10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒          QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

☐          TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

COMMISSION FILE NUMBER: 000-54884

CHINA UNITED INSURANCE SERVICE, INC.

(Exact name of registrant as specified in its charter)

Delaware	30-0826400
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

7F, No. 311 Section 3

Nan-King East Road

Taipei City, Taiwan, 105405

(Address of principal executive offices)

+8862-87126958

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☐	Accelerated filer  ☐
Non-accelerated filer  ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.

Yes ☐  No  ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

As of March 31, 2022, there were 30,286,199 shares of common stock issued and outstanding, and 1,000,000 preferred shares issued and outstanding.

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION	5
ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	5
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	27
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	30
ITEM 4.	CONTROLS AND PROCEDURES	31
PART II.	OTHER INFORMATION	32
ITEM 1.	LEGAL PROCEEDINGS	32
ITEM 1A.	RISK FACTORS	32
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	32
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	32
ITEM 4.	MINE SAFETY DISCLOSURES	32
ITEM 5.	OTHER INFORMATION	32
ITEM 6.	EXHIBITS	33
SIGNATURES		34

2

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This report contains forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievement expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the factors described under Part 1 Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

Forward-looking statements represent our estimates and assumptions only as of the date of this report. You should read this report and the documents that we reference in this report, or that we filed as exhibits to this report completely and with the understanding that our actual future results may be materially different from what we expect.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

3

OTHER PERTINENT INFORMATION

References in this quarterly report to “we,” “us,” “our” and the “Company” refer to China United Insurance Service, Inc., its subsidiaries and variable interest entities.

References to China or the PRC refer to the People’s Republic of China (excluding Hong Kong, Macao and Taiwan). References to Taiwan refer to Republic of China.

Unless context indicates otherwise, reference to the “Company” in this quarterly report refers to China United Insurance Service, Inc. and its subsidiaries. Reference to “AHFL” refers to the combined operations of Action Holdings Financial Limited and its Taiwan Subsidiaries (as defined below). Reference to “Anhou” refers to the combined operations of Law Anhou Insurance Agency Co., Ltd. and its subsidiaries.

Our business is conducted in Taiwan and China using New Taiwanese Dollars (“NT$” or “NTD”), the currency of Taiwan, Hong Kong Dollars (“HK$” or “HKD”), the currency of Hong Kong, and RMB, the currency of China, respectively, and our financial statements are presented in United States dollars (“USD”, “US$” or “$”). In this quarterly report, we refer to assets, obligations, commitments and liabilities in our financial statements in U.S. dollars. These dollar references are based on the exchange rate of NT$, HK$ and RMB to USD, determined as of a specific date. Changes in the exchange rate will affect the amount of our obligations and the value of our assets in terms of U.S. dollars which may result in an increase or decrease in the amount of our obligations (expressed in USD) and the value of our assets, including accounts receivable (expressed in USD).

4

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
(Amount in USD)	2022		2021
ASSETS
Current assets
Cash and cash equivalents	$	20,595,428	$	18,234,350
Time deposits		68,935,263		64,299,176
Accounts receivable		18,315,305		26,761,678
Contract assets		457,917		—
Marketable securities		832,990		—
Other current assets		1,173,425		1,207,496
Total current assets		110,310,328		110,502,700
Right-of-use assets under operating leases		6,594,686		6,449,182
Property and equipment, net		1,823,211		2,061,755
Intangible assets, net		359,759		333,118
Long-term investments		2,594,564		2,696,812
Restricted cash – noncurrent		13,650		88,282
Deferred tax assets		698,750		909,032
Other assets		4,733,347		4,740,640
TOTAL ASSETS	$	127,128,295	$	127,781,521
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Commission payable to sales professionals	$	9,840,217	$	14,003,541
Short-term loans		19,589,013		18,835,932
Income tax payable - current		5,087,907		3,893,047
Operating lease liabilities - current		3,312,917		3,059,329
Due to related parties		36,844		50,531
Other current liabilities		13,826,954		13,997,603
Total current liabilities		51,693,852		53,839,983
Income tax payable - noncurrent		539,636		539,636
Operating lease liabilities - noncurrent		3,250,652		3,298,089
Net defined benefit liabilities - noncurrent		376,522		389,198
Other liabilities		524,109		541,754
TOTAL LIABILITIES		56,384,771		58,608,660
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Preferred stock, par value $0.00001, 10,000,000 authorized, 1,000,000 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		10		10
Common stock, par value $0.00001, 100,000,000 authorized, 30,286,199 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		303		303
Additional paid-in capital		9,296,953		9,296,953
Statutory reserves		11,101,064		11,101,064
Retained earnings		16,635,245		13,690,368
Accumulated other comprehensive income		2,593,189		4,664,848
Total stockholders’ equity attributable to China United’s shareholders		39,626,764		38,753,546
Noncontrolling interests		31,116,760		30,419,315
TOTAL STOCKHOLDERS’ EQUITY		70,743,524		69,172,861
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	127,128,295	$	127,781,521

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

	Three Months Ended
	March 31,
(Amount in USD)	2022		2021
Revenue	$	30,980,523	$	30,530,117
Cost of revenue		19,009,519		18,973,432
Gross profit		11,971,004		11,556,685
Operating expenses:
Selling		684,150		579,777
General and administrative		5,973,039		6,090,254
Total operating expense		6,657,189		6,670,031
Income from operations		5,313,815		4,886,654
Other income (expenses):
Interest income		104,977		83,998
Interest expenses		(52,335)		(42,470)
Foreign currency exchange gains		737,550		328,466
Other - net		162,048		178,940
Total other income, net		952,240		548,934
Income before income taxes		6,266,055		5,435,588
Income tax expense		(1,581,897)		(1,398,806)
Net income		4,684,158		4,036,782
Less: net income attributable to noncontrolling interests		(1,739,281)		(1,626,396)
Net income attributable to China United’s shareholders		2,944,877		2,410,386
Other comprehensive items, net of tax:
Foreign currency translation loss		(3,113,495)		(1,191,299)
Other		—		364
Total other comprehensive loss		(3,113,495)		(1,190,935)
Comprehensive income		1,570,663		2,845,847
Less: comprehensive income attributable to noncontrolling interests		(697,445)		(1,263,321)
Comprehensive income attributable to China United’s shareholders	$	873,218	$	1,582,526
Weighted average shares outstanding:
Basic and diluted		30,286,199		29,421,736
Earnings per share attributable to common stockholders of China United:
Basic and diluted	$	0.094	$	0.079

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

												Accumulated
								Additional				Other
	Common			Preferred				Paid-in		Statutory		Comprehensive		Retained				Noncontrolling		Total
(Amount in USD)	Stock	Amount		Stock		Amount		Capital		Reserves		Income		Earnings		Total		Interests		Equity
Balance December 31, 2021	30,286,199	$	303		1,000,000	$	10	$	9,296,953	$	11,101,064	$	4,664,848	$	13,690,368	$	38,753,546	$	30,419,315	$	69,172,861
Foreign currency translation loss	—		—		—		—		—		—		(2,071,659)		—		(2,071,659)		(1,041,836)		(3,113,495)
Other comprehensive income	—		—		—		—		—		—		—		—		—		—		—
Net income	—		—		—		—		—		—		—		2,944,877		2,944,877		1,739,281		4,684,158
Balance March 31, 2022	30,286,199	$	303		1,000,000	$	10	$	9,296,953	$	11,101,064	$	2,593,189	$	16,635,245	$	39,626,764	$	31,116,760	$	70,743,524
												Accumulated
								Additional				Other
	Common			Preferred				Paid-in		Statutory		Comprehensive		Retained				Noncontrolling		Total
(Amount in USD)	Stock	Amount		Stock		Amount		Capital		Reserves		Income		Earnings		Total		Interests		Equity
Balance December 31, 2020	29,421,736	$	294		1,000,000	$	10	$	8,190,449	$	9,463,903	$	3,889,429	$	9,097,408	$	30,641,493	$	24,595,741	$	55,237,234
Foreign currency translation loss	—		—		—		—		—		—		(828,100)		—		(828,100)		(363,199)		(1,191,299)
Other comprehensive income	—		—		—		—		—		—		240		—		240		124		364
Net income	—		—		—		—		—		—		—		2,410,386		2,410,386		1,626,396		4,036,782
Balance March 31, 2021	29,421,736	$	294		1,000,000	$	10	$	8,190,449	$	9,463,903	$	3,061,569	$	11,507,794	$	32,224,019	$	25,859,062	$	58,083,081

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7

CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amount in USD)	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities:
Net income	$	4,684,158	$	4,036,782
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		286,049		301,618
Amortization of right-of-use assets		951,111		877,022
Amortization of bond premium		—		58
Gain on sales of financial assets		—		(140,913)
Loss on valuation of financial assets		11,177		150,992
Loss on disposals of equipment		4,368		77
Deferred income tax		41,730		80,710
Unrealized foreign currency exchange (gains)		(228,109)		—
Net changes in operating assets and liabilities:
Accounts receivable		7,774,338		6,353,128
Contract assets		(468,333)		(98,867)
Other current assets		(107,500)		33,244
Other assets		112,257		(58,712)
Commission payable to sales professionals		(3,799,212)		(2,154,109)
Income tax payable		1,327,928		1,171,156
Other current liabilities		(1,758,352)		(2,746,985)
Other liabilities		—		(217,259)
Lease liabilities		(1,232,314)		(1,142,714)
Net cash provided by operating activities		7,599,296		6,445,228
Cash flows from investing activities:
Purchases of marketable securities		(846,673)		—
Purchases of time deposits		(23,217,843)		(23,561,920)
Proceeds from maturities of time deposits		16,562,521		22,403,564
Proceeds from receipts in advance of disposal of a subsidiary		2,316,652		—
Proceeds from sales of marketable securities		—		1,424,798
Purchase of equipment		(69,500)		(57,520)
Purchase of intangible assets		(76,637)		(9,780)
Net cash (used in) provided by investing activities		(5,331,480)		199,142
Cash flows from financing activities:
Proceeds from short-term loans		6,488,087		6,324,770
Repayment of short-term loans		(5,423,529)		(4,140,000)
Repayment of related party borrowings		(9,789)		(13,627)
Net cash provided by financing activities		1,054,769		2,171,143
Foreign currency translation		(1,036,139)		(443,188)
Net increase in cash, cash equivalents and restricted cash		2,286,446		8,372,325
Cash, cash equivalents and restricted cash, beginning balance		18,322,632		9,129,828
Cash, cash equivalents and restricted cash, ending balance	$	20,609,078	$	17,502,153
SUPPLEMENTARY DISCLOSURE:
Interest paid	$	52,490	$	40,886
Income tax paid	$	—	$	—
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Lease liabilities arising from new right-of-use assets	$	1,096,615	$	635,360

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

8

CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amount in USD)

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES

China United Insurance Service, Inc. (“China United” or “CUII”), its subsidiaries and variable-interest entity and its subsidiaries (collectively referred to herein as the “Company”) primarily engage in insurance brokerage and insurance agency services. The Company markets and sells to customers two broad categories of insurance products: life insurance products and property and casualty insurance products, both focused on meeting the particular insurance needs of individuals. The insurance products are underwritten by some of the leading insurance companies in Taiwan and China. The Company manages its business through aggregating them into three geographic operating segments, Taiwan, the PRC, and Hong Kong. The Company’s common stock currently trades over the counter under the ticker symbol “CUII” on the OTCQB.

The corporate structure as of March 31, 2022 is as follows:

On January 31, 2022, Genius Investment Consultant Co., Ltd (“GIC”), a subsidiary entity of CUII entered into a stock transfer agreement with AIlife International Investment Co., Ltd. (“AIlife”), pursuant to which GIC sold and transferred to AIlife 100% of its equity ownership in Joint Insurance Broker Co., Ltd. (“JIB”), a former wholly-owned subsidiary of GIC, resulting in AIlife owning 100% equity interest in JIB. Such exchange of equity interests between CUII’s subsidiaries are under common control of the Company and

9

therefore, they were accounted for at the carrying amount of the equity interests transferred and there was no impact on consolidated financial statements as of and for the three months ended March 31, 2022.

On February 25, 2022, Law Anhou Insurance Agency Co., Ltd. (“Law Anhou”), a contractually controlled entity of CUII entered into a Share Purchase Agreement with Jiangsu Law Insurance Brokerage Co., Ltd. (“Jiangsu Law”) and third-party buyers, pursuant to which Law Anhou shall sell and transfer 100% of its equity ownership in Jiangsu Law, a wholly owned subsidiary of Law Anhou to the following buyers: Xuzhou Guosheng Furui Asset Management Co., Ltd., Jiangsu Zhongbozhixin Financial Service Outsourcing Co., Ltd., and Xuzhou Xinrui Service Outsourcing Co., Ltd. Due to delays in the registration of shareholder change caused by the COVID-19, the control of Jiangsu Law has not been transferred as of March 31, 2022. Law Anhou has received the first installment of the contract $2,317,971 (RMB 14.7 million) which was recorded under other current liabilities as of March 31, 2022. The total assets as of March 31, 2022 and revenue from Jiangsu Law for the three months ended March 31, 2022 were 0.67% and 0.72%, respectively, which were immaterial to the Company’s consolidated financial statements.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of China United, its subsidiaries and variable interest entity and its subsidiaries as shown in the corporate structure in Note 1. All significant intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to the consolidated financial statements for prior year to the current year’s presentation. Such reclassifications have no effect on net income and the cash flow statements operating activities as previously reported.

Basis of Presentation

The unaudited condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement of the financial statements have been included. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2021, which were included in the Company’s 2021 Annual Report on Form 10-K (“2021 Form 10-K”). The accompanying consolidated balance sheet as of December 31, 2021, has been derived from the Company’s audited consolidated financial statements as of that date.

Use of Estimates

The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto. Actual results may differ from those estimates and assumptions.

Variable Interest Entities

Due to the legal restrictions on foreign ownership and investment in insurance agency and brokerage businesses in China, especially those on qualifications as well as capital requirement of the investors, China United, through its subsidiary, Zhengzhou Zhonglian Hengfu Business Consulting Co., Limited (“WFOE”), entered into Exclusive Business Cooperation Agreement (the “EBCA”), Power of Attorney, Option Agreement, and Share Pledge Agreement (collectively, the First VIE Agreements) on January 17, 2011 with Anhou and Anhou original shareholders so as to operate and conduct the insurance agency and brokerage business in the PRC.

Pursuant to the EBCA, (a) WFOE has the right to provide Anhou with complete technical support, business support and related consulting services during the term of the EBCA; (b) Anhou agrees to accept all the consultations and services provided by WFOE. Anhou further agrees that unless with WFOE’s prior written consent, during the term of the EBCA, Anhou shall not directly or indirectly accept the same or any similar consultations and/or services provided by any third party and shall not establish similar cooperation relationship with any third party regarding the matters contemplated by the EBCA; (c) within 90 days after the end of each fiscal year Anhou shall pay an amount to WFOE equal to the shortfall, if any, of the aggregate net income of Anhou for such fiscal; (d) WFOE retains all exclusive and proprietary rights and interests in all rights, ownership, interests and intellectual properties arising out of or

10

created during the performance of the EBCA; and (e) the shareholders of Anhou have pledged all of their equity interests in Anhou to WFOE to guarantee Anhou’s performance of its obligations under the EBCA. The term of the EBCA is 10 years and may be extended and determined by WFOE prior to the expiration thereof, and Anhou shall accept such extended term unconditionally.

On March 23, 2022, Anhou and WFOE entered into an amendment to the EBCA, pursuant to which the EBCA shall be automatic renewed for successive terms unless WFOE gives a 30-day notice to terminate such agreement, with each term being 10 years.

To extend the business within the PRC, Anhou intended to increase its registered capital to RMB50 million (approximately $8 million) to meet the requirement of the China Insurance Regulatory Commission (the “CIRC”) so that it can set up new branches in any province beyond its current operations in China. China United increased the investment in Anhou through various loan agreements with the shareholders of Anhou. The aggregate funding provided by WFOE was RMB 40 million. Due to the capital increase, a series of variable interest agreements (the “Second VIE Agreements”), which include Power of Attorneys, Exclusive Option Agreements, Share Pledge Agreements, were signed on October 24, 2013 and entered in the same form as the First VIE Agreements, other than the change of shareholder names and their respective shareholdings. The First VIE Agreements were terminated by and among WFOE, Anhou and Anhou original shareholders on the same date. The EBCA executed by and between WFOE and Anhou on January 17, 2011 remains in full effect.

As a result of the Second VIE Agreements, WFOE is considered the primary beneficiary of Anhou and has effective control over Anhou. Accordingly, the results of operations, assets and liabilities of Anhou and its subsidiaries (collectively, the “Consolidated Affiliated Entities” or the “CAE”) are consolidated from the earliest period presented. The Company reviews the VIE’s status on an annual basis and determine if any events have occurred that could cause its primary beneficiary status to change, which include (a) the legal entity’s governing documents or contractual arrangements are changed in a manner that changes the characteristics or adequacy of the legal entity’s equity investment at risk; (b) the equity investment or some part thereof is returned to the equity investors, and other interests become exposed to expected losses of the legal entity; (c) the legal entity undertakes additional activities or acquires additional assets, beyond those anticipated at the later of the inception of the entity or the latest reconsideration event, that increase the entity’s expected losses; and (d) the legal entity receives an additional equity investment that is at risk, or the legal entity curtails or modifies its activities in a way that decreases its expected losses. For the three months ended March 31, 2022 and 2021, no event taken place that would change the Company’s primary beneficiary status.

Marketable Securities

The Company invests part of its excessive cash in equity securities and money market funds. Marketable securities represent trading securities bought and held primarily for sale in the near-term to generate income on short-term price differences and are stated at fair value. Realized and unrealized gains and losses are recorded in other income (expense).

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable includes commission receivables stated at net realizable values. The Company reviews its accounts receivable regularly to determine if a bad debt allowance is necessary at each quarter-end. Management reviews the composition of accounts receivable and analyzes the age of receivables outstanding, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the necessity of making such allowance. No allowance was deemed necessary as of March 31, 2022 and December 31, 2021.

Revenue Recognition

The Company’s revenue is derived from insurance agency and brokerage services with respect to life insurance and property and casualty insurance products. The Company, through its subsidiaries and variable interest entities, sells insurance products provided by insurance companies to individuals, and is compensated in the form of commissions from the respective insurance companies, according to the terms of each service agreement made by and between the Company and the insurance companies. The core revenue recognition principle under ASC 606, the Company considers the contracts with insurance companies contain one performance obligation and consideration should be recorded when performance obligation is satisfied at point in time. The sale of an insurance product by the Company is considered complete when initial insurance premium is paid by an individual and the insurance policy is approved by the respective insurance company. When a policy is effective, the insurance company is obligated to pay the agreed-upon commission to the Company under the terms of its service agreement with the Company and such commission is recognized as revenue.

For the first year commission (FYC), the Company recognizes the revenue when the individuals’ policies are effective. The Company makes the estimation amount to be entitled for annual performance and operating bonus which is based on the FYC. The Company

11

makes an estimation on performance and operation bonus which are based on the accumulated FYC on quarterly basis, and make reconciliation between actual and estimation amount on annual basis. For the three months ended March 31, 2022 and 2021, the estimated revenue was approximately $2.8 million and $2.0 million, respectively.

Others includes the contingent commissions for subsequent years, the bonus based on persistency ratio bonus, and service allowances, are considered highly susceptible to factors outside the company's influence and depend on the actions of third parties (i.e., the subsequent premiums paid by individual policyholders), and the uncertainty can be extended for many years. Considering the high uncertainties, the contingent commissions for subsequent years, the bonus based on persistency ratio, and service allowances will be recognized as revenue based on the actual amount received from the insurance companies after the uncertain event is resolved.

For property and casualty insurance products, the Company recognizes the revenue when the individuals’ policies are effective. The revenue from property and casualty insurance products were 7.0% and 5.6% of total revenue for the three months ended March 31, 2022 and 2021, respectively.

The Company is obligated to pay commissions to its sales professionals when an insurance policy becomes effective. The Company recognizes commission revenue granted from insurance companies on a gross basis, and the commissions paid to its sales professionals are recognized as cost of revenue.

The Company enters into service agreements with insurance companies, which may give rise to contract assets and contract liabilities. When the timing of revenue recognition differs from the timing of payments made by insurance companies, the Company recognizes either contract assets (its performance precedes the billing date) or contract liabilities (customer payment is received in advance of performance).

Foreign Currency Transactions

China United’s financial statements are presented in U.S. dollars ($), which is the China United’s reporting and functional currency. The functional currencies of the China United’s subsidiaries are New Taiwan dollar (“NTD”), China yuan (“RMB”) and Hong Kong dollar (“HKD”). Each subsidiary maintains its financial records in its own functional currency. Transactions denominated in foreign currencies are measured at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are remeasured at the exchange rates prevailing at the balance sheet date. Non-monetary items that are measured in terms of historical cost in foreign currency are remeasured using the exchange rates at the dates of the initial transactions. Exchange gains and losses are included in the consolidated statements of operations and other comprehensive income (loss).

The Company translates the assets and liabilities into U.S. dollars using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from NTD, RMB and HKD into U.S. dollars are recorded in stockholders’ equity as part of accumulated other comprehensive income. The exchange rates used for unaudited condensed consolidated financial statements are as follows:

	Average Rate for the three months ended
	March 31,
	2022		2021
	(unaudited)		(unaudited)
Taiwan dollar (NTD)	NTD	27.98355	NTD	28.06892
China yuan (RMB)	RMB	6.34536	RMB	6.48199
Hong Kong dollar (HKD)	HKD	7.80460	HKD	7.75690
United States dollar ($)	$	1.00000	$	1.00000

	Exchange Rate at
	March 31, 2022
	(unaudited)		December 31, 2021
Taiwan dollar (NTD)	NTD	28.62003	NTD	27.68785
China yuan (RMB)	RMB	6.34175	RMB	6.35877
Hong Kong dollar (HKD)	HKD	7.83033	HKD	7.79713
United States dollar ($)	$	1.00000	$	1.00000

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Earnings Per Share

Basic earnings per common share (“EPS”) is computed by dividing net income attributable to the common shareholders of the Company by the weighted-average number of common shares outstanding. Diluted EPS is computed in the same manner as basic EPS, except the number of shares includes additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued.

As the holders of preferred stock of the Company are entitled to share equally with the holders of common stock, on a per share basis, in such dividends and other distributions of cash, property or shares of stock of the Company as may be declared by the board of directors, the preferred stock is treated as a participating security. When calculating the basic earnings per common share, the two-class method is used to allocate earnings to common stock and participating security as required by FASB ASC Topic 260, “Earnings Per Share.” As of March 31, 2022 and 2021, the Company does not have any potentially dilutive instrument.

The following is a reconciliation of the income and share data used in the basic and diluted EPS computations for the three months ended March 31, 2022 and 2021 under the two-class method.

	Three Months Ended March 31,
	2022				2021
Numerator:	Common stock		Preferred stock		Common stock		Preferred stock
Allocation of net income attributable to the Company	$	2,850,750	$	94,127	$	2,331,154	$	79,232
Denominator:
Weighted average shares of the Company’s common/preferred stock outstanding - basic		30,286,199		1,000,000		29,421,736		1,000,000
Basic and diluted earnings per share	$	0.094	$	0.094	$	0.079	$	0.079

The participating rights (liquidation and dividend rights) of the holders of the Company’s common stock and preferred stock are identical, except with respect to voting right. As a result, and in accordance with ASC 260, the undistributed earnings for each year are allocated based on the contractual participation rights of the common stock and preferred stock as if the earnings for the year had been distributed. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis.

Fair Value of Financial Instruments

Fair value accounting establishes a framework for measuring fair value and expands disclosure about fair value measurements. Fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

- Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

-Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the financial instruments.

-Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

In determining the appropriate levels, the Company performs a detailed analysis of the assets and liabilities that are measured and reported on a fair value basis. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3.

