US Dollars are denoted herein by "USD", "$" and "dollars".
We primarily engage in the manufacturing and distribution of organic fertilizer and the sales of agricultural products in the PRC. Our organic fertilizer products are sold under our brand names "Zongbao," "Fukang," and "Muliang."
Viagoo business model has 3 main revenue streams.
? VTM provides single job and bulk orders or API connection for job posting. The
fees are pre-calculated based on distance, areas, volume matric weight, type
of goods, delivery options and time.
? eWallet option - eWallet will be used for the service purpose and payment will
be deducted from the eWallet stored value.
? Reports - Delivery reports are available for shippers to track the performance
and status of the delivery operation.
VTM is charged to carriers based on certain percentage of the freight charges. Other add-on services like online insurance, rest stop services will be a percentage charged to the service providers.
? Automatic Scheduling - Delivery / Invoice data will be pushed to the VES for
automatic schedule to the driver via VES mobile app. The criteria of automatic
scheduling are based on location, time preference, and route zoning. These
? Route Optimisation - The system is able to automatically calculate the best
routes based on various delivery points and constraints such as "time window".
With the route optimisation, the transport planner is able to handle new
delivery addresses dynamically. Also if there is a change in delivery plans
due to various unforeseen circumstances such as vehicle breakdown, customer
last minute cancellation, the system is able to re-optimise quickly by pushing
? VES Driver app - Task tracking - Once the tasks are started, they will be
tracked till the jobs are completed. If e-sign is accepted, customers can sign
and acknowledge the acceptance of goods using VES' mobile sign feature built
into the app or by taking a photo of the signed invoices or deliver orders
completion of the delivery. A copy of the invoice / delivery order along with
? Reports - Delivery reports are available for operations managers to track the
? VES Temperature Sensor Tracking Services - This is an additional module for
real-time tracking of temperature control (via a GPS temperature tracking
device installed in the truck) trucks for the purpose of preventing food waste
VES is charged based on a monthly subscription by vehicles and by users. It is integrated with VTM and jobs received via VTM can be assigned and tracked automatically by VES.
Disposal of land use right and production facility for repayment of debt
Critical accounting policies are defined as those that are reflective of significant judgments, estimates and uncertainties, and potentially result in materially different results under different assumptions and conditions. We believe the following are our critical accounting policies:
All transactions and balances among the Company, its subsidiaries, the VIE and the VIE' subsidiaries have been eliminated upon consolidation.
Details of the VIE Agreements, are set forth below:
Net cash provided by (used in) operating activities 5,484,916 1,413,581 Net cash provided by (used in) investment activities (1,158,773 )
(75,346 ) Net cash provided by (used in) financing activities $ (4,328,560 ) $ (1,648,247 )
VIE Agreements that were entered to give the Muliang Viagoo effective control over the VIE include:
Voting Rights Proxy Agreement and Irrevocable Power of Attorney
VIE Agreements that enables Muliang Viagoo to receive substantially all of the economic benefits from the VIE include:
Risks in relation to the VIE structure
? Revoke the business and operating licenses of the Muliang Viagoo's PRC
subsidiaries or consolidated affiliated entities;
? Discontinue or restrict the operations of any related-party transactions among
the Muliang Viagoo's PRC subsidiaries or consolidated affiliated entities;
? Impose fines or other requirements on the Muliang Viagoo's PRC subsidiaries or
? Require the Muliang Viagoo's PRC subsidiaries or consolidated affiliated
entities to revise the relevant ownership structure or restructure operations;
? Restrict or prohibit the Muliang Viagoo's use of the proceeds of the additional
public offering to finance the Muliang Viagoo's business and operations in
? Shut down the Muliang Viagoo's servers or blocking the Muliang Viagoo's online
? Discontinue or place restrictions or onerous conditions on the Muliang Viagoo's
? Require the Muliang Viagoo to undergo a costly and disruptive restructuring.
Management has determined that the adoption of ASC 606 did not impact the Company's previously reported financial statements in any prior period nor did it result in a cumulative effect adjustment to opening retained earnings.
? Recognize a right-of-use asset and a lease liability, initially measured at
the present value of the lease payments, in the statement of financial
? Recognize interest on the lease liability separately from amortization of the
right-of-use asset in the statement of comprehensive income
? Classify repayments of the principal portion of the lease liability within
financing activities and payments of interest on the lease liability and
variable lease payments within operating activities in the statement of cash
For operating leases, a lessee is required to do the following:
? Recognize a right-of-use asset and a lease liability, initially measured at
the present value of the lease payments, in the statement of financial
? Recognize a single lease cost, calculated so that the cost of the lease is
allocated over the lease term on a generally straight-line basis
? Classify all cash payments within operating activities in the statement of
? Apply ASC 840 in the comparative periods.
? Provide the disclosures required by ASC 840 for all periods that continue to
be presented in accordance with ASC 840.
? Recognize the effects of applying ASC 842 as a cumulative-effect adjustment to
retained earnings for the period of adoption.
The management has reviewed the accounting pronouncements and adopted the new standard on January 1, 2019 using the modified retrospective method of adoption.
The Company believes that there were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations.
We are principally engaged in the organic fertilizer manufacture and distribution business in the PRC, which account for 91.5% of our total revenue for the year ended December 31, 2021.
Operating Results for the Years Ended December 31, 2021 and 2020
Revenue for logistic increased from $378,853 for the year ended December 31, 2020 to $904,320 for the year ended December 31, 2021, which represented an increase of $525,467, or 138.7%.
Cost of sales for fertilizer decreased from $5,994,087 for the year ended December 31, 2020 to $5,910,703 for the year ended December 31, 2021, which represented a decrease of approximately $83,384, or 1.4%. The decrease in cost of revenue was in line with the decrease in revenue.
We have financed our operations over the years ended December 31, 2021 and 2020 primarily through proceeds from stock issuance and advances from related parties, and net cash inflow from operations.
The components of cash flows are discussed below:
Cash provided by Operating Activities
Cash used in Investing Activities
Net cash used in investing activities was $1,158,773 for the year ended December 31, 2021. The investment activity was payments made for construction in progress.
Net cash used in investing activities was $75,346 for the year ended December 31, 2020. The investment activity was payments made for construction in progress.
Cash used in Financing Activities
Net cash used in financing activities was $4,363,568 for the year ended December 31, 2021. During the year, cash provided by financing activities included repayment of short-term loans of $4,666,185, which were partly offset by proceeds from related parties of $302,617.
There is no commitment for capital expenditure as of December 31, 2021.
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