Exhibit 99.1

 

ZHONGCHAO INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

As of June 30, 2022 and December 31, 2021

(Expressed in U.S. dollar, except for the number of shares and per share data)

 

   June 30,
2022		   December 31,
2021		 
         
ASSETS        
Current Assets        
Cash and cash equivalents  $11,481,357   $13,914,982 
Short-term investments   524,396    296,158 
Accounts receivable, net   9,682,387    9,218,883 
Prepayments   1,162,235    394,971 
Loans receivable   2,437,895    2,660,668 
Due from affiliates   2,533,592    392,305 
Other current assets   280,142    375,709 
Total Current Assets   28,102,004    27,253,676 
           
Investment in equity method investees   1,836,693    1,993,285 
Investment in an equity security   150,000    150,000 
Prepayments for a long-term investment   597,193    
-
 
Property and equipment, net   3,597,987    3,923,086 
Deposit and prepayment for properties   127,939    181,233 
Prepayments for lease of land   325,016    353,347 
Intangible assets, net   26,129    30,259 
Right of use assets   1,766,401    205,824 
Other noncurrent assets   14,930    
-
 
Deferred tax assets   2,107,281    2,176,710 
Total Assets  $38,651,573   $36,267,420 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Current Liabilities          
Accounts payable  $23,968   $38,933 
Advances from customers   27,375    7,432 
Income tax payable   2,586,716    2,478,273 
Operating lease liabilities, current portion   405,431    88,968 
Accrued expenses and other liabilities   895,063    974,801 
Total Current Liabilities   3,938,553    3,588,407 
           
Operating lease liabilities, noncurrent portion   1,445,468    112,591 
Total Liabilities   5,384,021    3,700,998 
           
Commitments and Contingencies   
 
    
 
 
           
Shareholders’ Equity          
Class A Ordinary Share (par value $0.0001 per share, 450,000,000 shares authorized; 20,513,423 and 19,453,423 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively)   2,052    1,946 
Class B Ordinary Share (par value $0.0001 per share, 50,000,000 shares authorized; 5,497,715 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively)   550    550 
Additional paid-in capital   24,923,046    22,986,975 
Statutory reserve   1,199,054    1,199,054 
Retained earnings   7,274,435    7,180,891 
Accumulated other comprehensive (loss) income   (131,585)   1,197,006 
Total Shareholders’ Equity   33,267,552    32,566,422 
           
Total Liabilities and Shareholders’ Equity  $38,651,573   $36,267,420 

 

1

 

 

ZHONGCHAO INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

For the Six Months Ended June 30, 2022 and 2021

(Expressed in U.S. dollar, except for the number of shares and per share data)

 

  

For the Six Months Ended

June 30,

 
   2022   2021 
Revenues  $7,295,439   $8,615,572 
Cost of revenues   (2,236,718)   (3,147,596)
Gross Profit   5,058,721    5,467,976 
           
Operating Expenses          
Selling and marketing expenses   (1,316,733)   (1,957,522)
General and administrative expenses   (3,046,045)   (2,235,044)
Research and development expenses   (153,290)   (416,077)
Total Operating Expenses   (4,516,068)   (4,608,643)
           
Income from Operations   542,653    859,333 
           
Interest income, net   82,913    65,795 
Other (expenses) income, net   (247,327)   119,043 
Income Before Income Taxes   378,239    1,044,171 
           
Income tax expenses   (284,695)   (42,612)
           
Net Income   93,544    1,001,559 
           
Other Comprehensive (Loss) Income          
Foreign currency translation adjustment   (1,328,591)   193,677 
Comprehensive (Loss) Income  $(1,235,047)  $1,195,236 
           
Weighted average number of ordinary share outstanding          
Basic and Diluted
   25,976,000    24,933,138 
           
Earnings per share          
Basic and Diluted
  $0.00   $0.04 

 

2

 

 

ZHONGCHAO INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in U.S. dollar, except for the number of shares)

 

For the Six Months Ended June 30, 2022

 

   Ordinary share   Additional           Accumulated other     
   Class A   Class B   paid-in   Statutory   Retained   comprehensive   Total 
   Shares   Amount   Shares   Amount   capital   Reserve   earning   income   equity 
Balance as of December 31, 2021   19,435,423   $1,946    5,497,715   $550   $22,986,975   $1,199,054   $7,180,891   $1,197,006   $32,566,422 
Ordinary shares issued in a shelf offering   1,060,000    106    
-
    
