial position or results
of operations.
Recently adopted accounting pronouncements
In May 2016, the FASB issued ASU 2016-12,
"
Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients
". The
amendments, among other things: (1) clarify the objective of the collectability criterion for applying paragraph 606-10-25-7; (2)
permit an entity to exclude amounts collected from customers for all sales (and other similar) taxes from the transaction price;
(3) specify that the measurement date for noncash consideration is contract inception; (4) provide a practical expedient that permits
an entity to reflect the aggregate effect of all modifications that occur before the beginning of the earliest period presented
when identifying the satisfied and unsatisfied performance obligations, determining the transaction price, and allocating the transaction
price to the satisfied and unsatisfied performance obligations; (5) clarify that a completed contract for purposes of transition
is a contract for which all (or substantially all) of the revenue was recognized under legacy GAAP before the date of initial application,
and (6) clarify that an entity that retrospectively applies the guidance in Topic 606 to each prior reporting period is not required
to disclose the effect of the accounting change for the period of adoption. The effective date of these amendments is at the same
date that Topic 606 is effective. The Company adoptedASU 2016-12 from January 1, 2018.
In December 2016, the FASB issued ASU 2016-20,
"Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers"
. The amendments
in ASU 2016-20 affect narrow aspects of the guidance issued in ASU 2014-09 including Loan Guarantee Fees, Contract Costs, Provisions
for Losses on Construction-Type and Production-Type Contracts, Disclosure of Remaining Performance Obligations, Disclosure of Prior
Period Performance Obligations, Contract Modifications, Contract Asset vs. Receivable, Refund Liabilities, Advertising Costs, Fixed
Odds Wagering Contracts in the Casino Industry, and Costs Capitalized for Advisors to Private Funds and Public Funds. The effective
date of these amendments are at the same date that Topic 606 is effective. Topic 606 is effective for public entities for annual
reporting periods beginning after December 15, 2017, including interim reporting periods therein (i.e., January 1, 2018, for a
calendar year entity). The Company adopted ASU 2016-20 from January 1, 2018.
The Company adopted the
Revenue from
Contracts with Customers (Topic 606)
from January 1, 2018.
F-
43
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 3 – ACCOUNTS RECEIVABLE
Accounts receivable consisted of the following:
March 31,
December 31,
2019
2018
Accounts receivable
$
4,337,460
$
4,370,620
Less
: Allowance for doubtful accounts
(280,400
)
(279,733
)
Total, net
$
4,057,060
$
4,090,887
The Company reviews the accounts receivable
on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances.
After evaluating the collectability of individual receivable balances, the Company recognized bad debt allowance expense of $0
and $0 for the three months ended March 31, 2019 and 2018.
NOTE 4 – INVENTORIES
Inventories consisted of the following:
March 31,
December 31,
2019
2018
Raw materials
$
138,892
$
124,069
Finished goods
650,159
322,561
Total, net
$
789,051
$
446,630
The Company did not recognized loss from
inventory impairment for the three months ended March 31, 2019 and 2018.
F-
44
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 5 – PREPAYMENT
The prepayment balance of $1,519,834 as
of March 31, 2019 mainly represents the advanced payment for the construction of the black goat slaughtering and processing project
located in Shuangbai County, Chuxiong City, Yunnan Province, PRC. The remaining balance represents the advance to the suppliers
for business purpose.
NOTE 6 – PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at March
31, 2019 and December 31, 2018 consisted of:
March 31,
December 31,
2019
2018
Building
$
13,155,540
$
12,838,100
Operating equipment
2,896,937
2,754,463
Vehicle
82,547
104,121
Office equipment
21,501
59,897
Apple Orchard
1,070,395
1,026,505
Construction in progress
384,529
341,173
17,611,449
17,124,259
Less
: Accumulated depreciation
(2,468,578
)
(2,196,936
)
$
15,142,871
$
14,927,323
For the three months ended March 31, 2019
and 2018, depreciation expense amounted to $272,302 and $208,051, respectively. Depreciation is not taken during the period of
construction or equipment installation. Upon completion of the installation of manufacturing equipment or any construction in progress,
construction in progress balances will be classified to their respective property and equipment category.
