GREEN VISION BIOTECHNOLOGY CORP. - FORM 10-Q

Attached files

file	filename
EX-32.1 - CERTIFICATION - GREEN VISION BIOTECHNOLOGY CORP.	gvbi_ex321.htm
EX-31.2 - CERTIFICATION - GREEN VISION BIOTECHNOLOGY CORP.	gvbi_ex312.htm
EX-31.1 - CERTIFICATION - GREEN VISION BIOTECHNOLOGY CORP.	gvbi_ex311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended March 31, 2018

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

For the transition period from________________ to ___________________

Commission File No. No. 000-55210

GREEN VISION BIOTECHNOLOGY CORP.
(Exact name of registrant as specified in its charter)

Nevada

7380

98-1060941

(State or Other Jurisdiction

of Incorporation or Organization)

(Primary Standard Industrial

Classification Number)

(IRS Employer

Identification Number)

1255 W. Rio Salado Parkway, Suite 215

Tempe, Arizona, 85281

(Address of principal executive offices)

Copies to:

Matthew McMurdo, Esq.

McMurdo Law Group, LLC

1185 Avenue of the Americas

3rd Floor

New York, New York 10036

917-318-2885

__________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes x No o

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	x

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 x

Applicable Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five Years. N/A

Indicate by checkmark whether the issuer has filed all documents and reports required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court. Yes x No ¨

Applicable Only to Corporate Issuers:

Indicate the number of shares outstanding of each of issuer’s classes of common stock, as of the most practicable date: As of March 31, 2018, there were 160,790,000 shares of Common Stock of the issuer outstanding.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	3
	Consolidated Balance Sheets as of March 31, 2018 and December 31, 2017	3
	Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017	4
	Consolidated Statements of Stockholders’ Deficit and Comprehensive Loss as of March 31, 2018	5
	Consolidated Statements of Cash Flows for the nine months ended March 31, 2018 and 2017	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
	Signatures	32

PART I. FINANCIAL INFORMATION

ITEM: 1 FINANCIAL STATEMENTS

GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	Note	March 31, 2018			December 31, 2017
		(Unaudited)			(Audited)
ASSETS
Cash and cash equivalents		$	19,913		$	38,931
Accounts receivable, net of allowance for doubtful accounts			51,308			16,139
Inventories, net	7		282,782			278,086
Advance to suppliers			51,575			48,905
Other receivables	4		33,647			46,058
Total current assets			439,225			428,119

Property, plant equipment, net	5		3,114,941			3,013,161
Construction in progress			1,493			-
Intangible assets	6		924,898			883,488
Long term lease prepayment			20,889			19,962
Restricted cash			21,483			20,362
Total non-current assets			4,083,704			3,936,973
TOTAL ASSETS		$	4,522,929		$	4,365,092

LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable		$	31,500		$	31,363
Advances from customer			11,814			15
Accrued expenses			116,117			151,615
Accrued payroll			27,365			19,817
Other payables	9		75,332			47,276
Other tax payables			131			10,316
Amount due to related parties	11		5,359,345			5,300,859
Amount due to shareholder			4,176,827			3,895,903
Total current liabilities			9,798,431			9,457,164
TOTAL LIABILITIES		$	9,798,431		$	9,457,164

Stockholders’ equity
Common stock, $0.001 par value per share, authorized 750,000,000 and 750,000,000 shares, issued and outstanding 160,790,000 shares at March 31, 2018, and December 31, 2017 respectively			160,790			160,790
Additional paid-in capital			(282,209	)		(282,209	)
Accumulated other comprehensive loss			(37,650	)		(87,533	)
Accumulated deficit			(5,116,433	)		(4,883,120	)
TOTAL STOCKHOLDERS’ DEFICIT			(5,275,502	)		(5,092,072	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT		$	4,522,929		$	4,365,092

See accompanying notes to unaudited consolidated financial statements

Table of Contents

GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Note	Three Months Ended March 31, 2018			Three Months Ended March 31, 2017
		$			$
Revenue, net		$	52,917		$	62,909
Cost of Sales			37,255			38,566

Gross profit		$	15,662		$	24,343

Operating expenses
Selling expenses			(3,898	)		(7,882	)
General and administrative expenses			(243,371	)		(209,480	)

(Loss)/income from operations		$	(231,607	)	$	(193,019	)

Non-operating income (expense)
Interest income			26			-
Interest expense			(1,856	)		(1,083	)
Other income			124			392
Other expense			-			(3,254	)

(Loss)/income before income taxes		$	(233,313	)	$	(196,964	)

Income tax	12		-			-

Net (loss)/income		$	(233,313	)	$	(196,964	)

Non-controlling interest			-			-
Net (loss)/income attributable to the Company		$	(233,313	)	$	(196,964	)

Foreign currency translation adjustment			49,883			24,983

Comprehensive loss	14	$	(183,430	)	$	(171,981	)

Basic earnings per share of common stock	10	$	(0.15cents	)	$	(0.20cents	)
Diluted earnings per share	10	$	(0.15cents	)	$	(0.20cents	)

Weighted average number of common shares outstanding – basic and diluted			160,790,000			100,000,000

See accompanying notes to unaudited consolidated financial statements

4

Table of Contents

GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’DEFICIT AND COMPREHENSIVE INCOME

	Number of common shares outstanding		Amount		Additional paid-in capital			Accumulated other comprehensive income			Accumulated deficits			Total stockholders’ equity/ (deficit)

Balance, January 1, 2017		100,000,000	$	100,000		(57,120	)		(174,098	)		(3,199,950	)	$	(3,331,168	)
Reverse merge recapitalization		60,790,000		60,790		(225,089	)		-			-			(164,299	)
Net loss		-		-		-			-			(1,683,170	)		(1,683,170	)
Foreign currency translation adjustment		-		-		-			86,565			-			86,565

Balance, December 31, 2017		160,790,000	$	160,790		(282,209	)		(87,533	)		(4,883,120	)	$	(5,092,072	)

Balance, December 31, 2017		160,790,000	$	160,790		(282,209	)		(87,533	)		(4,883,120	)	$	(5,092,072	)
Net loss		-		-		-			-			(233,313	)		(233,313	)
Foreign currency translation adjustment		-		-		-			49,883			-			49,883

Balance, March 31, 2018		160,790,000	$	160,790		(282,209	)		(37,650	)		(5,116,433	)	$	(5,275,502	)

See accompanying notes to unaudited consolidated financial statements

5

Table of Contents

GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	(Unaudited)
	Three Months Ended March 31,
	2018			2017
Cash flows used in operating activities:
Net (loss) income	$	(233,313	)	$	(196,964	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		61,167			59,652
Amortization of intangible assets		6,331			5,971
Allowance for doubtful accounts		-			-
Long term lease prepayment		152			578
Changes in assets and liabilities:
Accounts receivable		(33,882	)		14,229
Inventories		10,230			(36,885	)
Advances to suppliers		(22	)		10,081
Other receivables		13,843			(1,581	)
Amount due from related parties		-			380,232
Restricted cash		(18	)		-
Accounts payable		(1,541	)		(7,513	)
Advances from customer		11,656			(11,642	)
Other payables		26,664			5,331
Other tax payables		(10,613	)		(25,339	)
Accrued payroll		6,397			(1,082	)
Accrued expenses		(34,942	)		(12,134	)
Amount due to related parties		55,215			(291,778	)
Net cash provided by (used for) operating activities		(122,676	)		(108,844	)
Cash flows used for investing activities:
Purchases of property, plant and equipment		(637	)		(135	)
Construction in progress		(1,475	)		-
Net cash used for investing activities		(2,112	)		(135	)
Cash flows provided by (used for) financing activities:
Amounts due to shareholder		104,692			(221,874	)
Net cash provided by (used for) financing activities		104,692			(221,874	)

Net increase (decrease) in cash		(20,096	)		(330,853	)
Effect of foreign currency translation		1,078			624
Cash – beginning of period		38,931			518,849
Cash – end of period	$	19,913		$	188,620
Supplemental disclosures of cash flow information:
Interest paid	$	1,856		$	1,083
Income taxes	$	-		$	-

See accompanying notes to unaudited consolidated financial statements

6

Table of Contents

GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION AND NATURE OF BUSINESS

Green Vision Biotechnology Corp. (formerly known as Vibe Wireless Corp., originally known as Any Translation Corp.), (the “Company”, “GVBT”), was incorporated under the laws of the State of Nevada on July 5, 2012. The Company was founded to be in the business of translation and interpretation. On November 12, 2015, the Company changed its name from Any Translation Corp. to Vibe Wireless Corp. On September 30, 2016, we changed our name from Vibe Wireless Corp. to Green Vision Biotechnology Corp.

