4. Related Party Transactions

6 Months Ended

May 31, 2016

Notes

4. Related Party Transactions

4.       RELATED PARTY TRANSACTIONS

The Company obtained demand loans from one of its stockholders which are non-interest bearing.  The loans of $218,069 as of May 31, 2016 and $166,106 as of November 30, 2015 are reflected as loans from stockholder.

The Company entered into a promotion agreement with Guangdong Tianmei Selenium-Rich Beverage Chain Co., LTD, a related party (“Tianmei”).  Prepaid promotion expenses as of May 31, 2016 and November 30, 2015 were $26,576 and $0, respectively. 

The Company entered into an agreement with Tianmei on June 10, 2015 to license the usage of the Company’s trademark for 10 years.  Trademark revenue recorded for the three and six months ended May 31, 2016 and 2015 were $0, $1,490, $0, and $0, respectively.  The future commitment is approximately $1,500 each year.

Equity investment

On April 28, 2016 the Company's wholly-owned subsidiary, Biotechnology International, entered into an investment agreement with Guangdong Tianmei.  At that time, 88% of the equity in Guangdong Tianmei was owned by two individuals who together own 22% of the Company's outstanding shares. The investment agreement provided that Biotechnology International would pay US$1,000,000 to acquire a 30% interest in an Australian corporation to be formed, which would indirectly own all of the equity in Guangdong Tianmei.

The acquisition by Biotechnology International of 30% Tianmei Australia was completed in May 2016, at which time Tianmei Australia acquired ownership, through subsidiaries, of Guangdong Tianmei.  The investment agreement provided that payment of the $1,000,000 purchase price was due on June 20, 2016, which was paid in full on June 17, 2016.

The net worth of Guangdong Tianmei at the time of the acquisition was $4,888,840, 30% of which is $1,466,652.  Because the Company and Guangdong Tianmei were under common control at the time of the acquisition, the $466,652 by which the Company's share of the net worth of Guangdong Tianmei exceeded the purchase price has been recorded as an increase to additional paid-in capital.

The changes in the equity investment are summarized as follows:

		May 31, 2016		November 30, 2015
		(Unaudited)
Initial investment	$	1,466,652	$	-
Pro rata share of net income		408,275		-
Investment, end of period/year	$	1,874,927	$	-

The following is a summary of results of operations of the investee for the period from April 29, 2016 to May 31, 2016:

Revenue	$	3,084,190
Cost of revenue	$	869,244
Expenses	$	854,030
Net income	$	1,360,916