The construction in progress of $384,529
represents the investment of a black goat processing plant located in Shuangbai County, Chuxiong City, Yunnan Province, PRC.
F-
45
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 7 – INTANGIBLE ASSETS
Intangible assets consisted of the following:
March 31,
December 31,
2019
2018
Land use rights
$
3,707,565
$
3,618,441
Non-patented technology
14,901
14,542
3,722,466
3,632,983
Less
: Accumulated amortization
(449,060
)
(419,853
)
$
3,273,406
$
3,213,130
For the three months ended March 31, 2019
and 2018, amortization of intangible assets amounted to $18,767 and $15,440, respectively.
NOTE 8 – DEFERRED TAX ASSETS, NET
The components of the deferred tax assets
are as follows:
March 31,
December 31,
2019
2018
Deferred tax assets, non-current
Deficit carried-forward
$
427,103
$
416,836
Allowance for doubtful accounts
38,849
37,915
Deferred tax assets
465,952
454,751
Less
: valuation allowance
-
-
Deferred tax assets, non-current
$
465,952
$
454,751
Deferred taxation is calculated under
the liability method in respect of taxation effect arising from all timing differences, which are expected with reasonable probability
to realize in the foreseeable future. The Company's subsidiary registered in the PRC is subject to income taxes within the
PRC at the applicable tax rate.
F-
46
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 9 – LOANS PAYABLE
Short-term loan of $154,222 represents
balance due to Shanghai Jinshan Limin Micro Loan Co., Ltd., with annualized interest rate of 16%. This loan was borrowed on March
3, 2017 and due on March 2, 2018. The Company extended this loan twice until the end of June 2019 with the same terms.
Current portion of long-term loans amounted
to $5,572,857 representing balance due to Agricultural Bank of China, with an annual interest rate of 5.70% + (HongkongInterBank
Offered Rate ("HIBOR")).
Long-term loans represent amounts due to
lenders that are due in more than one year, whose balance was $3,602,640 and $3,454,543 as of March 31, 2019 and December 31, 2018,
respectively.
Long-term loan and current portion of
long-term loan consisted of the following:
March 31,
December 31,
2019
2018
Loan payable to Agricultural Bank of China, annual interest rate of 5.70% + HIBOR, due by August 25, 2019.
$
4,455,305
$
4,362,748
Loan payable to Rushan City Rural Credit Union, annual interest 8.3125%, due by July 25, 2019.
1,117,552
1,090,687
Long-term loans and interest payable to individuals and entities without interest
3,602,640
3,454,543
9,175,497
8,907,978
Less
: Current portion of long-term loans
    payable
(5,572,857
)
(5,453,435
)
Total, net
$
3,602,640
$
3,454,543
As of March 31, 2019, the Company's
future loan obligations according to the terms of the loan agreement are as follows:
Year 1
$
5,727,079
Year 2
3,602,640
Total
$
9,329,719
The long-term bank loan with Agricultural
Bank of China was collateralized with land use rights and guaranteed by Mr. Lirong Wang, the CEO.
The Company recognized interest expenses
of $94,596 and $108,081 for the three months ended March 31, 2019 and 2018, respectively.
F-
47
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 10 – STOCKHOLDERS DEFICIT
Authorized Stock
The Company has authorized 500,000,000
common shares with a par value of $0.0001 per share.  Each common share entitles the holder to one vote, in person or proxy,
on any matter on which action of the stockholders of the corporation is sought.
On April 5, 2019, the Company filed a Certificate
of Amendment to our Articles of Incorporation with the Secretary of State of the State of Nevada to reflect the creation of Blank
Check Preferred Stock. As a result, the capital stock of the Company consists of 500,000,000 shares of common stock, $0.0001 par
value, and 100,000,000 shares of blank check preferred stock as of March 31, 2019.
Common Share Issuances
On June 29, 2018, the outstanding amount
$326,348 due to Mr. Wang, CEO and Chairman of the Company, were converted into 43,200 shares of Common Shares at $ 7.55 per share.
On June 29, 2018 the Company issued 298,518
common shares of the Company at $7.55 for proceeds of $2,255,111 to Mr. Wang, CEO and Chairman of the Company.
