10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2021

OR

☐          TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

COMMISSION FILE NUMBER: 000-54884

CHINA UNITED INSURANCE SERVICE, INC.

(Exact name of registrant as specified in its charter)

Delaware	30-0826400
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

7F, No. 311 Section 3

Nan-King East Road

Taipei City, Taiwan

(Address of principal executive offices)

+8862-87126958

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).

Yes ☒  No ☐

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 ☐

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  ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

As of May 10, 2021, there were 29,421,736 shares of common stock issued and outstanding, and 1,000,000 preferred shares issued and outstanding.

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION	5
ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	5
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	25
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	28
ITEM 4.	CONTROLS AND PROCEDURES	28
PART II.	OTHER INFORMATION	29
ITEM 1.	LEGAL PROCEEDINGS	29
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	30
SIGNATURES		31

2

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This report contains forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievement expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the factors described under Part 1 Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

Forward-looking statements represent our estimates and assumptions only as of the date of this report. You should read this report and the documents that we reference in this report, or that we filed as exhibits to this report completely and with the understanding that our actual future results may be materially different from what we expect.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

3

OTHER PERTINENT INFORMATION

References in this quarterly report to “we,” “us,” “our” and the “Company” refer to China United Insurance Service, Inc., its subsidiaries and variable interest entities.

References to China or the PRC refer to the People’s Republic of China (excluding Hong Kong, Macao and Taiwan). References to Taiwan refer to Republic of China.

Unless context indicates otherwise, reference to the “Company” in this quarterly report refers to China United Insurance Service, Inc. and its subsidiaries. Reference to “AHFL” refers to the combined operations of Action Holdings Financial Limited and its Taiwan Subsidiaries (as defined below). Reference to “Anhou” refers to the combined operations of Law Anhou Insurance Agency Co., Ltd. and its subsidiaries.

Our business is conducted in Taiwan and China using New Taiwanese Dollars (“NT$” or “NTD”), the currency of Taiwan, Hong Kong Dollars (“HK$” or “HKD”), the currency of Hong Kong, and RMB, the currency of China, respectively, and our financial statements are presented in United States dollars (“USD”, “US$” or “$”). In this quarterly report, we refer to assets, obligations, commitments and liabilities in our financial statements in U.S. dollars. These dollar references are based on the exchange rate of NT$, HK$ and RMB to USD, determined as of a specific date. Changes in the exchange rate will affect the amount of our obligations and the value of our assets in terms of U.S. dollars which may result in an increase or decrease in the amount of our obligations (expressed in USD) and the value of our assets, including accounts receivable (expressed in USD).

4

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	March 31, 2021		December 31, 2020
(Amount in USD)	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	17,436,654	$	9,063,338
Time deposits		53,749,018		53,339,508
Accounts receivable		18,744,199		25,346,250
Contract assets		97,480		—
Marketable securities		—		1,272,573
Other current assets		1,332,842		1,491,168
Total current assets		91,360,193		90,512,837
Right-of-use assets under operating leases		6,282,892		6,524,555
Property and equipment, net		2,157,445		2,373,245
Intangible assets, net		330,273		381,747
Long-term investments		2,636,257		2,835,095
Restricted cash – noncurrent		65,499		66,490
Deferred tax assets		866,702		1,021,890
Other assets		4,135,077		4,012,370
TOTAL ASSETS	$	107,834,338	$	107,728,229
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Commission payable to sales professionals	$	9,801,187	$	12,088,291
Short-term loans		16,235,471		14,159,108
Contract liabilities		1,103,987		1,119,361
Income tax payable - current		4,266,279		3,146,018
Operating lease liabilities - current		3,018,303		3,043,056
Due to related parties		76,831		94,047
Other current liabilities		10,476,912		13,591,034
Total current liabilities		44,978,970		47,240,915
Income tax payable - noncurrent		719,515		719,515
Operating lease liabilities - noncurrent		3,191,735		3,440,343
Other liabilities		861,037		1,090,222
TOTAL LIABILITIES		49,751,257		52,490,995
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Preferred stock, par value $0.00001, 10,000,000 authorized, 1,000,000 issued and outstanding as of March 31, 2021 and December 31, 2020, respectively		10		10
Common stock, par value $0.00001, 100,000,000 authorized, 29,421,736 issued and outstanding as of March 31, 2021 and December 31, 2020, respectively		294		294
Additional paid-in capital		8,190,449		8,190,449
Statutory reserves		9,463,903		9,463,903
Retained earnings		11,507,794		9,097,408
Accumulated other comprehensive income		3,061,569		3,889,429
Total stockholders' equity attributable to China United's shareholders		32,224,019		30,641,493
Noncontrolling interests		25,859,062		24,595,741
TOTAL STOCKHOLDERS' EQUITY		58,083,081		55,237,234
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	107,834,338	$	107,728,229