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The following table summarize financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	Fair Value						Carrying
	Level 1		Level 2		Level 3		Value
Assets
Marketable securities :
Stock and mutual funds	$	832,990	$	—	$	—	$	832,990
Long-term investments:
REITs		1,204,320		—		—		1,204,320
Total assets measured at fair value	$	2,037,310	$	—	$	—	$	2,037,310

	December 31, 2021
	Fair Value						Carrying
	Level 1		Level 2		Level 3		Value
Assets
Long-term investments:
REITs	$	1,261,482	$	—	$	—	$	1,261,482
Total assets measured at fair value	$	1,261,482	$	—	$	—	$	1,261,482

The carrying amounts of current financial assets and liabilities in the consolidated balance sheets for cash equivalents, time deposits, and restricted cash equivalents approximate fair value due to the short-term duration of those instruments, which are considered level 2 fair value measurement.

Marketable securities and long-term investments in REITs – The fair values of mutual funds and REITs were valued based on quoted market prices in active markets.

Concentration of Risk

The Company maintains cash with banks in the USA, People’s Republic of China (“PRC”), Hong Kong, and Taiwan. Should any bank holding the Company’s cash become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose all or part of its cash deposit with that bank; however, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. In Taiwan, a depositor has up to NTD3,000,000 insured by Central Deposit Insurance Corporation (“CDIC”). In China, a depositor has up to RMB500,000 insured by the People’s Bank of China Financial Stability Bureau (“FSD”). In Hong Kong, a depositor has up to HKD500,000 insured by Hong Kong Deposit Protection Board (“DPB”). In the United States, the standard insurance amount is $250,000 per depositor in a bank insured by the Federal Deposit Insurance Corporation (“FDIC”).

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, time deposits, restricted cash, register capital deposit and accounts receivable. As of March 31, 2022 and December 31, 2021, approximately $2,643,000 and $2,712,000 of the Company’s cash and cash equivalents, time deposits, and registered capital deposits held by financial institutions, was insured, and the remaining balance of approximately $90,445,000 and $83,446,000, was not insured. With respect to accounts receivable, the Company generally does not require collateral and does not have an allowance for doubtful accounts.

For the three months ended March 31, 2022 and 2021, the Company’s revenues from sale of insurance policies underwritten by these companies were:

	Three Months Ended March 31,
	2022				2021
	(unaudited)				(unaudited)
			% of Total				% of Total
	Amount		Revenue		Amount		Revenue
TransGlobe Life Insurance Inc.	$	7,680,425	25	%	$	6,600,629	22	%
Taiwan Life Insurance Co., Ltd.		4,406,584	14	%		7,231,458	24	%
Farglory Life Insurance Co., Ltd.		3,431,308	11	%		4,519,841	15	%

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As of March 31, 2022 and December 31, 2021, the Company’s accounts receivable from these companies were:

	March 31, 2022
	(unaudited)				December 31, 2021
			% of Total				% of Total
			Accounts				Accounts
	Amount		Receivable		Amount		Receivable
TransGlobe Life Insurance Inc.	$	5,217,313	28	%	$	8,569,590	32	%
Taiwan Life Insurance Co., Ltd		3,520,479	19	%		4,483,343	17	%
Farglory Life Insurance Co., Ltd.		2,049,294	11	%		2,729,673	10	%

The Company’s operations are in the PRC, Hong Kong and Taiwan. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic, foreign currency exchange and legal environments in the PRC, Hong Kong and Taiwan, and by the state of each economy. The Company’s results of operations may be adversely affected by changes in the political and social conditions in the PRC, Hong Kong and Taiwan, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.

Income Taxes

The Company records income tax expense using the asset-and-liability method of accounting for deferred income taxes. Under this method, deferred 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 year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance if, based on available evidence, it is more likely than not that the deferred tax assets will not be realized.

When tax returns are filed, it is likely some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits are classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of operations and other comprehensive income (loss).

New Accounting Pronouncements and Other Guidance

New accounting pronouncements not yet adopted

Credit Losses

In June 2016, the FASB issued ASU No. 2016-13, (FASB ASC Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, rather than the “incurred loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments.

In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company believes the adoption of ASU No. 2016-13 will not have a material impact on the Company’s consolidated financial statements.

15

Reference Rate Reform

In March 2020, the FASB issued ASU No. 2020–04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The guidance was effective for all entities upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. The Company is currently evaluating the effects of the guidance on the Company’s consolidated financial statements and related disclosures.

The management does not believe that other than disclosed above, accounting pronouncements the recently issued but not yet adopted will have a material impact on its financial position, results of operations or cash flows.

NOTE 3 – CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Cash, cash equivalents and restricted cash consisted of the following as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	(unaudited)		December 31, 2021
Cash and cash equivalents:
Cash on hand and in banks	$	20,595,428	$	18,234,350
Restricted cash – noncurrent		13,650		88,282
Total cash, cash equivalents and restricted cash shown in the statements of cash flows	$	20,609,078	$	18,322,632

Noncurrent restricted cash includes a mandatory deposit in the bank in conformity with Provisions of the Supervision and Administration of Specialized Insurance Agencies in PRC, which is not allowed to be withdrawn without the permission of the regulatory commission.

NOTE 4 – TIME DEPOSITS

	March 31, 2022
	(unaudited)		December 31, 2021
Total time deposits	$	72,718,699	$	71,161,391
Less: Time deposits – with original maturities less than three months		(3,783,436)		(6,862,215)
Time deposits – original maturities over three months but less than one year	$	68,935,263	$	64,299,176

Time Deposits Pledged as Collateral

The Company had a total of $24,767,563 (NTD 708.8 million) and $23,811,616 (NTD 659.3 million) restricted time deposits, respectively, as of March 31, 2022 and December 31, 2021. As of March 31, 2022 and December 31, 2021, time deposits of $34,941 (NTD 1 million) and $36,117 (NTD 1 million) were pledged as collateral for the Company’s credit card, respectively. In addition, the Company had time deposits of $24,732,622 and $23,775,499 pledged as collateral for short-term loans, respectively, as of March 31, 2022 and December 31, 2021. See Note 6.

NOTE 5 – LONG-TERM INVESTMENTS

As of March 31, 2022 and December 31, 2021, the Company’s long-term investments consisted of the following:

	March 31, 2022
	(unaudited)		December 31, 2021
Equity investments under cost method	$	1,390,244	$	1,435,330
REITs		1,204,320		1,261,482
Total long-term investments	$	2,594,564	$	2,696,812

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Equity Investments under cost method using the measurement alternative

	March 31, 2022
	(unaudited)				December 31, 2021
	Investment				Investment
Investee	Ownership			Amount	Ownership			Amount
Genius Insurance Broker Co., Ltd (“GIB”)	11.73	%	$	1,342,938	11.73	%	$	1,388,151
Hainan Haoguan Yucheng Technology Service LLP (“HAINAN”)	9.99	%		47,306	9.99	%		47,179

On February 13, 2015, the Company and AHFL, a wholly owned subsidiary of the Company, entered into an acquisition agreement with Mr. Chwan Hau Li, the selling shareholder of GHFL. Subsequent to the acquisition, GHFL became a wholly-owned subsidiary of the Company which in turn holds approximately 15.64% issued and outstanding shares of Genius Insurance Broker Co., Ltd. (“Genius Broker”). Accordingly, the acquisition was accounted for as an asset acquisition of Genius Broker, which is an equity investment under cost method using the measurement alternative acquired by the Company.

The total paid-in capital with GIB changed from NTD 45 million to NTD 60 million due to capital increase taken place on August 14, 2020. GIC didn’t subscribe the new shares during the capital increase. As a result, the equity interest of GIB owned by GIC reduced from 15.64% to 11.73%.

A new investee in the investment ownership was due to the Company’s investment in HAINAN in 2021. HAINAN operates projects for insurance platforms, which contain insurance product centralized procurement, share service platform of sub-hierarchy distribution channel, and IoT business requirement. The Company invested HAINAN for RMB 300,000, or 9.99%, to engage in the qualification of supplier membership and distributor membership.

The change in carrying value of equity investment resulted from the fluctuation of exchange rates.

REITs

REITs are valued based on quoted market prices in the active market of Taiwan. The fair value of REITs as of March 31, 2022 and December 31, 2021 were $1,204,320 and $1,261,482, respectively.

Unrealized losses included in earnings for assets held at the end of the reporting periods were $16,441 and $20,489 for the three months ended March 31, 2022 and 2021, respectively.

For the three months ended March 31, 2022 and 2021, no other-than temporary impairment were recorded related to the long-term investments.

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NOTE 6 – SHORT-TERM LOANS

The Company’s short-term loans consisted of the following as of March 31, 2022 and December 31, 2021:

		March 31, 2022
		(unaudited)				December 31, 2021
		Debt		Collateral		Debt		Collateral
Line of Credit	Collateral	balance		value		balance		value
$8.7 million (NTD 250 million) revolving line of credit with Cathay United Bank Company Limited (“CUB”); the loan bears interest at the higher of CUB's adjustable rates for loans plus a margin of 0.41% or the 1-month TAIBOR rate plus a margin of 0.8% and matures on May 4, 2022.	Time deposits	$	5,223,615	$	5,258,556	$	9,011,172	$	9,047,289
$4.0 million revolving line of credit with O-Bank; the loan bears interest at the TAIFX3 rate plus a margin of 0.5% and matures on December 2, 2022.	Time deposits		4,000,000		4,821,799		4,000,000		4,984,135
$6.0 million revolving line of credit with Taishin International Bank (“TSIB”); the loan bears interest at the TSIB’s cost of funds plus a margin of 0.7% and matures on May 31, 2022.	Time deposits		2,200,000		3,065,801		2,200,000		3,065,801
$2.5 million revolving line of credit with Far Eastern International Bank (“FEIB”); the loan bears interest at the TAIFX3 rate plus a margin of 0.5% and matures on June 15, 2022.	Time deposits		1,850,000		2,865,127		1,850,000		2,961,588
$3.1 million revolving line of credit with KGI; the loan bears interest at the TAIFX Fixing rate plus a margin of 0.9% and matures on May 18, 2022.	Time deposits		1,540,000		2,357,961		1,540,000		2,481,926
$7.0 million (NTD 200 million) revolving line of credit with Taishin International Bank (“TSIB”); the loan bears interest at the TSIB’s cost of funds plus a margin of 0.625% and matures on May 31, 2022.	Time deposits		3,721,171		3,721,171		234,760		234,760
$3.0 million revolving line of credit with E. Sun Bank (“E. Sun”); the loan bears interest at the TAIFX3 rate plus a margin of 0.4% and matures on November 30, 2022.	Time deposits		600,000		1,000,000		—		1,000,000
$7.0 million (NTD 200 million) revolving line of credit with E. Sun Bank (“E. Sun”); the loan bears interest at the E. Sun’s adjustable rates for loans plus a margin of 0.1% and matures on October 15, 2022.	Time deposits		454,227		1,642,207		—		—
		$	19,589,013	$	24,732,622	$	18,835,932	$	23,775,499

Borrowings under the revolving credit agreements are generally due 90 days or less. Total interest expenses for short-term loans incurred were $52,335 and $42,470, respectively, for the three months ended March 31, 2022 and 2021, respectively.

NOTE 7 – COMMISSIONS PAYABLE TO SALES PROFESSIONALS

Commissions payable to sales professionals consisted of the following as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	(unaudited)		December 31, 2021
Taiwan	$	9,625,456	$	13,793,343
PRC		214,761		210,198
Total commissions payable to sales professionals	$	9,840,217	$	14,003,541

Commissions payable to sales professionals are usually settled within twelve months.

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NOTE 8 – OTHER CURRENT LIABILITIES

Other current liabilities were as follows, as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	(unaudited)		December 31, 2021
Accrued bonus	$	5,463,307	$	6,645,496
Payroll payable and other benefits		1,742,262		2,188,074
Accrued business tax and tax withholdings		1,323,088		1,903,039
Proceeds from receipts in advance of disposal of a subsidiary		2,317,971		—
Execution fees payable – AIA(Note 10)		1,153,039		1,191,858
Other accrued liabilities		1,827,287		2,069,136
Total other current liabilities	$	13,826,954	$	13,997,603

Accrued Bonus

The Company’s foreign subsidiaries have various bonus plans, which provide cash awards to employees based upon their performance, and had accrued bonus of $2,932,572 and $4,059,901, respectively, related to cash awards to employees as of March 31, 2022 and December 31, 2021.

The Company has other compensation plans solely provided by Law Broker to its officers. The compensation plans eligible to Law Broker’s officers include a surplus bonus based on a percentage of income after tax and other performance bonuses such as retention and non-competition. For the three months ended March 31, 2022 and 2021, the bonus expenses to Law Broker’s officers under the compensation plans were $72,905 and $91,896, respectively.

As of March 31, 2022 and December 31, 2021, the Company had accrued bonus of $2,530,735 and $2,585,595 payable within next 12 months, respectively, related to the compensation plans for Law Broker’s officers. See Note 15 for additional information of agreements with Law Broker’s officers.

NOTE 9 – OTHER LIABILITIES

The Company’s other liabilities consisted of the following as of March 31, 2022 and December 31, 2021: 

	March 31, 2022
	(unaudited)		December 31, 2021
Due to previous shareholders of AHFL	$	524,109	$	541,754
Total other liabilities	$	524,109	$	541,754

Due to Previous Shareholders of AHFL

Due to previous shareholders of AHFL is the entire remaining balance payable of the acquisition cost. On March 27, 2019, the Company and the selling shareholders of AHFL entered into a sixth amendment to the acquisition agreement, pursuant to which, the Company will make the cash payment in the amount of NTD15 million on or prior to March 31, 2021. In March 2021, the Company entered a seventh amendment with the selling shareholders in negotiation with the previous shareholders of AHFL to extend the repayment date to March 31, 2024. As of March 31, 2022 and December 31, 2021, the amount due to previous shareholders of AHFL were $524,109 and $541,754, respectively.

NOTE 10 – CONTRACTS WITH CUSTOMERS

Information about accounts receivable and contract assets from contracts with customers is as follows:

	March 31, 2022
	(unaudited)		December 31, 2021
Accounts receivable	$	18,315,305	$	26,761,678
Contract assets		457,917		—

19

Contract assets are the Company’s conditional rights to consideration for completed performance obligation and are in relation to the performance bonus to be rewarded based on the annual performance. The Company recognizes the contingent commission as a contract asset when the performance obligation is fulfilled, and the Company has not had the unconditional rights to the payment. As of March 31, 2022 and December 31, 2021, the Company had $457,917 and nil of contract assets, respectively.

Contract with AIATW

On June 10, 2013, AHFL entered into a Strategic Alliance Agreement (the “Alliance Agreement”) with AIA International Limited Taiwan Branch (“AIATW”), the purpose of which is to promote life insurance products provided by AIATW within Taiwan by insurance agencies or brokerage companies affiliated with AHFL or China United. Pursuant to the terms of the Alliance Agreement, AIATW paid AHFL an execution fee, which was recorded as revenue upon fulfilling certain criteria over the original term of the Alliance Agreement from June 1, 2013 to May 31, 2018. From 2014 to 2017, AHFL has entered into three amendments to the Alliance Agreement with AIATW to further revise certain terms and conditions in the Alliance Agreement, including the extension of the expiration date from May 31, 2018 to December 31, 2021. Pursuant to the Third Amendment to the Alliance Agreement (the “Amendment 3”), both AHFL and AIATW agreed to adjust certain terms and conditions set forth in this amendment, some of which included (i) except the first contract year (April 15th, 2013 to September 30th, 2014), the sales target of the alliance between the parties shall be changed to (a) value of new business (“VONB”) and (b) the 13-month persistency ratio; and (ii) AIATW will calculate and recognize the VONB and 13-month persistency ratio each contract year and inform the Company the result; and (iii) the Company agrees to return the basic business promotion fees to AIATW within thirty (30) days of receipt of the notice sent by AIATW if the Company fails to meet the targets set forth in the Amendment 3, AIATW reserves the right to offset such amount against the amount payable by it to the Company; and (iv) upon the termination of the Alliance Agreement and its amendments pursuant to the Section 8.2 of the Alliance Agreement, both parties agreed to calculate the amount to be returned or repaid, as applicable, based on the past and current contract years. The Company shall return the basic business execution fees at NTD 50 million for the first contract year, NTD 35 million for the second contract year, and NTD 33 million for each contract year thereafter within one month after the termination. Accordingly, for the last contract year of 2021, no revenue was recognized because the Company failed to meet the targets set forth in the Amendment 3 and therefore, the Company shall refund the basic business execution fees of NTD 33 million based on the calculation of VONB and 13-month persistency for the same contract period. As of March 31, 2022 and December 31, 2021, the basic business execution fees of $1,153,039 and $1,191,858 were payable and recorded under other current liabilities, respectively.

On March 15, 2022, AHFL entered into the Fourth Amendment to the Alliance Agreement (the “Amendment 4”), which, among other things, extended the expiration date of the Alliance Agreement to December 31, 2031. Pursuant to Amendment 4, the sales targets for the remaining contract term under the Alliance Agreement shall be changed by reference to (i) the amount of VONB and (ii) the 13-month persistency ratio as set forth therein, provided that to the extent any underlying insurance contract is revoked, invalidated or terminated and premiums are refunded to such policyholder, the amount of the related VONB shall be correspondingly reduced. Amendment 4 provides that AIATW shall pay the strategic alliance business promotion fee of NTD 50 million to AHFL; however, AHFL shall be required to return certain portions of or all of the business promotion fees within thirty (30) days of receipt of notice provided by AIATW if AFHL fails to meet certain goals set in Table 2 and Table 3 of Amendment 4. The primary factor under formula one focuses on the annual and/or accumulated achievement rate(s), while the primary factor under formula two focuses on the 13-month persistency ratio(s), among others.

The Company recognized the revenue related to AIATW of $22,135 (NTD 619,428) and nil, net of VAT, for the three months ended March 31, 2022 and 2021, respectively.

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NOTE 11 –LEASE

The Company has operating leases for its offices with lease terms ranging from one to five years. The Company recorded its operating lease cost of $1,370,536 and $1,020,873 for the three months ended March 31, 2022 and 2021.

Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. As of March 31, 2022 and December 31, 2021, operating lease right-of-use assets and lease liabilities were as follows:

	March 31, 2022
	(unaudited)		December 31, 2021
Right-of-use assets under operating leases	$	6,594,686	$	6,449,182
Operating lease liabilities – current		3,312,917		3,059,329
Operating lease liabilities – noncurrent		3,250,652		3,298,089

Lease term and discount rate

	March 31, 2022
	(unaudited)			December 31, 2021
Weighted average remaining lease term
Operating lease		2.23	years		2.31	years
Weighted average discount rate
Operating lease		3.19	%		2.80	%

Supplemental cash flow information related to leases

	Three Months Ended March 31,
	2022(unaudited)		2021(unaudited)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows related to operating leases	$	1,232,314	$	1,142,714
Amortization of right-of-use assets under operating leases		951,111		877,022

The minimum future lease payments as of March 31, 2022 are as follows:

	Amount
2022 (remainder of year)		2,705,341
2023		2,577,470
2024		1,292,693
2025		178,775
2026		12,074
Thereafter		—
Total minimum lease payments		6,766,353
Less: Interest		(202,784)
Present value of future minimum lease payments	$	6,563,569

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NOTE 12 – NONCONTROLLING INTERESTS

Noncontrolling interests consisted of the following as of March 31, 2022 and December 31, 2021:

	% of Non-						Other		March 31,
	controlling		December 31,		Net Income		Comprehensive		2022
Name of Entity	Interest		2021		(Loss)		(Loss)		(unaudited)
Law Enterprise	34.05	%	$	(676,166)	$	(82,974)	$	(5,870)		(765,010)
Law Broker	34.05	%		31,016,203		1,650,826		(1,018,942)		31,648,087
Uniwill	50.00	%		48,802		149,554		(16,158)		182,198
Rays	1.00	%		(6,461)		(55)		—		(6,516)
PFAL	49.00	%		364,056		21,930		(866)		385,120
MKI	49.00	%		(327,119)		—		—		(327,119)
Total			$	30,419,315	$	1,739,281	$	(1,041,836)	$	31,116,760

	% of Non-						Other		Impact from
	controlling		December 31,		Net Income		Comprehensive		Liquidation of		December 31,
Name of Entity	Interest		2020		(Loss)		Income (Loss)		PA Taiwan		2021
Law Enterprise	34.05	%	$	(414,957)	$	(264,642)	$	3,433	$	—	$	(676,166)
Law Broker	34.05	%		25,177,272		5,444,673		394,258		—		31,016,203
Uniwill	50.00	%		(421,035)		466,934		2,903		—		48,802
Rays	1.00	%		(5,772)		(689)		—		—		(6,461)
PFAL	49.00	%		423,978		(63,441)		3,519		—		364,056
MKI	49.00	%		(732)		(161,090)		—		(165,297)		(327,119)
PA Taiwan	49.00	%		(163,013)		1,102		(3,386)		165,297		—
Total			$	24,595,741	$	5,422,847	$	400,727	$	—	$	30,419,315

NOTE 13 – INCOME TAX

The following table reconciles the Company’s statutory tax rates to effective tax rates for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
	2022		2021
	(unaudited)		(unaudited)
US statutory rate	21	%	21	%
Tax rate difference	(2)	%	(2)	%
Change in valuation allowance	8	%	4	%
Income tax on undistributed earnings	4	%	4	%
Utilization of deferred tax assets not previously recognized	(2)	%	(1)	%
Non-deductible and non-taxable items	—	%	1	%
True up of prior year income tax	—	%	(1)	%
Other	(4)	%	—	%
Effective tax rate	25	%	26	%

The Company’s income tax expense is mainly generated by its subsidiaries in Taiwan. The Company’s subsidiaries in Taiwan are governed by the Income Tax Law of Taiwan and subject to a statutory tax rate on income reported in the statutory financial statements at 20% and a tax on undistributed earnings at 5%. The Company had no plan to distribute earnings earned for the years ended December 2021 and 2020, and the tax on undistributed earnings on entities in Taiwan of 5% was estimated. As of March 31, 2022 and December 31, 2021, the Company had current tax payable of $4,904,891 and $3,703,412 for Taiwan income tax, respectively.

WFOE and the Consolidated Affiliated Entities (“CAE”) in the PRC are governed by the Income Tax Law of PRC concerning private-run enterprises, which are generally subject to tax at 25% on income reported in the statutory financial statements after appropriate adjustments. WFOE and CAE had no income tax expenses for the three months ended March 31, 2022 and 2021 due to the net operating losses generated in the previous years.

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The Company’s subsidiaries in Hong Kong are governed by the Inland Revenue Ordinance Tax Law and subject to two-tiered profits tax regime. The first HK$2 million assessable profits is taxed at 8.25% and any assessable profits over HK$2 million is taxed at 16.25%. As of March 31, 2022 and December 31, 2021, the Company had current tax payable of $3,137 and $9,756 for Hong Kong income tax.

The 2017 Tax Act was enacted into law on December 22, 2017 and imposed a mandatory one-time tax on accumulated earnings of foreign subsidiaries, introducing new tax regimes, and changing how foreign earnings are subject to U.S. tax. Based on the Company’s total post-1986 earnings and profits (“E&P”) that it previously deferred from U.S. income taxes, we recorded the one-time transition tax $1,199,195 in eight annual installments for the transition tax on undistributed earnings of non-U.S. subsidiaries during the year ended December 31, 2018. As of March 31, 2022 and December 31, 2021, the Company both had current tax payable of $179,879 and noncurrent tax payable of $539,636 for U.S. income tax.

NOTE 14 – RELATED PARTY TRANSACTIONS

The following summarized the Company’s loans payable related parties as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	(unaudited)		December 31, 2021
Due to Ms. Lu (A shareholder of Anhou)	$	25,654	$	41,311
Others		11,190		9,220
Total	$	36,844	$	50,531

Amounts due to Ms. Lu were borrowings from Ms. Lu to support Anhou’s business operation. The amounts were non-interesting bearing and payable on demand.

Due to bonus to officer, please refer to Note 8; and due to AHFL previous shareholders, please refer to Note 9.

There was no other material related party transactions other than those disclosed above.

NOTE 15– COMMITMENTS AND CONTINGENCIES

Operating Leases

See future minimum annual lease payments in Note 11.

Time Deposits Pledged as Collateral

See time deposits pledged as collateral in Notes 4 and 6.