On April 4, 2019, the Company's Board
of Directors and majority shareholder approved a 5 to 1 reverse stock split of all of the issued and outstanding shares of the
Company's common stock (the "Reverse Stock Split").
On April 16, 2019, the Company filed a
Certificate of Change to our Articles of Incorporation with the Secretary of State of the State of Nevada to reflect the Reverse
stock Split. The common shares outstanding have been retroactively restated to reflect the reverse stock split.
As a result of the Reverse Stock Split, the total issued and
outstanding shares of common stock the Company is 56,341,953 as of March 31, 2019.
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48
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 11 – RELATED PARTY TRANSACTIONS
Ms. Hui Song was the Company's former
sales director. In 2013, Ms. Hui Song resigned and she no longer has any significant control or influence over the Company therefore
she was no longer considered a related party. Jilin Jiliang Zongbao Biological Technology Co., Ltd., an entity controlled by Ms.
Hui Song, and Yantai Zongbao Tele-Agriculture Service Co., Ltd., a related company of Ms. Hui Song, were also no longer considered
as related parties of the Company.
*Account receivable from and sales
to Ms. Hui Song and her associated
For the three months ended March 31, 2019,
the Company did not sell any products to
Ms. Hui Song and her associated.
The Company sold fertilizer manufacturing
equipment to Jilin Jiliang Zongbao Biological Technology Co., Ltd., in the amount of $171,664, with related cost of $107,567 for
the three months ended March 31, 2018. This transaction was reflected in the revenue and cost of goods sold.
As of March 31, 2019 and December 31, 2018,
the Company has account receivable balance of $190,238 and $185,665 from Jilin Jiliang Zongbao Biological Technology Co., Ltd.,
respectively.
As of March 31, 2019 and December 31, 2018,
the Company has account receivable balance of $37,252 and $61,082 from Yantai Zongbao Tele-Agriculture Service Co., Ltd., respectively.
*Account payable to and purchase
from Ms. Hui Song and its associated
For
the three months ended March 31, 2019 and 2018, the Company purchased fertilizer of $518,943 and $459,421 from
Jilin Jiliang
Zongbao Biological Technology Co., Ltd., respectively
.
As of March 31, 2019 and December
31, 2018,
account payable to
Jilin Jiliang Zongbao Biological Technology Co., Ltd.
was $596,176 and $72,712 respectively.
As of March 31, 2019, long-term loan payable
balances for Jilin Jiliang Zongbao Biological Technology Co., Ltd. and Ms Hui Song were $827,676 and $273,428, respectively.
As of December 31, 2018, long-term loan
payable balances for Jilin Jiliang Zongbao Biological Technology Co., Ltd. and Ms. Hui Song were $807,780 and $266,855, respectively.
F-
49
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 11 – RELATED PARTY TRANSACTIONS
(CONTINUED)
*Account payable to and purchase
from related parties
The
Company did not make any purchase from related parties for the three months ended March 31, 2019.
The
Company purchased fertilizer manufacturing equipment of $107,567 from Shanghai Aoke Chemicals Co., Ltd. for the three months ended
March 31, 2018. Shanghai Aoke Chemicals Co., Ltd. was 95% controlled by Mr. Lirong Wang, CEO and majority shareholder of the Company.
As
of March 31, 2019 and December 31, 2018, account payable to Shanghai Aoke Chemicals Co., Ltd. were $119,205 and $116,340.
*Due to related party
Outstanding balance due to Mr. Lirong Wang
and Mr. Guohua Lin below are advances from related parties for working capital of the Company which are due on demand, non-interest
bearing, and unsecured, unless further disclosed.
March 31,
December 31,
2019
2018
Relationship
Mr. Lirong Wang
680,238
1,442,751
The CEO and Chairman / Actual controlling person
Ms. Xueying Sheng
161,403
169,743
Controller/Accounting manager of the Company
Mr. Guohua Lin
85,083
3,054
Senior management / One of the Company's shareholders
Total
926,724
1,615,547
For the three months ended March 31, 2019,
the Company borrowed $574,295 from Mr. Lirong Wang, and repaid $1,114,501.