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	Three Months Ended March 31,
(Amount in USD)	2021		2020
Revenue	$	30,530,117	$	28,523,210
Cost of revenue		18,973,432		19,499,924
Gross profit		11,556,685		9,023,286
Operating expenses:
Selling		579,777		490,030
General and administrative		6,090,254		6,984,554
Total operating expense		6,670,031		7,474,584
Income from operations		4,886,654		1,548,702
Other income (expenses):
Interest income		83,998		110,891
Interest expenses		(42,470)		(59,282)
Foreign currency exchange gain (loss), net		328,466		(55,937)
Other - net		178,940		(96,802)
Total other income (expenses), net		548,934		(101,130)
Income before income taxes		5,435,588		1,447,572
Income tax expense		(1,398,806)		(1,111,287)
Net income		4,036,782		336,285
Less: net income attributable to noncontrolling interests		(1,626,396)		(625,522)
Net income (loss) attributable to China United’s shareholders		2,410,386		(289,237)
Other comprehensive items, net of tax:
Foreign currency translation loss		(1,191,299)		(567,633)
Other		364		(57)
Total other comprehensive loss		(1,190,935)		(567,690)
Comprehensive income (loss)		2,845,847		(231,405)
Less: comprehensive income attributable to noncontrolling interests		(1,263,321)		(390,854)
Comprehensive income (loss) attributable to China United’s shareholders	$	1,582,526	$	(622,259)
Weighted average shares outstanding:
Basic and diluted		29,421,736		29,421,736
Earnings (Loss) per share attributable to common stockholders of China United:
Basic and diluted	$	0.079	$	(0.010)

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(UNAUDITED)

												Accumulated
								Additional				Other
	Common			Preferred				Paid-in		Statutory		Comprehensive		Retained				Noncontrolling		Total
	Stock	Amount		Stock		Amount		Capital		Reserves		Income		Earnings		Total		Interests		Equity
(Amount in USD)
Balance December 31, 2020	29,421,736	$	294		1,000,000	$	10	$	8,190,449	$	9,463,903	$	3,889,429	$	9,097,408	$	30,641,493	$	24,595,741	$	55,237,234
Foreign currency translation loss	—		—		—		—		—		—		(828,100)		—		(828,100)		(363,199)		(1,191,299)
Other comprehensive income	—		—		—		—		—		—		240		—		240		124		364
Net income	—		—		—		—		—		—		—		2,410,386		2,410,386		1,626,396		4,036,782
Balance March 31, 2021	29,421,736	$	294		1,000,000	$	10	$	8,190,449	$	9,463,903	$	3,061,569	$	11,507,794	$	32,224,019	$	25,859,062	$	58,083,081
												Accumulated
								Additional				Other
	Common			Preferred				Paid-in		Statutory		Comprehensive		Retained				Noncontrolling		Total
	Stock	Amount		Stock		Amount		Capital		Reserves		Income		Earnings		Total		Interests		Equity
(Amount in USD)
Balance December 31, 2019	29,421,736	$	294		1,000,000	$	10	$	8,190,449	$	8,228,904	$	417,015	$	9,402,294	$	26,238,966	$	19,512,526	$	45,751,492
Issuance of preferred stock1based compensation	—		—		—		—		—		—		—		—		—		980,466		980,466
Foreign currency translation loss	—		—		—		—		—		—		(332,984)		—		(332,984)		(234,649)		(567,633)
Other comprehensive loss	—		—		—		—		—		—		(38)		—		(38)		(19)		(57)
Net (loss) income	—		—		—		—		—		—		—		(289,237)		(289,237)		625,522		336,285
Balance March 31, 2020	29,421,736	$	294		1,000,000	$	10	$	8,190,449	$	8,228,904	$	83,993	$	9,113,057	$	25,616,707	$	20,883,846	$	46,500,533

