Full Press Release Details
RONS INTELLIGENT TECHNOLOGY (BEIJING) CO.,
LTD. AND SHENZHEN XINBAO
INVESTMENT MANAGEMENT CO., LTD.
INDEX TO COMBINED FINANCIAL STATEMENTS
| CONTENTS | PAGE(S) | |
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID: 6907) | F-2 | |
| COMBINED BALANCE SHEETS AS OF SEPTEMBER 30, 2023 AND 2024 | F-3 | |
| COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2024 | F-4 | |
| COMBINED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2024 | F-5 | |
| COMBINED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2024 | F-6 | |
| NOTES TO COMBINED FINANCIAL STATEMENTS | F-8 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
To the Board of Directors and Shareholders of
RONS INTELLIGENT TECHNOLOGY (BEIJING) CO.,
LTD. AND SHENZHEN XINBAO INVESTMENT MANAGEMENT CO., LTD.
Opinion on the Combined Financial Statements
We have audited the accompanying
combined balance sheets of RONS Intelligent Technology (Beijing) Co., Ltd. and Shenzhen Xinbao Investment Management Co., Ltd. and its
subsidiaries (the "Company") as of September 30, 2023 and 2024, the related combined statements of operations and comprehensive
loss, changes in shareholders' equity, and cash flows for each of years ended September 30, 2023 and 2024, and the related notes
(collectively referred to as the "combined financial statements"). In our opinion, the combined financial statements present
fairly, in all material respects, the financial position of the Company as of September 30, 2023 and 2024, and the results of its operations
and its cash flows for each of the years ended September 30, 2023 and 2024, in conformity with accounting principles generally accepted
in the United States of America ("U.S. GAAP").
These combined financial statements
are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's combined
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 audits to obtain reasonable assurance
about whether the combined financial statements are free of material misstatement, whether due to error or fraud. The Company is not
required to have, nor 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 combined 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 combined 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 combined financial statements. We believe that our audits provide
a reasonable basis for our opinion.
We have served as the Company's auditor since 2024.
RONS INTELLIGENT TECHNOLOGY (BEIJING) CO.,
LTD. AND SHENZHEN XINBAO
INVESTMENT MANAGEMENT CO., LTD.
Combined Balance Sheets
(USD, except for share and per share data, or otherwise noted)
| As of September 30, | ||||||||
| 2023 | 2024 | |||||||
| USD | USD | |||||||
| ASSETS: | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | 1,330,119 | 599,425 | ||||||
| Restricted cash | 3,401,683 | 1,867,800 | ||||||
| Accounts receivable, net | 3,366,213 | 2,313,143 | ||||||
| Amount due from related parties-Account receivables | 1,305,385 | 2,113,891 | ||||||
| Amount due from related parties-Other receivables | 17,110,120 | 16,987,105 | ||||||
| Other receivables | 237,530 | 362,103 | ||||||
| Other current assets | 184,011 | - | ||||||
| Total current assets | 26,935,061 | 24,243,467 | ||||||
| Non-current assets: | ||||||||
| Restricted cash | 861,276 | 1,070,446 | ||||||
| Property, plant, and equipment, net | 295,298 | 155,660 | ||||||
| Deferred tax assets | 171,327 | 178,383 | ||||||
| Right of use assets | 157,952 | 332,195 | ||||||
| Total non-current assets | 1,485,853 | 1,736,684 | ||||||
| Total assets | 28,420,914 | 25,980,151 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY: | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | 1,172,736 | 302,772 | ||||||
| Insurance premium payable | 3,391,658 | 1,866,688 | ||||||
| Amount due to related parties-Account payable | 5,550,968 | 3,941,635 | ||||||
| Amount due to related parties-Other payable | 6,300,178 | 8,607,315 | ||||||
| Other payables and accrued expenses | 276,741 | 293,843 | ||||||
| Accrued payroll | 884,812 | 476,972 | ||||||
| Income taxes payable | 582,426 | 421,694 | ||||||
| Lease liabilities | 137,865 | 278,012 | ||||||
| Total current liabilities | 18,297,384 | 16,188,931 | ||||||
| Non-current liability: | ||||||||
| Lease liabilities | - | 25,623 | ||||||
| Total liabilities | 18,297,384 | 16,214,554 | ||||||
| Commitments and contingencies (Note 9) | ||||||||
| Shareholders' Equity: | ||||||||
| Share capital | 4,319,675 | 4,319,675 | ||||||
| Additional paid-in capital | 431,605 | 431,605 | ||||||
| Statutory reserves | 859,489 | 879,295 | ||||||
| Accumulated other comprehensive income | (749,032 | ) | (344,107 | ) | ||||
| Retained earnings | 5,261,793 | 4,479,129 | ||||||
| Total shareholder's equity | 10,123,530 | 9,765,597 | ||||||
| Total liabilities and shareholders' equity | 28,420,914 | 25,980,151 |
The accompanying notes are an integral part
of the combined financial statements.