For the three months ended March 31, 2019,
the Company borrowed $83,742 from Mr. Guohua Lin, and repaid $271.
On November 8, 2017, the Company borrowed
$31,993 from Ms. Xueying Sheng. The loan is unsecured, without maturity, and bears an interest rate of 20%.
For the three months ended March 31, 2019,
the Company borrowed $25,976 from Ms. Xueying Sheng and repaid $38,431.
These loan are due on demand, non-interest bearing, and
unsecured.
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50
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 12 – CONCENTRATIONS
Customers Concentrations
The following table sets forth information
as to each customer that accounted for 10% or more of the Company's revenues for the three months ended March 31, 2019 and
2018.
For the three months ended
March 31,
Customer
2019
2018
Amount
%
Amount
%
A
414,488
22
%
N/A
N/A
B
386,325
20
%
N/A
N/A
C
266,809
14
%
N/A
N/A
D
222,341
12
%
N/A
N/A
E
N/A
N/A
626,267
52
%
F
N/A
N/A
314,634
26
%
G
N/A
N/A
171,664
14
%
Suppliers Concentrations
The following table sets forth information
as to each supplier that accounted for 10% or more of the Company's purchase for the three months ended March 31, 2019 and
2018.
For the three months ended
March 31,
Suppliers
2019
2018
Amount
%
Amount
%
A
401,440
34
%
N/A
N/A
B
142,476
12
%
N/A
N/A
C
518,943
44
%
459,421
76
%
D
N/A
N/A
107,567
18
%
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51
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 12 – CONCENTRATIONS (CONTINUED)
Credit Risks
The Company's operations are carried
out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the
political, economic and legal environment in the PRC, and by the general state of the PRC's economy. The Company's
operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North
America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations,
anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.
Financial instruments which potentially
subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. Substantially all
of the Company's cash is maintained with state-owned banks within the PRC, and none of these deposits are covered by insurance.
The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.
A significant portion of the Company's sales are credit sales which are primarily to customers whose ability to pay is dependent
upon the industry economics prevailing in these areas; however, concentrations of credit risk with respect to trade accounts receivables
is limited due to generally short payment terms. The Company also performs ongoing credit evaluations of its customers to help
further reduce credit risk. At March 31, 2019 and December 31, 2018, the Company's cash balances by geographic area were
as follows:
March 31,
2019
December 31,
2018
China
$
6,317
100
%
$
12,778
100
%
Total cash and cash equivalents
$
6,317
100
%
$
12,778
100
%
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52
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 13 – INCOME TAXES
United States
Muliang Agritech is established in the
State of Nevada in the United States and is subject to Nevada State and US Federal tax laws. Muliang Agritech has approximately
$102,000 of unused net operating losses ("NOLs") available for carrying forward to future years for U.S. federal income
tax reporting purposes. The benefit from the carry forward of such NOLs will begin expiring during the year ended December 31,
2034. Because United States tax laws limit the time during which NOL carry forwards may be applied against future taxable income,
the Company may be unable to take full advantage of its NOLs for federal income tax purposes should the Company generate taxable
income. Further, the benefit from utilization of NOL carry forwards could be subject to limitations due to material ownership changes
that could occur in the Company as it continues to raise additional capital. Based on such limitations, the Company has significant
NOLs for which realization of tax benefits is uncertain.
On December 22, 2017, the United States
enacted the Tax Cuts and Jobs Act (the "Act") resulting in significant modifications to existing law. The Company has
considered the accounting impact of the effects of the Act during the year ended December 31, 2018 including a reduction in the
corporate tax rate from 34% to 21% among other changes.
Hong Kong
Muliang HK is established in Hong Kong
and its income is subject to a 16.5% profit tax rate for income sourced within the country. For the years ended December 31, 2018
and 2017, Muliang HK did not earn any income derived in Hong Kong, and therefore was not subject to Hong Kong Profits Tax.
China, PRC
Shanghai Mufeng and its subsidiaries Muliang
Industry, Zongbao, Zongbao Cangzhou, Muliang Sales, Fukang, Agritech Development, Zhongliang and Yunnan Muliang are established
in China and its income is subject to income tax rate of 25%.
