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Note 9 - Related Party Transactions and Balances
9 Months Ended
Dec. 31, 2017
Notes  
Note 9 - Related Party Transactions and Balances

NOTE 9 - RELATED PARTY TRANSACTIONS AND BALANCES

 Balances:

 (i)      Security deposit to related party:

The security deposit - related party of $1,530,409 represents the deposit paid to Shandong Yongchuntang Bioengineering Co. Ltd. ("Shandong Yongchuntang") on January 4, 2017 for using the direct-sales license issued to Shandong Yongchuntang. The amount is non-interest bearing and not secured. Shandong Yongchuntang owns 3% of the common stock of Shandong Spring.

 (ii)     Trade related balance with related party:

On December 31, 2017, the purchase deposit to related party of $1,304,919 pertains to purchase deposit paid in respect of the purchase of healthcare products from Shandong Yongchuntang.

On March 31, 2017, accounts payable balance of $706,048 pertains to payable in respect of the purchase of healthcare products from Shandong Yongchuntang.

(iii)    Sales to related party:

During the three and nine months ended December 31, 2017, the Company sold acer truncatum oil product to Shandong Yongchuntang for $131,906.

(iv)    Purchase from related party:

See Note 10 for details.

Contingency:

The Company is authorized by Shandong Yongchuntang to sell Shandong Yongchuntang's products using the direct-sales license issued to Shandong Yongchuntang.  As a condition for using the direct-sales license, the Company needs to increase sales each year based on the 95% of sales of the year 2014.  If the Company cannot meet this sales target in any year from April 1, 2017 to June 30, 2020, the Company needs to pay approximately $1.5 million as an annual fee for using the direct-sales license.  There is risk that the Company may fail to meet the sales target and may need to pay approximate $1.5 million in one or more subsequent years.