The Acquisition of the Zhongshan Hospital

3 Months Ended

Mar. 31, 2021

The Acquisition Of The Zhongshan Hospital [Abstract]

THE ACQUISITION OF THE ZHONGSHAN HOSPITAL

6. THE ACQUISITION OF THE ZHONGSHAN HOSPITAL

On December 15, 2020, the Company entered into a Stock Purchase Agreement to acquire Chaohu Zhongshan Minimally Invasive Hospital (“Zhongshan Hospital”), a private hospital in the southeast region of China with 65 hospital beds, 25 medical doctors, 22 medical technicians and 45 nurses. Zhongshan Hospital is a general hospital known for its complex minimally invasive surgeries. Pursuant to the Agreement, the Company agreed to purchase all the issued and outstanding equity interests in Zhongshan Hospital in consideration of approximately $18,515,661(RMB 120,000,000). As partial consideration, approximately $6,100,723 (RMB 40,000,000) was paid in cash at the closing and 2,000,000 shares of common stock of the Company were delivered on February 2021. The balance of the purchase price in the amount of approximately $6,100,723 (RMB 40,000,000) is subject to post-closing adjustments based on the performance of Zhongshan Hospital in 2021 and 2022.The transaction closed on February 5, 2021.

The following summarizes the identified assets acquired and liabilities assumed pursuant to the Zhongshan Acquisition as of February 5, 2021:

Items	Amount
Assets
Cash	$	46,748
Accounts receivable		92,900
Inventories		108,413
Prepayments and other receivables		432,231
Property, plant and equipment		344,208
Right-of-use asset		1,188,693
Goodwill		10,443,494
Liabilities
Short-term bank borrowings		(154,701	)
Accounts payable, trade		(928,640	)
Advances from customers		(5,603	)
Amount due to related parties		(217,203	)
Other payables and accrued liabilities		(435,290	)
Lease liability-current		(160,774	)
Lease liability-non current		(1,102,589	)
Total-net assets	$	9,651,887

The fair value of all assets acquired and liabilities assumed is the estimated book value of the Zhongshan. Goodwill represents the excess of the fair value of purchase price over the amounts assigned to the fair value of the assets acquired and the liabilities assumed of Zhongshan Hospital at the acquisition date.