On September 30, 2016, the Company filed a Certificate of Amendment with the Nevada Secretary of State (the “Nevada SOS”) whereby it amended its Articles of Incorporation by increasing the Company’s authorized number of shares of common stock from 75 million to 750 million and increasing all of its issued and outstanding shares of common stock at a ratio of ten (10) shares for every one (1) share held. The Company’s Board of Directors approved this amendment on September 30, 2016. This stock split has been retroactively applied.

On the same date, September 30, 2016, the Company filed Articles of Merger with the Nevada SOS whereby it entered into a statutory merger with its wholly-owned subsidiary, Green Vision Biotechnology Corp. pursuant to Nevada Revised Statutes 92A.200 et. seq. The effect of such merger is that the Company is the sole surviving entity and changed its name to “Green Vision Biotechnology Corp.”

The investment transaction under the share exchange agreements and contractual agreements as described below (collectively the “Transaction Agreements”) was entered into, between each of the Shareholders of Lutu International Biotechnology Limited (“Lutu International”), a company incorporated under the laws of Cayman Islands and GVBT (the “Investment Transaction”) on May 12, 2017. As a result of closing the Investment Transaction, GVBT acquired part of the shares of Lutu International and assumed management of Lutu International and all its direct and indirect subsidiaries (“the Lutu Group”).

On May 12, 2017, GVBT entered into a share exchange agreement with Harcourt Capital Limited (“Harcourt”), a limited company incorporated in the British Virgin Islands, which holds 6% of the issued and outstanding shares of Lutu International; and Woodhead Investments Limited (“Woodhead”), a limited company incorporated in the British Virgin Islands, which holds 5% of the issued and outstanding shares of Lutu International (the “Minority Interest Exchange Agreement”). Under the Minority Interest Exchange Agreement, Woodhead agreed to transfer GVBT a total of 5% of the issued and outstanding shares of Lutu International. In consideration, GVBT agreed to grant Woodhead, or persons designated by Woodhead, a right to receive a total of 5 million shares of GVBT’s common stock. Under the Minority Interest Exchange Agreement, Harcourt agreed to transfer to GVBT a total of 6% of the issued and outstanding shares of Lutu International. In consideration, GVBT agreed to grant Harcourt, or persons designated by Harcourt, a right to receive a total of 6 million shares of GVBT’s common stock. The transactions under the Minority Interest Exchange Agreement were completed on May 12, 2017.

Able Lead has an outstanding loan of $4.43 million denominated in Renminbi (“RMB”) owed to an unrelated third party with its maturity date on January 22, 2018 (the “Outstanding Loan”). Able Lead is currently negotiating an extension of the Outstanding Loan to 2019 with the third party creditor. Shares of Lutu International held by Able Lead were offered by Able Lead as collateral to secure repayment of the Outstanding Loan (the “Security”)..

On May 12, 2017, GVBT entered into a share exchange agreement (the “Majority Interest Exchange Agreement”) with Able Lead, the 89% shareholder of Lutu International. Under the Majority Interest Exchange Agreement, Able Lead agreed to enter into a series of contractual arrangements with GVBT (collectively, the “Contractual Arrangements”) (as described below), in which GVBT assumed management control of the Lutu Group. Able Lead further agreed to deliver the shares of Lutu International to GVBT once the Outstanding Loan is fully repaid. In consideration, GVBT agreed to issue and deliver a total of 89 million shares of GVBT’s common stock to an escrow agent (issued in the name of the escrow agent or its nominee) (the “ Escrow Shares “). The Escrow Shares shall be held in escrow for a period of one year or such period of time to be agreed by GVBT and Able Lead upon the execution of the Majority Interest Exchange Agreement. Conditional upon the full repayment of the Outstanding Loan and the release of the Security, the Escrow Shares shall be released to Able Lead in exchange for the delivery of a total of 89% of the issued and outstanding shares of Lutu International by Able Lead to GVBT. In the event that Able Lead fully repays the Outstanding Loan and causes the release of the Security, then the Escrow Shares shall be delivered to Able Lead. In the event that Able Lead cannot fully repay the Outstanding Loan (within a period of one year, or such period of time to be agreed by GVBT and Able Lead) and cause the release of the Security, then the Escrow Shares shall be delivered to transfer agent for cancellation. Unless otherwise expressly agreed in writing by GVBT and Able Lead, the Majority Share Exchange Agreement shall be automatically terminated upon the termination of any of the agreements in the Contractual Arrangements described as below. The transactions under the Majority Interest Exchange Agreement were completed on May 12, 2017.

Table of Contents

GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION AND NATURE OF BUSINESS (CONTINUED)

Pursuant to an escrow agreement (the “Escrow Agreement”) entered into between Booth Udall Fuller, PLC (the “Escrow Agent”) and GVBT on May 12, 2017, the Escrow Shares shall be held by Booth Udall Fuller, PLC for a year upon the execution of the Majority Share Exchange Agreement. The Escrow Shares shall not be subject to any lien, attachment, or any other judicial process of any creditor of GVBT, and shall be held and disbursed solely for the purposes and in accordance with the terms of the Majority Share Exchange Agreement.

On May 12, 2017, GVBT entered into a series of contractual agreements as described below with Lutu International and/or Able Lead (the “Contractual Arrangements”). Upon execution of the Contractual Arrangements, GVBT assumed management of Lutu International and its subsidiaries (the “Lutu Group”) and received economic benefits which includes right to receive the expected residual returns and and/or obligation to absorb expected loss from the Lutu Group. Each agreement in the Contractual Arrangements constitutes valid and binding obligations of the parties of such agreements and is enforceable and valid in accordance with the laws of Cayman Islands. All agreements executed by Lutu International were duly approved by its board of directors and the Shareholders of Lutu International.

Consulting Services Agreement

Pursuant to the exclusive consulting services agreement entered into between GVBT and Lutu International on May 12, 2017, GVBT has the exclusive right to provide to the Lutu Group general business operation services, including advice and strategic planning, as well as consulting services related to the technological research and development of bio-fertilizers. Further, GVBT owns the intellectual property rights developed or discovered through research and development, in the course of providing the consulting services, or derived from the provision of the consulting services. In consideration, Lutu International pays an annual consulting service fees to GVBT in the amount equivalent to all of Lutu International’s net profits for the relevant financial year. The term of this consulting service agreement is five (5) years from its effective date and may be terminated upon GVBT’s written confirmation prior to the expiration of this agreement.

Unless otherwise expressly agreed in writing by GVBT and Able Lead, the Consulting Services Agreement shall be automatically terminated upon the termination of any of the agreements in the Contractual Arrangements or the Majority Interest Exchange Agreement.

Operating Agreement

Pursuant to the operating agreement entered into between GVBT, Lutu International and Able Lead on May 12, 2017, GVBT agreed to provide guidance and instructions on the Lutu Group’s daily operations, financial management and employment issues. Able Lead agreed to designate candidates recommended by GVBT as their representatives on the boards of directors of each member of the Lutu Group. GVBT has the right to appoint senior executives of each member of the Lutu Group. In addition, GVBT agreed to guarantee the Lutu Group’s performance under any agreements or arrangements relating to the Lutu Group’s business arrangements with any third party. In consideration, Lutu International agrees that it will not, and will cause the Lutu Group not to, without the prior consent of GVBT, engage in any transactions that could materially affect their respective assets, liabilities, rights or operations, including but not limited to, incurrence or assumption of any indebtedness, sale or purchase of any assets or rights, incurrence of any encumbrance on any of their assets or intellectual property rights in favor of a third party or transfer of any agreements relating to their business operation to any third party. The term of this operating agreement is five (5) years from its effective date and may be extended and terminated only upon GVBT’s written confirmation prior to the expiration of this agreement.

Unless otherwise expressly agreed in writing by GVBT and Able Lead, the Operating Agreement shall be automatically terminated upon the termination of any of the agreements in the Contractual Arrangements or the Majority Interest Exchange Agreement.

Proxy Agreement

Pursuant to the proxy agreement entered into between Able Lead, Lutu International, and GVBT on May 12, 2017, Able Lead agreed to irrevocably grant a person to be designated by GVBT the right to exercise its voting rights and other rights, including the attendance of, and the voting at the shareholders’ meetings of Lutu International for and on behalf of Able Lead (or the signing of written resolutions in lieu of such meetings) in accordance with applicable laws and its articles of association, including but not limited to the appointment and voting for the directors and chairman of the board as the authorized representative of Able Lead to exercise controlling power in the Lutu Group. The proxy agreement may be terminated by joint consent of the parties or upon 7-day written notice from GVBT.