RONS INTELLIGENT TECHNOLOGY (BEIJING) CO.,
LTD. AND SHENZHEN XINBAO
INVESTMENT MANAGEMENT CO., LTD.
Combined Statements of Operations and Comprehensive
(USD, except for share and per share data, or otherwise noted)
| Year Ended September 30 | ||||||||
| 2023 | 2024 | |||||||
| USD | USD | |||||||
| Revenues: | ||||||||
| Technology services fee | 6,927,967 | 7,589,813 | ||||||
| Insurance commission fee | 15,120,653 | 15,254,074 | ||||||
| Total revenues | 22,048,620 | 22,843,887 | ||||||
| Operating expenses: | ||||||||
| Technology cost | (2,249,053 | ) | (2,828,627 | ) | ||||
| Commission cost | (12,456,173 | ) | (12,712,377 | ) | ||||
| Total operating costs | (14,705,226 | ) | (15,541,004 | ) | ||||
| Selling expenses | (1,050,630 | ) | (640,684 | ) | ||||
| General and administrative expenses | (9,337,958 | ) | (7,529,190 | ) | ||||
| Total operating expenses | (10,388,588 | ) | (8,169,874 | ) | ||||
| Loss from operations | (3,045,194 | ) | (866,991 | ) | ||||
| Other income, net: | ||||||||
| Interest income | 121,195 | 24,345 | ||||||
| Others income, net | 332,020 | 159,636 | ||||||
| Loss before income taxes expense | (2,591,979 | ) | (683,010 | ) | ||||
| Income tax expense | (393,810 | ) | (79,848 | ) | ||||
| Total comprehensive loss | (2,985,789 | ) | (762,858 | ) | ||||
| Other comprehensive income | ||||||||
| Foreign currency translation adjustment attributable to company | (296,999 | ) | 404,925 | |||||
| Comprehensive income | (3,282,788 | ) | (357,933 | ) |
The accompanying notes are an integral part
of these combined financial statements.
RONS INTELLIGENT TECHNOLOGY
(BEIJING) CO., LTD. AND SHENZHEN XINBAO
INVESTMENT MANAGEMENT CO., LTD.
COMBINEDCOMBINED STATEMENTS OF CHANGES IN SHAREHOLDERS'
(USD, except for share and per share data,
| Additional paid-in | Statutory | Accumulated other comprehensive | Retained | Total shareholder's | ||||||||||||||||||||
| Share Capital | Capital | Reserves | income | Earnings | equity | |||||||||||||||||||
| USD | USD | USD | USD | USD | USD | |||||||||||||||||||
| Balance as of September 30, 2022 | 4,319,675 | 431,605 | 744,816 | (452,033 | ) | 8,362,255 | 13,406,318 | |||||||||||||||||
| Net loss | - | - | - | - | (2,985,789 | ) | (2,985,789 | ) | ||||||||||||||||
| Provision for statutory reserves | - | - | 114,673 | - | (114,673 | ) | - | |||||||||||||||||
| Currency translation adjustment | - | - | - | (296,999 | ) | - | (296,999 | ) | ||||||||||||||||
| Balance as of September 30, 2023 | 4,319,675 | 431,605 | 859,489 | (749,032 | ) | 5,261,793 | 10,123,530 | |||||||||||||||||
| Net loss | - | - | - | - | (762,858 | ) | (762,858 | ) | ||||||||||||||||
| Provision for statutory reserves | - | 19,806 | (19,806 | ) | - | |||||||||||||||||||
| Currency translation adjustment | - | - | - | 404,925 | - | 404,925 | ||||||||||||||||||
| Balance as of September 30, 2024 | 4,319,675 | 431,605 | 879,295 | (344,107 | ) | 4,479,129 | 9,765,597 |
The accompanying notes are an integral part of
the combined financial statements.
RONS INTELLIGENT TECHNOLOGY (BEIJING) CO.,
LTD. AND SHENZHEN XINBAO
INVESTMENT MANAGEMENT CO., LTD.