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended March 31,
(Amount in USD)	2021		2020
Cash flows from operating activities:
Net income	$	4,036,782	$	336,285
Adjustments to reconcile net income to net cash provided by operating activities
Noncash stock-based compensation		—		980,466
Depreciation and amortization		301,618		201,522
Amortization of bond premium		58		66
Gain on sales of financial assets		(140,913)		—
Loss on valuation of financial assets		150,992		170,530
Loss on disposals of equipment		77		7,346
Deferred income tax		80,710		(251,548)
Changes in operating assets and liabilities:
Accounts receivable		6,353,128		7,596,492
Contract assets		(98,867)		(221,848)
Other current assets		33,244		(235,848)
Other assets		(58,712)		(156,709)
Commission payable to sales professionals		(2,154,109)		(4,171,583)
Income tax payable		1,171,156		1,306,071
Other current liabilities		(3,012,677)		(2,005,065)
Other liabilities		(217,259)		(215,366)
Net cash provided by operating activities		6,445,228		3,340,811
Cash flows from investing activities:
Cash received from issuance of preferred stock		—		319
Purchases of time deposits		(23,561,920)		(22,634,176)
Proceeds from maturities of time deposits		22,403,564		18,441,127
Purchases of marketable securities		—		(940,268)
Proceeds from sales of marketable securities		1,424,798		—
Proceeds from disposal of equipment		—		2,879
Purchase of equipment		(57,520)		(195,976)
Purchase of intangible assets		(9,780)		(9,487)
Net cash provided by (used in) investing activities		199,142		(5,335,582)
Cash flows from financing activities:
Proceeds from short-term loans		6,324,770		22,800,000
Repayment of short-term loans		(4,140,000)		(21,300,000)
Proceeds from related party borrowings		(13,627)		79,759
Net cash provided by financing activities		2,171,143		1,579,759
Foreign currency translation		(443,188)		(142,027)
Net increase (decrease) in cash, cash equivalents and restricted cash		8,372,325		(557,039)
Cash, cash equivalents and restricted cash, beginning balance		9,129,828		12,658,500
Cash, cash equivalents and restricted cash, ending balance	$	17,502,153	$	12,101,461
SUPPLEMENTARY DISCLOSURE:
Interest paid	$	40,886	$	58,926
Income tax paid	$	—	$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Amount in USD)

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES

China United Insurance Service, Inc. (“China United” or “CUII”), its subsidiaries and variable-interest entities (collectively referred to herein as the “Company”) primarily engage in insurance brokerage and insurance agency services. The Company markets and sells to customers two broad categories of insurance products: life insurance products and property and casualty insurance products, both focused on meeting the particular insurance needs of individuals. The insurance products the Company sells are underwritten by some of the leading insurance companies in Taiwan and China. The Company manages its business through three geographic operating segments, Taiwan, the PRC, and Hong Kong. The Company’s common stock currently trades over the counter on the OTCQB under the ticker symbol “CUII.”

The corporate structure as of March 31, 2021 is as follows:

9

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The condensed consolidated financial statements include the accounts of China United, its subsidiaries and variable interest entities as shown in the corporate structure in Note 1. All significant intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to the consolidated financial statements for prior year to the current year’s presentation. Such reclassifications have no effect on net income as previously reported.

Basis of Presentation

The condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement of the financial statements have been included. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

These condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2020, which were included in the Company’s 2020 Annual Report on Form 10-K (“2020 Form 10-K”). The accompanying consolidated balance sheet as of December 31, 2020, has been derived from the Company’s audited consolidated financial statements as of that date.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto. Actual results may differ from those estimates and assumptions.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable includes commission receivables stated at net realizable values. The Company reviews its accounts receivable regularly to determine if a bad debt allowance is necessary at each quarter-end. Management reviews the composition of accounts receivable and analyzes the age of receivables outstanding, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the necessity of making such allowance. No allowance was deemed necessary as of March 31, 2021 and December 31, 2020.

Foreign Currency Transactions

China United’s financial statements are presented in U.S. dollars ($), which is the China United’s reporting and functional currency. The functional currencies of the China United’s subsidiaries are New Taiwan dollar (“NTD”), China yuan (“RMB”) and Hong Kong dollar (“HKD”). The resulting translation adjustments are reported under other comprehensive income. Gains and losses resulting from the translation of foreign currency transactions are reflected in the consolidated statements of operations and other comprehensive income (loss). Monetary assets and liabilities denominated in foreign currency are translated at the functional currency using the rate of exchange prevailing at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the consolidated statements of operations and other comprehensive income (loss).