Table of Contents

GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION AND NATURE OF BUSINESS (CONTINUED)

Changes Resulting from the Investment Transaction

The closing of the Investment Transaction occurred on May 12, 2017, resulting in a change of control of GVBT. Prior to closing of the Investment Transaction, GVBT had a total of 60,790,000 shares of common stock issued and outstanding. As a result of the closing of the Investment Transaction, GVBT now has a total of 160,790,000 shares of its common stock issued and outstanding, of which 60,790,000 shares, or approximately 37.8%, are owned by the previous existing shareholders of GVBT, with the balance of 100,000,000 shares, or approximately 62.2%, owned by the previous shareholders of Lutu International, with certain shares held in escrow pursuant to the Escrow Agreement.

Following the closing of the Investment Transaction, GVBT carries on the business of the Lutu Group. The Lutu Group, with its operation primarily located in the Shanxi Province of China, is engaged in the biotechnology industry, in particular, the production and distribution of bio-fertilizers. Revenues of the Lutu Group are currently generated from China.

Changes to the Board of Directors and Officers

Simultaneous with the closing of the Investment Transaction, there was a change in the officers and directors of GVBT. As authorized by the bylaws, the existing director of GVBT, Mr. Ma Wai Kin, appointed two (2) additional members to the Board of GVBT. Such members are Mr. Lam Ching Wan (also known as William Lam) and Mr. Leung Kwong Tak (also known as Dr. Michael Leung). Mr. Ma also appointed Mr. William Lam as GVBT’s Chief Executive Officer and Mr. Lo Kwok Leung as GVBT’s Chief Financial Officer. Mr. Lo Kwok Leung is not related to Dr. Michael Leung.

All members of the Board shall hold their respective offices for a term of one year from their respective dates of appointment, or until the election and qualification of their successors, and thereafter to resign as a director of GVBT. In accordance with the bylaws, officers are elected by the board of directors and serve at the discretion of the board of directors.

Accounting Treatment

The Investment Transaction is being accounted for as a reverse-merger and recapitalization. For financial reporting purposes, Lutu International is the acquirer and GVBT is the acquired company. After completion of the transaction, the assets, liabilities, operations results and cash flow of GVBT that will be reflected in the historical consolidated financial statements prior to the Investment Transaction will be those of Lutu International and its subsidiaries and will be recorded at the historical cost basis of Lutu International and its subsidiaries. Number of shares deemed to be outstanding for the period from January 1, 2017 to the acquisition date will be reflected in the balance of the common stock and paid in capital. The Company changed its fiscal year ended from January 31 to December 31.

Tax Treatment and SEC Filer Status: Small Business Issuer

The Investment Transaction is intended to constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), or such other tax free reorganization exemptions that may be available under the Code. Immediately following the Investment Transaction, the filer status of GVBT will be a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K, as promulgated by SEC.

Implications of Being an Emerging Growth Company

As a company with less than $1.0 billion in revenue during our last fiscal year, the Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:

	·	a requirement to have only two years of audited financial statements and only two years of related Management's Discussion and Analysis of Financial Condition and Results of Operations disclosure; and

	·	an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes- Oxley Act of 2002.

Table of Contents

GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION AND NATURE OF BUSINESS (CONTINUED)

The Company may take advantage of these provisions until the end of the fiscal year ending after the fifth anniversary of their initial public offering or such earlier time that they are no longer an emerging growth company, and if they do, the information that they provide to the stockholders may be different than you might get from other public companies in which you hold equity.

The Company would cease to be an emerging growth company if they have more than $1.0 billion in annual revenue, have more

than $700 million in market value of their ordinary shares held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period. The JOBS Act permits an “emerging growth company” like the Company to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies.

NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for consolidated financial reporting.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Presentation

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The historical presentation of the consolidated financial statements includes the financial statements of LUTU INTERNATIONAL BIOTECHNOLOGY LIMITED, and its wholly-owned subsidiaries (collectively referred to herein as the “Company”). All intercompany accounts, transactions, and profits have been eliminated upon consolidation.

The following table depicts the identity of the subsidiaries:

Name of Subsidiary	Place of Incorporation	Attributable Equity Interest %		Registered Capital
Lutu International Biotechnology Limited (RTO accounting acquirer) (1)	Cayman Islands		100	USD100
Light Raise Limited (2)	BVI		100	USD 1
Hong Kong Prolific Mineral Resources Holdings Limited (3)	HKD		100	HKD 2
Shanxi Green Biotechnology Industry Company Limited (4)	PRC		100	RMB 100,000,000
Shenzhen Qianhai Lutu Supply Chain Management Company Limited (5)	PRC		100	RMB 5,000,000

Note:	(1)	Wholly owned subsidiary of Green Vision Biotechnology Corp.
	(2)	Wholly owned subsidiary of Lutu International Biotechnology Limited
	(3)	Wholly owned subsidiary of Light Raise Limited
	(4)	Wholly owned subsidiary of Hong Kong Prolific Mineral Resources Holdings Limited
	(5)	Wholly owned subsidiary of Shanxi Green Biotechnology Industry Company Limited

Table of Contents

GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING (CONTINUED)

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

Significant estimates and judgments inherent in the preparation of these consolidated financial statements include, among other things, accounting for asset impairments, allowances for doubtful accounts, depreciation and amortization, the collection of revenues from the Agricultural Cooperative.

Economic and political risks

The Company’s operations are mainly conducted in the Hong Kong Special Administrative Region (“Hong Kong”) and the People’s Republic of China (“China”) (for the purpose of this Current Report on Form 10-Q, China does not include Hong Kong, Macau Special Administrative Region of the People's Republic of China and Taiwan (The Republic of China) and a large number of customers are located in northern China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in Hong Kong and China, and by the general state of the economy in Hong Kong and China.

The Company’s operations and customers in Hong Kong and China are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments, and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in Hong Kong and China, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

Foreign Currency Translation

The Company’s financial statements are presented in the U.S. dollar ($), which is the Company’s reporting currency, while its functional currency are Chinese Renminbi (RMB) and Hong Kong Dollar (HKD). Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements of income. Monetary assets and liabilities denominated in foreign currency are translated at the functional currency rate of exchange ruling at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the statements of income.

In accordance with ASC 830, Foreign Currency Matters, the Company translated the assets and liabilities into US $ using the rate of exchange prevailing at the applicable balance sheet date and the statements of income and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation are recorded in shareholders’ equity as part of accumulated other comprehensive income.

Below is a table with foreign exchange rates used for translation:

For the three months and year ended, (Average Rate)	Mar. 31, 2018			Dec 31, 2017			Mar. 31, 2017
Chinese Renminbi (RMB)	RMB		6.35819	RMB		6.76141	RMB		6.86288
United States dollar ($)		$	1.00000		$	1.00000		$	1.00000

As of (Closing Rate)	Mar. 31, 2018			Dec 31, 2017			Mar. 31, 2017
Chinese Renminbi (RMB)	RMB		6.28068	RMB		6.62061	RMB		6.88280
United States dollar ($)		$	1.00000		$	1.00000		$	1.00000

For the three months and year ended, (Average Rate)	Mar. 31, 2018			Dec 31, 2017			Mar. 31, 2017
Hong Kong (HKD)	RMB		7.82750	RMB		7.79197	RMB		7.76145
United States dollar ($)		$	1.00000		$	1.00000		$	1.00000

As of (Closing Rate)	Mar. 31, 2018			Dec 31, 2017			Mar. 31, 2017
Hong Kong (HKD)	RMB		7.84906	RMB		7.80715	RMB		7.77000
United States dollar ($)		$	1.00000		$	1.00000		$	1.00000

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GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING (CONTINUED)

Revenue Recognition

The Company earns revenue by selling merchandise to end using customers primarily through distribution agent and directly to customers.

Revenue is recognized when merchandise is purchased by and delivered to the customer and confirmed and collectability is reasonably assured. Revenue from wholesale agent is recognized after goods delivered, amount fixed or determined and collectability is reasonably assured.

All revenues are shown net of estimated returns during the relevant period represented by estimated allowance for sales returns based upon historical experience.

The Company records sales tax collected from its customers on a net basis, and therefore excludes it from revenue as defined in ASC 605, Revenue Recognition.