Combined Statements of Cash Flows
(USD, except for share and per share data,
| Year Ended September 30 | ||||||||
| 2023 | 2024 | |||||||
| USD | USD | |||||||
| Cash flows from operating activities: | ||||||||
| Net Loss | (2,985,789 | ) | (762,858 | ) | ||||
| Adjustments to reconcile net income to net cash generated from operating activities: | ||||||||
| Depreciation expense | 174,629 | 156,078 | ||||||
| Change to Provision (Reversal) for credit losses | (844 | ) | 228 | |||||
| Amortization of right-of-use assets | 544,288 | 295,530 | ||||||
| Written off property, plant and equipment | 163 | - | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 809,537 | 1,173,003 | ||||||
| Amount due from related parties | 343,767 | (743,042 | ) | |||||
| Other receivables | 94,712 | (113,011 | ) | |||||
| Other current assets | (186,405 | ) | 188,619 | |||||
| Accounts payable | (519,982 | ) | (904,026 | ) | ||||
| Amount due to related parties | (926,474 | ) | (1,809,454 | ) | ||||
| Insurance premium payable | 784,401 | (1,638,847 | ) | |||||
| Other payable and accrued expenses | (211,035 | ) | 5,616 | |||||
| Accrued payroll | (374,040 | ) | (437,394 | ) | ||||
| Income taxes payable | (44,357 | ) | (181,855 | ) | ||||
| Lease liability | (518,287 | ) | (303,057 | ) | ||||
| Net cash used in operating activities | (3,015,716 | ) | (5,074,470 | ) | ||||
| Cash flows from investing activity: | ||||||||
| Purchase of property, plant and equipment | (109,060 | ) | (6,631 | ) | ||||
| Net cash used in investing activity | (109,060 | ) | (6,631 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from dividend | 14,439,832 | - | ||||||
| Proceeds from related parties | 24,381,100 | 27,866,941 | ||||||
| Repayments to related parties | (34,412,638 | ) | (25,036,160 | ) | ||||
| Net cash generated from financing activities | 4,408,294 | 2,830,781 | ||||||
| Effect of exchange rate changes | (127,468 | ) | 194,913 | |||||
| Net increase (decrease) in cash and cash equivalents, and restricted cash | 1,156,050 | (2,055,407 | ) | |||||
| Cash and cash equivalents and restricted cash at beginning of year | 4,437,028 | 5,593,078 | ||||||
| Cash and cash equivalents and restricted cash at the end of the year | 5,593,078 | 3,537,671 | ||||||
| Reconciliation in amounts on the combined balance sheets: | ||||||||
| Cash and cash equivalents at the end of the year | 5,593,078 | 3,537,671 | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Income taxes paid | 425,146 | 288,526 | ||||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH FLOW INFORMATION: | ||||||||
| Right-of-use assets obtained in exchange for operating lease liabilities | - | 607,410 |
The accompanying notes are an integral part of
the combined financial statement
The following tables provide a reconciliation
of cash, cash equivalents and restricted cash reported within the balance sheets that sum to the total of the same amounts shown in the
combined statements of cash flows:
| As of September 30, | ||||||||
| 2023 | 2024 | |||||||
| Cash and cash equivalents, beginning of the year | 841,973 | 1,330,119 | ||||||
| Restricted cash, beginning of year | 3,595,055 | 4,262,959 | ||||||
| Total cash, cash equivalents and restricted cash at beginning of year | 4,437,028 | 5,593,078 | ||||||
| Cash and cash equivalents, end of the year | 1,330,119 | 599,425 | ||||||
| Restricted cash, end of year | 4,262,959 | 2,938,246 | ||||||
| Total cash, cash equivalents and restricted cash at end of year | 5,593,078 | 3,537,671 |
RONS INTELLIGENT TECHNOLOGY (BEIJING) CO.,
LTD. AND SHENZHEN XINBAO
INVESTMENT MANAGEMENT CO., LTD.
Notes to the Combined Financial Statements
(USD, except for share and per share data, or otherwise noted
(1) Organization and Description of Business
RONS Intelligent Technology
(Beijing) co., Ltd (RONS). and Shenzhen Xinbao Investment Management Co., Ltd. (Xinbao) and its subsidiaries (collectively as the "Company")
was incorporated in China. The Company are principally engaged in the provision of intelligent technology services to insurance intermediaries'
companies and online insurances sales provider in the People's Republic of China (the "PRC").
As of the date of September
30, 2024 and 2023, the Company's combined subsidiaries are as below:
| Entities | Date of Incorporation | Place of Incorporation | % of Ownership |
| Rons Intelligent Thechnology (Beijin) Co., Ltd. | February 26, 2009 | Beijing, China | 100% |
| Shenzhen Xinbao Investment Management Co., Ltd. | June 12, 2010 | Shenzhen, China | 100% |
| Fanhua RONS Insurance Sales & Service Co., Ltd. | August 8,2019 | Shenzhen, China | 100% |
| Shenzhen Baowang E-commerce Co., Ltd. | June 2, 2004 | Shenzhen, China | 100% |
(2) Summary of Significant Accounting Policies
The combined financial statements
have been prepared on the going concern basis in accordance with, and in compliance with, accounting principles generally accepted in
the United States of America ("U.S. GAAP"). The combined financial statements have been prepared on the basis of accounting
policies applicable to a going concern. This basis presumes that funds will be available to finance future operations that the realization
of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. The combined
financial statements have been prepared on the historical cost convention, unless otherwise stated in the accounting policies which follow
and incorporate the principal accounting policies set out below. The presentation currency is RMB.
The preparation of the combined
financial statements in conformity with U.S. GAAP requires management of the Company to make a number of estimates and assumptions relating
to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the combined
financial statements and the reported amounts of revenues and expenses during the reported period. The Company evaluates estimates, including
those related to the allowance for credit losses of accounts receivable, other receivables, and the useful lives of property, plant and
equipment, impairment of long-lived assets, and other long-term receivables, and deferred tax valuation allowance among others. The Company,
based their estimates on historical experience and various other factors, believed to be reasonable under the circumstances, that the