The reconciliation of effective income tax rate as follows:
For the Three Months Ended
March 31,
March 31,
2019
2018
US Statutory income tax rate
21
%
21
%
Lower rates in PRC, net
-
-
Valuation allowance
(21
)%
(21
)%
Total
-
-
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53
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 13 – INCOME TAXES (CONTINUED)
The provision for income taxes consists of the following:
For
the Three Months Ended
March 31,
2019
2018
Current
$
97,860
$
-
Deferred
-
-
Total
$
97,860
$
-
Accounting for Uncertainty in Income Taxes
The tax authority of the PRC government
conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises complete their
relevant tax filings. Therefore, the Company's PRC entities' tax filings results are subject to change. It is therefore
uncertain as to whether the PRC tax authority may take different views about the Company's PRC entities' tax filings,
which may lead to additional tax liabilities.
ASC 740 requires recognition and measurement
of uncertain income tax positions using a "more-likely-than-not" approach. The management evaluated the Company's
tax positions and concluded that no provision for uncertainty in income taxes was necessary as of March 31, 2019 and December
31, 2018.
NOTE 14 – BUSINESS SEGMENTS
The revenues and cost of goods sold from operation consist of
the following:
Revenues
Cost of Sales
For the Three Months Ended
For the Three Months Ended
March 31,
March 31,
March 31,
March 30,
2019
2018
2019
2018
Fertilizer sales
$
1,915,973
$
1,188,020
$
1,024,937
$
682,779
Agricultural products (food) sales
309,395
-
313,939
-
Total
$
2,225,368
$
1,188,020
$
1,338,876
$
682,779
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54
MULIANG AGRITECH, INC. AND SUBSIDIARIES
NOTES OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 15 – SUBSEQUENT EVENT
Reverse Stock Split
On April 4, 2019, the Company's Board of Directors and
majority shareholder approved a 5 to 1 reverse stock split of all of the issued and outstanding shares of the Company's common
stock (the "Reverse Stock Split"),  No fractional shares of Common Stock will be issued as a result of the reverse
stock split. The Stock Split does not affect the par value or the number of authorized shares of common stock of the Company.
On April 16, 2019, the Company filed a Certificate of Change
to the Articles of Incorporation with the Secretary of State of the State of Nevada to reflect the reverse stock split.
The reverse stock split took effect on May 7, 2019
As a result of this reverse stock split,
all references in the financial statements and notes thereto to the number of shares outstanding, per share amounts, of the Company's
Common Stock have been restated to reflect the effect of the stock split for all periods presented.
Name Change
On April 4, 2019, the Company's Board of Directors and
majority shareholder approved change of corporate name from "Mullan Agritech Inc." to "Muliang Agritech Inc."
(the "Name Change"). On April 5, 2019, Company filed a Certificate of Amendment to its Articles of Incorporation with
the Secretary of State of the State of Nevada to reflect the Name Change. The name change took effect on May 7, 2019
Blank Check Preferred Stock
On April 4, 2019,
the Company's Board of Directors and majority shareholder approved creation of one hundred million (100,000,000) shares of
Blank Check Preferred Stock, $0.0001 par value. To the fullest extent permitted by the laws of the State of Nevada, as the same
now exists or may hereafter be amended or supplemented, the Board of Directors may fix and determine the designations, rights,
preferences or other variations of each class or series within each class of preferred stock of the Company. The Company may issue
the shares of stock for such consideration as may be fixed by the Board of Directors.
On April 5, 2019, the Company filed a Certificate
of Amendment to the Articles of Incorporation with the Secretary of State of the State of Nevada to authorize the creation of Blank
Check Preferred Stock.
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55
Shares of Common Stock
Muliang Agritech, Inc.
PROSPECTUS
,
2019
Through and including
,
2019 (the 25
th
day after the date of this offering), all dealers effecting transactions in these securities, whether
or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation
to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.
PART II — INFORMATION NOT REQUIRED
IN THE PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
Set forth below is an itemization of the total expenses, excluding
underwriters' discounts and commissions, that we expect to incur in connection with this offering. With the exception of
the SEC registration fee, the FINRA filing fee and the Nasdaq listing fee, all amounts are estimates.