During the three months ended March 31, 2018 and 2017, the provision of sales return were $ Nil respectively.

Cost of Goods Sold

Cost of goods sold includes the cost of materials, labor, and relevant manufacturing expenses.

Selling Expenses

Selling expenses include packaging and shipping costs, as well as advertising and certain expenses associated with operating the Company’s corporate headquarters.

Advertising Costs

The Company expensed all advertising costs as incurred. Advertising expense, net of reimbursement from suppliers, amounted to $Nil and $1,064 for the three months ended March 31, 2018 and 2017 respectively. Advertising expense is included in selling expense and general and administrative expenses in the accompanying consolidated statements of income.

Leases

The Company accounts for its leases under the provisions of ASC 840, Leases. Certain of the Company’s operating leases provide for minimum annual payments that change over the life of the lease. The aggregate minimum annual payments are expensed on the straight-line basis over the minimum lease term. The Company recognizes a deferred rent liability for minimum step rents when the amount of rent expense exceeds the actual lease payments and it reduces the deferred rent liability when the actual lease payments exceeds the amount of straight-line rent expense. Rent holidays and tenant improvement allowances for office remodels are amortized on the straight-line basis over the initial term of the lease and any option period that is reasonably assured of being exercised.

The Company did not have a lease that met the criteria of a capital lease. Leases that do not qualify as a capital lease are classified as an operating lease. Operating lease rental expenses included in selling, general and administrative expenses for the three months ended March 31, 2018 and 2017 were $5,083 and $4,328 respectively.

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GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Accounts Receivable

Accounts receivable is recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An allowance for doubtful accounts is maintained for all customers based on a variety of factors, including the industry practice, the length of time the receivables are past due, significant one-time events and historical experience. The Company is selling products delivered to certain customers which are closed to Agriculture Cooperatives as defined by ASC 905 “Agriculture”. The collection cycle may be varied and depended on the growing crops cycle.

Management reviews and adjusts this allowance periodically based on historical experience and its evaluation of the collectability of outstanding accounts receivable. The Company evaluates the credit risk of its customers utilizing historical data and estimates of future performance. Bad debts are written off as incurred. During the quarter ended March 31, 2018 and year ended December 31, 2017, the bad debts incurred were $Nil and $Nil respectively.

Outstanding accounts balances are reviewed individually for collectability. The Company does not charge any interest income on trade receivables. Accounts balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. To date, the Company has not charged off any balances as it has yet to exhaust all means of collection.

During the quarter ended March 31, 2018 and year ended December 31, 2017, the provision of doubtful debts were $Nil and $865,942 respectively.

Inventories

Inventories primarily consist of merchandise inventories and are stated at lower of cost or market and net realizable value. Cost of inventories is calculated on the weighted average basis which approximates cost.

Management regularly reviews inventories and records valuation reserves for damaged and defective returns, inventories with slow-moving or obsolescence exposure and inventories with carrying value that exceeds market value. Because of its product mix, the Company has not historically experienced significant occurrences of obsolescence.

Inventory shrinkage is accrued as a percentage of revenues based on historical inventory shrinkage trends. The Company performs physical inventory count of its stores once per quarter and cycle counts inventories at its distribution centers once per quarter throughout the year. The reserve for inventory shrinkage represents an estimate for inventory shrinkage for each store since the last physical inventory date through the reporting date.

These reserves are estimates, which could vary significantly, either favorably or unfavorably, from actual results if future economic conditions, consumer demand and competitive environments differ from expectations.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Significant additions or improvements extending useful lives of assets are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation is provided over the estimated useful lives, using the straight-line method with 5% scrape value as follows:

Buildings		20 years
Machinery & equipment		10 years
Office equipment		3 years
Motor vehicles		4 years

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GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Land Use Rights

According to the laws of the PRC, the government owns all the land in the PRC. Companies or individuals are authorized to possess and use the land only through the land use rights granted by the government. The land use rights represent cost of the rights to use the land in respect of properties located in the PRC. Land use rights are carried at cost and amortized on a straight-line basis over the period of rights of 50 years.

Goodwill

Goodwill represents the excess of purchase price over fair value of net assets acquired. Under ASC 350, Intangibles — Goodwill and Other, goodwill is not amortized but evaluated for impairment annually or whenever events or changes in circumstances indicate that the value may not be recoverable.

The Company performed an annual impairment test as of the fiscal year ended December 31, 2017, and a quarter review as of the period ended March 31, 2018, and determined that the impairment loss in the amount of $nil and $nil were recorded respectively.

Long-lived Assets

The Company reviews long-lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Long-lived assets are reviewed for recoverability at the lowest level in which there are identifiable cash flows, usually at the store level. The carrying amount of a long-lived asset is not considered recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset. If the asset is determined not to be recoverable, then it is considered to be impaired and the impairment to be recognized is the amount by which the carrying amount of the asset exceeds the fair value of the asset, determined using discounted cash flow valuation techniques, as defined in ASC 360, Property, Plant, and Equipment.

The Company determined the sum of the undiscounted cash flows expected to result from the use of the asset by projecting future revenue and operating expense for each store under consideration for impairment. The estimates of future cash flows involve management judgment and are based upon assumptions about expected future operating performance. The actual cash flows could differ from management’s estimates due to changes in business conditions, operating performance and economic conditions.

During the reporting periods, the Company performed the evaluation and there was no impairment loss.

Cash and Concentration of Credit Risk

The Company maintains cash in bank deposit accounts in Hong Kong and PRC, and considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company performs ongoing evaluations of the institution to limit its concentration risk exposure.

The Company’s customers are mainly located in the northeastern China. Because of this, the Company is subject to regional risks, such as the economy, regional financial conditions and unemployment, weather conditions, power outages, and other natural disasters specific to the region in which the Company operates.

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GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Retirement Benefit Plans

Full time employees of the Company in China participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require the Company to make contributions to the government for these benefits based on certain percentages of the employees’ salaries. The Company accounts the mandated defined contribution plan under the vested benefit obligations approach based on the guidance of ASC 715, Compensation—Retirement Benefits.

The total amounts for such employee benefits which were expensed were $5,682 and $687 for the three months ended March 31, 2018 and 2017 respectively.

Income Taxes

The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.

Comprehensive income

Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other consolidated financial statements. The Company’s current component of comprehensive income is the net income and foreign currency translation adjustment.

Segment Reporting

The Company operates in one industry segment, operating manufacturing and selling of organic bio-fertilizer. ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Given the economic characteristics of the similar nature of the products sold, the type of customer and the method of distribution, the Company operates as one reportable segment as defined by ASC 280, Segment Reporting.

Basic and diluted earnings (loss) per share

In accordance with ASC No. 260 “Earnings Per Share”, the basic earnings (loss) per common share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings (loss) per common share is computed similarly to basic earnings (loss) per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

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GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently Issued Accounting Guidance

FASB Simplifies Adoption of New Leases Standard for Certain Land Easements. The FASB has issued Accounting Standards Update (ASU) No. 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842, which clarifies the application of the new leases guidance to land easements and eases adoption efforts for some land easements.

ASU 2018-01 is expected to reduce the cost of adopting the new leases standard for certain land easements. It is also an attempt to help ensure that companies can make a successful transition to the standard without compromising the quality of information provided to investors about these transactions.

Land easements (also commonly referred to as rights of way) represent the right to use, access, or cross another entity’s land for a specified purpose. Land easements are used by utility and telecommunications companies, for example, when they need to take a small strip of land, or easement, to bury wires. Not all companies have historically accounted for them as leases.

Stakeholders pointed out that the requirement to evaluate all old and existing land easements, sometimes numbering in the tens of thousands, to determine if they meet the definition of a lease under the new standard could be very costly. They also noted there would be limited benefit to applying this requirement, as many of their land easements would not meet the definition of a lease, or even if they met that definition, many of their easements are prepaid and, therefore, already are recognized on the balance sheet.

The land easements ASU addresses this by:

	·	Providing an optional transition practical expedient that, if elected, would not require an organization to reconsider their accounting for existing land easements that are not currently accounted for under the old leases standard; and

	·	Clarifying that new or modified land easements should be evaluated under the new leases standard, once an entity has adopted the new standard.

The FASB issued an Accounting Standards Update (ASU) that helps organizations address certain stranded income tax effects in accumulated other comprehensive income (AOCI) resulting from the Tax Cuts and Jobs Act.

ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, provides financial statement preparers with an option to reclassify stranded tax effects within AOCI to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded.