Appointment agreement

On December 21, 2018, Law Broker entered into an appointment agreement with Shu-Fen, Lee (“Ms. Lee”), pursuant to which, she served as the president of Law Broker from December 21, 2018 to December 20, 2021. Law Broker expects to extend Ms. Lee’s appointment agreement at the next meeting  of the board of directors. Ms. Lee’s primary responsibilities included 1) overall business planning, 2) implementation of resolution of the shareholders' meeting or the board of directors, 3) the appointment and dismissal of the Law Broker’s employees and sales professionals, except for internal auditors, 4) financial management and application, 5) being the representative of Law Broker, 6) other matters assigned by the board of directors. According to the appointment agreement, Ms. Lee’s compensation plan included: 1) base salary, 2) managerial allowance, 3) surplus bonus based on 1.25%  of Law Broker’s income after tax, and 4) annual year-end bonus. The renewed appointment agreement is expected to be signed in May 2022. For the three months ended March 31, 2022 and 2021, the Company has recorded the compensation expense of $72,905 and $62,208 under the appointment agreement, respectively.

Engagement agreement

On December 23, 2021, Law Broker entered into a new engagement agreement with Hui-Hsien Chao (“Ms. Chao”), pursuant to which she shall have served as the general manager of Law Broker from December 23, 2021 to December 22, 2024. Ms. Chao’s primary responsibilities are to assist Law Broker in operating and managing insurance agency business. According to the engagement agreement, Ms. Chao’s Bonus plans shall include: 1) execution, 2) long-term service fees and 3) non-competition. The payment of such bonuses

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will only occur upon satisfaction of certain conditions and subject to the terms in the engagement agreement. Ms. Chao has agreed to act as the general manager or equivalent position of Law Broker for a term of at least three years. For the three months ended March 31, 2022 and 2021, the Company has recorded the performance bonus expense of nil and $29,689 under the engagement agreement, respectively.

NOTE 16 –VARIABLE INTEREST ENTITIES

The carrying amounts of the assets, liabilities and the results of operations of the VIE and its subsidiaries (i.e., Zhengzhou Zhonglia Hengfu Business Consulting Co., Limited and its subsidiaries) included in the Company’s consolidated balance sheets and statements of comprehensive loss after the elimination of intercompany balances and transactions among VIEs and their subsidiaries within the Company are as follows:

	March 31, 2022
(Amount in USD)	(unaudited)		December 31, 2021
ASSETS
Current assets
Cash and cash equivalents	$	2,808,564	$	1,001,974
Accounts receivable and notes receivable		731,192		455,884
Other current assets		173,360		120,113
Total current assets		3,713,116		1,577,971
Right-of-use assets under operating leases		1,400,738		1,528,856
Property and equipment, net		209,016		199,056
Prepaid expenses - intangible assets		20,389		9,377
Long-term investments		47,306		47,179
Restricted cash – noncurrent		856		72,870
Registered capital deposits		1,103,796		1,100,842
Deferred tax assets		—		74,709
Other assets		84,176		83,951
TOTAL ASSETS	$	6,579,393	$	4,694,811
LIABILITIES
Current liabilities
Commissions payable to sales professionals	$	214,761	$	210,198
Other current liabilities		3,312,953		1,117,738
Due to related parties - Ms. Lu (the shareholder of Law Anhou)		25,654		41,311
Total current liabilities		3,553,368		1,369,247
Operating lease liabilities - noncurrent		807,009		908,971
TOTAL LIABILITIES	$	4,360,377	$	2,278,218

	Three Months Ended March 31,
(Amount in USD)	2022		2021
Revenue	$	1,347,816	$	1,951,469
Net loss		(201,946)		(50,781)
Net cash used in operating activities		(472,033)		(449,692)
Net cash provided by (used in) investing activities		2,290,667		(7,292)
Net cash used in financing activities		(15,760)		(7,714)

The VIEs contributed $ 1,347,816 and $1,951,469 of the Company’s consolidated revenue for the three months ended March 31, 2022 and 2021, respectively, after elimination of inter-company transactions.

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As of March 31, 2022, there was no pledge or collateralization of the VIEs’ assets that can only be used to settle obligations of the VIEs, other than the share pledge agreements, restricted cash and registered capital deposits. Other than the amounts due to the Company and its non-VIE subsidiaries (which are eliminated upon consolidation), the creditors of the VIEs’ third-party liabilities did not have recourse to the general credit of the Company in normal course of business. The Company did not provide or intend to provide financial or other supports not previously contractually required to the VIEs during the years presented.

NOTE 17 – SEGMENT REPORTING

The Company organizes and manages its business as three operating segments by operating geographic areas. The business of WFOE, CU Hong Kong and the CAE in PRC was managed and reviewed as PRC segment. The business of AHFL and its subsidiaries in Taiwan was managed and reviewed as Taiwan segment. The business of PFAL was managed and reviewed as Hong Kong segment. PRC and Taiwan segments retain majority of reported consolidated amounts.

The geographical distributions of the Company’s financial information for the three months ended March 31, 2022 and 2021 were as follows:

	Three Months Ended March 31,
	(unaudited)		(unaudited)
	2022		2021
Geographical Areas
Revenue
Taiwan	$	30,505,357	$	28,851,500
PRC		1,347,816		1,951,469
Hong Kong		82,822		110,985
Elimination adjustment		(955,472)		(383,837)
Total revenue	$	30,980,523	$	30,530,117
Income (loss) from operations
Taiwan	$	5,213,523	$	4,690,729
PRC		(155,919)		(3,918)
Hong Kong		38,401		61,493
Elimination adjustment		217,810		138,350
Total income from operations	$	5,313,815	$	4,886,654
Non operating income (expense)
Taiwan	$	860,527	$	587,469
PRC		256,585		96,152
Hong Kong		9,502		(118)
Elimination adjustment		(174,374)		(134,569)
Total non-operating income (expense)	$	952,240	$	548,934
Net income
Taiwan	$	4,570,169	$	3,933,490
PRC		25,798		46,918
Hong Kong		44,756		56,312
Elimination adjustment		43,435		62
Total net income	$	4,684,158	$	4,036,782

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The geographical distribution of the Company’s financial information as of March 31, 2022 and December 31, 2021 were as follows:

	March 31, 2022
	(unaudited)		December 31, 2021
Geographical Areas
Reportable assets
Taiwan	$	190,952,606	$	195,981,770
PRC		14,209,455		12,326,308
Hong Kong		798,648		756,692
Elimination adjustment		(78,832,414)		(81,283,249)
Total reportable assets	$	127,128,295	$	127,781,521
Long-lived assets
Taiwan	$	6,809,903	$	6,784,644
PRC		1,609,754		1,727,911
Hong Kong		1,146		1,287
Elimination adjustment		(2,906)		(2,905)
Total long-lived assets	$	8,417,897	$	8,510,937
Capital investments (CAPEX cash flows)
Taiwan	$	43,515	$	595,591
PRC		25,985		79,203
Hong Kong		—		154
Total capital investments	$	69,500	$	674,948

NOTE 18 –RISKS AND UNCERTAINTIES

There has continued to be widespread impact from the coronavirus disease (“COVID-19”) pandemic including potentially more contagious strains of COVID-19 such as the Delta and Omicron variants. It has created significant volatility and uncertainty and economic disruption. The extent to which the pandemic impacts the Company’s business and operations will depend on numerous evolving factors, many of which are not within the Company’s control and which the Company may not be able to accurately predict, including its duration and scope; the ultimate availability, administration and effectiveness of vaccines around the world; governmental actions that have been and continue to be taken in response to the pandemic, including vaccine coverage; the impact of the pandemic on economic activity and actions taken in response; the ability of the Company’s customers to pay their insurance premiums which could impact the Company’s commission and fee revenues for the services provided; and the long-term impact of employees working from home, including increased technology costs.

NOTE 19 – SUBSEQUENT EVENTS

The Company has evaluated all other subsequent events through the date these consolidated financial statements were issued and determine that there were no subsequent events or transactions that require recognition or disclosures in the consolidated financial statements, except for the following:

As disclosed in Note 10, the Company failed to meet the targets set forth in the Amendment 3 of the Alliance Agreement with AIATW and shall refund the basic business execution fees of $1,159,039 (NTD 33 million). On May 6, 2022, AIATW issued a formal letter to the Company and agreed to reduce the refund amount of $1,159,039 (NTD 33.0 million) to $807,127 (NTD 23.1 million).

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.

The following discussion of the results of operations and financial condition should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto included in Item 1 of this part. This report, including the information incorporated by reference, contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The use of any of the words “believe,” “expect,” “anticipate,” “plan,” “estimate,” and similar expressions are intended to identify such statements. Forward-looking statements include statements concerning our possible or assumed future results. The actual results that we achieve may differ materially from those discussed in such forward-looking statements due to the risks and uncertainties described in the Risk Factors section of this report, in Management’s Discussion and Analysis of Financial Condition and Results of Operations, and in other sections of this report, as well as in our annual report on Form 10-K. We undertake no obligation to update any forward-looking statements.

Overview

The Company primarily provides two broad categories of insurance products, life insurance products and property and casualty insurance products, in Taiwan and People’s Republic of China (“PRC”). The Company also provides reinsurance brokerage services and insurance consulting services in Hong Kong and Taiwan. The percentage of reinsurance brokerage services and insurance consulting services is less than 1% of our total revenue. The insurance products that the Company’s subsidiaries sell are underwritten by some of the leading insurance companies in Taiwan and PRC, respectively.

(1) Life Insurance Products

Total revenue from Taiwan segment’s sales of life insurance products were 89.2% and 88.1% of total revenue for the three months ended March 31, 2022 and 2021, respectively. Total revenue from PRC segment’s sales of life insurance products were 3.6% and 6.0% of total revenue for the three months ended March 31, 2022 and 2021, respectively.

In addition to the periodic premium payment schedules, most of the individual life insurance products we distribute also allow the insured to choose to make a single, lump-sum premium payment at the beginning of the policy term. If a periodic payment schedule is adopted by the insured, a life insurance policy can generate periodic payment of fixed premiums to the insurance company for a specified period of time. This means that once the Company sells a life insurance policy with a periodic premium payment schedule, they will be able to derive commission and fee income from that policy for an extended period of time, sometimes up to 25 years. Because of this feature and the expected sustainable growth of life insurance sales in the PRC and Taiwan, we have focused significant resources ever since the incorporation of Anhou and Law Broker on developing our capability to distribute individual life insurance products with periodic payment schedules. We expect that sales of life insurance products will continuously be our primary source of revenue in the next several years.

(2) Property and Casualty Insurance Products

Total revenue from Taiwan segment’s sales of property and casualty insurance products were 6.3% and 5.2% of total revenue for the three months ended March 31, 2022 and 2021, respectively. Total revenue from PRC segment’s sales of property and casualty insurance products were 0.7% and 0.4% of total revenue for the three months ended March 31, 2022 and 2021, respectively.

As COVID-19 and its duration remain uncertain, we have been monitoring and will continue to measure and modify our business to protect our customers, sales professionals and employees. The extent of the COVID-19 impact to the Company will depend on numerous factors and developments. Consequently, any potential impacts of COVID-19 remain highly uncertain and cannot be predicted with confidence.

Critical Accounting Policies and Estimates

A critical accounting policy is one that is both important to the portrayal of our financial condition and results of operation and requires our management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We have had no changes to our Critical Accounting Policies as described in our most recent Form 10-K for the year ended December 31, 2021 and believe that of our significant accounting and reporting policies, the more critical policies include our accounting for revenue recognition and estimate of income taxes. Our significant accounting policies are described

27

in Note 1 of “Summary of Significant Accounting Policies” included within our 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Results of Operations- Three Months ended March 31, 2022 Compared to Three Months ended March 31, 2021

The following table shows the results of operations for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
	2022			2021
	(Unaudited)			(Unaudited)			Change			Percent
Revenue	$	30,980,523		$	30,530,117		$	450,406		2	%
Cost of revenue		19,009,519			18,973,432			36,087		—	%
Gross profit		11,971,004			11,556,685			414,319		4	%
Gross profit margin		38.6	%		37.9	%		0.7	%	2	%
Operating expenses:
Selling		684,150			579,777			104,373		18	%
General and administrative		5,973,039			6,090,254			(117,215)		(2)	%
Total operating expenses		6,657,189			6,670,031			(12,842)		—	%
Income from operations		5,313,815			4,886,654			427,161		9	%
Other income (expenses):
Interest income		104,977			83,998			20,979		25	%
Interest expenses		(52,335)			(42,470)			(9,865)		23	%
Foreign currency exchange gains, net		737,550			328,466			409,084		125	%
Other - net		162,048			178,940			(16,892)		(9)	%
Total other income, net		952,240			548,934			403,306		74	%
Income before income taxes		6,266,055			5,435,588			830,467		15	%
Income tax expense		(1,581,897)			(1,398,806)			(183,091)		13	%
Net income		4,684,158			4,036,782			647,376		16	%
Net income attributable to the noncontrolling interests		(1,739,281)			(1,626,396)			(112,885)		7	%
Net income attributable to China United’s shareholders	$	2,944,877		$	2,410,386		$	534,491		22	%

Revenue

As a distributor of insurance products, we derive our revenue primarily from commissions and fees paid by insurance companies, typically calculated as a percentage of premiums paid by our customers to the insurance companies in Taiwan, PRC and Hong Kong. We generate revenue primarily through our sales force, which consists of individual sales agents in our distribution and service network. For the three months ended March 31, 2022 and 2021, the revenues generated from Taiwan, PRC and Hong Kong were as follows:

Geographic Areas	Three Months Ended March 31,
	2022			2021			Change		Percent
Revenue
Taiwan segment	$	29,549,885		$	28,467,663		$	1,082,222	3.8	%
Percentage of revenue		95.4	%		93.2	%
PRC segment		1,347,816			1,951,469			(603,653)	(30.9)	%
Percentage of revenue		4.3	%		6.4	%
Hong Kong segment		82,822			110,985			(28,163)	(25.4)	%
Percentage of revenue		0.3	%		0.4	%
Total revenue	$	30,980,523		$	30,530,117		$	450,406	1.5	%

Revenue from our Taiwan segment increased by $1.0 million from $28.5 million for the three months ended March 31, 2021 to $29.5 million for the three months ended March 31, 2022. Increase in revenue was mainly due to the high performance of sales of investment-

28

type insurance policies, our continued growth in the sales of insurance products in the past years, and our continuance of receiving more persistency-rate-linked bonuses for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021.

Revenue from our PRC segment decreased by $0.6 million from $1.9 million for the three months ended March 31, 2021 to $1.3 million for the three months ended March 31, 2022. The insurance premium of certain products were priced higher in the first quarter of 2022 than those in the first quarter of 2021 and therefore, customers in PRC were unwilling to buy the insurance products, which resulted in the decrease of revenue. In addition, the persistency-rate-linked bonuses in the PRC segment also decreased for the three months ended March 31, 2022 due to the termination of certain sales agreement with some of the PRC insurance companies.

Revenue from the Hong Kong Segment was primarily derived from reinsurance commission on sales of insurance products from other insurers to Taiwan Life Insurance Co., Ltd. (“Taiwan Life”) for risk management. Revenue from our Hong Kong segment for the three months ended March 31, 2022 remained consistent with that of the same period in 2021.

Cost of revenue and gross profit

The cost of revenue mainly consists of commissions paid to our sales professionals. The cost of revenue for the three months ended March 31, 2022 remained consistent with that of the same period in 2021.

Consequently, the gross profit margin increased from 37.9% for the three months ended March 31, 2021 to 38.6% for the three months ended March 31, 2022. Such increase in the gross profit margin mainly resulted from receiving more contingent commissions for subsequent years.

Selling expenses

Selling expenses were mainly incurred by Law Broker and Uniwill in connection with online marketing and advertising. For the three months ended March 31, 2022, selling expenses were $0.7 million, reflecting an increase of $ 0.1 million, compared with $0.6 million of selling expenses for the three months ended March 31, 2021. Increase in the selling expenses was caused by the donation for charity foundations in Taiwan during the three months ended March 31, 2022.

General and administrative expenses

General and administrative (“G&A”) expenses are principally comprised of salaries and benefits for our administrative staff, office rental expenses, travel expenses, depreciation and amortization, entertainment expenses, and professional service fees. General and administrative expenses were $6.0 million for the three months ended March 31, 2022, which was not significantly different from those of the same period of 2021.

Other income (expense)

Other income mainly consisted of interest income, interest expenses, gain or loss on valuation of financial assets, and foreign currency exchange gain or loss. Other income were $1.0 million, reflecting an increase of $0.5 million, compared with the other income of $0.5 million for the three months ended March 31, 2021. The increase in other income was mainly due to foreign currency exchange gain recognized from foreign currency time deposits because of the depreciation of the New Taiwan Dollar against the U.S. dollar and Chinese Yuan during the first quarter of 2022.  

Income tax expense

For the three months ended March 31, 2022, income tax expense was $1.6 million, reflecting an increase of $0.2 million or 13%, compared with the income tax expense of $1.4 million for the three months ended March 31, 2021. The increase in tax expenses was mainly due to the increase in revenues generated in the Taiwan segment during the first quarter of 2022.

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Liquidity and Capital Resources

The following table presents a comparison of the net cash provided by operating activities, net cash provided by (used in) investing activities and net cash provided by financing activities for the three-month periods ended March 31, 2022 and 2021:

	Three Months Ended March 31,
	2022		2021		Change		Percent
Net cash provided by operating activities	$	7,599,296	$	6,445,228	$	1,154,068	17.9	%
Net cash (used in) provided by investing activities		(5,331,480)		199,142		(5,530,622)	(2,777.2)	%
Net cash provided by financing activities		1,054,769		2,171,143		(1,116,374)	(51.4)	%

Operating activities

Net cash provided by operating activities during the three months ended March 31, 2022 was $7.6 million, reflecting an increase of $1.2 million or 17.9% in comparison with that of $6.4 million during the three months ended March 31, 2021. The increase in cash inflows was mainly due to the higher net income and collection from accounts receivable for the three months ended March 31, 2022 compared with that of the same period in 2021.

Investing activities

Net cash used in investing activities was $5.3 million during the three months ended March 31, 2022 as compared with the net cash provided by investing activities of $0.2 million for the three months ended March 31, 2021. Increases in the cash used in the investing activities resulted from the increase of the purchases of marketable securities and time deposits, and the decrease of proceeds from maturities of time deposits during the first quarter of 2022.  

Financing activities

Net cash provided by financing activities was $1.1 million during the three months ended March 31, 2022, which decreased by $1.1 million from that of $2.2 million during the same period of 2021. The decrease was mainly due to the decrease in the net proceeds from additional borrowings under the revolving credit agreements and partially offset by the decrease of repayment of related party borrowings during the first quarter of 2022.

Contractual Obligations

There have been no significant changes to the Company’s contractual obligations as disclosed in the Company’s 2021 Annual Report filed on Form 10-K.

Off Balance Sheet Arrangements

The Company had no off-balance sheet arrangements as of March 31, 2022.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

As a smaller reporting company as defined by Rule 12b-2 of the Exchange Act, we are not required to provide the information under this item.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit of possible controls and procedures.

Under the supervision and with the participation of management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of March 31, 2022. This conclusion was based on the material weaknesses in our internal control over financial reporting described in Part II, Item 9A, “Controls and Procedures” of our annual report on Form 10-K for the year ended December 31, 2021. The material weaknesses have not been remediated as of March 31, 2022. We continue to work on the remediation of the material weakness, we may determine to take additional measures to address our control deficiencies. The material weakness will continue to exist until the remediation steps identified in our 2021 Form 10-K are fully implemented and concluded to be operating effectively.

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 Company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis. If not remediated, the material weaknesses in our internal control over financial reporting described in the Form 10-K for the year of 2021 could result in a material misstatement of our annual or interim consolidated financial statements that would not be prevented or detected on a timely basis.

Changes in Internal Control over Financial Reporting

During the fiscal quarter ended March 31, 2022, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

31

PART II.  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

On November 29, 2021, Law Broker received a decision letter (the “Law Broker Decision Letter”) dated November 25, 2021 from the Financial Supervisory Commission (Taiwan) (the “FSC”) stating that Law Broker was fined NTD 200,000 (equivalent to approximately $7,227 USD) (the “Fine”) and a one-month correction period (the “Correction Period,” collectively with the Fine, the “Penalty”) by the FSC for violating Article 163 Sections 4 and 8 of the Insurance Act (the “Act”) and Section 23 of Article 49 of the Regulations Governing Insurance Brokers (the “Regulation”). The FSC found that one of Law Broker’s insurance agents, within a short period of time, solicited the same customer for insurance policies from different insurance companies but the financial information of the customer in such agent’s report was different. The insurance agent and Law Broker were not able to verify the reason behind such discrepancy.

Further, the FSC found that Law Broker’s current “Customer Risk Assessment Standards for Preventing Money Laundering and Combating Terrorism,” underestimated customers’ risk levels and therefore such standards may have deficiency in screening the risks.

Law Broker has paid the Fine in full and is in the process of adjusting its business models to regain compliance with the Act and the Regulation.

Except as disclosed above, during the three months ended March 31, 2022, we were not aware of any other legal proceedings or claims that we believed would have a material adverse effect on our business, financial condition or operating results. From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business, such as labor and employment disputes. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

ITEM 1A. RISK FACTORS.

As a smaller reporting company, we are not required to make disclosure under this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Not applicable during this reporting period.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable during this reporting period.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable during this reporting period.

32

ITEM 6. EXHIBITS

Exhibit
Number		Description of Exhibit
10.1		Share Purchase Agreement (the English Translation) dated February 25, 2022 by and among, Law Anhou Insurance Agency Co., Ltd., Jiangsu Law Insurance Brokerage Co., Ltd., Xuzhou Guosheng Furui Asset Management Co., Ltd., Jiangsu Zhongbozhixin Financial Service Outsourcing Co., Ltd., and Xuzhou Xinrui Service Outsocuring Co., Ltd. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on March 3, 2022)
10.2		Translation of Amendment 4 to the Strategic Alliance Agreement between Action Holdings Financial Limited and AIA International Limited Taiwan Branch dated March 15, 2022 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on March 18, 2022)
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
32.1*		Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*The certifications attached as Exhibits 32.1 and 32.2 accompany this quarterly report on Form 10-Q pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

33

SIGNATURES

Pursuant to the requirements 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.