-
    1,850,368    
-
    
-
    
-
    1,850,474 
Share-based compensation expenses   -    
-
    -    
-
    85,703    
-
    
-
    
-
    85,703 
Net income   -    
-
    -    
-
    
-
    
-
    93,544    
-
    93,544 
Foreign currency translation adjustments   -    
-
    -    
-
    
-
    
-
    
-
    (1,328,591)   (1,328,591)
Balance as of June 30, 2022   20,513,423   $2,052    5,497,715   $550   $24,923,046   $1,199,054   $7,274,435   $(131,585)  $33,267,552 

 

For the Six Months Ended June 30, 2021

 

   Ordinary share   Additional           Accumulated other     
   Class A   Class B   paid-in   Statutory   Retained   comprehensive   Total 
   Shares   Amount   Shares   Amount   capital   Reserve   earning   income   equity 
Balance as of December 31, 2020   19,435,423   $1,944    5,497,715   $550   $22,775,154   $801,502   $7,339,778   $915,213   $31,834,141 
Share-based compensation expenses   -    
-
    -    
-
    89,502    
-
    
-
    
-
    89,502 
Net income   -    
-
    -    
-
    
-
    
-
    1,001,559    
-
    1,001,559 
Foreign currency translation adjustments   -    
-
    -    
-
    
-
    
-
    
-
    193,677    193,677 
Balance as of June 30, 2021   19,435,423   $1,944    5,497,715   $550   $22,864,656   $801,502   $8,341,337   $1,108,890   $33,118,879 

 

3

 

 

ZHONGCHAO INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30, 2022 and 2021

(Expressed in U.S. dollar, except for the number of shares)

 

   For the Six Months Ended June 30, 
   2022   2021 
Cash Flows from Operating Activities:        
Net income  $93,544   $1,001,559 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:          
Depreciation and amortization expenses   128,356    143,028 
Writing off accounts receivable   
-
    323,524 
Amortization of right of use assets   183,132    139,217 
Recognition of share-based compensation expenses   85,703    89,502 
Deferred tax benefits   (29,296)   (485,654)
Equity investment loss   61,774    43 
Changes in fair value of short-term investments   234,652    (62,533)
Changes in operating assets and liabilities:          
Accounts receivable   (942,164)   (303,213)
Prepayments   (813,023)   420,735 
Other current assets   79,119    10,626 
Accounts payable   (13,515)   64,575 
Advances from customers   20,991    68,888 
Income tax payable   235,956    474,650 
Accrued expenses and other liabilities   (30,266)   (120,956)
Lease liabilities   (91,584)   (151,123)
Deferred government grants   -    1,127 
Net Cash (Used in) Provided by Operating Activities   (796,621)   1,613,995 
           
Cash Flows from Investing Activities:          
Purchases of property and equipment   (25,291)   (1,874,496)
Purchases of intangible assets   (15,434)   - 
Prepayments for a long-term investment   (617,370)   - 
Loans to third parties   (971,712)   (1,390,000)
Repayment of loans from third parties   1,165,041    
-
 
Due from affiliates   (2,233,335)   
-
 
Investments in short-term investments   (996,638)   (838,747)
Proceeds from redemption of short-term investments   533,747    
-
 
Net Cash Used in Investing Activities   (3,160,992)   (4,103,243)
           
Cash Flows from Financing Activities:          
Proceeds from issuance of ordinary shares in connection with a shelf offering   1,850,474    
-
 
Net Cash Provided by Financing Activities   1,850,474    
-
 
           
Effect of exchange rate changes on cash and cash equivalents   (326,486)   80,693 
           
Net decrease in cash and cash equivalents   (2,433,625)   (2,408,555)
Cash and cash equivalents at beginning of period   13,914,982    15,072,947 
Cash and cash equivalents at end of period  $11,481,357   $12,664,392 
           
Supplemental Cash Flow Information          
Cash paid for income tax  $78,034   $41,112 
           
Noncash investing activities          
Right of use assets obtained in exchange for operating lease obligations  $1,771,361   $199,505 

 

 

4

 

 

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