The ASU requires financial statement preparers to disclose:

	·	A description of the accounting policy for releasing income tax effects from AOCI;

	·	Whether they elect to reclassify the stranded income tax effects from the Tax Cuts and Jobs Act; and

	·	Information about the other income tax effects that are reclassified.

The amendments affect any organization that is required to apply the provisions of Topic 220, Income Statement—Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP.

The amendments are effective for all organizations for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. Organizations should apply the proposed amendments either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized.

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GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently Issued Accounting Guidance (continued)

FASB Issues Corrections and Improvements to Financial Instruments. The FASB has issued Accounting Standards Update (ASU) No. 2018-03, Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, that clarifies the guidance in ASU No. 2016-01, Financial Instruments—Overall (Subtopic 825-10), as follows:

	·	Issue 1: Equity Securities without a Readily Determinable Fair Value— Discontinuation. The amendment clarifies that an entity measuring an equity security using the measurement alternative may change its measurement approach to a fair value method in accordance with Topic 820, Fair Value Measurement, through an irrevocable election that would apply to that security and all identical or similar investments of the same issuer. Once an entity makes this election, the entity should measure all future purchases of identical or similar investments of the same issuer using a fair value method in accordance with Topic 820.

	·	Issue 2: Equity Securities without a Readily Determinable Fair Value— Adjustments. The amendment clarifies that the adjustments made under the measurement alternative are intended to reflect the fair value of the security as of the date that the observable transaction for a similar security took place.

	·	Issue 3: Forward Contracts and Purchased Options. The amendment clarifies that remeasuring the entire value of forward contracts and purchased options is required when observable transactions occur on the underlying equity securities.

	·	Issue 4: Presentation Requirements for Certain Fair Value Option Liabilities. The amendment clarifies that when the fair value option is elected for a financial liability, the guidance in paragraph 825-10- 45-5 should be applied, regardless of whether the fair value option was elected under either Subtopic 815-15,Derivatives and Hedging— Embedded Derivatives, or 825-10,Financial Instruments— Overall.

	·	Issue 5: Fair Value Option Liabilities Denominated in a Foreign Currency. The amendments clarify that for financial liabilities for which the fair value option is elected, the amount of change in fair value that relates to the instrument-specific credit risk should first be measured in the currency of denomination when presented separately from the total change in fair value of the financial liability. Then, both components of the change in the fair value of the liability should be remeasured into the functional currency of the reporting entity using end-of-period spot rates.

	·	Issue 6: Transition Guidance for Equity Securities without a Readily Determinable Fair Value. The amendment clarifies that the prospective transition approach for equity securities without a readily determinable fair value in the amendments in ASU No. 2016-01 is meant only for instances in which the measurement alternative is applied. An insurance entity subject to the guidance in Topic 944, Financial Services— Insurance, should apply a prospective transition method when applying the amendments related to equity securities without readily determinable fair values. An insurance entity should apply the selected prospective transition method consistently to the entity’s entire population of equity securities for which the measurement alternative is elected.

For public business entities, ASU 2018-03 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years beginning after June 15, 2018. Public business entities with fiscal years beginning between December 15, 2017, and June 15, 2018, are not required to adopt ASU 2018-03 until the interim period beginning after June 15, 2018, and public business entities with fiscal years beginning between June 15, 2018, and December 15, 2018, are not required to adopt these amendments before adopting the amendments in ASU 2016-01. For all other entities, the effective date is the same as the effective date in ASU 2016-01.

All entities may early adopt ASU 2018-03 for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, as long as they have adopted ASU 2016-01.

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GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently Issued Accounting Guidance (continued)

FASB Adds SEC Guidance to the Codification on the Tax Cuts and Jobs Act. The FASB has issued Accounting Standards Update (ASU) No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. ASU 2018-05 amends certain SEC material in Topic 740 for the income tax accounting implications of the recently issued Tax Cuts and Jobs Act (Act).

ASU 2018-05 adds the following guidance, among other things, to the FASB Accounting Standards Codification™ regarding the Act:

	·	Question 1:If the accounting for certain income tax effects of the Act is not completed by the time a company issues its financial statements that include the reporting period in which the Act was enacted, what amounts should a company include in its financial statements for those income tax effects for which the accounting under Topic 740 is incomplete?

	·	Answer 1:In a company’s financial statements that include the reporting period in which the Act was enacted, a company must first reflect the income tax effects of the Act in which the accounting under Topic 740 is complete. These completed amounts would not be provisional amounts. The company would then also report provisional amounts for those specific income tax effects of the Act for which the accounting under Topic 740 will be incomplete but a reasonable estimate can be determined. For any specific income tax effects of the Act for which a reasonable estimate cannot be determined, the company would not report provisional amounts and would continue to apply Topic 740 based on the provisions of the tax laws that were in effect immediately prior to the Act being enacted. For those income tax effects for which a company was not able to determine a reasonable estimate (such that no related provisional amount was reported for the reporting period in which the Act was enacted), the company would report provisional amounts in the first reporting period in which a reasonable estimate can be determined.

	·	Question 2: If an entity accounts for certain income tax effects of the Act under a measurement period approach, what disclosures should be provided?

	·	Answer 2:The staff believes an entity should include financial statement disclosures to provide information about the material financial reporting impacts of the Act for which the accounting under Topic 740 is incomplete, including:

	a)	Qualitative disclosures of the income tax effects of the Act for which the accounting is incomplete;

	b)	Disclosures of items reported as provisional amounts;

	c)	Disclosures of existing current or deferred tax amounts for which the income tax effects of the Act have not been completed;

	d)	The reason why the initial accounting is incomplete;

	e)	The additional information that is needed to be obtained, prepared, or analyzed in order to complete the accounting requirements under Topic 740;

	f)	The nature and amount of any measurement period adjustments recognized during the reporting period;

	g)	The effect of measurement period adjustments on the effective tax rate; and

	h)	When the accounting for the income tax effects of the Act has been completed.

ASU 2018-05 is effective upon inclusion in the FASB Codification.

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GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3. GOING CONCERN

As of March 31, 2018 and December 31, 2017, the Company has an accumulated deficit of $5,116,433 and $4,883,120 respectively, and its current liabilities exceed its current assets resulting in negative working capital of $9,359,206 and $9,029,045 respectively. In view of the matters described above, recoverability of a major portion of the recorded asset amounts and realization of the portion of current liabilities into revenue shown in the accompanying balance sheets are dependent upon continued operations of the Company, which in turn are dependent upon the Company’s ability to raise additional financing and to succeed in its future operations. The Company may need additional cash resources to operate during the upcoming 12 months, and the continuation of the Company may be dependent upon the continuing financial support of investors and/or stockholders of the Company. However, there is no assurance that equity or debt offerings will be successful in raising sufficient funds to assure the eventual profitability of the Company. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Management has taken the following steps to revise its operating and financial requirements, which it believes are sufficient to provide the Company with the ability to continue as a going concern. The Company is actively pursuing (i) additional funding which would enhance capital employed; and (ii) strategic partners which would increase revenue bases or reduce operation expenses. Management believes that the above actions will allow the Company to continue its operations throughout this fiscal year.

NOTE 4. OTHER RECEIVABLES

Other receivables consisted of the following:

	March 31, 2018			December 31, 2017
	(unaudited)			(audited)
Deposits	$	115,451		$	108,930
Prepaid expenses		1,529			82
Advance to employee		28,368			43,013

Less: Allowance for doubtful debts		(111,701	)		(105,967	)

Total	$	33,647		$	46,058

NOTE 5. PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment consisted of the following:

	March 31, 2018			December 31, 2017
	(unaudited)			(audited)
Buildings	$	3,184,177		$	3,020,685
Machinery & equipment		604,463			573,427
Office equipment		72,781			68,495
Motor vehicles		106,230			100,775

Total property, plant and equipment		3,967,651			3,763,382
Less: accumulated depreciation and impairment charges		(852,710	)		(750,221	)

Total property, plant and equipment, net	$	3,114,941		$	3,013,161

The depreciation expenses for the three months ended March 31, 2018 and 2017 were $61,167 and $59,651 respectively.

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GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6. INTANGIBLE ASSETS

Intangible assets consisted of the following:

	March 31, 2018			December 31, 2017
	(unaudited)			(audited)
Land use rights	$	1,281,614		$	1,205,819
Software system		1,398			1,326
Less – accumulated amortization		(358,114	)		(333,647	)

Total intangible assets, net	$	924,898		$	883,488

The amortization expenses of land use rights and software systems for the three months ended March 31, 2018 and 2017 were $6,331 and $5,971 respectively.