	China United Insurance Service, Inc.
Date: May 16, 2022	By:	/s/ Yi-Hsiao Mao
	Name:	Yi-Hsiao Mao
	Its:	Chief Executive Officer
		(Principal Executive Officer)
Date: May 16, 2022	By:	/s/ Mei-Kuan Yeh
	Name:	Mei-Kuan Yeh
	Its:	Chief Financial Officer
		(Principal Financial and Accounting Officer)

34

EX-31.1

 Exhibit 31.1

CERTIFICATION

I, Yi-Hsiao Mao, certify that:

1. I have reviewed this quarterly report on Form 10-Q of China United Insurance Service, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15-d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 16, 2022
By:	/s/ Yi-Hsiao Mao
Name:	Yi-Hsiao Mao
Title:	Chief Executive Officer
(principal executive officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Mei-Kuan Yeh, certify that:

1. I have reviewed this quarterly report on Form 10-Q of China United Insurance Service, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15-d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 16, 2022
By:	/s/ Mei-Kuan Yeh
Name:	Mei-Kuan Yeh
Title:	Chief Financial Officer
(principal financial officer and principal accounting officer)

EX-32.1

Exhibit 32.1

CERTIFICATION

In connection with the quarterly report of China United Insurance Service, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2022, as filed with the Securities and Exchange Commission (the “Report”), I, Yi-Hsiao Mao, Chief Executive Officer and President (Principal Executive Officer) of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

Date: May 16, 2022
By:	/s/ Yi-Hsiao Mao
Name:	Yi-Hsiao Mao
Title:	Chief Executive Officer
(principal executive officer)

This certification is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company. under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing. A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION

In connection with the quarterly report of China United Insurance Service, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2022, as filed with the Securities and Exchange Commission (the “Report”), I, Mei-Kuan Yeh, Chief Financial Officer (Principal Financial Officer) of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

Date: May 16, 2022
By:	/s/ Mei-Kuan Yeh
Name:	Mei-Kuan Yeh
Title:	Chief Financial Officer
(principal financial officer and principal accounting officer)

This certification is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company. under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing. A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2022 shares
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2022
Entity File Number	000-54884
Entity Registrant Name	CHINA UNITED INSURANCE SERVICE, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	30-0826400
Entity Address, Address Line One	7F, No. 311 Section 3
Entity Address, Address Line Two	Nan-King East Road
Entity Address, City or Town	Taipei City
Entity Address, Country	TW
Entity Address, Postal Zip Code	105405
City Area Code	8862
Local Phone Number	87126958
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	30,286,199
Entity Central Index Key	0001512927
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 20,595,428	$ 18,234,350
Time deposits	68,935,263	64,299,176
Accounts receivable	18,315,305	26,761,678
Contract assets	457,917	0
Marketable securities	832,990
Other current assets	1,173,425	1,207,496
Total current assets	110,310,328	110,502,700
Right-of-use assets under operating leases	6,594,686	6,449,182
Property and equipment, net	1,823,211	2,061,755
Intangible assets, net	359,759	333,118
Long-term investments	2,594,564	2,696,812
Restricted cash - noncurrent	13,650	88,282
Deferred tax assets	698,750	909,032
Other assets	4,733,347	4,740,640
TOTAL ASSETS	127,128,295	127,781,521
Current liabilities
Commission payable to sales professionals	9,840,217	14,003,541
Short-term loans	19,589,013	18,835,932
Income tax payable - current	5,087,907	3,893,047
Operating lease liabilities - current	3,312,917	3,059,329
Due to related parties	36,844	50,531
Other current liabilities	13,826,954	13,997,603
Total current liabilities	51,693,852	53,839,983
Income tax payable - noncurrent	539,636	539,636
Operating lease liabilities - noncurrent	3,250,652	3,298,089
Net defined benefit liabilities - noncurrent	376,522	389,198
Other liabilities	524,109	541,754
TOTAL LIABILITIES	56,384,771	58,608,660
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, par value $0.00001, 10,000,000 authorized, 1,000,000 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively	10	10
Common stock, par value $0.00001, 100,000,000 authorized, 30,286,199 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively	303	303
Additional paid-in capital	9,296,953	9,296,953
Statutory reserves	11,101,064	11,101,064
Retained earnings	16,635,245	13,690,368
Accumulated other comprehensive income	2,593,189	4,664,848
Total stockholders' equity attributable to China United's shareholders	39,626,764	38,753,546
Noncontrolling interests	31,116,760	30,419,315
TOTAL STOCKHOLDERS' EQUITY	70,743,524	69,172,861
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 127,128,295	$ 127,781,521

XML

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
Preferred stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred Stock, shares issued	1,000,000	1,000,000
Preferred Stock, shares outstanding	1,000,000	1,000,000
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	30,286,199	30,286,199
Common stock, shares outstanding	30,286,199	30,286,199

XML

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Revenue	$ 30,980,523	$ 30,530,117
Cost of revenue	19,009,519	18,973,432
Gross profit	11,971,004	11,556,685
Operating expenses:
Selling	684,150	579,777
General and administrative	5,973,039	6,090,254
Total operating expense	6,657,189	6,670,031
Income from operations	5,313,815	4,886,654
Other income (expenses):
Interest income	104,977	83,998
Interest expenses	(52,335)	(42,470)
Foreign currency exchange gains	737,550	328,466
Other - net	162,048	178,940
Total other income, net	952,240	548,934
Income before income taxes	6,266,055	5,435,588
Income tax expense	(1,581,897)	(1,398,806)
Net income	4,684,158	4,036,782
Less: net income attributable to noncontrolling interests	(1,739,281)	(1,626,396)
Net income attributable to China United's shareholders	2,944,877	2,410,386
Other comprehensive items, net of tax:
Foreign currency translation loss	(3,113,495)	(1,191,299)
Other	0	364
Total other comprehensive loss	(3,113,495)	(1,190,935)
Comprehensive income	1,570,663	2,845,847
Less: comprehensive income attributable to noncontrolling interests	(697,445)	(1,263,321)
Comprehensive income attributable to China United's shareholders	$ 873,218	$ 1,582,526
Weighted average shares outstanding:
Basic	30,286,199	29,421,736
Diluted	30,286,199	29,421,736
Earnings per share attributable to common stockholders of China United:
Basic	$ 0.094	$ 0.079
Diluted	$ 0.094	$ 0.079

XML

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)	Common Stock	Preferred Stock	Additional Paid-in Capital	Statutory Reserves	Accumulated Other Comprehensive Loss	Retained Earnings	Parent	Noncontrolling Interests	Total
Balance at Dec. 31, 2020	$ 294	$ 10	$ 8,190,449	$ 9,463,903	$ 3,889,429	$ 9,097,408	$ 30,641,493	$ 24,595,741	$ 55,237,234
Balance (in shares) at Dec. 31, 2020	29,421,736	1,000,000
Foreign currency translation loss					(828,100)		(828,100)	(363,199)	(1,191,299)
Other comprehensive income					240		240	124	364
Net income						2,410,386	2,410,386	1,626,396	4,036,782
Balance at Mar. 31, 2021	$ 294	$ 10	8,190,449	9,463,903	3,061,569	11,507,794	32,224,019	25,859,062	58,083,081
Balance (in shares) at Mar. 31, 2021	29,421,736	1,000,000
Balance at Dec. 31, 2020	$ 294	$ 10	8,190,449	9,463,903	3,889,429	9,097,408	30,641,493	24,595,741	55,237,234
Balance (in shares) at Dec. 31, 2020	29,421,736	1,000,000
Balance at Dec. 31, 2021	$ 303	$ 10	9,296,953	11,101,064	4,664,848	13,690,368	38,753,546	30,419,315	69,172,861
Balance (in shares) at Dec. 31, 2021	30,286,199	1,000,000
Foreign currency translation loss					(2,071,659)		(2,071,659)	(1,041,836)	(3,113,495)
Net income						2,944,877	2,944,877	1,739,281	4,684,158
Balance at Mar. 31, 2022	$ 303	$ 10	$ 9,296,953	$ 11,101,064	$ 2,593,189	$ 16,635,245	$ 39,626,764	$ 31,116,760	$ 70,743,524
Balance (in shares) at Mar. 31, 2022	30,286,199	1,000,000

XML

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net income	$ 4,684,158	$ 4,036,782
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	286,049	301,618
Amortization of right-of-use assets	951,111	877,022
Amortization of bond premium		58
Gain on sales of financial assets		(140,913)
Loss on valuation of financial assets	11,177	150,992
Loss on disposals of equipment	4,368	77
Deferred income tax	41,730	80,710
Unrealized foreign currency exchange (gains)	(228,109)
Net changes in operating assets and liabilities:
Accounts receivable	7,774,338	6,353,128
Contract assets	(468,333)	(98,867)
Other current assets	(107,500)	33,244
Other assets	112,257	(58,712)
Commission payable to sales professionals	(3,799,212)	(2,154,109)
Income tax payable	1,327,928	1,171,156
Other current liabilities	(1,758,352)	(2,746,985)
Other liabilities		(217,259)
Lease liabilities	(1,232,314)	(1,142,714)
Net cash provided by operating activities	7,599,296	6,445,228
Cash flows from investing activities:
Purchases of marketable securities	(846,673)
Purchases of time deposits	(23,217,843)	(23,561,920)
Proceeds from maturities of time deposits	16,562,521	22,403,564
Proceeds from receipts in advance of disposal of a subsidiary	2,316,652
Proceeds from sales of marketable securities		1,424,798
Purchase of equipment	(69,500)	(57,520)
Purchase of intangible assets	(76,637)	(9,780)
Net cash (used in) provided by investing activities	(5,331,480)	199,142
Cash flows from financing activities:
Proceeds from short-term loans	6,488,087	6,324,770
Repayment of short-term loans	(5,423,529)	(4,140,000)
Repayment of related party borrowings	(9,789)	(13,627)
Net cash provided by financing activities	1,054,769	2,171,143
Foreign currency translation	(1,036,139)	(443,188)
Net increase in cash, cash equivalents and restricted cash	2,286,446	8,372,325
Cash, cash equivalents and restricted cash, beginning balance	18,322,632	9,129,828
Cash, cash equivalents and restricted cash, ending balance	20,609,078	17,502,153
SUPPLEMENTARY DISCLOSURE:
Interest paid	52,490	40,886
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Lease liabilities arising from new right-of-use assets	$ 1,096,615	$ 635,360

XML

ORGANIZATION AND PRINCIPAL ACTIVITIES

3 Months Ended

Mar. 31, 2022

ORGANIZATION AND PRINCIPAL ACTIVITIES

ORGANIZATION AND PRINCIPAL ACTIVITIES

CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amount in USD)

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES

China United Insurance Service, Inc. (“China United” or “CUII”), its subsidiaries and variable-interest entity and its subsidiaries (collectively referred to herein as the “Company”) primarily engage in insurance brokerage and insurance agency services. The Company markets and sells to customers two broad categories of insurance products: life insurance products and property and casualty insurance products, both focused on meeting the particular insurance needs of individuals. The insurance products are underwritten by some of the leading insurance companies in Taiwan and China. The Company manages its business through aggregating them into three geographic operating segments, Taiwan, the PRC, and Hong Kong. The Company’s common stock currently trades over the counter under the ticker symbol “CUII” on the OTCQB.

The corporate structure as of March 31, 2022 is as follows:

On January 31, 2022, Genius Investment Consultant Co., Ltd (“GIC”), a subsidiary entity of CUII entered into a stock transfer agreement with AIlife International Investment Co., Ltd. (“AIlife”), pursuant to which GIC sold and transferred to AIlife 100% of its equity ownership in Joint Insurance Broker Co., Ltd. (“JIB”), a former wholly-owned subsidiary of GIC, resulting in AIlife owning 100% equity interest in JIB. Such exchange of equity interests between CUII’s subsidiaries are under common control of the Company and

therefore, they were accounted for at the carrying amount of the equity interests transferred and there was no impact on consolidated financial statements as of and for the three months ended March 31, 2022.

On February 25, 2022, Law Anhou Insurance Agency Co., Ltd. (“Law Anhou”), a contractually controlled entity of CUII entered into a Share Purchase Agreement with Jiangsu Law Insurance Brokerage Co., Ltd. (“Jiangsu Law”) and third-party buyers, pursuant to which Law Anhou shall sell and transfer 100% of its equity ownership in Jiangsu Law, a wholly owned subsidiary of Law Anhou to the following buyers: Xuzhou Guosheng Furui Asset Management Co., Ltd., Jiangsu Zhongbozhixin Financial Service Outsourcing Co., Ltd., and Xuzhou Xinrui Service Outsourcing Co., Ltd. Due to delays in the registration of shareholder change caused by the COVID-19, the control of Jiangsu Law has not been transferred as of March 31, 2022. Law Anhou has received the first installment of the contract $2,317,971 (RMB 14.7 million) which was recorded under other current liabilities as of March 31, 2022. The total assets as of March 31, 2022 and revenue from Jiangsu Law for the three months ended March 31, 2022 were 0.67% and 0.72%, respectively, which were immaterial to the Company’s consolidated financial statements.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of China United, its subsidiaries and variable interest entity and its subsidiaries as shown in the corporate structure in Note 1. All significant intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to the consolidated financial statements for prior year to the current year’s presentation. Such reclassifications have no effect on net income and the cash flow statements operating activities as previously reported.

Basis of Presentation

The unaudited condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement of the financial statements have been included. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2021, which were included in the Company’s 2021 Annual Report on Form 10-K (“2021 Form 10-K”). The accompanying consolidated balance sheet as of December 31, 2021, has been derived from the Company’s audited consolidated financial statements as of that date.

Use of Estimates

The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto. Actual results may differ from those estimates and assumptions.

Variable Interest Entities

Due to the legal restrictions on foreign ownership and investment in insurance agency and brokerage businesses in China, especially those on qualifications as well as capital requirement of the investors, China United, through its subsidiary, Zhengzhou Zhonglian Hengfu Business Consulting Co., Limited (“WFOE”), entered into Exclusive Business Cooperation Agreement (the “EBCA”), Power of Attorney, Option Agreement, and Share Pledge Agreement (collectively, the First VIE Agreements) on January 17, 2011 with Anhou and Anhou original shareholders so as to operate and conduct the insurance agency and brokerage business in the PRC.

Pursuant to the EBCA, (a) WFOE has the right to provide Anhou with complete technical support, business support and related consulting services during the term of the EBCA; (b) Anhou agrees to accept all the consultations and services provided by WFOE. Anhou further agrees that unless with WFOE’s prior written consent, during the term of the EBCA, Anhou shall not directly or indirectly accept the same or any similar consultations and/or services provided by any third party and shall not establish similar cooperation relationship with any third party regarding the matters contemplated by the EBCA; (c) within 90 days after the end of each fiscal year Anhou shall pay an amount to WFOE equal to the shortfall, if any, of the aggregate net income of Anhou for such fiscal; (d) WFOE retains all exclusive and proprietary rights and interests in all rights, ownership, interests and intellectual properties arising out of or

created during the performance of the EBCA; and (e) the shareholders of Anhou have pledged all of their equity interests in Anhou to WFOE to guarantee Anhou’s performance of its obligations under the EBCA. The term of the EBCA is 10 years and may be extended and determined by WFOE prior to the expiration thereof, and Anhou shall accept such extended term unconditionally.

On March 23, 2022, Anhou and WFOE entered into an amendment to the EBCA, pursuant to which the EBCA shall be automatic renewed for successive terms unless WFOE gives a 30-day notice to terminate such agreement, with each term being 10 years.

To extend the business within the PRC, Anhou intended to increase its registered capital to RMB50 million (approximately $8 million) to meet the requirement of the China Insurance Regulatory Commission (the “CIRC”) so that it can set up new branches in any province beyond its current operations in China. China United increased the investment in Anhou through various loan agreements with the shareholders of Anhou. The aggregate funding provided by WFOE was RMB 40 million. Due to the capital increase, a series of variable interest agreements (the “Second VIE Agreements”), which include Power of Attorneys, Exclusive Option Agreements, Share Pledge Agreements, were signed on October 24, 2013 and entered in the same form as the First VIE Agreements, other than the change of shareholder names and their respective shareholdings. The First VIE Agreements were terminated by and among WFOE, Anhou and Anhou original shareholders on the same date. The EBCA executed by and between WFOE and Anhou on January 17, 2011 remains in full effect.

As a result of the Second VIE Agreements, WFOE is considered the primary beneficiary of Anhou and has effective control over Anhou. Accordingly, the results of operations, assets and liabilities of Anhou and its subsidiaries (collectively, the “Consolidated Affiliated Entities” or the “CAE”) are consolidated from the earliest period presented. The Company reviews the VIE’s status on an annual basis and determine if any events have occurred that could cause its primary beneficiary status to change, which include (a) the legal entity’s governing documents or contractual arrangements are changed in a manner that changes the characteristics or adequacy of the legal entity’s equity investment at risk; (b) the equity investment or some part thereof is returned to the equity investors, and other interests become exposed to expected losses of the legal entity; (c) the legal entity undertakes additional activities or acquires additional assets, beyond those anticipated at the later of the inception of the entity or the latest reconsideration event, that increase the entity’s expected losses; and (d) the legal entity receives an additional equity investment that is at risk, or the legal entity curtails or modifies its activities in a way that decreases its expected losses. For the three months ended March 31, 2022 and 2021, no event taken place that would change the Company’s primary beneficiary status.

Marketable Securities

The Company invests part of its excessive cash in equity securities and money market funds. Marketable securities represent trading securities bought and held primarily for sale in the near-term to generate income on short-term price differences and are stated at fair value. Realized and unrealized gains and losses are recorded in other income (expense).

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable includes commission receivables stated at net realizable values. The Company reviews its accounts receivable regularly to determine if a bad debt allowance is necessary at each quarter-end. Management reviews the composition of accounts receivable and analyzes the age of receivables outstanding, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the necessity of making such allowance. No allowance was deemed necessary as of March 31, 2022 and December 31, 2021.

Revenue Recognition

The Company’s revenue is derived from insurance agency and brokerage services with respect to life insurance and property and casualty insurance products. The Company, through its subsidiaries and variable interest entities, sells insurance products provided by insurance companies to individuals, and is compensated in the form of commissions from the respective insurance companies, according to the terms of each service agreement made by and between the Company and the insurance companies. The core revenue recognition principle under ASC 606, the Company considers the contracts with insurance companies contain one performance obligation and consideration should be recorded when performance obligation is satisfied at point in time. The sale of an insurance product by the Company is considered complete when initial insurance premium is paid by an individual and the insurance policy is approved by the respective insurance company. When a policy is effective, the insurance company is obligated to pay the agreed-upon commission to the Company under the terms of its service agreement with the Company and such commission is recognized as revenue.

For the first year commission (FYC), the Company recognizes the revenue when the individuals’ policies are effective. The Company makes the estimation amount to be entitled for annual performance and operating bonus which is based on the FYC. The Company

makes an estimation on performance and operation bonus which are based on the accumulated FYC on quarterly basis, and make reconciliation between actual and estimation amount on annual basis. For the three months ended March 31, 2022 and 2021, the estimated revenue was approximately $2.8 million and $2.0 million, respectively.

Others includes the contingent commissions for subsequent years, the bonus based on persistency ratio bonus, and service allowances, are considered highly susceptible to factors outside the company's influence and depend on the actions of third parties (i.e., the subsequent premiums paid by individual policyholders), and the uncertainty can be extended for many years. Considering the high uncertainties, the contingent commissions for subsequent years, the bonus based on persistency ratio, and service allowances will be recognized as revenue based on the actual amount received from the insurance companies after the uncertain event is resolved.

For property and casualty insurance products, the Company recognizes the revenue when the individuals’ policies are effective. The revenue from property and casualty insurance products were 7.0% and 5.6% of total revenue for the three months ended March 31, 2022 and 2021, respectively.

The Company is obligated to pay commissions to its sales professionals when an insurance policy becomes effective. The Company recognizes commission revenue granted from insurance companies on a gross basis, and the commissions paid to its sales professionals are recognized as cost of revenue.

The Company enters into service agreements with insurance companies, which may give rise to contract assets and contract liabilities. When the timing of revenue recognition differs from the timing of payments made by insurance companies, the Company recognizes either contract assets (its performance precedes the billing date) or contract liabilities (customer payment is received in advance of performance).

Foreign Currency Transactions

China United’s financial statements are presented in U.S. dollars ($), which is the China United’s reporting and functional currency. The functional currencies of the China United’s subsidiaries are New Taiwan dollar (“NTD”), China yuan (“RMB”) and Hong Kong dollar (“HKD”). Each subsidiary maintains its financial records in its own functional currency. Transactions denominated in foreign currencies are measured at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are remeasured at the exchange rates prevailing at the balance sheet date. Non-monetary items that are measured in terms of historical cost in foreign currency are remeasured using the exchange rates at the dates of the initial transactions. Exchange gains and losses are included in the consolidated statements of operations and other comprehensive income (loss).

The Company translates the assets and liabilities into U.S. dollars using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from NTD, RMB and HKD into U.S. dollars are recorded in stockholders’ equity as part of accumulated other comprehensive income. The exchange rates used for unaudited condensed consolidated financial statements are as follows:

	Average Rate for the three months ended
	March 31,
	2022		2021
	(unaudited)		(unaudited)
Taiwan dollar (NTD)	NTD	27.98355	NTD	28.06892
China yuan (RMB)	RMB	6.34536	RMB	6.48199
Hong Kong dollar (HKD)	HKD	7.80460	HKD	7.75690
United States dollar ($)	$	1.00000	$	1.00000

	Exchange Rate at
	March 31, 2022
	(unaudited)		December 31, 2021
Taiwan dollar (NTD)	NTD	28.62003	NTD	27.68785
China yuan (RMB)	RMB	6.34175	RMB	6.35877
Hong Kong dollar (HKD)	HKD	7.83033	HKD	7.79713
United States dollar ($)	$	1.00000	$	1.00000

Earnings Per Share

Basic earnings per common share (“EPS”) is computed by dividing net income attributable to the common shareholders of the Company by the weighted-average number of common shares outstanding. Diluted EPS is computed in the same manner as basic EPS, except the number of shares includes additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued.

As the holders of preferred stock of the Company are entitled to share equally with the holders of common stock, on a per share basis, in such dividends and other distributions of cash, property or shares of stock of the Company as may be declared by the board of directors, the preferred stock is treated as a participating security. When calculating the basic earnings per common share, the two-class method is used to allocate earnings to common stock and participating security as required by FASB ASC Topic 260, “Earnings Per Share.” As of March 31, 2022 and 2021, the Company does not have any potentially dilutive instrument.

The following is a reconciliation of the income and share data used in the basic and diluted EPS computations for the three months ended March 31, 2022 and 2021 under the two-class method.

	Three Months Ended March 31,
	2022				2021
Numerator:	Common stock		Preferred stock		Common stock		Preferred stock
Allocation of net income attributable to the Company	$	2,850,750	$	94,127	$	2,331,154	$	79,232
Denominator:
Weighted average shares of the Company’s common/preferred stock outstanding - basic		30,286,199		1,000,000		29,421,736		1,000,000
Basic and diluted earnings per share	$	0.094	$	0.094	$	0.079	$	0.079

The participating rights (liquidation and dividend rights) of the holders of the Company’s common stock and preferred stock are identical, except with respect to voting right. As a result, and in accordance with ASC 260, the undistributed earnings for each year are allocated based on the contractual participation rights of the common stock and preferred stock as if the earnings for the year had been distributed. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis.

Fair Value of Financial Instruments

Fair value accounting establishes a framework for measuring fair value and expands disclosure about fair value measurements. Fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

- Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

-Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the financial instruments.

-Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

In determining the appropriate levels, the Company performs a detailed analysis of the assets and liabilities that are measured and reported on a fair value basis. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3.

The following table summarize financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	Fair Value						Carrying
	Level 1		Level 2		Level 3		Value
Assets
Marketable securities :
Stock and mutual funds	$	832,990	$	—	$	—	$	832,990
Long-term investments:
REITs		1,204,320		—		—		1,204,320
Total assets measured at fair value	$	2,037,310	$	—	$	—	$	2,037,310

	December 31, 2021
	Fair Value						Carrying
	Level 1		Level 2		Level 3		Value
Assets
Long-term investments:
REITs	$	1,261,482	$	—	$	—	$	1,261,482
Total assets measured at fair value	$	1,261,482	$	—	$	—	$	1,261,482

The carrying amounts of current financial assets and liabilities in the consolidated balance sheets for cash equivalents, time deposits, and restricted cash equivalents approximate fair value due to the short-term duration of those instruments, which are considered level 2 fair value measurement.

Marketable securities and long-term investments in REITs – The fair values of mutual funds and REITs were valued based on quoted market prices in active markets.

Concentration of Risk

The Company maintains cash with banks in the USA, People’s Republic of China (“PRC”), Hong Kong, and Taiwan. Should any bank holding the Company’s cash become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose all or part of its cash deposit with that bank; however, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. In Taiwan, a depositor has up to NTD3,000,000 insured by Central Deposit Insurance Corporation (“CDIC”). In China, a depositor has up to RMB500,000 insured by the People’s Bank of China Financial Stability Bureau (“FSD”). In Hong Kong, a depositor has up to HKD500,000 insured by Hong Kong Deposit Protection Board (“DPB”). In the United States, the standard insurance amount is $250,000 per depositor in a bank insured by the Federal Deposit Insurance Corporation (“FDIC”).

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, time deposits, restricted cash, register capital deposit and accounts receivable. As of March 31, 2022 and December 31, 2021, approximately $2,643,000 and $2,712,000 of the Company’s cash and cash equivalents, time deposits, and registered capital deposits held by financial institutions, was insured, and the remaining balance of approximately $90,445,000 and $83,446,000, was not insured. With respect to accounts receivable, the Company generally does not require collateral and does not have an allowance for doubtful accounts.

