Parent Company Only Condensed Financial Information

12 Months Ended

Nov. 30, 2015

Notes

Parent Company Only Condensed Financial Information

10.              PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

The following is the condensed financial information of China Gewang Biotechnology, Inc., the US parent, consisting of balance sheets as of November 30, 2015 and 2014, statements of income and cash flows for the years ended November 30, 2015 and 2014.

Condensed Balance Sheets

ASSETS		November 30, 2015			November 30, 2014
Investments in subsidiaries and VIE	$		8,977,483	$		3,026,966
TOTAL ASSETS	$		8,977,483	$		3,026,966
LIABILITIES AND stockholders’  EQUITY
Current liabilities:
Accrued expenses	$		33,375	$		-
Stockholder loans			156,866			6,417
Total current liabilities		190,241			6,417
Stockholders’ equity:
Common stock, $0.001 par value, 75,000,000 shares authorized, 45,500,000 shares issued and outstanding as of November 30, 2015 and 35,000,000 shares issued and outstanding as of November 30, 2014)		45,500			35,500
Additional paid-in capital		6,525,743			1,539,275
Statutory reserve fund		281,766			144,454
Other comprehensive (loss) income		(252,022)			62,998
Retained earnings		2,186,255			1,238,321
Total stockholder’s equity		8,787,242			3,020,549
TOTAL LIABILITIES AND     STOCKHOLDERS’ EQUITY	$		8,977,483	$		3,026,966

Condensed Statements of Income

		Year Ended November 30,
		2015			2014
Revenues:
Share of earnings from   investments in subsidiaries and VIE	$		1,310,747	$	724,555
Operating expenses:
General and administrative		183,824			6,417
Net income	$		1,126,923	$	718,138

Condensed Statements of Cash Flows

	Year Ended November 30
		2015				2014
Cash flows from operating activities:
Net income	$	1,126,923			$	718,138
Adjustments to reconcile net income to net cash   provided by (used in) operating activities
Share of earnings from investment in   subsidiaries and VIE		(1,310,747)					(724,555)
Increase in accrued expenses and other liabilities		183,824					6,417
Net cash provided by (used in) operating activities				-			-
Net change in cash		-					-
Cash, beginning of period		-					-
Cash, end of period	$		-		$	-
Noncash financing activities:
Payment of accrued expenses and other     payables by shareholder	$		159,689		$	6,417

Basis of Presentation

The Company records its investment in its subsidiaries and VIE under the equity method of accounting.  Such investments are presented as “Investments in subsidiaries and VIE” on the condensed balance sheets and the subsidiaries and VIE profits are presented as “Share of earnings from investments in subsidiaries and VIE” in the condensed statements of income.

Certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted.  The parent only financial information has been derived from the Company’s consolidated financial statements and should be read in conjunction with the Company’s consolidated financial statements.

There were no cash transactions in the US parent company during the years ended November 30, 2015 and 2014.

Restricted Net Assets

Under PRC laws and regulations, the Company’s PRC subsidiaries and VIE are restricted in their ability to transfer certain of their net assets to the Company in the form of dividend payments, loans or advances.  The restricted net assets of the Company’s PRC subsidiaries and the VIE were approximately $9,038,000 and $3,066,000 as of November 30, 2015 and 2014, respectively.

The Company’s operations and revenues are conducted and generated in the PRC, and all of the Company’s revenues being earned and currency received are denominated in RMB. RMB is subject to the foreign exchange control regulations in China, and, as a result, the Company may be unable to distribute any dividends outside of China due to PRC foreign exchange control regulations that restrict the Company’s ability to convert RMB into US Dollars.

Schedule I of Article 5-04 of Regulation S-X requires the condensed financial information of the parent company to be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of the above test, restricted net assets of consolidated subsidiaries shall mean that amount of the Company’s proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by its subsidiaries in the form of loans, advances or cash dividends without the consent of a third party.  The condensed parent company only financial statements have been prepared in accordance with Rule 12-04,

Schedule I of Regulation S-X as the restricted net assets of the Company’s PRC subsidiaries and VIE exceed 25% of the consolidated net assets of the Company.