Future amortization of land use rights and software systems is as follows:

Years ending December 31,	Amount
2018	$	19,224
2019		25,632
2020		25,632
2021		25,632
2022		25,632
Thereafter		803,146

Total	$	924,898

NOTE 7. INVENTORIES

Inventories consisted of the following:

	March 31, 2018		December 31, 2017
	(unaudited)		(audited)
Raw material	$	112,210	$	110,841
Work in progress		-		7,044
Finished goods		135,847		139,988
Goods on consignment		34,725		20,213

Inventories, net	$	282,782	$	278,086

NOTE 8. CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS

Sales:

Customer	As at March 31, 2018				As at December 31, 2017
A	$	22,628	43	%	$	33,022	24	%
B		21,707	41	%		32,255	24	%
C		-	-	%		26,632	20	%
D		-	-	%		14,914	11	%
E		-	-	%		13,316	10	%
Total	$	44,335	84	%	$	120,139	89	%

Purchases:

Supplier	As at March31, 2018				As at December 31, 2017
AA	$	4,640	50	%	$	41,882	49	%
BB		3,498	38	%		17,549	21	%
CC		725	8	%		11,849	14	%
DD		441	4	%		5,203	6	%
EE		-	-	%		2,444	3	%
Total	$	9,304	100	%	$	78,927	93	%

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GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9. OTHER PAYABLES

Other payables consisted of the following:

	March 31, 2018		December 31, 2017
	(unaudited)		(audited)
Payables to employees	$	33,299	$	5,826
Miscellaneous		42,033		41,450

Total other payables	$	75,332	$	47,276

NOTE 10. LOSS PER SHARE

The Company calculates earnings per share in accordance with ASC 260, Earnings Per Share, which requires a dual presentation of basic and diluted earnings per share. Basic earnings per share are computed using the weighted average number of shares outstanding during the fiscal year. Potentially dilutive common shares consist of convertible preferred stock (using the if-converted method) and exercisable warrants and stock options outstanding (using the treasury method). The following table sets forth the computation of basic and diluted net income per common share:

The following table sets forth the computation of basic and diluted net income per common share:

Period ended March 31,	March 31, 2018			March 31, 2017
	(unaudited)			(unaudited)
Net loss attributable to ordinary shareholders for computing basic net loss per ordinary share	$	(233,313	)	$	(196,964	)
Weighted-average shares of common stock outstanding in computing net loss per common stock
Basic		160,790,000			100,000,000
Diluted		160,790,000			100,000,000
Basic loss per share of common stock		(0.15)cents			(0.20)cents
Diluted loss per share		(0.15)cents			(0.20)cents

NOTE 11. AMOUNT DUE FROM / TO RELATED PARTIES

The details for amount due to related parties were as follows:

Amount as at	March 31, 2018		December 31, 2017
	(unaudited)		(audited)
Holmsun Capital Limited (a) (b)		5,359,345		5,300,859
	$	5,359,345	$	5,300,859

(a)	Common director, LEUNG Kwong Tak of operating subsidiary Lutu International Biotechnology Limited
(b)	Common shareholder, LEUNG Kwong Tak of operating subsidiary Lutu International Biotechnology Limited

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GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12. INCOME TAXES

The Company and its subsidiaries have no operation in United States, Cayman Islands and British Virgin Islands, and are not subject to any domestic income tax. Therefore, no domestic income tax of United States, Cayman Islands and British Virgin Islands are paid in the quarter ended March 31, 2018 and year ended December 31, 2017.

Hong Kong Prolific Mineral Resources Holdings Limited was incorporated in Hong Kong and is subjected to Hong Kong profits tax rate of 16.5% for the three months ended March 31, 2018 and 2017. Income tax (reversal) expense amounted to $Nil for the quarter ended March 31, 2018 and year ended December 31, 2017.

A reconciliation of the provision for income taxes with amounts determined by applying the Hong Kong profit rate of 16.5% to income before income taxes is as follows:

	March 31, 2018			December 31, 2017
	(unaudited)			(audited)
Profit (Loss) before income tax	$	(90,457	)	$	(333,619	)
Temporary Difference		-			-
Permanent Difference		-			-
Taxable loss	$	(90,457	)	$	(333,619	)
Hong Kong Profits Tax rate		16.5	%	16.5		%
Current tax credit	$	14,925		$	55,047
Less: Valuation allowance		(14,925	)		(55,047	)
	$	-		$	-

No deferred tax has been provided as there are no material temporary differences arising during the quarter ended March 31, 2018 and year ended December 31, 2017.

Shanxi Green Biotechnology Industry Company Limited and Shenzhen Qianhai Lutu Supply Chain Management Company Limited were incorporated in the PRC and are subjected to income taxes under the current laws of the PRC. The EIT rate of PRC was 25% for the quarter ended March 31, 2018 and year ended December 31, 2017.

Profit (loss) before income tax of $(142,857) and $(1,272,919) for the quarter ended March 31, 2018 and year ended December 31, 2017 respectively, were attributed to operations in China. The income tax expenses consisted of the following:

	March 31, 2018			December 31, 2017
	(unaudited)			(audited)
Profit (Loss) before income tax	$	(142,857	)	$	(1,272,919	)
Temporary Difference		-			-
Permanent Difference		-			-
Taxable loss	$	(142,857	)	$	(1,272,919	)
China Enterprise Income Tax rate		25	%		25.0	%
Current tax credit	$	35,714		$	318,230
Less: Valuation allowance		(35,714	)		(318,230	)
	$	-		$	-

No deferred tax has been provided as there are no material temporary differences arising during the quarter ended March 31, 2018 and year ended December 31, 2017.

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GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13. SEGMENT INFORMATION

FASB Accounting Standard Codification Topic 280 (ASC 280) “Segment Reporting” establishes standards for reporting information about operating segments in financial statements. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance.

In the quarter ended March 31, 2018 and year ended December 31, 2017, the Company is regarded as a single operating segment, being engaged in the manufacturing of bio-fertilizer. This principal activity and geographical market are substantially based in China, accordingly, no operating or geographical segment information are presented.

NOTE 14. COMPREHENSIVE INCOME

Total comprehensive income includes, in addition to net income, changes in equity that are excluded from the consolidated statements of income and are recorded directly into a separate section of shareholders’ equity on the consolidated balance sheets. Comprehensive income and its components consist of the following:

Period and Year Ended	March 31, 2018			December 31, 2017
	(unaudited)			(audited)
Net loss	$	(233,313	)	$	(1,683,170	)
Other comprehensive income, net of tax
Foreign currency translation adjustment		49,883			86,565

Comprehensive loss	$	(183,430	)	$	(1,596,605	)

NOTE 15. COMMITMENTS AND CONTINGENCIES

Operating Leases

Certain of our real properties are operated under lease agreements. Rental expense under operating leases was as follows:

	March 31, 2018		December 31, 2017
	(unaudited)		(audited)
Rent expense	$	5,083	$	17,986

Total rent expense, net	$	5,083	$	17,986

Annual minimum payments under operating leases are as follows:

Years Ended December 31,	Minimum Lease Payment

2018		14,015
2019		10,122

Total	$	24,137

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GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16. RELATED PARTY TRANSACTIONS

The Board must approve all related party transactions. All material related party transactions will be made or entered into on terms that are no less favorable to the Company than can be obtained from unaffiliated third parties.

The following table listed the transaction with related party for the quarter ended March 31, 2018 and 2017:

	March 31, 2018		Dec 31, 2017
Consultancy fee paid to KM International Property Consultants Limited	$	12,649	$	62,115

Consultancy fee, net	$	12,649	$	62,115

Mr. Ma Wai Kin, Chief Operation Officer and Director of the Company, has a 100% ownership interest in KM International Property Consultants Limited (“KM”). The main transaction between the Company and KM is the consulting service regarding the marketing activities of GVBT provided by KM.

NOTE 17. LEGAL PROCEEDINGS

Civil case with Mr. Yao Gui Mu

Yao Gui Mu (“the Plaintiff”), former operation manager of the subsidiary in Shanxi, Shanxi Green Biotechnology Industry Company Limited (“the Shanxi Subsidiary”), brought a lawsuit against the Shanxi Subsidiary, in the District People’s Court of Jin Zhong City, Yu Ci District. The subject dispute of the lawsuit concerns an unsettled current account balance of $141,550 (RMB900,000) which was claimed to be a loan advanced to the Company by the Plaintiff. Together with the subject dispute, the Plaintiff also claimed the relevant interest was RMB513,100 calculated from November 6, 2012 to August 15, 2017 with 1% monthly interest rate. The Company’s PRC lawyer had submitted a Statement of Defense on November 23, 2017 to The District People’s Court of Yuci District, Jin Zhong City (“the Court”). A court hearing was held on December 5, 2017. Upon the request by the Court, Shanxi Subsidiary provided supplemental evidence to the Court on January 16, 2018. Shanxi Subsidiary is awaiting notice for a second hearing from the Court.