For the three months ended March 31, 2022 and 2021, the Company’s revenues from sale of insurance policies underwritten by these companies were:

	Three Months Ended March 31,
	2022				2021
	(unaudited)				(unaudited)
			% of Total				% of Total
	Amount		Revenue		Amount		Revenue
TransGlobe Life Insurance Inc.	$	7,680,425	25	%	$	6,600,629	22	%
Taiwan Life Insurance Co., Ltd.		4,406,584	14	%		7,231,458	24	%
Farglory Life Insurance Co., Ltd.		3,431,308	11	%		4,519,841	15	%

As of March 31, 2022 and December 31, 2021, the Company’s accounts receivable from these companies were:

	March 31, 2022
	(unaudited)				December 31, 2021
			% of Total				% of Total
			Accounts				Accounts
	Amount		Receivable		Amount		Receivable
TransGlobe Life Insurance Inc.	$	5,217,313	28	%	$	8,569,590	32	%
Taiwan Life Insurance Co., Ltd		3,520,479	19	%		4,483,343	17	%
Farglory Life Insurance Co., Ltd.		2,049,294	11	%		2,729,673	10	%

The Company’s operations are in the PRC, Hong Kong and Taiwan. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic, foreign currency exchange and legal environments in the PRC, Hong Kong and Taiwan, and by the state of each economy. The Company’s results of operations may be adversely affected by changes in the political and social conditions in the PRC, Hong Kong and Taiwan, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.

Income Taxes

The Company records income tax expense using the asset-and-liability method of accounting for deferred income taxes. Under this method, deferred 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 year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance if, based on available evidence, it is more likely than not that the deferred tax assets will not be realized.

When tax returns are filed, it is likely some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits are classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of operations and other comprehensive income (loss).

New Accounting Pronouncements and Other Guidance

New accounting pronouncements not yet adopted

Credit Losses

In June 2016, the FASB issued ASU No. 2016-13, (FASB ASC Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, rather than the “incurred loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments.

In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company believes the adoption of ASU No. 2016-13 will not have a material impact on the Company’s consolidated financial statements.

Reference Rate Reform

In March 2020, the FASB issued ASU No. 2020–04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The guidance was effective for all entities upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. The Company is currently evaluating the effects of the guidance on the Company’s consolidated financial statements and related disclosures.

The management does not believe that other than disclosed above, accounting pronouncements the recently issued but not yet adopted will have a material impact on its financial position, results of operations or cash flows.

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CASH, CASH EQUIVALENTS AND RESTRICTED CASH

3 Months Ended

Mar. 31, 2022

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

NOTE 3 – CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Cash, cash equivalents and restricted cash consisted of the following as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	(unaudited)		December 31, 2021
Cash and cash equivalents:
Cash on hand and in banks	$	20,595,428	$	18,234,350
Restricted cash – noncurrent		13,650		88,282
Total cash, cash equivalents and restricted cash shown in the statements of cash flows	$	20,609,078	$	18,322,632

Noncurrent restricted cash includes a mandatory deposit in the bank in conformity with Provisions of the Supervision and Administration of Specialized Insurance Agencies in PRC, which is not allowed to be withdrawn without the permission of the regulatory commission.

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TIME DEPOSITS

3 Months Ended

Mar. 31, 2022

TIME DEPOSITS

TIME DEPOSITS

NOTE 4 – TIME DEPOSITS

	March 31, 2022
	(unaudited)		December 31, 2021
Total time deposits	$	72,718,699	$	71,161,391
Less: Time deposits – with original maturities less than three months		(3,783,436)		(6,862,215)
Time deposits – original maturities over three months but less than one year	$	68,935,263	$	64,299,176

Time Deposits Pledged as Collateral

The Company had a total of $24,767,563 (NTD 708.8 million) and $23,811,616 (NTD 659.3 million) restricted time deposits, respectively, as of March 31, 2022 and December 31, 2021. As of March 31, 2022 and December 31, 2021, time deposits of $34,941 (NTD 1 million) and $36,117 (NTD 1 million) were pledged as collateral for the Company’s credit card, respectively. In addition, the Company had time deposits of $24,732,622 and $23,775,499 pledged as collateral for short-term loans, respectively, as of March 31, 2022 and December 31, 2021. See Note 6.

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LONG-TERM INVESTMENTS

3 Months Ended

Mar. 31, 2022

LONG-TERM INVESTMENTS.

LONG-TERM INVESTMENTS

NOTE 5 – LONG-TERM INVESTMENTS

As of March 31, 2022 and December 31, 2021, the Company’s long-term investments consisted of the following:

	March 31, 2022
	(unaudited)		December 31, 2021
Equity investments under cost method	$	1,390,244	$	1,435,330
REITs		1,204,320		1,261,482
Total long-term investments	$	2,594,564	$	2,696,812

Equity Investments under cost method using the measurement alternative

	March 31, 2022
	(unaudited)				December 31, 2021
	Investment				Investment
Investee	Ownership			Amount	Ownership			Amount
Genius Insurance Broker Co., Ltd (“GIB”)	11.73	%	$	1,342,938	11.73	%	$	1,388,151
Hainan Haoguan Yucheng Technology Service LLP (“HAINAN”)	9.99	%		47,306	9.99	%		47,179

On February 13, 2015, the Company and AHFL, a wholly owned subsidiary of the Company, entered into an acquisition agreement with Mr. Chwan Hau Li, the selling shareholder of GHFL. Subsequent to the acquisition, GHFL became a wholly-owned subsidiary of the Company which in turn holds approximately 15.64% issued and outstanding shares of Genius Insurance Broker Co., Ltd. (“Genius Broker”). Accordingly, the acquisition was accounted for as an asset acquisition of Genius Broker, which is an equity investment under cost method using the measurement alternative acquired by the Company.

The total paid-in capital with GIB changed from NTD 45 million to NTD 60 million due to capital increase taken place on August 14, 2020. GIC didn’t subscribe the new shares during the capital increase. As a result, the equity interest of GIB owned by GIC reduced from 15.64% to 11.73%.

A new investee in the investment ownership was due to the Company’s investment in HAINAN in 2021. HAINAN operates projects for insurance platforms, which contain insurance product centralized procurement, share service platform of sub-hierarchy distribution channel, and IoT business requirement. The Company invested HAINAN for RMB 300,000, or 9.99%, to engage in the qualification of supplier membership and distributor membership.

The change in carrying value of equity investment resulted from the fluctuation of exchange rates.

REITs

REITs are valued based on quoted market prices in the active market of Taiwan. The fair value of REITs as of March 31, 2022 and December 31, 2021 were $1,204,320 and $1,261,482, respectively.

Unrealized losses included in earnings for assets held at the end of the reporting periods were $16,441 and $20,489 for the three months ended March 31, 2022 and 2021, respectively.

For the three months ended March 31, 2022 and 2021, no other-than temporary impairment were recorded related to the long-term investments.

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SHORT-TERM LOANS

3 Months Ended

Mar. 31, 2022

SHORT-TERM LOANS

SHORT-TERM LOANS

NOTE 6 – SHORT-TERM LOANS

The Company’s short-term loans consisted of the following as of March 31, 2022 and December 31, 2021:

		March 31, 2022
		(unaudited)				December 31, 2021
		Debt		Collateral		Debt		Collateral
Line of Credit	Collateral	balance		value		balance		value
$8.7 million (NTD 250 million) revolving line of credit with Cathay United Bank Company Limited (“CUB”); the loan bears interest at the higher of CUB's adjustable rates for loans plus a margin of 0.41% or the 1-month TAIBOR rate plus a margin of 0.8% and matures on May 4, 2022.	Time deposits	$	5,223,615	$	5,258,556	$	9,011,172	$	9,047,289
$4.0 million revolving line of credit with O-Bank; the loan bears interest at the TAIFX3 rate plus a margin of 0.5% and matures on December 2, 2022.	Time deposits		4,000,000		4,821,799		4,000,000		4,984,135
$6.0 million revolving line of credit with Taishin International Bank (“TSIB”); the loan bears interest at the TSIB’s cost of funds plus a margin of 0.7% and matures on May 31, 2022.	Time deposits		2,200,000		3,065,801		2,200,000		3,065,801
$2.5 million revolving line of credit with Far Eastern International Bank (“FEIB”); the loan bears interest at the TAIFX3 rate plus a margin of 0.5% and matures on June 15, 2022.	Time deposits		1,850,000		2,865,127		1,850,000		2,961,588
$3.1 million revolving line of credit with KGI; the loan bears interest at the TAIFX Fixing rate plus a margin of 0.9% and matures on May 18, 2022.	Time deposits		1,540,000		2,357,961		1,540,000		2,481,926
$7.0 million (NTD 200 million) revolving line of credit with Taishin International Bank (“TSIB”); the loan bears interest at the TSIB’s cost of funds plus a margin of 0.625% and matures on May 31, 2022.	Time deposits		3,721,171		3,721,171		234,760		234,760
$3.0 million revolving line of credit with E. Sun Bank (“E. Sun”); the loan bears interest at the TAIFX3 rate plus a margin of 0.4% and matures on November 30, 2022.	Time deposits		600,000		1,000,000		—		1,000,000
$7.0 million (NTD 200 million) revolving line of credit with E. Sun Bank (“E. Sun”); the loan bears interest at the E. Sun’s adjustable rates for loans plus a margin of 0.1% and matures on October 15, 2022.	Time deposits		454,227		1,642,207		—		—
		$	19,589,013	$	24,732,622	$	18,835,932	$	23,775,499

Borrowings under the revolving credit agreements are generally due 90 days or less. Total interest expenses for short-term loans incurred were $52,335 and $42,470, respectively, for the three months ended March 31, 2022 and 2021, respectively.

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COMMISSIONS PAYABLE TO SALES PROFESSIONALS

3 Months Ended

Mar. 31, 2022

COMMISSIONS PAYABLE TO SALES PROFESSIONALS

COMMISSIONS PAYABLE TO SALES PROFESSIONALS

NOTE 7 – COMMISSIONS PAYABLE TO SALES PROFESSIONALS

Commissions payable to sales professionals consisted of the following as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	(unaudited)		December 31, 2021
Taiwan	$	9,625,456	$	13,793,343
PRC		214,761		210,198
Total commissions payable to sales professionals	$	9,840,217	$	14,003,541

Commissions payable to sales professionals are usually settled within twelve months.

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OTHER CURRENT LIABILITIES

3 Months Ended

Mar. 31, 2022

OTHER CURRENT LIABILITIES

OTHER CURRENT LIABILITIES

NOTE 8 – OTHER CURRENT LIABILITIES

Other current liabilities were as follows, as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	(unaudited)		December 31, 2021
Accrued bonus	$	5,463,307	$	6,645,496
Payroll payable and other benefits		1,742,262		2,188,074
Accrued business tax and tax withholdings		1,323,088		1,903,039
Proceeds from receipts in advance of disposal of a subsidiary		2,317,971		—
Execution fees payable – AIA(Note 10)		1,153,039		1,191,858
Other accrued liabilities		1,827,287		2,069,136
Total other current liabilities	$	13,826,954	$	13,997,603

Accrued Bonus

The Company’s foreign subsidiaries have various bonus plans, which provide cash awards to employees based upon their performance, and had accrued bonus of $2,932,572 and $4,059,901, respectively, related to cash awards to employees as of March 31, 2022 and December 31, 2021.

The Company has other compensation plans solely provided by Law Broker to its officers. The compensation plans eligible to Law Broker’s officers include a surplus bonus based on a percentage of income after tax and other performance bonuses such as retention and non-competition. For the three months ended March 31, 2022 and 2021, the bonus expenses to Law Broker’s officers under the compensation plans were $72,905 and $91,896, respectively.

As of March 31, 2022 and December 31, 2021, the Company had accrued bonus of $2,530,735 and $2,585,595 payable within next 12 months, respectively, related to the compensation plans for Law Broker’s officers. See Note 15 for additional information of agreements with Law Broker’s officers.

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OTHER LIABILITIES

3 Months Ended

Mar. 31, 2022

OTHER LIABILITIES

OTHER LIABILITIES

NOTE 9 – OTHER LIABILITIES

The Company’s other liabilities consisted of the following as of March 31, 2022 and December 31, 2021: 

	March 31, 2022
	(unaudited)		December 31, 2021
Due to previous shareholders of AHFL	$	524,109	$	541,754
Total other liabilities	$	524,109	$	541,754

Due to Previous Shareholders of AHFL

Due to previous shareholders of AHFL is the entire remaining balance payable of the acquisition cost. On March 27, 2019, the Company and the selling shareholders of AHFL entered into a sixth amendment to the acquisition agreement, pursuant to which, the Company will make the cash payment in the amount of NTD15 million on or prior to March 31, 2021. In March 2021, the Company entered a seventh amendment with the selling shareholders in negotiation with the previous shareholders of AHFL to extend the repayment date to March 31, 2024. As of March 31, 2022 and December 31, 2021, the amount due to previous shareholders of AHFL were $524,109 and $541,754, respectively.

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CONTRACTS WITH CUSTOMERS

3 Months Ended

Mar. 31, 2022

CONTRACTS WITH CUSTOMERS

CONTRACTS WITH CUSTOMERS

NOTE 10 – CONTRACTS WITH CUSTOMERS

Information about accounts receivable and contract assets from contracts with customers is as follows:

	March 31, 2022
	(unaudited)		December 31, 2021
Accounts receivable	$	18,315,305	$	26,761,678
Contract assets		457,917		—

Contract assets are the Company’s conditional rights to consideration for completed performance obligation and are in relation to the performance bonus to be rewarded based on the annual performance. The Company recognizes the contingent commission as a contract asset when the performance obligation is fulfilled, and the Company has not had the unconditional rights to the payment. As of March 31, 2022 and December 31, 2021, the Company had $457,917 and nil of contract assets, respectively.

Contract with AIATW

On June 10, 2013, AHFL entered into a Strategic Alliance Agreement (the “Alliance Agreement”) with AIA International Limited Taiwan Branch (“AIATW”), the purpose of which is to promote life insurance products provided by AIATW within Taiwan by insurance agencies or brokerage companies affiliated with AHFL or China United. Pursuant to the terms of the Alliance Agreement, AIATW paid AHFL an execution fee, which was recorded as revenue upon fulfilling certain criteria over the original term of the Alliance Agreement from June 1, 2013 to May 31, 2018. From 2014 to 2017, AHFL has entered into three amendments to the Alliance Agreement with AIATW to further revise certain terms and conditions in the Alliance Agreement, including the extension of the expiration date from May 31, 2018 to December 31, 2021. Pursuant to the Third Amendment to the Alliance Agreement (the “Amendment 3”), both AHFL and AIATW agreed to adjust certain terms and conditions set forth in this amendment, some of which included (i) except the first contract year (April 15th, 2013 to September 30th, 2014), the sales target of the alliance between the parties shall be changed to (a) value of new business (“VONB”) and (b) the 13-month persistency ratio; and (ii) AIATW will calculate and recognize the VONB and 13-month persistency ratio each contract year and inform the Company the result; and (iii) the Company agrees to return the basic business promotion fees to AIATW within thirty (30) days of receipt of the notice sent by AIATW if the Company fails to meet the targets set forth in the Amendment 3, AIATW reserves the right to offset such amount against the amount payable by it to the Company; and (iv) upon the termination of the Alliance Agreement and its amendments pursuant to the Section 8.2 of the Alliance Agreement, both parties agreed to calculate the amount to be returned or repaid, as applicable, based on the past and current contract years. The Company shall return the basic business execution fees at NTD 50 million for the first contract year, NTD 35 million for the second contract year, and NTD 33 million for each contract year thereafter within one month after the termination. Accordingly, for the last contract year of 2021, no revenue was recognized because the Company failed to meet the targets set forth in the Amendment 3 and therefore, the Company shall refund the basic business execution fees of NTD 33 million based on the calculation of VONB and 13-month persistency for the same contract period. As of March 31, 2022 and December 31, 2021, the basic business execution fees of $1,153,039 and $1,191,858 were payable and recorded under other current liabilities, respectively.

On March 15, 2022, AHFL entered into the Fourth Amendment to the Alliance Agreement (the “Amendment 4”), which, among other things, extended the expiration date of the Alliance Agreement to December 31, 2031. Pursuant to Amendment 4, the sales targets for the remaining contract term under the Alliance Agreement shall be changed by reference to (i) the amount of VONB and (ii) the 13-month persistency ratio as set forth therein, provided that to the extent any underlying insurance contract is revoked, invalidated or terminated and premiums are refunded to such policyholder, the amount of the related VONB shall be correspondingly reduced. Amendment 4 provides that AIATW shall pay the strategic alliance business promotion fee of NTD 50 million to AHFL; however, AHFL shall be required to return certain portions of or all of the business promotion fees within thirty (30) days of receipt of notice provided by AIATW if AFHL fails to meet certain goals set in Table 2 and Table 3 of Amendment 4. The primary factor under formula one focuses on the annual and/or accumulated achievement rate(s), while the primary factor under formula two focuses on the 13-month persistency ratio(s), among others.

The Company recognized the revenue related to AIATW of $22,135 (NTD 619,428) and nil, net of VAT, for the three months ended March 31, 2022 and 2021, respectively.

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LEASE

3 Months Ended

Mar. 31, 2022

LEASE

LEASE

NOTE 11 –LEASE

The Company has operating leases for its offices with lease terms ranging from one to five years. The Company recorded its operating lease cost of $1,370,536 and $1,020,873 for the three months ended March 31, 2022 and 2021.

Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. As of March 31, 2022 and December 31, 2021, operating lease right-of-use assets and lease liabilities were as follows:

	March 31, 2022
	(unaudited)		December 31, 2021
Right-of-use assets under operating leases	$	6,594,686	$	6,449,182
Operating lease liabilities – current		3,312,917		3,059,329
Operating lease liabilities – noncurrent		3,250,652		3,298,089

Lease term and discount rate

	March 31, 2022
	(unaudited)			December 31, 2021
Weighted average remaining lease term
Operating lease		2.23	years		2.31	years
Weighted average discount rate
Operating lease		3.19	%		2.80	%

Supplemental cash flow information related to leases

	Three Months Ended March 31,
	2022(unaudited)		2021(unaudited)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows related to operating leases	$	1,232,314	$	1,142,714
Amortization of right-of-use assets under operating leases		951,111		877,022

The minimum future lease payments as of March 31, 2022 are as follows:

	Amount
2022 (remainder of year)		2,705,341
2023		2,577,470
2024		1,292,693
2025		178,775
2026		12,074
Thereafter		—
Total minimum lease payments		6,766,353
Less: Interest		(202,784)
Present value of future minimum lease payments	$	6,563,569

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NONCONTROLLING INTERESTS

3 Months Ended

Mar. 31, 2022

NONCONTROLLING INTERESTS

NONCONTROLLING INTERESTS

NOTE 12 – NONCONTROLLING INTERESTS

Noncontrolling interests consisted of the following as of March 31, 2022 and December 31, 2021:

	% of Non-						Other		March 31,
	controlling		December 31,		Net Income		Comprehensive		2022
Name of Entity	Interest		2021		(Loss)		(Loss)		(unaudited)
Law Enterprise	34.05	%	$	(676,166)	$	(82,974)	$	(5,870)		(765,010)
Law Broker	34.05	%		31,016,203		1,650,826		(1,018,942)		31,648,087
Uniwill	50.00	%		48,802		149,554		(16,158)		182,198
Rays	1.00	%		(6,461)		(55)		—		(6,516)
PFAL	49.00	%		364,056		21,930		(866)		385,120
MKI	49.00	%		(327,119)		—		—		(327,119)
Total			$	30,419,315	$	1,739,281	$	(1,041,836)	$	31,116,760

	% of Non-						Other		Impact from
	controlling		December 31,		Net Income		Comprehensive		Liquidation of		December 31,
Name of Entity	Interest		2020		(Loss)		Income (Loss)		PA Taiwan		2021
Law Enterprise	34.05	%	$	(414,957)	$	(264,642)	$	3,433	$	—	$	(676,166)
Law Broker	34.05	%		25,177,272		5,444,673		394,258		—		31,016,203
Uniwill	50.00	%		(421,035)		466,934		2,903		—		48,802
Rays	1.00	%		(5,772)		(689)		—		—		(6,461)
PFAL	49.00	%		423,978		(63,441)		3,519		—		364,056
MKI	49.00	%		(732)		(161,090)		—		(165,297)		(327,119)
PA Taiwan	49.00	%		(163,013)		1,102		(3,386)		165,297		—
Total			$	24,595,741	$	5,422,847	$	400,727	$	—	$	30,419,315

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INCOME TAX

3 Months Ended

Mar. 31, 2022

INCOME TAX

INCOME TAX

NOTE 13 – INCOME TAX

The following table reconciles the Company’s statutory tax rates to effective tax rates for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
	2022		2021
	(unaudited)		(unaudited)
US statutory rate	21	%	21	%
Tax rate difference	(2)	%	(2)	%
Change in valuation allowance	8	%	4	%
Income tax on undistributed earnings	4	%	4	%
Utilization of deferred tax assets not previously recognized	(2)	%	(1)	%
Non-deductible and non-taxable items	—	%	1	%
True up of prior year income tax	—	%	(1)	%
Other	(4)	%	—	%
Effective tax rate	25	%	26	%

The Company’s income tax expense is mainly generated by its subsidiaries in Taiwan. The Company’s subsidiaries in Taiwan are governed by the Income Tax Law of Taiwan and subject to a statutory tax rate on income reported in the statutory financial statements at 20% and a tax on undistributed earnings at 5%. The Company had no plan to distribute earnings earned for the years ended December 2021 and 2020, and the tax on undistributed earnings on entities in Taiwan of 5% was estimated. As of March 31, 2022 and December 31, 2021, the Company had current tax payable of $4,904,891 and $3,703,412 for Taiwan income tax, respectively.

WFOE and the Consolidated Affiliated Entities (“CAE”) in the PRC are governed by the Income Tax Law of PRC concerning private-run enterprises, which are generally subject to tax at 25% on income reported in the statutory financial statements after appropriate adjustments. WFOE and CAE had no income tax expenses for the three months ended March 31, 2022 and 2021 due to the net operating losses generated in the previous years.

The Company’s subsidiaries in Hong Kong are governed by the Inland Revenue Ordinance Tax Law and subject to two-tiered profits tax regime. The first HK$2 million assessable profits is taxed at 8.25% and any assessable profits over HK$2 million is taxed at 16.25%. As of March 31, 2022 and December 31, 2021, the Company had current tax payable of $3,137 and $9,756 for Hong Kong income tax.

The 2017 Tax Act was enacted into law on December 22, 2017 and imposed a mandatory one-time tax on accumulated earnings of foreign subsidiaries, introducing new tax regimes, and changing how foreign earnings are subject to U.S. tax. Based on the Company’s total post-1986 earnings and profits (“E&P”) that it previously deferred from U.S. income taxes, we recorded the one-time transition tax $1,199,195 in eight annual installments for the transition tax on undistributed earnings of non-U.S. subsidiaries during the year ended December 31, 2018. As of March 31, 2022 and December 31, 2021, the Company both had current tax payable of $179,879 and noncurrent tax payable of $539,636 for U.S. income tax.

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RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2022

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 14 – RELATED PARTY TRANSACTIONS

The following summarized the Company’s loans payable related parties as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	(unaudited)		December 31, 2021
Due to Ms. Lu (A shareholder of Anhou)	$	25,654	$	41,311
Others		11,190		9,220
Total	$	36,844	$	50,531

Amounts due to Ms. Lu were borrowings from Ms. Lu to support Anhou’s business operation. The amounts were non-interesting bearing and payable on demand.

Due to bonus to officer, please refer to Note 8; and due to AHFL previous shareholders, please refer to Note 9.

There was no other material related party transactions other than those disclosed above.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2022

COMMITMENTS AND CONTINGENCIES.

COMMITMENTS AND CONTINGENCIES

NOTE 15– COMMITMENTS AND CONTINGENCIES

Operating Leases

See future minimum annual lease payments in Note 11.

Time Deposits Pledged as Collateral

See time deposits pledged as collateral in Notes 4 and 6.