Securities and Exchange Commission Registration Fee
$
2,000
Nasdaq Listing Fee
$
50,000
FINRA
$
3,000
Legal Fees and Expenses
$
Accounting Fees and Expenses
$
Printing and Engraving Expenses
$
Miscellaneous Expenses
$
Total Expenses
$
All amounts are estimates other than the SEC's registration
fee. We are paying all expenses of the offering listed above.
Item 14. Indemnification of Directors and Officers.
To the fullest extent permitted by the
laws of the State of Nevada, our Articles of Incorporation and Bylaws, we may indemnify an officer or director who is made a party
to any proceeding, including a lawsuit, because of his/her position, if he/she acted in good faith and in a manner he/she reasonably
believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer
or director is successful on the merits in a proceeding as to which he/she is to be indemnified, we must indemnify him/her against
all expenses incurred, including attorney's fees. With respect to a derivative action, indemnity may be made only for expenses
actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court
order.
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 theretofore unenforceable.
Item 15. Recent Sales of Unregistered Securities.
For
the past three years, we have issued and sold the securities described below without registering the securities under the Securities
Act. None of these transactions involved any underwriters' underwriting discounts or commissions, or any public offering.
We believe that each of the following issuances was exempt from registration under the Securities Act in reliance on Regulation S
promulgated under the Securities Act regarding sales by an issuer in offshore transactions, Regulation D under the Securities
Act, Rule 701 under the Securities Act or pursuant to Section 4(a)(2) of the Securities Act regarding transactions not
involving a public offering.
We
completed a 5-for-1 reverse stock split on May 7, 2019. All share and per share information in this Item 15 has been
adjusted to reflect this reverse stock split.
On
June 29, 2018, the outstanding amount $326,348 due to Mr. Wang, CEO and Chairman of the Company, were converted into 43,200 shares
of common stock at $7.55 per share.
On June
29, 2018, the Company issued 298,518 shares of common stock of the Company at $7.55 per share, to Mr. Wang, CEO and Chairman
of the Company
, for aggregate proceeds of $2,255,111.
Item 16. Exhibits.
Exhibit
Number
Description
3.1 (1)
Certificate of Incorporation
3.2 (2)
Certificate of Amendment filed with the Secretary of the State of Nevada on April 5, 2019
3.3 (2)
Certificate of Change filed with the Secretary of the State of Nevada on April 16, 2019
3.4 (1)
Bylaws
4.1*
Specimen Common Stock Certificate
5.1*
Opinion of Ortoli Rosenstadt LLP, counsel to Mullan Agritech, Inc., as to the validity of the common stock
8.1*
Opinion of                        regarding certain PRC tax matters (included in Exhibit 99.1)
14.1*
Code of Business Conduct and Ethics of the Company
21.1†
List of Subsidiaries
23.1†
Consent of WWC, PC
23.2*
Consent of Ortoli Rosenstadt LLP (included in Exhibit 5.1).
23.3*
Consent of                         Law Firm
99.1*
Audit Committee Charter
99.2*
Compensation Committee Charter
99.3*
Nominating Committee Charter
(1)
Incorporated by reference
to the Registration Statement on Form S-1 filed with the SEC on January 5, 2015.
(2)
Incorporated by reference
to the Annual Report on Form 8-K filed with the SEC on May 10, 2019.
*
To be filed by amendment
†
Filed herewith.
II-
1
Item 17. Undertakings.
The undersigned Registrant hereby undertakes to provide to the
underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such
names as required by the underwriters to permit prompt delivery to each 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.
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 of 1933;
(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 Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement;
(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 of 1933 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 of 1933 to any purchaser, 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 of 1933 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-
2
(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.
(6)
The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
(7)
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 provisions described in Item 14 above, 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.
(8)
The undersigned Registrant hereby undertakes:
(1)
That for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2)
That for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and this offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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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 June 26, 2019.
MULLAN AGRITECH, INC.
By:
/s/ LirongWang
LirongWang
Chief Executive Officer and
Chief Financial Officer
(Principal Executive Officer and
Principal 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/ Lirong Wang
Chairman of the Board & Chief Executive Officer
June 26
, 2019
Lirong Wang
(Principal Executive Officer)
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