For the relevant interest of RMB513,100 claimed by the Plaintiff, there is no evidence showing that it is more likely not that the Company will be liable for the said interest. Hence, no provision was made as at March 31, 2018.

Criminal investigation regarding a potential fraud with one of its former customers

Management of the Company suspects that there was a potential fraud committed in the sales made to one of its previous customers. Management reported to the local police of Yuci District, Jinzhong City, Shanxi Province, China about the said potential fraud. The Bureau of Public Security of Yuci District officially undertook the case and initiated investigation procedures on September 11, 2017. Management has been informed that the case is currently under criminal investigation by relevant authorities. As the receivable amount regarding the sales to aforementioned customer was long outstanding and it is uncertain that the amount can be settled, the Company has made a provision of doubtful debt regarding the amount receivables of $748,907 (RMB4,703,640) as at March 31, 2018.[THIS DOESN’T MATCH WHAT WAS STATED IN Note 2]

Criminal investigation against one of GVBT’s former employee

Management of the Company suspects that one of its former senior staff may have committed the offence of “unlawfully taking possession of company property through taking advantage of his position” under his employment with the Company. Management reported to the local police of Yuci District, Jinzhong City, Shanxi Province, China about the said potential fraud on October 10, 2017. The Bureau of Public Security of Yuci District officially undertook its case and initiated investigation procedures on 28 January 2018. Management has been informed that the case is currently under criminal investigation by relevant authorities in China.

NOTE 18. SUBSEQUENT EVENT

Management has evaluated all activities and concluded that there was no other subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the notes to the consolidated financial statements.

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FORWARD LOOKING STATEMENTS

Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements". These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

GENERAL

Green Vision Biotechnology Corp. (the “Company”), formerly known as Vibe Wireless Corp., formerly known as Any Translation Corp., was incorporated under the laws of the State of Nevada on July 5, 2012. We were founded to be in the business of translation and interpretation. The Company undertook translation and interpretation projects for various fields from business, economics, to science issues. The Company later adopted a business plan to pursue business opportunities in the global telecommunications industry.

On September 2, 2015, a change in control of the Company took place by virtue of the Company's largest shareholder and sole officer and director at that time, selling 4,000,000 shares of the Company's common stock to Forestbay Capital Partners II, LLC, a Delaware limited liability company. Such shares represented 65.8% of the Company's total issued and outstanding shares of common stock. As part of the sale of the shares, Forestbay Capital Partners arranged with the former officer and director, prior to his resignation as the sole officer and director of the Company Board, to appoint Mr. Edward Mooney as the sole officer and director of the Company. Mr. Mooney is the Manager of Forestbay Capital Partners II, LLC.

On November 12, 2015, we changed our name to Vibe Wireless Corp in connection with merging with our wholly-owned subsidiary. This name change and our ticker symbol change was acknowledged by FINRA and effected in the market on November 23, 2015.

The Company was originally incorporated under the laws of the State of Nevada on July 5, 2012 as Any Translation Corp.

On September 30, 2016, the Company filed Articles of Merger with the Nevada SOS whereby it entered into a statutory merger with its wholly-owned subsidiary, Green Vision Biotechnology Corp. pursuant to Nevada Revised Statutes 92A.200 et. seq. The effect of such merger is that the Company is the surviving entity and changed its name to “Green Vision Biotechnology Corp.”

On September 30, 2016, the Company filed an Issuer Company-Related Action Notification Form with FINRA requesting that the aforementioned forward split and name change be effected in the market. The Company also requested that its ticker symbol be changed to “GVBT”. This name change and our ticker symbol change was acknowledged by FINRA and effected in the market on November 27, 2016.

As disclosed in our Current Report on Form 8-K dated May 12, 2017 there has been a change in our management.

Results of Operations

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue our operation.

We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

Result of Operations for the Three months ended March 31, 2018 and 2017

Revenue was $52,917 for the three months ended March 31, 2018 (“Q1”), decreased by $9,992, or 15.9% from $62,909 for the three months ended March 31, 2017 (“Comparable Quarter”). The decrease in revenue during the Q1 as compared to the Comparable Quarter was due to the restrictions on our production capacity as a result of the enforcement on new environmental regulations over industrial production by coal-fired boilers by local authorities in Shanxi. In this quarter, our company has conducted various field trials in Guangxi, Heilongjiang, and Yunnan in order to promote our products.

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Cost of sales was decreased by $1,311, or 3.4% from $38,566 in the Comparable Quarter to $37,255 in Q1. The decrease was due to the decrease in production corresponding to the decrease in the sales revenue. In terms of percentage of revenue, cost of sales was 70.4% in Q1 as compared to 61.3% in the Comparable Quarter. The decrease was due to the significant decrease in certain variable costs as the production level dropped.

Gross profit was decreased by $8,681, or 35.7% from $24,343 in the Comparable Quarter to $15,662 in Q1. The decrease reflected the correlation in reduction of revenue. In terms of percentage of revenue, the gross profit percentage was decreased to 29.6% for Q1 as compared to 38.7% for the Comparable Quarter. The decrease of gross profit was primarily due to the significant drop in the sales revenue.

Selling expenses were decreased by $3,984, or 50.5% from $7,882 for the Comparable Quarter to $3,898 in Q1. In terms of percentage of revenue, the rates were 7.4% in Q1 compared to 12.5% in the Comparable Quarter. The decrease is primarily due to the decrease of testing expenses and shipping and transportation expenses which were correlated to the decrease in sales.

General and administrative expenses were increased by $33,891, or 16.2% from $209,480 for the Comparable Quarter to $243,371 for Q1. The increase is primarily due to the audit fee and consultation fee in Q1.

The following is a summary of general and administrative expenses for the three months ended March 31, 2018, and 2017.

	March 31, 2018		March 31, 2017		Difference
	Unaudited		Unaudited
Consulting fees	$	58,585	$	33,097	$	25,488
Salary and payroll expenses		54,832		53,158		1,674
Professional fees		7,909		-		7,909
Travel and entertainment		20,735		37,218		(16,483	)
Research and Development		786		-		786
Provision for doubtful debts		-		-		-
Depreciation and amortization		55,428		54,871		557
Other		45,096		31,136		13,960
	$	243,371	$	209,480	$	33,891

Consulting fees were increased by $25,488, or 77%, from $33,097 in Comparable Quarter to $58,585 in Q1, owing to the engagement of external consultants to improve the Company’s operating activities in the Comparable Quarter.

Our salary and payroll expenses were increased by $1,674, or 3.1%, to $54,832 in Q1, as compared to $53,158 in the Comparable Quarter. We anticipate that salary and payroll expenses will continue to rise in future periods as it becomes necessary to increase our staff in order to enhance our management quality for the listing requirement and to increase our production activities.

Professional fees were increased by $7,909, from $Nil in Comparable Quarter to $7,909 in Q1. The increase of professional fees was due to the engagement of more independent professionals such as international lawyers and accountants.

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Travel and entertainment expenses were decreased by $16,483, or 44.3%, from $37,218 in Comparable Quarter to $20,735 in Q1. The decrease of travel and entertainment expenses was due to the reduction of project-based travelling activities.

Research and Development expenses were increased to $786 in Q1 from $Nil in Comparable Quarter.

Depreciation and amortization expenses were increased by $557, or 1.0%, from $54,871 in Comparable Quarter to $55,428 in Q1.

Other expenses include items such as office expenses, software related costs, telephone and a variety of other miscellaneous expenses. None of these expenses alone changed significantly, as the difference was $13,960, or 44.8% increase from $31,136 in Comparable Quarter to $45,096 in Q1.

We anticipate that we will incur higher general and administrative expenses as a public company. We expect that our professional fees, cost of transfer agent, investor relations costs and other stock related costs will increase.

We also anticipate that selling, general and administrative expenses will concurrently increase with our increased activity in the future but will not increase in the same proportion to that of revenue.

Our loss from operations was increased by $38,588 or 20%, to negative $231,607 in Q1, from $193,019 in Comparable Quarter.