Appointment agreement

On December 21, 2018, Law Broker entered into an appointment agreement with Shu-Fen, Lee (“Ms. Lee”), pursuant to which, she served as the president of Law Broker from December 21, 2018 to December 20, 2021. Law Broker expects to extend Ms. Lee’s appointment agreement at the next meeting  of the board of directors. Ms. Lee’s primary responsibilities included 1) overall business planning, 2) implementation of resolution of the shareholders' meeting or the board of directors, 3) the appointment and dismissal of the Law Broker’s employees and sales professionals, except for internal auditors, 4) financial management and application, 5) being the representative of Law Broker, 6) other matters assigned by the board of directors. According to the appointment agreement, Ms. Lee’s compensation plan included: 1) base salary, 2) managerial allowance, 3) surplus bonus based on 1.25%  of Law Broker’s income after tax, and 4) annual year-end bonus. The renewed appointment agreement is expected to be signed in May 2022. For the three months ended March 31, 2022 and 2021, the Company has recorded the compensation expense of $72,905 and $62,208 under the appointment agreement, respectively.

Engagement agreement

On December 23, 2021, Law Broker entered into a new engagement agreement with Hui-Hsien Chao (“Ms. Chao”), pursuant to which she shall have served as the general manager of Law Broker from December 23, 2021 to December 22, 2024. Ms. Chao’s primary responsibilities are to assist Law Broker in operating and managing insurance agency business. According to the engagement agreement, Ms. Chao’s Bonus plans shall include: 1) execution, 2) long-term service fees and 3) non-competition. The payment of such bonuses

will only occur upon satisfaction of certain conditions and subject to the terms in the engagement agreement. Ms. Chao has agreed to act as the general manager or equivalent position of Law Broker for a term of at least three years. For the three months ended March 31, 2022 and 2021, the Company has recorded the performance bonus expense of nil and $29,689 under the engagement agreement, respectively.

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VARIABLE INTEREST ENTITIES

3 Months Ended

Mar. 31, 2022

VARIABLE INTEREST ENTITIES

VARIABLE INTEREST ENTITIES

NOTE 16 –VARIABLE INTEREST ENTITIES

The carrying amounts of the assets, liabilities and the results of operations of the VIE and its subsidiaries (i.e., Zhengzhou Zhonglia Hengfu Business Consulting Co., Limited and its subsidiaries) included in the Company’s consolidated balance sheets and statements of comprehensive loss after the elimination of intercompany balances and transactions among VIEs and their subsidiaries within the Company are as follows:

	March 31, 2022
(Amount in USD)	(unaudited)		December 31, 2021
ASSETS
Current assets
Cash and cash equivalents	$	2,808,564	$	1,001,974
Accounts receivable and notes receivable		731,192		455,884
Other current assets		173,360		120,113
Total current assets		3,713,116		1,577,971
Right-of-use assets under operating leases		1,400,738		1,528,856
Property and equipment, net		209,016		199,056
Prepaid expenses - intangible assets		20,389		9,377
Long-term investments		47,306		47,179
Restricted cash – noncurrent		856		72,870
Registered capital deposits		1,103,796		1,100,842
Deferred tax assets		—		74,709
Other assets		84,176		83,951
TOTAL ASSETS	$	6,579,393	$	4,694,811
LIABILITIES
Current liabilities
Commissions payable to sales professionals	$	214,761	$	210,198
Other current liabilities		3,312,953		1,117,738
Due to related parties - Ms. Lu (the shareholder of Law Anhou)		25,654		41,311
Total current liabilities		3,553,368		1,369,247
Operating lease liabilities - noncurrent		807,009		908,971
TOTAL LIABILITIES	$	4,360,377	$	2,278,218

	Three Months Ended March 31,
(Amount in USD)	2022		2021
Revenue	$	1,347,816	$	1,951,469
Net loss		(201,946)		(50,781)
Net cash used in operating activities		(472,033)		(449,692)
Net cash provided by (used in) investing activities		2,290,667		(7,292)
Net cash used in financing activities		(15,760)		(7,714)

The VIEs contributed $ 1,347,816 and $1,951,469 of the Company’s consolidated revenue for the three months ended March 31, 2022 and 2021, respectively, after elimination of inter-company transactions.

As of March 31, 2022, there was no pledge or collateralization of the VIEs’ assets that can only be used to settle obligations of the VIEs, other than the share pledge agreements, restricted cash and registered capital deposits. Other than the amounts due to the Company and its non-VIE subsidiaries (which are eliminated upon consolidation), the creditors of the VIEs’ third-party liabilities did not have recourse to the general credit of the Company in normal course of business. The Company did not provide or intend to provide financial or other supports not previously contractually required to the VIEs during the years presented.

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SEGMENT REPORTING

3 Months Ended

Mar. 31, 2022

SEGMENT REPORTING

SEGMENT REPORTING

NOTE 17 – SEGMENT REPORTING

The Company organizes and manages its business as three operating segments by operating geographic areas. The business of WFOE, CU Hong Kong and the CAE in PRC was managed and reviewed as PRC segment. The business of AHFL and its subsidiaries in Taiwan was managed and reviewed as Taiwan segment. The business of PFAL was managed and reviewed as Hong Kong segment. PRC and Taiwan segments retain majority of reported consolidated amounts.

The geographical distributions of the Company’s financial information for the three months ended March 31, 2022 and 2021 were as follows:

	Three Months Ended March 31,
	(unaudited)		(unaudited)
	2022		2021
Geographical Areas
Revenue
Taiwan	$	30,505,357	$	28,851,500
PRC		1,347,816		1,951,469
Hong Kong		82,822		110,985
Elimination adjustment		(955,472)		(383,837)
Total revenue	$	30,980,523	$	30,530,117
Income (loss) from operations
Taiwan	$	5,213,523	$	4,690,729
PRC		(155,919)		(3,918)
Hong Kong		38,401		61,493
Elimination adjustment		217,810		138,350
Total income from operations	$	5,313,815	$	4,886,654
Non operating income (expense)
Taiwan	$	860,527	$	587,469
PRC		256,585		96,152
Hong Kong		9,502		(118)
Elimination adjustment		(174,374)		(134,569)
Total non-operating income (expense)	$	952,240	$	548,934
Net income
Taiwan	$	4,570,169	$	3,933,490
PRC		25,798		46,918
Hong Kong		44,756		56,312
Elimination adjustment		43,435		62
Total net income	$	4,684,158	$	4,036,782

The geographical distribution of the Company’s financial information as of March 31, 2022 and December 31, 2021 were as follows:

	March 31, 2022
	(unaudited)		December 31, 2021
Geographical Areas
Reportable assets
Taiwan	$	190,952,606	$	195,981,770
PRC		14,209,455		12,326,308
Hong Kong		798,648		756,692
Elimination adjustment		(78,832,414)		(81,283,249)
Total reportable assets	$	127,128,295	$	127,781,521
Long-lived assets
Taiwan	$	6,809,903	$	6,784,644
PRC		1,609,754		1,727,911
Hong Kong		1,146		1,287
Elimination adjustment		(2,906)		(2,905)
Total long-lived assets	$	8,417,897	$	8,510,937
Capital investments (CAPEX cash flows)
Taiwan	$	43,515	$	595,591
PRC		25,985		79,203
Hong Kong		—		154
Total capital investments	$	69,500	$	674,948

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RISKS AND UNCERTAINTIES

3 Months Ended

Mar. 31, 2022

RISKS AND UNCERTAINTIES

RISKS AND UNCERTAINTIES

NOTE 18 –RISKS AND UNCERTAINTIES

There has continued to be widespread impact from the coronavirus disease (“COVID-19”) pandemic including potentially more contagious strains of COVID-19 such as the Delta and Omicron variants. It has created significant volatility and uncertainty and economic disruption. The extent to which the pandemic impacts the Company’s business and operations will depend on numerous evolving factors, many of which are not within the Company’s control and which the Company may not be able to accurately predict, including its duration and scope; the ultimate availability, administration and effectiveness of vaccines around the world; governmental actions that have been and continue to be taken in response to the pandemic, including vaccine coverage; the impact of the pandemic on economic activity and actions taken in response; the ability of the Company’s customers to pay their insurance premiums which could impact the Company’s commission and fee revenues for the services provided; and the long-term impact of employees working from home, including increased technology costs.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2022

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 19 – SUBSEQUENT EVENTS

The Company has evaluated all other subsequent events through the date these consolidated financial statements were issued and determine that there were no subsequent events or transactions that require recognition or disclosures in the consolidated financial statements, except for the following:

As disclosed in Note 10, the Company failed to meet the targets set forth in the Amendment 3 of the Alliance Agreement with AIATW and shall refund the basic business execution fees of $1,159,039 (NTD 33 million). On May 6, 2022, AIATW issued a formal letter to the Company and agreed to reduce the refund amount of $1,159,039 (NTD 33.0 million) to $807,127 (NTD 23.1 million).

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of China United, its subsidiaries and variable interest entity and its subsidiaries as shown in the corporate structure in Note 1. All significant intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to the consolidated financial statements for prior year to the current year’s presentation. Such reclassifications have no effect on net income and the cash flow statements operating activities as previously reported.

Basis of Presentation

Basis of Presentation

The unaudited condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement of the financial statements have been included. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2021, which were included in the Company’s 2021 Annual Report on Form 10-K (“2021 Form 10-K”). The accompanying consolidated balance sheet as of December 31, 2021, has been derived from the Company’s audited consolidated financial statements as of that date.

Use of Estimates

Use of Estimates

The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto. Actual results may differ from those estimates and assumptions.

Variable Interest Entities

Variable Interest Entities

Due to the legal restrictions on foreign ownership and investment in insurance agency and brokerage businesses in China, especially those on qualifications as well as capital requirement of the investors, China United, through its subsidiary, Zhengzhou Zhonglian Hengfu Business Consulting Co., Limited (“WFOE”), entered into Exclusive Business Cooperation Agreement (the “EBCA”), Power of Attorney, Option Agreement, and Share Pledge Agreement (collectively, the First VIE Agreements) on January 17, 2011 with Anhou and Anhou original shareholders so as to operate and conduct the insurance agency and brokerage business in the PRC.

Pursuant to the EBCA, (a) WFOE has the right to provide Anhou with complete technical support, business support and related consulting services during the term of the EBCA; (b) Anhou agrees to accept all the consultations and services provided by WFOE. Anhou further agrees that unless with WFOE’s prior written consent, during the term of the EBCA, Anhou shall not directly or indirectly accept the same or any similar consultations and/or services provided by any third party and shall not establish similar cooperation relationship with any third party regarding the matters contemplated by the EBCA; (c) within 90 days after the end of each fiscal year Anhou shall pay an amount to WFOE equal to the shortfall, if any, of the aggregate net income of Anhou for such fiscal; (d) WFOE retains all exclusive and proprietary rights and interests in all rights, ownership, interests and intellectual properties arising out of or

created during the performance of the EBCA; and (e) the shareholders of Anhou have pledged all of their equity interests in Anhou to WFOE to guarantee Anhou’s performance of its obligations under the EBCA. The term of the EBCA is 10 years and may be extended and determined by WFOE prior to the expiration thereof, and Anhou shall accept such extended term unconditionally.

On March 23, 2022, Anhou and WFOE entered into an amendment to the EBCA, pursuant to which the EBCA shall be automatic renewed for successive terms unless WFOE gives a 30-day notice to terminate such agreement, with each term being 10 years.

To extend the business within the PRC, Anhou intended to increase its registered capital to RMB50 million (approximately $8 million) to meet the requirement of the China Insurance Regulatory Commission (the “CIRC”) so that it can set up new branches in any province beyond its current operations in China. China United increased the investment in Anhou through various loan agreements with the shareholders of Anhou. The aggregate funding provided by WFOE was RMB 40 million. Due to the capital increase, a series of variable interest agreements (the “Second VIE Agreements”), which include Power of Attorneys, Exclusive Option Agreements, Share Pledge Agreements, were signed on October 24, 2013 and entered in the same form as the First VIE Agreements, other than the change of shareholder names and their respective shareholdings. The First VIE Agreements were terminated by and among WFOE, Anhou and Anhou original shareholders on the same date. The EBCA executed by and between WFOE and Anhou on January 17, 2011 remains in full effect.

As a result of the Second VIE Agreements, WFOE is considered the primary beneficiary of Anhou and has effective control over Anhou. Accordingly, the results of operations, assets and liabilities of Anhou and its subsidiaries (collectively, the “Consolidated Affiliated Entities” or the “CAE”) are consolidated from the earliest period presented. The Company reviews the VIE’s status on an annual basis and determine if any events have occurred that could cause its primary beneficiary status to change, which include (a) the legal entity’s governing documents or contractual arrangements are changed in a manner that changes the characteristics or adequacy of the legal entity’s equity investment at risk; (b) the equity investment or some part thereof is returned to the equity investors, and other interests become exposed to expected losses of the legal entity; (c) the legal entity undertakes additional activities or acquires additional assets, beyond those anticipated at the later of the inception of the entity or the latest reconsideration event, that increase the entity’s expected losses; and (d) the legal entity receives an additional equity investment that is at risk, or the legal entity curtails or modifies its activities in a way that decreases its expected losses. For the three months ended March 31, 2022 and 2021, no event taken place that would change the Company’s primary beneficiary status.

Marketable Securities

Marketable Securities

The Company invests part of its excessive cash in equity securities and money market funds. Marketable securities represent trading securities bought and held primarily for sale in the near-term to generate income on short-term price differences and are stated at fair value. Realized and unrealized gains and losses are recorded in other income (expense).

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable includes commission receivables stated at net realizable values. The Company reviews its accounts receivable regularly to determine if a bad debt allowance is necessary at each quarter-end. Management reviews the composition of accounts receivable and analyzes the age of receivables outstanding, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the necessity of making such allowance. No allowance was deemed necessary as of March 31, 2022 and December 31, 2021.

Revenue Recognition

Revenue Recognition

The Company’s revenue is derived from insurance agency and brokerage services with respect to life insurance and property and casualty insurance products. The Company, through its subsidiaries and variable interest entities, sells insurance products provided by insurance companies to individuals, and is compensated in the form of commissions from the respective insurance companies, according to the terms of each service agreement made by and between the Company and the insurance companies. The core revenue recognition principle under ASC 606, the Company considers the contracts with insurance companies contain one performance obligation and consideration should be recorded when performance obligation is satisfied at point in time. The sale of an insurance product by the Company is considered complete when initial insurance premium is paid by an individual and the insurance policy is approved by the respective insurance company. When a policy is effective, the insurance company is obligated to pay the agreed-upon commission to the Company under the terms of its service agreement with the Company and such commission is recognized as revenue.

For the first year commission (FYC), the Company recognizes the revenue when the individuals’ policies are effective. The Company makes the estimation amount to be entitled for annual performance and operating bonus which is based on the FYC. The Company

makes an estimation on performance and operation bonus which are based on the accumulated FYC on quarterly basis, and make reconciliation between actual and estimation amount on annual basis. For the three months ended March 31, 2022 and 2021, the estimated revenue was approximately $2.8 million and $2.0 million, respectively.

Others includes the contingent commissions for subsequent years, the bonus based on persistency ratio bonus, and service allowances, are considered highly susceptible to factors outside the company's influence and depend on the actions of third parties (i.e., the subsequent premiums paid by individual policyholders), and the uncertainty can be extended for many years. Considering the high uncertainties, the contingent commissions for subsequent years, the bonus based on persistency ratio, and service allowances will be recognized as revenue based on the actual amount received from the insurance companies after the uncertain event is resolved.

For property and casualty insurance products, the Company recognizes the revenue when the individuals’ policies are effective. The revenue from property and casualty insurance products were 7.0% and 5.6% of total revenue for the three months ended March 31, 2022 and 2021, respectively.

The Company is obligated to pay commissions to its sales professionals when an insurance policy becomes effective. The Company recognizes commission revenue granted from insurance companies on a gross basis, and the commissions paid to its sales professionals are recognized as cost of revenue.

The Company enters into service agreements with insurance companies, which may give rise to contract assets and contract liabilities. When the timing of revenue recognition differs from the timing of payments made by insurance companies, the Company recognizes either contract assets (its performance precedes the billing date) or contract liabilities (customer payment is received in advance of performance).

Foreign Currency Transactions

Foreign Currency Transactions

China United’s financial statements are presented in U.S. dollars ($), which is the China United’s reporting and functional currency. The functional currencies of the China United’s subsidiaries are New Taiwan dollar (“NTD”), China yuan (“RMB”) and Hong Kong dollar (“HKD”). Each subsidiary maintains its financial records in its own functional currency. Transactions denominated in foreign currencies are measured at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are remeasured at the exchange rates prevailing at the balance sheet date. Non-monetary items that are measured in terms of historical cost in foreign currency are remeasured using the exchange rates at the dates of the initial transactions. Exchange gains and losses are included in the consolidated statements of operations and other comprehensive income (loss).

The Company translates the assets and liabilities into U.S. dollars using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from NTD, RMB and HKD into U.S. dollars are recorded in stockholders’ equity as part of accumulated other comprehensive income. The exchange rates used for unaudited condensed consolidated financial statements are as follows:

	Average Rate for the three months ended
	March 31,
	2022		2021
	(unaudited)		(unaudited)
Taiwan dollar (NTD)	NTD	27.98355	NTD	28.06892
China yuan (RMB)	RMB	6.34536	RMB	6.48199
Hong Kong dollar (HKD)	HKD	7.80460	HKD	7.75690
United States dollar ($)	$	1.00000	$	1.00000

	Exchange Rate at
	March 31, 2022
	(unaudited)		December 31, 2021
Taiwan dollar (NTD)	NTD	28.62003	NTD	27.68785
China yuan (RMB)	RMB	6.34175	RMB	6.35877
Hong Kong dollar (HKD)	HKD	7.83033	HKD	7.79713
United States dollar ($)	$	1.00000	$	1.00000

Earnings Per Share

Earnings Per Share

Basic earnings per common share (“EPS”) is computed by dividing net income attributable to the common shareholders of the Company by the weighted-average number of common shares outstanding. Diluted EPS is computed in the same manner as basic EPS, except the number of shares includes additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued.

As the holders of preferred stock of the Company are entitled to share equally with the holders of common stock, on a per share basis, in such dividends and other distributions of cash, property or shares of stock of the Company as may be declared by the board of directors, the preferred stock is treated as a participating security. When calculating the basic earnings per common share, the two-class method is used to allocate earnings to common stock and participating security as required by FASB ASC Topic 260, “Earnings Per Share.” As of March 31, 2022 and 2021, the Company does not have any potentially dilutive instrument.

The following is a reconciliation of the income and share data used in the basic and diluted EPS computations for the three months ended March 31, 2022 and 2021 under the two-class method.

	Three Months Ended March 31,
	2022				2021
Numerator:	Common stock		Preferred stock		Common stock		Preferred stock
Allocation of net income attributable to the Company	$	2,850,750	$	94,127	$	2,331,154	$	79,232
Denominator:
Weighted average shares of the Company’s common/preferred stock outstanding - basic		30,286,199		1,000,000		29,421,736		1,000,000
Basic and diluted earnings per share	$	0.094	$	0.094	$	0.079	$	0.079

The participating rights (liquidation and dividend rights) of the holders of the Company’s common stock and preferred stock are identical, except with respect to voting right. As a result, and in accordance with ASC 260, the undistributed earnings for each year are allocated based on the contractual participation rights of the common stock and preferred stock as if the earnings for the year had been distributed. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Fair value accounting establishes a framework for measuring fair value and expands disclosure about fair value measurements. Fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

- Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

-Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the financial instruments.

-Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

In determining the appropriate levels, the Company performs a detailed analysis of the assets and liabilities that are measured and reported on a fair value basis. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3.

The following table summarize financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	Fair Value						Carrying
	Level 1		Level 2		Level 3		Value
Assets
Marketable securities :
Stock and mutual funds	$	832,990	$	—	$	—	$	832,990
Long-term investments:
REITs		1,204,320		—		—		1,204,320
Total assets measured at fair value	$	2,037,310	$	—	$	—	$	2,037,310

	December 31, 2021
	Fair Value						Carrying
	Level 1		Level 2		Level 3		Value
Assets
Long-term investments:
REITs	$	1,261,482	$	—	$	—	$	1,261,482
Total assets measured at fair value	$	1,261,482	$	—	$	—	$	1,261,482

The carrying amounts of current financial assets and liabilities in the consolidated balance sheets for cash equivalents, time deposits, and restricted cash equivalents approximate fair value due to the short-term duration of those instruments, which are considered level 2 fair value measurement.

Marketable securities and long-term investments in REITs – The fair values of mutual funds and REITs were valued based on quoted market prices in active markets.

Concentration of Risk

Concentration of Risk

The Company maintains cash with banks in the USA, People’s Republic of China (“PRC”), Hong Kong, and Taiwan. Should any bank holding the Company’s cash become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose all or part of its cash deposit with that bank; however, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. In Taiwan, a depositor has up to NTD3,000,000 insured by Central Deposit Insurance Corporation (“CDIC”). In China, a depositor has up to RMB500,000 insured by the People’s Bank of China Financial Stability Bureau (“FSD”). In Hong Kong, a depositor has up to HKD500,000 insured by Hong Kong Deposit Protection Board (“DPB”). In the United States, the standard insurance amount is $250,000 per depositor in a bank insured by the Federal Deposit Insurance Corporation (“FDIC”).

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, time deposits, restricted cash, register capital deposit and accounts receivable. As of March 31, 2022 and December 31, 2021, approximately $2,643,000 and $2,712,000 of the Company’s cash and cash equivalents, time deposits, and registered capital deposits held by financial institutions, was insured, and the remaining balance of approximately $90,445,000 and $83,446,000, was not insured. With respect to accounts receivable, the Company generally does not require collateral and does not have an allowance for doubtful accounts.

For the three months ended March 31, 2022 and 2021, the Company’s revenues from sale of insurance policies underwritten by these companies were:

	Three Months Ended March 31,
	2022				2021
	(unaudited)				(unaudited)
			% of Total				% of Total
	Amount		Revenue		Amount		Revenue
TransGlobe Life Insurance Inc.	$	7,680,425	25	%	$	6,600,629	22	%
Taiwan Life Insurance Co., Ltd.		4,406,584	14	%		7,231,458	24	%
Farglory Life Insurance Co., Ltd.		3,431,308	11	%		4,519,841	15	%

As of March 31, 2022 and December 31, 2021, the Company’s accounts receivable from these companies were:

	March 31, 2022
	(unaudited)				December 31, 2021
			% of Total				% of Total
			Accounts				Accounts
	Amount		Receivable		Amount		Receivable
TransGlobe Life Insurance Inc.	$	5,217,313	28	%	$	8,569,590	32	%
Taiwan Life Insurance Co., Ltd		3,520,479	19	%		4,483,343	17	%
Farglory Life Insurance Co., Ltd.		2,049,294	11	%		2,729,673	10	%

The Company’s operations are in the PRC, Hong Kong and Taiwan. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic, foreign currency exchange and legal environments in the PRC, Hong Kong and Taiwan, and by the state of each economy. The Company’s results of operations may be adversely affected by changes in the political and social conditions in the PRC, Hong Kong and Taiwan, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.

Income Taxes

Income Taxes

The Company records income tax expense using the asset-and-liability method of accounting for deferred income taxes. Under this method, deferred 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 year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance if, based on available evidence, it is more likely than not that the deferred tax assets will not be realized.

When tax returns are filed, it is likely some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits are classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of operations and other comprehensive income (loss).

New Accounting Pronouncements and Other Guidance

New Accounting Pronouncements and Other Guidance

New accounting pronouncements not yet adopted

Credit Losses

In June 2016, the FASB issued ASU No. 2016-13, (FASB ASC Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, rather than the “incurred loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments.

In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company believes the adoption of ASU No. 2016-13 will not have a material impact on the Company’s consolidated financial statements.

Reference Rate Reform

In March 2020, the FASB issued ASU No. 2020–04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The guidance was effective for all entities upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. The Company is currently evaluating the effects of the guidance on the Company’s consolidated financial statements and related disclosures.