10

The Company translates the assets and liabilities into U.S. dollars using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from NTD, RMB and HKD into U.S. dollars are recorded in stockholders’ equity as part of accumulated other comprehensive income. The exchange rates used for condensed consolidated financial statements are as follows:

	Average Rate for the three months ended
	March 31,
	2021		2020
Taiwan dollar (NTD)	NTD	28.06892	NTD	30.10404
China yuan (RMB)	RMB	6.48199	RMB	6.97985
Hong Kong dollar (HKD)	HKD	7.75690	HKD	7.77046
United States dollar ($)	$	1.00000	$	1.00000

	Exchange Rate at
	March 31, 2021		December 31, 2020
Taiwan dollar (NTD)	NTD	28.46825	NTD	28.07725
China yuan (RMB)	RMB	6.55363	RMB	6.52765
Hong Kong dollar (HKD)	HKD	7.77422	HKD	7.75249
United States dollar ($)	$	1.00000	$	1.00000

Earnings (Loss) Per Share

Basic earnings (loss) per common share (“EPS”) is computed by dividing net income attributable to the common shareholders of the Company by the weighted-average number of common shares outstanding. Diluted EPS is computed in the same manner as basic EPS, except the number of shares includes additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued.

As the holders of preferred stock of the Company are entitled to share equally with the holders of common stock, on a per share basis, in such dividends and other distributions of cash, property or shares of stock of the Company as may be declared by the board of directors, the preferred stock is treated as a participating security. When calculating the basic earnings per common share, the two-class method is used to allocate earnings to common stock and participating security as required by FASB ASC Topic 260, “Earnings Per Share.” As of March 31, 2021 and 2020, the Company does not have any potentially dilutive instrument.

Fair Value of Financial Instruments

Fair value accounting establishes a framework for measuring fair value and expands disclosure about fair value measurements. Fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the financial instruments.

● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

11

The following table summarizes financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020:

	March 31, 2021
	Fair Value						Carrying
	Level 1		Level 2		Level 3		Value
Assets
Total time deposits	$	53,749,018	$	—	$	—	$	53,749,018
Long-term investments:
REITs		1,286,159		—		—		1,286,159
Total assets measured at fair value	$	55,035,177	$	—	$	—	$	55,035,177

	December 31, 2020
	Fair Value						Carrying
	Level 1		Level 2		Level 3		Value
Assets
Total cash equivalents and time deposits	$	53,339,508	$	—	$	—	$	53,339,508
Marketable securities :
Stock Mutual funds		1,272,573		—		—		1,272,573
Long-term investments:
Government bonds held for available -for -sale		—		107,096		—		107,096
REITs		1,359,100		—		—		1,359,100
Total assets measured at fair value	$	55,971,181	$	107,096	$	—	$	56,078,277

The carrying amounts of current financial assets and liabilities in the consolidated balance sheets for cash equivalents and time deposits, approximate fair value due to the short-term duration of those instruments.

Marketable securities and long-term investments in REITs – The fair values of mutual funds and REITs were valued based on quoted market prices in active markets.

Government bonds – The fair value of government bonds is valued based on theoretical bond price in the Taipei Exchange.  

According to Taiwan Regulations Governing Deposit of Bond and Acquirement of Insurance by Insurance Agents, Insurance Brokers and Insurance Surveyors (“RGDBAI”) Article 3 and 4, Law Broker is required to maintain a minimum of NTD 3,000,000 ($105,381 and $106,848 as of March 31, 2021 and December 31, 2020, respectively) restricted balance in a separate account or government bonds issued by the central government in order to maintain its insurance license. The government bonds matured on March 17, 2021 and the amortized cost of the bonds was nil and $106,906 (NTD 3,001,620) as of March 31, 2021 and December 31, 2020, respectively. The Company will purchase a similar investment after the maturity of the bonds to maintain the insurance license.

Concentration of Risk

The Company maintains cash with banks in the USA, People’s Republic of China (“PRC”), Hong Kong, and Taiwan. Should any bank holding the Company’s cash become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose all or part of its cash deposit with that bank; however, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. In Taiwan, a depositor has up to NTD3,000,000 insured by Central Deposit Insurance Corporation (“CDIC”). In China, a depositor has up to RMB500,000 insured by the People’s Bank of China Financial Stability Bureau (“FSD”). In Hong Kong, a depositor has up to HKD500,000 insured by Hong Kong Deposit Protection Board (“DPB”). In the United States, the standard insurance amount is $250,000 per depositor in a bank insured by the Federal Deposit Insurance Corporation (“FDIC”).

12

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, time deposits, restricted cash, register capital deposit and accounts receivable. As of March 31, 2021 and December 31, 2020, approximately $2,215,000 and $2,229,000 of the Company’s cash and cash equivalents, time deposits, and registered capital deposits held by financial institutions, was insured, and the remaining balance of approximately $71,987,000 and $63,222,000, was not insured. With respect to accounts receivable, the Company generally does not require collateral and does not have an allowance for doubtful accounts.