Non-operating income (expenses) was reduced by $2,239, or 56.8%, to negative $1,706 in Q1, from $3,945 in Comparable Quarter, of which mainly due to the decrease of other non-operating expenses in Q1.

The net loss attributed to the Company was expanded by $36,349, or 18.5% to negative $233,313 in Q1, as compared to negative $196, 964 in Comparable Quarter.

Liquidity and Capital Resources

The Company’s liquidity and capital is dependent on whether the Company is capable of generating its revenues and increasing its capital for the development and expansion of its business.

Management plans to support the Company’s operation and its business strategy by raising funds through public and private offerings and relying on officers and directors to perform essential management functions with minimal compensation. If we do not raise all of the money we need from a public offering, we will have to find alternative sources, such as a private placement of securities, or loans from our officers, directors or others. The loans are likely to be unsecured, non-interest bearing and repayable at demand.

Moreover, management has actively taken steps to revise its operating and financial needs. Management believes that the Company’s current and available capital resources will allow it to continue its operations throughout this fiscal year.

Working capital

At March 31, 2018, we had a working capital deficit of $9,359,206, as compared to a working capital deficit of $9,029,045 at December 31, 2017. Of the working capital deficit at March 31, 2018, $9,359,206 was amount due to related parties and shareholder. Excluding the amounts due to related parties and shareholder, we would have had a working capital surplus of $176,966 at March 31, 2018. As comparison, the working capital deficit at December 31, 2017, $9,029,045 was amount due to related parties and holding company. Excluding the amounts due to related parties and holding company, we would have had a working capital surplus of $167,717 at December 31, 2017. The amounts due to related parties and shareholder are unsecured, interest free and repayable on demand.

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Operating activities

During the three months ended March 31, 2018, operating activities used cash of $122,676, and for the comparable three months ended March 31, 2017, operating activities used cash in operations of $108,844. The use of cash in operating activities for the three months ended March 31, 2018 was mainly derived from a net loss of $233,313 with a non-cash item of $67,498 ($61,167 plus $6,331) in depreciation and amortization; moreover, there was an increase in cash of $10,230 in inventories; an increase in cash of $13,843 in other receivables; an increase in cash of $26,664 in other payable and an increase in cash of $55,215 in amount due to related parties, which were offset by a decrease in cash of $33,882 in accounts receivable; a decrease in cash of 10,613 in tax payables; and a decrease in cash of $34,942 in accrued expenses. As comparison, the use of cash in operating activities for the comparable three months ended March 31, 2017 was mainly derived from a net loss of $196,964 with a non-cash item of $65,623 in depreciation and amortization; moreover, there was an increase in cash of $14,229 in account receivable; an increase in cash of $10,081 in advances to suppliers; a net increase in cash of $88,454($380,232 minus $291,778) in amount due to/from related parties ; which were offset by a decrease in cash of $36,885 in inventories; a decrease in cash of $11,642 in advances from customer; a decrease in cash of $25,339 in tax payables and a decrease in cash of $12,134 in accrued expenses.

Investing Activities

During the three months ended March 31, 2018, investing activities used $2,112 of cash; and for comparable three months ended March 31, 2017, investing activities used $135 of cash. The increase in use of cash was due to the spending in investment on purchases of property, plant and equipment, construction in progress and exchange difference between USD and CNY.

Financing Activities:

During the three months ended March 31, 2018, financing activities provided cash of $104,692; and for comparable three months ended March 31, 2017, financing activities used cash of $221,874. The change of cash used by financing activities was derived from the changes in the amounts due to our shareholder.

As at March 31, 2018, net cash and cash equivalents balance was $19,913 as compared to balance $188,620 as at December 31, 2017.

As of March 31, 2018, stockholder’s equity was negative $5,275,502, compared to a negative equity of $5,092,072 at December 31, 2017.

The source of fund for supporting the Company’s business operation was loans from directors and shareholders. In the event the directors and shareholders do not continue to support the Company’s business operation, the Company could be short of funds and may not be able to operate any longer. The amounts due to related parties and director are interest-free loans. These loans are unsecured and have no fixed repayment terms.

Plan of Operation and Funding

We expect that working capital requirements will continue to be funded through a combination of our existing funds, loans from third parties, other debt facilities, or further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.

Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next three months. We have no lines of credit or other bank financing arrangements. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) developmental expenses associated with a growing business; and (ii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to the shareholdings of our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations. We will have to raise additional funds in the next twelve months in order to sustain and expand our operations. We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock. We have and will continue to seek to obtain short-term loans from our directors, although no future arrangement for additional loans has been made. We do not have any agreements with our directors concerning these loans. We do not have any arrangements in place for any future equity financing.

Since 2017, local government of Jinzhong City, Shanxi Province, China (where Shanxi Lutu and our production plant is located) has promulgated a new set of environmental regulations restricting the use of coal-fired boilers in factories. Since coal-powered generators were used in our production plant, our production activities in 2018 were restricted to a certain extent.

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We cannot ensure that we can comply with the new environmental regulations in time. If that is the case, our production and our production capacity may be reduced as a result. This will affect our ability to generate income and to meet the demand of our customers, which in turn could have a material adverse effect on our financial condition and results of operations.

Due to the enforcement on new environmental regulations over industrial production by coal-fired boilers by local authorities in Shanxi, the Company’s production was restricted to a certain extent in 2017. In order to fully comply with the new environmental regulations in place, management of the Company has planned to carry our rectification work. Management expected that the rectification work will be completed by mid of 2018 and full-scale production may resume in the second half of 2018.

Off-Balance Sheet Arrangements

As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Going Concern

The independent auditors' report accompanying our December 31, 2017 audited financial statements filed in Form 10-K on April 17, 2018 contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

ITEM 3: QUANTITATIVE AND QUALITAIVE DISCLOSURE ABOUT MARKET RISK

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

ITEM 4. CONTROLS AND PROCEDURES

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

An evaluation was conducted by an officer under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2018. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Such officer also confirmed that there was no change in our internal control over financial reporting during the three months period ended March 31, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Civil case with Mr. Yao Gui Mu

Yao Gui Mu (“the Plaintiff”), former operation manager of the subsidiary in Shanxi, Shanxi Green Biotechnology Industry Company Limited (“the Shanxi Subsidiary”), brought a lawsuit against the Shanxi Subsidiary, in the District People’s Court of Jin Zhong City, Yu Ci District. The subject dispute of the lawsuit concerns an unsettled current account balance of $141,550 (RMB900,000) which was claimed to be a loan advanced to the Company by the Plaintiff. Together with the subject dispute, the Plaintiff also claimed the relevant interest was RMB513,100 calculated from November 6, 2012 to August 15, 2017 with 1% monthly interest rate. The Company’s PRC lawyer had submitted a Statement of Defense on November 23, 2017 to The District People’s Court of Yuci District, Jin Zhong City (“the Court”). A court hearing was held on December 5, 2017. Upon the request by the Court, Shanxi Subsidiary provided supplemental evidence to the Court on 16 January 2018. Shanxi Subsidiary is awaiting notice for a second hearing from the Court.

Criminal investigation regarding a potential fraud with one of its former customers

Criminal investigation against one of GVBT’s former employee

Management of the Company suspects that one of its former senior staff may have committed the offence of “unlawfully taking possession of company property through taking advantage of his position” under his employment with the Company. Management reported to the local police of Yuci District, Jinzhong City, Shanxi Province, China about the said potential fraud on October 10, 2017. The Bureau of Public Security of Yuci District officially undertook its case and initiated investigation procedures on January 28, 2018. Management has been informed that the case is currently under criminal investigation by relevant authorities in China.

Besides the disclosure stated above, management is not aware of any other legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

ITEM 1A. RISK FACTORS

Not applicable to an emerging growth company.

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

No report required.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

No report required.

ITEM 4. MINE SAFETY DISCLOUSURES

Not applicable.

ITEM 5. OTHER INFORMATION

No report required.

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ITEM 6. EXHIBITS

Exhibits

Exhibit No.		Description

31.1		Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GREEN VISION BIOTECHNOLOGY CORP.

Date: May 21, 2018	By:	/s/ William Ching Wan Lam
		William Ching Wan Lam
		Chief Executive Officer

Date: May 21, 2018	By :	/s/ Kwok Leung Lo
		Kwok Leung Lo
		Chief Financial Officer

GREEN VISION BIOTECHNOLOGY CORP. - FORM 10-Q - May 22, 2018

Attached files

GREEN VISION BIOTECHNOLOGY CORP. Reports