The management does not believe that other than disclosed above, accounting pronouncements the recently issued but not yet adopted will have a material impact on its financial position, results of operations or cash flows.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of Intercompany Foreign Currency Balances

	Average Rate for the three months ended
	March 31,
	2022		2021
	(unaudited)		(unaudited)
Taiwan dollar (NTD)	NTD	27.98355	NTD	28.06892
China yuan (RMB)	RMB	6.34536	RMB	6.48199
Hong Kong dollar (HKD)	HKD	7.80460	HKD	7.75690
United States dollar ($)	$	1.00000	$	1.00000

	Exchange Rate at
	March 31, 2022
	(unaudited)		December 31, 2021
Taiwan dollar (NTD)	NTD	28.62003	NTD	27.68785
China yuan (RMB)	RMB	6.34175	RMB	6.35877
Hong Kong dollar (HKD)	HKD	7.83033	HKD	7.79713
United States dollar ($)	$	1.00000	$	1.00000

Schedule of reconciliation of the income and share data used in the basic and diluted EPS computations

The following is a reconciliation of the income and share data used in the basic and diluted EPS computations for the three months ended March 31, 2022 and 2021 under the two-class method.

	Three Months Ended March 31,
	2022				2021
Numerator:	Common stock		Preferred stock		Common stock		Preferred stock
Allocation of net income attributable to the Company	$	2,850,750	$	94,127	$	2,331,154	$	79,232
Denominator:
Weighted average shares of the Company’s common/preferred stock outstanding - basic		30,286,199		1,000,000		29,421,736		1,000,000
Basic and diluted earnings per share	$	0.094	$	0.094	$	0.079	$	0.079

Schedule of assets and liabilities measured at fair value on a recurring basis

The following table summarize financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	Fair Value						Carrying
	Level 1		Level 2		Level 3		Value
Assets
Marketable securities :
Stock and mutual funds	$	832,990	$	—	$	—	$	832,990
Long-term investments:
REITs		1,204,320		—		—		1,204,320
Total assets measured at fair value	$	2,037,310	$	—	$	—	$	2,037,310

	December 31, 2021
	Fair Value						Carrying
	Level 1		Level 2		Level 3		Value
Assets
Long-term investments:
REITs	$	1,261,482	$	—	$	—	$	1,261,482
Total assets measured at fair value	$	1,261,482	$	—	$	—	$	1,261,482

Schedule Of Revenue From Insurance Services

For the three months ended March 31, 2022 and 2021, the Company’s revenues from sale of insurance policies underwritten by these companies were:

	Three Months Ended March 31,
	2022				2021
	(unaudited)				(unaudited)
			% of Total				% of Total
	Amount		Revenue		Amount		Revenue
TransGlobe Life Insurance Inc.	$	7,680,425	25	%	$	6,600,629	22	%
Taiwan Life Insurance Co., Ltd.		4,406,584	14	%		7,231,458	24	%
Farglory Life Insurance Co., Ltd.		3,431,308	11	%		4,519,841	15	%

Schedule Of Accounts Receivable From Related Parties

As of March 31, 2022 and December 31, 2021, the Company’s accounts receivable from these companies were:

	March 31, 2022
	(unaudited)				December 31, 2021
			% of Total				% of Total
			Accounts				Accounts
	Amount		Receivable		Amount		Receivable
TransGlobe Life Insurance Inc.	$	5,217,313	28	%	$	8,569,590	32	%
Taiwan Life Insurance Co., Ltd		3,520,479	19	%		4,483,343	17	%
Farglory Life Insurance Co., Ltd.		2,049,294	11	%		2,729,673	10	%

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CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Tables)

3 Months Ended

Mar. 31, 2022

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Schedule of cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash consisted of the following as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	(unaudited)		December 31, 2021
Cash and cash equivalents:
Cash on hand and in banks	$	20,595,428	$	18,234,350
Restricted cash – noncurrent		13,650		88,282
Total cash, cash equivalents and restricted cash shown in the statements of cash flows	$	20,609,078	$	18,322,632

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TIME DEPOSITS (Tables)

3 Months Ended

Mar. 31, 2022

TIME DEPOSITS

Schedule of time deposits

	March 31, 2022
	(unaudited)		December 31, 2021
Total time deposits	$	72,718,699	$	71,161,391
Less: Time deposits – with original maturities less than three months		(3,783,436)		(6,862,215)
Time deposits – original maturities over three months but less than one year	$	68,935,263	$	64,299,176

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LONG-TERM INVESTMENTS (Tables)

3 Months Ended

Mar. 31, 2022

LONG-TERM INVESTMENTS.

Schedule of company's long-term investments

As of March 31, 2022 and December 31, 2021, the Company’s long-term investments consisted of the following:

	March 31, 2022
	(unaudited)		December 31, 2021
Equity investments under cost method	$	1,390,244	$	1,435,330
REITs		1,204,320		1,261,482
Total long-term investments	$	2,594,564	$	2,696,812

Schedule of change in carrying value of Equity investments accounted for the cost method due to foreign currency translation

Equity Investments under cost method using the measurement alternative

	March 31, 2022
	(unaudited)				December 31, 2021
	Investment				Investment
Investee	Ownership			Amount	Ownership			Amount
Genius Insurance Broker Co., Ltd (“GIB”)	11.73	%	$	1,342,938	11.73	%	$	1,388,151
Hainan Haoguan Yucheng Technology Service LLP (“HAINAN”)	9.99	%		47,306	9.99	%		47,179

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SHORT-TERM LOANS (Tables)

3 Months Ended

Mar. 31, 2022

SHORT-TERM LOANS

Schedule of short-term loans

The Company’s short-term loans consisted of the following as of March 31, 2022 and December 31, 2021:

		March 31, 2022
		(unaudited)				December 31, 2021
		Debt		Collateral		Debt		Collateral
Line of Credit	Collateral	balance		value		balance		value
$8.7 million (NTD 250 million) revolving line of credit with Cathay United Bank Company Limited (“CUB”); the loan bears interest at the higher of CUB's adjustable rates for loans plus a margin of 0.41% or the 1-month TAIBOR rate plus a margin of 0.8% and matures on May 4, 2022.	Time deposits	$	5,223,615	$	5,258,556	$	9,011,172	$	9,047,289
$4.0 million revolving line of credit with O-Bank; the loan bears interest at the TAIFX3 rate plus a margin of 0.5% and matures on December 2, 2022.	Time deposits		4,000,000		4,821,799		4,000,000		4,984,135
$6.0 million revolving line of credit with Taishin International Bank (“TSIB”); the loan bears interest at the TSIB’s cost of funds plus a margin of 0.7% and matures on May 31, 2022.	Time deposits		2,200,000		3,065,801		2,200,000		3,065,801
$2.5 million revolving line of credit with Far Eastern International Bank (“FEIB”); the loan bears interest at the TAIFX3 rate plus a margin of 0.5% and matures on June 15, 2022.	Time deposits		1,850,000		2,865,127		1,850,000		2,961,588
$3.1 million revolving line of credit with KGI; the loan bears interest at the TAIFX Fixing rate plus a margin of 0.9% and matures on May 18, 2022.	Time deposits		1,540,000		2,357,961		1,540,000		2,481,926
$7.0 million (NTD 200 million) revolving line of credit with Taishin International Bank (“TSIB”); the loan bears interest at the TSIB’s cost of funds plus a margin of 0.625% and matures on May 31, 2022.	Time deposits		3,721,171		3,721,171		234,760		234,760
$3.0 million revolving line of credit with E. Sun Bank (“E. Sun”); the loan bears interest at the TAIFX3 rate plus a margin of 0.4% and matures on November 30, 2022.	Time deposits		600,000		1,000,000		—		1,000,000
$7.0 million (NTD 200 million) revolving line of credit with E. Sun Bank (“E. Sun”); the loan bears interest at the E. Sun’s adjustable rates for loans plus a margin of 0.1% and matures on October 15, 2022.	Time deposits		454,227		1,642,207		—		—
		$	19,589,013	$	24,732,622	$	18,835,932	$	23,775,499

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COMMISSIONS PAYABLE TO SALES PROFESSIONALS (Tables)

3 Months Ended

Mar. 31, 2022

COMMISSIONS PAYABLE TO SALES PROFESSIONALS

Schedule of commissions payable to professionals

Commissions payable to sales professionals consisted of the following as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	(unaudited)		December 31, 2021
Taiwan	$	9,625,456	$	13,793,343
PRC		214,761		210,198
Total commissions payable to sales professionals	$	9,840,217	$	14,003,541

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OTHER CURRENT LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2022

OTHER CURRENT LIABILITIES

Schedule of other current liabilities

Other current liabilities were as follows, as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	(unaudited)		December 31, 2021
Accrued bonus	$	5,463,307	$	6,645,496
Payroll payable and other benefits		1,742,262		2,188,074
Accrued business tax and tax withholdings		1,323,088		1,903,039
Proceeds from receipts in advance of disposal of a subsidiary		2,317,971		—
Execution fees payable – AIA(Note 10)		1,153,039		1,191,858
Other accrued liabilities		1,827,287		2,069,136
Total other current liabilities	$	13,826,954	$	13,997,603

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OTHER LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2022

OTHER LIABILITIES

Schedule of other noncurrent liabilities

The Company’s other liabilities consisted of the following as of March 31, 2022 and December 31, 2021: 

	March 31, 2022
	(unaudited)		December 31, 2021
Due to previous shareholders of AHFL	$	524,109	$	541,754
Total other liabilities	$	524,109	$	541,754

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CONTRACTS WITH CUSTOMERS (Tables)

3 Months Ended

Mar. 31, 2022

CONTRACTS WITH CUSTOMERS

Schedule of revenue recognition guidance

Information about accounts receivable and contract assets from contracts with customers is as follows:

	March 31, 2022
	(unaudited)		December 31, 2021
Accounts receivable	$	18,315,305	$	26,761,678
Contract assets		457,917		—

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LEASE (Tables)

3 Months Ended

Mar. 31, 2022

LEASE

Schedule of operating lease right-of-use assets and lease liabilities

	March 31, 2022
	(unaudited)		December 31, 2021
Right-of-use assets under operating leases	$	6,594,686	$	6,449,182
Operating lease liabilities – current		3,312,917		3,059,329
Operating lease liabilities – noncurrent		3,250,652		3,298,089

Schedule of lease term and discount rate

Lease term and discount rate

	March 31, 2022
	(unaudited)			December 31, 2021
Weighted average remaining lease term
Operating lease		2.23	years		2.31	years
Weighted average discount rate
Operating lease		3.19	%		2.80	%

Schedule of supplemental cash flow information related to leases

Supplemental cash flow information related to leases

	Three Months Ended March 31,
	2022(unaudited)		2021(unaudited)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows related to operating leases	$	1,232,314	$	1,142,714
Amortization of right-of-use assets under operating leases		951,111		877,022

Schedule of operating lease right-of-use assets and lease liabilities

The minimum future lease payments as of March 31, 2022 are as follows:

	Amount
2022 (remainder of year)		2,705,341
2023		2,577,470
2024		1,292,693
2025		178,775
2026		12,074
Thereafter		—
Total minimum lease payments		6,766,353
Less: Interest		(202,784)
Present value of future minimum lease payments	$	6,563,569

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NONCONTROLLING INTERESTS (Tables)

3 Months Ended

Mar. 31, 2022

NONCONTROLLING INTERESTS

Schedule of noncontrolling interests

	% of Non-						Other		March 31,
	controlling		December 31,		Net Income		Comprehensive		2022
Name of Entity	Interest		2021		(Loss)		(Loss)		(unaudited)
Law Enterprise	34.05	%	$	(676,166)	$	(82,974)	$	(5,870)		(765,010)
Law Broker	34.05	%		31,016,203		1,650,826		(1,018,942)		31,648,087
Uniwill	50.00	%		48,802		149,554		(16,158)		182,198
Rays	1.00	%		(6,461)		(55)		—		(6,516)
PFAL	49.00	%		364,056		21,930		(866)		385,120
MKI	49.00	%		(327,119)		—		—		(327,119)
Total			$	30,419,315	$	1,739,281	$	(1,041,836)	$	31,116,760

	% of Non-						Other		Impact from
	controlling		December 31,		Net Income		Comprehensive		Liquidation of		December 31,
Name of Entity	Interest		2020		(Loss)		Income (Loss)		PA Taiwan		2021
Law Enterprise	34.05	%	$	(414,957)	$	(264,642)	$	3,433	$	—	$	(676,166)
Law Broker	34.05	%		25,177,272		5,444,673		394,258		—		31,016,203
Uniwill	50.00	%		(421,035)		466,934		2,903		—		48,802
Rays	1.00	%		(5,772)		(689)		—		—		(6,461)
PFAL	49.00	%		423,978		(63,441)		3,519		—		364,056
MKI	49.00	%		(732)		(161,090)		—		(165,297)		(327,119)
PA Taiwan	49.00	%		(163,013)		1,102		(3,386)		165,297		—
Total			$	24,595,741	$	5,422,847	$	400,727	$	—	$	30,419,315

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INCOME TAX (Tables)

3 Months Ended

Mar. 31, 2022

INCOME TAX

Schedule of reconciles the Company's statutory tax rates to effective tax rates

The following table reconciles the Company’s statutory tax rates to effective tax rates for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
	2022		2021
	(unaudited)		(unaudited)
US statutory rate	21	%	21	%
Tax rate difference	(2)	%	(2)	%
Change in valuation allowance	8	%	4	%
Income tax on undistributed earnings	4	%	4	%
Utilization of deferred tax assets not previously recognized	(2)	%	(1)	%
Non-deductible and non-taxable items	—	%	1	%
True up of prior year income tax	—	%	(1)	%
Other	(4)	%	—	%
Effective tax rate	25	%	26	%

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RELATED PARTY TRANSACTIONS (Tables)

3 Months Ended

Mar. 31, 2022

RELATED PARTY TRANSACTIONS

Schedule of due to related parties

The following summarized the Company’s loans payable related parties as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	(unaudited)		December 31, 2021
Due to Ms. Lu (A shareholder of Anhou)	$	25,654	$	41,311
Others		11,190		9,220
Total	$	36,844	$	50,531

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VARIABLE INTEREST ENTITIES (Tables)

3 Months Ended

Mar. 31, 2022

VARIABLE INTEREST ENTITIES

Schedule of variable interest entities

	March 31, 2022
(Amount in USD)	(unaudited)		December 31, 2021
ASSETS
Current assets
Cash and cash equivalents	$	2,808,564	$	1,001,974
Accounts receivable and notes receivable		731,192		455,884
Other current assets		173,360		120,113
Total current assets		3,713,116		1,577,971
Right-of-use assets under operating leases		1,400,738		1,528,856
Property and equipment, net		209,016		199,056
Prepaid expenses - intangible assets		20,389		9,377
Long-term investments		47,306		47,179
Restricted cash – noncurrent		856		72,870
Registered capital deposits		1,103,796		1,100,842
Deferred tax assets		—		74,709
Other assets		84,176		83,951
TOTAL ASSETS	$	6,579,393	$	4,694,811
LIABILITIES
Current liabilities
Commissions payable to sales professionals	$	214,761	$	210,198
Other current liabilities		3,312,953		1,117,738
Due to related parties - Ms. Lu (the shareholder of Law Anhou)		25,654		41,311
Total current liabilities		3,553,368		1,369,247
Operating lease liabilities - noncurrent		807,009		908,971
TOTAL LIABILITIES	$	4,360,377	$	2,278,218

	Three Months Ended March 31,
(Amount in USD)	2022		2021
Revenue	$	1,347,816	$	1,951,469
Net loss		(201,946)		(50,781)
Net cash used in operating activities		(472,033)		(449,692)
Net cash provided by (used in) investing activities		2,290,667		(7,292)
Net cash used in financing activities		(15,760)		(7,714)

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SEGMENT REPORTING (Tables)

3 Months Ended

Mar. 31, 2022

SEGMENT REPORTING

Schedule of revenue by major customers by reporting segments

	Three Months Ended March 31,
	(unaudited)		(unaudited)
	2022		2021
Geographical Areas
Revenue
Taiwan	$	30,505,357	$	28,851,500
PRC		1,347,816		1,951,469
Hong Kong		82,822		110,985
Elimination adjustment		(955,472)		(383,837)
Total revenue	$	30,980,523	$	30,530,117
Income (loss) from operations
Taiwan	$	5,213,523	$	4,690,729
PRC		(155,919)		(3,918)
Hong Kong		38,401		61,493
Elimination adjustment		217,810		138,350
Total income from operations	$	5,313,815	$	4,886,654
Non operating income (expense)
Taiwan	$	860,527	$	587,469
PRC		256,585		96,152
Hong Kong		9,502		(118)
Elimination adjustment		(174,374)		(134,569)
Total non-operating income (expense)	$	952,240	$	548,934
Net income
Taiwan	$	4,570,169	$	3,933,490
PRC		25,798		46,918
Hong Kong		44,756		56,312
Elimination adjustment		43,435		62
Total net income	$	4,684,158	$	4,036,782

Schedule of long-lived assets

The geographical distribution of the Company’s financial information as of March 31, 2022 and December 31, 2021 were as follows:

	March 31, 2022
	(unaudited)		December 31, 2021
Geographical Areas
Reportable assets
Taiwan	$	190,952,606	$	195,981,770
PRC		14,209,455		12,326,308
Hong Kong		798,648		756,692
Elimination adjustment		(78,832,414)		(81,283,249)
Total reportable assets	$	127,128,295	$	127,781,521
Long-lived assets
Taiwan	$	6,809,903	$	6,784,644
PRC		1,609,754		1,727,911
Hong Kong		1,146		1,287
Elimination adjustment		(2,906)		(2,905)
Total long-lived assets	$	8,417,897	$	8,510,937
Capital investments (CAPEX cash flows)
Taiwan	$	43,515	$	595,591
PRC		25,985		79,203
Hong Kong		—		154
Total capital investments	$	69,500	$	674,948

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ORGANIZATION AND PRINCIPAL ACTIVITIES - Narrative (Details) ¥ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($)	Mar. 31, 2022 CNY (¥)	Feb. 25, 2022	Jan. 31, 2022 USD ($)	Jan. 31, 2022 CNY (¥)
Down Payment received	$ 2,317,971
GIC
Ownership percentage				100.00%	100.00%
Jiangsu Law [Member]
Ownership percentage			100.00%
Down Payment received		¥ 14.7		$ 2,317,971	¥ 14.7
Percentage of total assets	0.67%
Jiangsu Law [Member] | AFHL
Percentage of total revenue	0.72%
Max Key Investments Limited
% of Non-controlling Interests				100.00%	100.00%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Details)	3 Months Ended
	Mar. 31, 2022 shares	Mar. 31, 2021	Dec. 31, 2021 shares
Common Stock, Shares, Issued	30,286,199		30,286,199
Taiwan Dollar (TWD)
Foreign currency average rate translation	27.98355	28.06892
Foreign currency exchange rate, translation	28.62003		27.68785
China yuan (RMB)
Foreign currency average rate translation	6.34536	6.48199
Foreign currency exchange rate, translation	6.34175		6.35877
Hong Kong dollar (HKD)
Foreign currency average rate translation	7.80460	7.75690
Foreign currency exchange rate, translation	7.83033		7.79713
United States dollar ($)
Foreign currency average rate translation	1.00000	1.00000
Foreign currency exchange rate, translation	1.00000		1.00000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Risk (Revenue) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Concentration Risk [Line Items]
Amount of Revenue	$ 30,980,523	$ 30,530,117
Revenues | Customer concentration | TransGlobe Life Insurance Inc
Concentration Risk [Line Items]
Amount of Revenue	$ 7,680,425	$ 6,600,629
Concentration risk percentage	25.00%	22.00%
Revenues | Customer concentration | Taiwan Life Insurance Co., Ltd
Concentration Risk [Line Items]
Amount of Revenue	$ 4,406,584	$ 7,231,458
Concentration risk percentage	14.00%	24.00%
Revenues | Customer concentration | Farglory Life Insurance Co., Ltd.
Concentration Risk [Line Items]
Amount of Revenue	$ 3,431,308	$ 4,519,841
Concentration risk percentage	11.00%	15.00%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Risk ( Accounts Receivable) (Details) - Credit concentration - Accounts receivable - USD ($)	Mar. 31, 2022	Dec. 31, 2021
TransGlobe Life Insurance Inc
Concentration Risk [Line Items]
Accounts receivable, net	$ 5,217,313	$ 8,569,590
Percentage of accounts receivable	28.00%	32.00%
Taiwan Life Insurance Co., Ltd
Concentration Risk [Line Items]
Accounts receivable, net	$ 3,520,479	$ 4,483,343
Percentage of accounts receivable	19.00%	17.00%
Farglory Life Insurance Co., Ltd.
Concentration Risk [Line Items]
Accounts receivable, net	$ 2,049,294	$ 2,729,673
Percentage of accounts receivable	11.00%	10.00%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details)		1 Months Ended	3 Months Ended
	Mar. 23, 2022	Mar. 31, 2021 USD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2022 CNY (¥)	Mar. 31, 2021 USD ($)	Mar. 31, 2022 CNY (¥)	Mar. 31, 2022 TWD ($)	Mar. 31, 2022 HKD ($)	Dec. 31, 2021 USD ($)
Disclosure of Summary Of Significant Accounting Policies
Cash, uninsured amount			$ 250,000
Increase in registered capital			$ 8,000,000			¥ 50,000,000
Tax benefit percentage expected to be realized upon settlement			50.00%			50.00%	50.00%	50.00%
Revenue			$ 30,980,523		$ 30,530,117
Compensation costs for awards granted to nonemployees			$ 72,905		$ 62,208
Notice Period Terminate Agreement	30 days
Aggregate funding provided by WFOE | ¥				¥ 40,000,000
Property And Casualty Insurance Products
Disclosure of Summary Of Significant Accounting Policies
Revenue from products as a percentage of total revenue			7.00%	7.00%	5.60%
Taiwan
Disclosure of Summary Of Significant Accounting Policies
Cash, FDIC insured amount							$ 3,000,000
Revenue		$ 2,000,000.0	$ 2,800,000
CHINA
Disclosure of Summary Of Significant Accounting Policies
Cash, FDIC insured amount | ¥						¥ 500,000
HONG KONG
Disclosure of Summary Of Significant Accounting Policies
Cash, FDIC insured amount								$ 500,000
Credit concentration
Disclosure of Summary Of Significant Accounting Policies
Cash, FDIC insured amount			2,643,000						$ 2,712,000
Cash, uninsured amount			$ 90,445,000						$ 83,446,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Condensed Balance Sheets of VIE (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Assets, Current [Abstract]
Cash and cash equivalents	$ 20,595,428	$ 18,234,350
Accounts receivable	18,315,305	26,761,678
Other current assets	1,173,425	1,207,496
Total current assets	110,310,328	110,502,700
Right-of-use assets under operating leases	6,594,686	6,449,182
Property and equipment, net	1,823,211	2,061,755
Long-term Investments	2,594,564	2,696,812
Restricted cash - noncurrent	13,650	88,282
Deferred tax assets	698,750	909,032
Other assets	4,733,347	4,740,640
TOTAL ASSETS	127,128,295	127,781,521
Liabilities, Current [Abstract]
Commission payable to sales professionals	9,840,217	14,003,541
Operating Lease, Liability, Current	3,312,917	3,059,329
Total current liabilities	51,693,852	53,839,983
Operating lease liabilities - noncurrent	3,250,652	3,298,089
TOTAL LIABILITIES	56,384,771	58,608,660
Commitments and Contingencies
STOCKHOLDERS EQUITY
Common Stock, Value, Issued	303	303
Additional paid-in capital	9,296,953	9,296,953
Retained earnings	16,635,245	13,690,368
Accumulated other comprehensive income	2,593,189	4,664,848
Total stockholders' equity attributable to China United's shareholders	39,626,764	38,753,546
TOTAL STOCKHOLDERS' EQUITY	70,743,524	69,172,861	$ 58,083,081	$ 55,237,234
Zhengzhou Zhonglia Hengfu Business Consulting Co., Limited
Assets, Current [Abstract]
Cash and cash equivalents	2,808,564	1,001,974
Accounts receivable	731,192	455,884
Other current assets	173,360	120,113
Total current assets	3,713,116	1,577,971
Right-of-use assets under operating leases	1,400,738	1,528,856
Property and equipment, net	209,016	199,056
Long-term Investments	47,306	47,179
Restricted cash - noncurrent	856	72,870
Deferred tax assets		74,709
Other assets	84,176	83,951
TOTAL ASSETS	6,579,393	4,694,811
Liabilities, Current [Abstract]
Commission payable to sales professionals	214,761	210,198
Total current liabilities	3,553,368	1,369,247
Operating lease liabilities - noncurrent	807,009	908,971
TOTAL LIABILITIES	$ 4,360,377	$ 2,278,218

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Condensed Statements of Operations of VIE (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenue	$ 30,980,523	$ 30,530,117
Gross Profit	11,971,004	11,556,685
Operating expenses:
Selling	684,150	579,777
General and administrative	5,973,039	6,090,254
Total operating expense	6,657,189	6,670,031
Income from operations	5,313,815	4,886,654
Other income (expenses):
Interest income	104,977	83,998
Foreign currency exchange gains (losses)	737,550	328,466
Other - net	162,048	178,940
Total other income, net	952,240	548,934
Income before income taxes	6,266,055	5,435,588
Income tax expense	(1,581,897)	(1,398,806)
Net income	4,684,158	4,036,782
Variable Interest Entity, Primary Beneficiary [Member]
Revenue	1,347,816	1,951,469
Zhengzhou Zhonglia Hengfu Business Consulting Co., Limited
Revenue	1,347,816	1,951,469
Other income (expenses):
Net income	$ (201,946)	$ (50,781)

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value of Financial Instruments (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Time deposits	$ 72,718,699	$ 71,161,391
Marketable securities:
Stock and mutual funds	832,990
Long-term investment:
REITs	1,204,320	1,261,482
Total assets measured at fair value	2,037,310	1,261,482
Fair Value, Inputs, Level 1
Marketable securities:
Stock and mutual funds	832,990
Long-term investment:
REITs	1,204,320	1,261,482
Total assets measured at fair value	$ 2,037,310	$ 1,261,482

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of the income and share data used in the basic and diluted EPS computations (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Allocation of net income attributable to the Company.	$ 2,944,877	$ 2,410,386
Weighted Average Number of Shares Outstanding, Basic	30,286,199	29,421,736
Earnings Per Share, Basic	$ 0.094	$ 0.079
Earnings Per Share, Diluted	$ 0.094	$ 0.079
Common Stock
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Allocation of net income attributable to the Company.	$ 2,850,750	$ 2,331,154
Weighted Average Number of Shares Outstanding, Basic	30,286,199	29,421,736
Earnings Per Share, Basic	$ 0.094	$ 0.079
Earnings Per Share, Diluted	$ 0.094	$ 0.079
Preferred Stock
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Allocation of net income attributable to the Company.	$ 94,127	$ 79,232
Weighted Average Number of Shares Outstanding, Basic	1,000,000	1,000,000
Earnings Per Share, Basic	$ 0.094	$ 0.079
Earnings Per Share, Diluted	$ 0.094	$ 0.079

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CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash on hand and in banks	$ 20,595,428	$ 18,234,350
Restricted cash - noncurrent	13,650	88,282
Total cash, cash equivalents and restricted cash shown in the statements of cash flows	$ 20,609,078	$ 18,322,632	$ 17,502,153	$ 9,129,828

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TIME DEPOSITS (Details) $ in Millions	Mar. 31, 2022 USD ($)	Mar. 31, 2022 TWD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2021 TWD ($)
TIME DEPOSITS
Restricted Time Deposits	$ 24,767,563	$ 708.8	$ 23,811,616	$ 659.3
Time deposits pledged as collateral	34,941	$ 1.0	36,117	$ 1.0
Total time deposits	72,718,699		71,161,391
Restricted Cash	24,732,622		23,775,499
Less: Time deposits - with original maturities less than three months	(3,783,436)		(6,862,215)
Time deposits - original maturities over three months but less than one year	$ 68,935,263		$ 64,299,176

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LONG-TERM INVESTMENTS - Summary of Companys long-term investments (Details) $ in Millions	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Aug. 14, 2020 TWD ($)	Aug. 13, 2020 TWD ($)
LONG-TERM INVESTMENTS.
Equity investments under cost method	$ 1,390,244	$ 1,435,330	$ 60	$ 45
REITs	1,204,320	1,261,482
Total long-term investments	$ 2,594,564	$ 2,696,812

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LONG-TERM INVESTMENTS - Summary of change in carrying value of Equity investments accounted for the cost method due to foreign currency translation (Details) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2021 CNY (¥)	Aug. 14, 2020 TWD ($)	Aug. 13, 2020 TWD ($)	Feb. 13, 2015
Schedule of Equity Method Investments [Line Items]
Long-Term Investment In Equity Amount	$ 1,390,244	$ 1,435,330		$ 60	$ 45
Genius Insurance Broker Co Ltd
Schedule of Equity Method Investments [Line Items]
Investment Ownership Percentage	11.73%	11.73%	11.73%	11.73%	15.64%	15.64%
Long-Term Investment In Equity Amount	$ 1,342,938	$ 1,388,151
Investee Name	Genius Insurance Broker Co., Ltd (“GIB”)	Genius Insurance Broker Co., Ltd (“GIB”)
Hainan Haoguan Yucheng Technology Service LLP ("HAINAN")
Schedule of Equity Method Investments [Line Items]
Investment Ownership Percentage	9.99%	9.99%	9.99%
Long-Term Investment In Equity Amount	$ 47,306	$ 47,179	¥ 300,000
Investee Name	Hainan Haoguan Yucheng Technology Service LLP (“HAINAN”)	Hainan Haoguan Yucheng Technology Service LLP (“HAINAN”)

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LONG-TERM INVESTMENTS - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
LONG-TERM INVESTMENTS.
Real Estate Investment Property, Net	$ 1,204,320		$ 1,261,482
Unrealized losses on Investments	$ 16,441	$ 20,489

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SHORT-TERM LOANS (Details) $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2022 TWD ($)	Dec. 31, 2021 USD ($)
Short-term Debt [Line Items]
Line of Credit, Current	$ 19,589,013			$ 18,835,932
Collateral value	24,732,622			23,775,499
Total short term loans	19,589,013			18,835,932
Interest Expense, Short-term Borrowings	52,335	$ 42,470
Credit facility, CUB
Short-term Debt [Line Items]
Line of Credit, Current	5,223,615			9,011,172
Collateral value	5,258,556			9,047,289
Line of Credit Facility, Maximum Borrowing Capacity	8,700,000		$ 250
Credit facility, O-Bank
Short-term Debt [Line Items]
Line of Credit, Current	4,000,000			4,000,000
Collateral value	4,821,799			4,984,135
Line of Credit Facility, Maximum Borrowing Capacity	$ 4,000,000.0
Debt Instrument, Description of Variable Rate Basis	0.50%
Credit facility, KGI
Short-term Debt [Line Items]
Line of Credit, Current	$ 1,540,000			1,540,000
Collateral value	2,357,961			2,481,926
Line of Credit Facility, Maximum Borrowing Capacity	3,100,000
Credit facility, FEIB [Member]
Short-term Debt [Line Items]
Line of Credit, Current	1,850,000			1,850,000
Collateral value	2,865,127			2,961,588
Line of Credit Facility, Maximum Borrowing Capacity	2,500,000
Credit Facility E Sun Bank
Short-term Debt [Line Items]
Line of Credit, Current	600,000
Collateral value	1,000,000			1,000,000
Line of Credit Facility, Maximum Borrowing Capacity	3,000,000.0
Credit Facility E Sun Bank 2
Short-term Debt [Line Items]
Line of Credit, Current	454,227
Collateral value	1,642,207
Line of Credit Facility, Maximum Borrowing Capacity	7,000,000.0		200
Credit Facility, TSIB
Short-term Debt [Line Items]
Line of Credit, Current	2,200,000			2,200,000
Collateral value	3,065,801			3,065,801
Line of Credit Facility, Maximum Borrowing Capacity	6,000,000.0
Credit Facility, TSIB 2
Short-term Debt [Line Items]
Line of Credit, Current	3,721,171			234,760
Collateral value	3,721,171			$ 234,760
Line of Credit Facility, Maximum Borrowing Capacity	$ 7,000,000.0		$ 200
LIBOR | Credit facility, KGI
Short-term Debt [Line Items]
Debt Instrument, Description of Variable Rate Basis	0.90%
LIBOR | Credit facility, FEIB [Member]
Short-term Debt [Line Items]
Debt Instrument, Description of Variable Rate Basis	0.50%
LIBOR | Credit Facility E Sun Bank
Short-term Debt [Line Items]
Debt Instrument, Description of Variable Rate Basis	0.40%
Adjustable rates for loans | Credit facility, CUB
Short-term Debt [Line Items]
Debt Instrument, Description of Variable Rate Basis	0.41%
Adjustable rates for loans | Credit Facility E Sun Bank 2
Short-term Debt [Line Items]
Debt Instrument, Description of Variable Rate Basis	0.10%
1 month TAIBOR rate | Credit facility, CUB
Short-term Debt [Line Items]
Debt Instrument, Description of Variable Rate Basis	0.80%
Cost of funds plus a margin | Credit Facility, TSIB
Short-term Debt [Line Items]
Debt Instrument, Description of Variable Rate Basis	0.70%
Cost of funds plus a margin | Credit Facility, TSIB 2
Short-term Debt [Line Items]
Debt Instrument, Description of Variable Rate Basis	0.625%

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COMMISSIONS PAYABLE TO SALES PROFESSIONALS (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Total commissions payable to sales professionals	$ 9,840,217	$ 14,003,541
Taiwan
Total commissions payable to sales professionals	9,625,456	13,793,343
PRC
Total commissions payable to sales professionals	$ 214,761	$ 210,198

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OTHER CURRENT LIABILITIES (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
OTHER CURRENT LIABILITIES
Accrued bonus	$ 5,463,307	$ 6,645,496
Payroll payable and other benefits	1,742,262	2,188,074
Accrued business tax and tax withholdings	1,323,088	1,903,039
Proceeds from receipts in advance of disposal of a subsidiary	2,317,971
Execution fees payable	1,153,039	1,191,858
Other accrued expenses	1,827,287	2,069,136
Total other current liabilities	$ 13,826,954	$ 13,997,603

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OTHER CURRENT LIABILITIES - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Debt Instrument [Line Items]
Accrued bonus amount	$ 2,932,572		$ 4,059,901
Accrued bonus current	5,463,307		6,645,496
Compensation Plan [Member]
Debt Instrument [Line Items]
Bonus expense	72,905	$ 91,896
Accrued bonus current	$ 2,530,735		$ 2,585,595

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OTHER LIABILITIES - Other noncurrent liabilities (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
OTHER LIABILITIES
Due to previous shareholders of AHFL	$ 524,109	$ 541,754
Total other liabilities	$ 524,109	$ 541,754

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OTHER LIABILITIES - Additional Information (Details) $ in Millions	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Mar. 27, 2019 TWD ($)
OTHER LIABILITIES
Amount due to previous shareholders to AHFL	$ 524,109	$ 541,754	$ 15

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CONTRACTS WITH CUSTOMERS - Contract balance (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
CONTRACTS WITH CUSTOMERS
Accounts receivable	$ 18,315,305	$ 26,761,678
Contract assets	$ 457,917	$ 0

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CONTRACTS WITH CUSTOMERS - Revenue and refund for each contract (Details)			3 Months Ended
	Mar. 15, 2022 TWD ($)	Jun. 14, 2017 TWD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2022 TWD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2022 TWD ($)	Dec. 31, 2021 USD ($)
Basic Business Promotion Fees	$ 50,000,000	$ 33,000,000
Execution Fee Amount Payable			$ 1,153,039				$ 1,191,858
First Year [Member]
Basic Business Promotion Fees		50,000,000
Second Year [Member]
Basic Business Promotion Fees		$ 35,000,000
AIATW [Member]
Execution Fee Amount Payable			1,153,039			$ 33,000,000	$ 1,191,858
Revenue Amount			$ 22,135	$ 619,428	$ 0

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LEASE - Operating lease right-of-use assets and lease liabilities (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
LEASE
Right-of-use assets under operating leases	$ 6,594,686	$ 6,449,182
Operating lease liabilities - current	3,312,917	3,059,329
Operating lease liabilities - noncurrent	$ 3,250,652	$ 3,298,089

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LEASE - Lease term and discount rate (Details)	Mar. 31, 2022	Dec. 31, 2021
LEASE
Weighted average remaining lease term, Operating lease	2 years 2 months 23 days	2 years 3 months 21 days
Weighted average discount rate, Operating lease	3.19%	2.80%

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LEASE - Supplemental cash flow information related to leases (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows related to operating leases	$ 1,232,314	$ 1,142,714
Amortization of right-of-use assets under operating leases	$ 951,111	$ 877,022

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LEASE - Minimum future lease payments (Details)	Mar. 31, 2022 USD ($)
LEASE
2022 (reminder of year)	$ 2,705,341
2023	2,577,470
2024	1,292,693
2025	178,775
2026	12,074
Thereafter	0
Total minimum lease payments	6,766,353
Less: Interest	(202,784)
Present value of future minimum lease payments	$ 6,563,569

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LEASE - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
LEASE
Operating Lease, Cost	$ 1,370,536	$ 1,020,873

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NONCONTROLLING INTERESTS (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Schedule Of Noncontrolling Interests [Line Items]
Net Income (Loss)	$ 1,739,281	$ 5,422,847
Other Comprehensive Income (Loss)	(1,041,836)	400,727
Noncontrolling Interests	$ 31,116,760	$ 30,419,315	$ 24,595,741
Law Enterprise
Schedule Of Noncontrolling Interests [Line Items]
% of Non-controlling Interests	34.05%	34.05%
Net Income (Loss)	$ (82,974)	$ (264,642)
Other Comprehensive Income (Loss)	(5,870)	3,433
Noncontrolling Interests	$ (765,010)	$ (676,166)	(414,957)
Law Broker
Schedule Of Noncontrolling Interests [Line Items]
% of Non-controlling Interests	34.05%	34.05%
Net Income (Loss)	$ 1,650,826	$ 5,444,673
Other Comprehensive Income (Loss)	(1,018,942)	394,258
Noncontrolling Interests	$ 31,648,087	$ 31,016,203	25,177,272
Uniwill
Schedule Of Noncontrolling Interests [Line Items]
% of Non-controlling Interests	50.00%	50.00%
Net Income (Loss)	$ 149,554	$ 466,934
Other Comprehensive Income (Loss)	(16,158)	2,903
Noncontrolling Interests	$ 182,198	$ 48,802	(421,035)
Rays
Schedule Of Noncontrolling Interests [Line Items]
% of Non-controlling Interests	1.00%	1.00%
Net Income (Loss)	$ (55)	$ (689)
Noncontrolling Interests	$ (6,516)	$ (6,461)	(5,772)
PFAL
Schedule Of Noncontrolling Interests [Line Items]
% of Non-controlling Interests	49.00%	49.00%
Net Income (Loss)	$ 21,930	$ (63,441)
Other Comprehensive Income (Loss)	(866)	3,519
Noncontrolling Interests	$ 385,120	$ 364,056	423,978
MKI
Schedule Of Noncontrolling Interests [Line Items]
% of Non-controlling Interests	49.00%	49.00%
Net Income (Loss)		$ (161,090)
Impact from Liquidation of PA Taiwan		(165,297)
Noncontrolling Interests	$ (327,119)	$ (327,119)	(732)
PA Taiwan
Schedule Of Noncontrolling Interests [Line Items]
% of Non-controlling Interests		49.00%
Net Income (Loss)		$ 1,102
Other Comprehensive Income (Loss)		(3,386)
Impact from Liquidation of PA Taiwan		$ 165,297
Noncontrolling Interests			$ (163,013)

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INCOME TAX - Effective Income tax rate reconciliation (Details)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
INCOME TAX
U.S. statutory rate	21.00%	21.00%
Tax rate difference	(2.00%)	(2.00%)
Change in valuation allowance	8.00%	4.00%
Income tax on undistributed earnings	4.00%	4.00%
Utilization of deferred tax assets not previously recognized	(2.00%)	(1.00%)
Non-deductible and non-taxable items		1.00%
True up of prior year income tax		(1.00%)
Effective tax rate	25.00%	26.00%

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INCOME TAX - Additional Information (Details) $ in Millions	3 Months Ended			12 Months Ended
	Mar. 31, 2022 USD ($)	Mar. 31, 2022 HKD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2021 HKD ($)	Dec. 31, 2020	Dec. 31, 2018 USD ($)	Dec. 31, 2021 USD ($)
Schedule of Income Tax [Line Items]
Tax per financial statements	25.00%	25.00%	26.00%
Net loss	$ 4,684,158		$ 4,036,782
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate	21.00%	21.00%	21.00%
Percentage Of Undistributed Earnings				5.00%	5.00%
Undistributed Earnings, Diluted						$ 1,199,195
Accrued Income Taxes, Noncurrent	$ 539,636						$ 539,636
Current Tax payable	$ 5,087,907						3,893,047
Taiwan Dollar (TWD)
Schedule of Income Tax [Line Items]
Additional Income Tax Rate On Undistributed Earnings	5.00%	5.00%
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate	20.00%	20.00%
Taxes Payable, Current	$ 4,904,891						3,703,412
USA
Schedule of Income Tax [Line Items]
Accrued Income Taxes, Noncurrent							539,636
Current Tax payable	$ 179,879
HONG KONG
Schedule of Income Tax [Line Items]
Tax per financial statements	8.25%	8.25%		16.25%
Net loss		$ 2		$ 2
Taxes Payable, Current	$ 3,137						$ 9,756
Subsidiary [Member]
Schedule of Income Tax [Line Items]
Tax per financial statements	25.00%	25.00%

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RELATED PARTY TRANSACTIONS - Due to related parties (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Related Party Transaction [Line Items]
Due to related parties, Total	$ 36,844	$ 50,531
Ms.Lu (A shareholder of Anhou)
Related Party Transaction [Line Items]
Due to related parties, Total	25,654	41,311
Others
Related Party Transaction [Line Items]
Due to related parties, Total	$ 11,190	$ 9,220

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COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
COMMITMENTS AND CONTINGENCIES.
Surplus Bonus Percentage	1.25%
Compensation expenses	$ 72,905	$ 62,208
Number of years	3 years
Performance Bonus	$ 0	$ 29,689

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VARIABLE INTEREST ENTITIES (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 20,595,428		$ 18,234,350
Accounts receivable and notes receivable	18,315,305		26,761,678
Other current assets	1,173,425		1,207,496
Total current assets	110,310,328		110,502,700
Right-of-use assets under operating leases	6,594,686		6,449,182
Property and equipment, net	1,823,211		2,061,755
Prepaid expenses - intangible assets	359,759		333,118
Long-term Investments	2,594,564		2,696,812
Restricted cash - noncurrent	13,650		88,282
Deferred tax assets	698,750		909,032
Other assets	4,733,347		4,740,640
TOTAL ASSETS	127,128,295		127,781,521
Current liabilities
Commissions payable to sales professionals	9,840,217		14,003,541
Other current liabilities	13,826,954		13,997,603
Due to related parties - Ms. Lu (the shareholder of Law Anhou)	524,109		541,754
Total current liabilities	51,693,852		53,839,983
Operating lease liabilities - noncurrent	3,250,652		3,298,089
TOTAL LIABILITIES	56,384,771		58,608,660
Revenue	30,980,523	$ 30,530,117
Net loss	4,684,158	4,036,782
Net cash used in operating activities	7,599,296	6,445,228
Net cash provided by (used in) investing activities	(5,331,480)	199,142
Net cash used in financing activities	1,054,769	2,171,143
Zhengzhou Zhonglia Hengfu Business Consulting Co., Limited
Current assets
Cash and cash equivalents	2,808,564		1,001,974
Accounts receivable and notes receivable	731,192		455,884
Other current assets	173,360		120,113
Total current assets	3,713,116		1,577,971
Right-of-use assets under operating leases	1,400,738		1,528,856
Property and equipment, net	209,016		199,056
Prepaid expenses - intangible assets	20,389		9,377
Long-term Investments	47,306		47,179
Restricted cash - noncurrent	856		72,870
Registered capital deposits	1,103,796		1,100,842
Deferred tax assets			74,709
Other assets	84,176		83,951
TOTAL ASSETS	6,579,393		4,694,811
Current liabilities
Commissions payable to sales professionals	214,761		210,198
Other current liabilities	3,312,953		1,117,738
Due to related parties - Ms. Lu (the shareholder of Law Anhou)	25,654		41,311
Total current liabilities	3,553,368		1,369,247
Operating lease liabilities - noncurrent	807,009		908,971
TOTAL LIABILITIES	4,360,377		$ 2,278,218
Revenue	1,347,816	1,951,469
Net loss	(201,946)	(50,781)
Net cash used in operating activities	(472,033)	(449,692)
Net cash provided by (used in) investing activities	2,290,667	(7,292)
Net cash used in financing activities	$ (15,760)	$ (7,714)

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VARIABLE INTEREST ENTITIES - Additional information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Variable Interest Entity [Line Items]
Revenue	$ 30,980,523	$ 30,530,117
Variable Interest Entity, Primary Beneficiary [Member]
Variable Interest Entity [Line Items]
Revenue	$ 1,347,816	$ 1,951,469

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SEGMENT REPORTING - Revenue by major customers by reporting segments (Details)	3 Months Ended
	Mar. 31, 2022 USD ($) segment	Mar. 31, 2021 USD ($)
Schedule of Geographical Sales [Line Items]
Number of operating segments | segment	3
Revenue
Total revenue	$ 30,980,523	$ 30,530,117
Income (loss) from operations
Total income from operations	5,313,815	4,886,654
Non operating income (expense)
Total non-operating income (expense)	952,240	548,934
Net income
Net income	4,684,158	4,036,782
Elimination adjustment
Revenue
Total revenue	(955,472)	(383,837)
Income (loss) from operations
Total income from operations	217,810	138,350
Non operating income (expense)
Total non-operating income (expense)	(174,374)	(134,569)
Net income
Net income	43,435	62
Taiwan Dollar (TWD)
Revenue
Total revenue	30,505,357	28,851,500
Income (loss) from operations
Total income from operations	5,213,523	4,690,729
Non operating income (expense)
Total non-operating income (expense)	860,527	587,469
Net income
Net income	4,570,169	3,933,490
PRC
Revenue
Total revenue	1,347,816	1,951,469
Income (loss) from operations
Total income from operations	(155,919)	(3,918)
Non operating income (expense)
Total non-operating income (expense)	256,585	96,152
Net income
Net income	25,798	46,918
Hong Kong
Revenue
Total revenue	82,822	110,985
Income (loss) from operations
Total income from operations	38,401	61,493
Non operating income (expense)
Total non-operating income (expense)	9,502	(118)
Net income
Net income	$ 44,756	$ 56,312

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SEGMENT REPORTING - Geographical distribution (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Reportable assets
Total reportable assets	$ 127,128,295	$ 127,781,521
Long-lived assets
Total long-lived assets	8,417,897	8,510,937
Capital investments (CAPEX cash flows)
Total capital investments	69,500	674,948
Elimination adjustment
Reportable assets
Total reportable assets	(78,832,414)	(81,283,249)
Long-lived assets
Total long-lived assets	(2,906)	(2,905)
Taiwan Dollar (TWD)
Reportable assets
Total reportable assets	190,952,606	195,981,770
Long-lived assets
Total long-lived assets	6,809,903	6,784,644
Capital investments (CAPEX cash flows)
Total capital investments	43,515	595,591
PRC
Reportable assets
Total reportable assets	14,209,455	12,326,308
Long-lived assets
Total long-lived assets	1,609,754	1,727,911
Capital investments (CAPEX cash flows)
Total capital investments	25,985	79,203
Hong Kong
Reportable assets
Total reportable assets	798,648	756,692
Long-lived assets
Total long-lived assets	$ 1,146	1,287
Capital investments (CAPEX cash flows)
Total capital investments		$ 154

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SUBSEQUENT EVENTS (Details) - AIATW [Member] $ in Millions	May 06, 2022 USD ($)	May 06, 2022 TWD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2022 TWD ($)
Subsequent Event [Line Items]
Execution Fees			$ 1,159,039	$ 33.0
Subsequent Event
Subsequent Event [Line Items]
Execution Fees	$ 1,159,039	$ 33.0
Refund Amount	$ 807,127	$ 23.1