For the three months ended March 31, 2021 and 2020, the Company’s revenues from sale of insurance policies underwritten by these companies were:

	Three months ended March 31,
	2021				2020
			% of Total				% of Total
	Amount		Revenue		Amount		Revenue
Taiwan Life Insurance Co., Ltd.	$	7,231,458	24	%	$	5,592,675	20	%
TransGlobe Life Insurance Inc.		6,600,629	22	%		4,995,954	18	%
Farglory Life Insurance Co., Ltd.		4,519,841	15	%		3,379,091	12	%
Shin Kong Life Insurance Co., Ltd.		(*)	(*)			3,062,062	11	%

(*) The related revenues for the three months ended had not exceeded 10% or more of the consolidated revenues.

As of March 31, 2021 and December 31, 2020, the Company’s accounts receivable from these companies were:

	March 31, 2021				December 31, 2020
			% of Total				% of Total
			Accounts				Accounts
	Amount		Receivable		Amount		Receivable
Taiwan Life Insurance Co., Ltd	$	5,103,386	27	%	$	4,557,862	18	%
TransGlobe Life Insurance Inc.		4,118,134	22	%		7,761,664	31	%
Farglory Life Insurance Co., Ltd.		2,046,970	11	%		2,787,586	11	%

The Company’s operations are in the PRC, Hong Kong and Taiwan. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic, foreign currency exchange and legal environments in the PRC, Hong Kong and Taiwan, and by the state of each economy. The Company’s results of operations may be adversely affected by changes in the political and social conditions in the PRC, Hong Kong and Taiwan, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.

Stock-Based Compensation

The Company accounts for equity-based compensation cost in accordance with ASC 718, Compensation-Stock Compensation after adoption of ASC 2018-07, which requires the measurement and recognition of compensation expense related to the fair value of equity-based compensation awards that are ultimately expected to vest. Stock-based compensation expense recognized includes the compensation cost for all share-based compensation payments granted to employees and nonemployees, net of estimated forfeitures, over the employees requisite service period or the non-employee performance period based on the grant date fair value estimated in accordance with the provisions of ASC 718. ASC 718 is also applied to awards modified, repurchased, or cancelled during the periods reported. Compensation costs for awards granted to nonemployees under Uniwill for the three months ended March 31, 2021 and 2020 were nil and $980,466, respectively.

Income Taxes

The Company records income tax expense using the asset-and-liability method of accounting for deferred income taxes. Under this method, deferred taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance if, based on available evidence, it is more likely than not that the deferred tax assets will not be realized.

13

When tax returns are filed, it is likely some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits are classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of operations and other comprehensive income (loss).

New Accounting Pronouncements and Other Guidance

New Accounting Pronouncements Effective January 1, 2021:

Income Tax

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes which is intended to simplify various aspects related to accounting for income taxes. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted. The Company adopted this standard in the beginning of January 1, 2021, and the adoption did not have any significant impact on the Company’s condensed consolidated financial statements.

Equity Securities, Equity-method Investments and Certain Derivatives

In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The guidance provides clarification of the interaction of rules for equity securities, the equity method of accounting and forward contracts and purchase options on certain types of securities. ASU 2020-01 is effective for the Company in the first quarter of 2021. The adoption did not have any significant impact on the Company’s condensed consolidated financial statements.

Accounting Standards Issued but Not Yet Adopted:

Credit Losses

In June 2016, the FASB issued ASU No. 2016-13, (FASB ASC Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, rather than the “incurred loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments.

In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company believes the adoption of ASU No. 2016-13 will not have a material impact on its financial position and results of operations.

Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The standard provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions in which the reference LIBOR or another reference rate are expected to be discontinued as a result of the Reference Rate Reform. The standard is effective for all entities. The standard may be adopted as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 through December 31, 2022. We are currently evaluating the effects of the standard on our consolidated financial statements and related disclosures.

14

Convertible Debt, and Derivatives and Hedging

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, to improve financial reporting associated with accounting for convertible instruments and contracts in an entity's own equity. ASU 2020-06 will be effective for the Company in the first quarter of 2022. The Company is currently evaluating the amended guidance and the impact on its consolidated financial statements and related disclosures.

The management does not believe that other than disclosed above, accounting pronouncements the recently issued but not yet adopted will have a material impact on its financial position results of operations or cash flows.

NOTE 3 – CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Cash, cash equivalents and restricted cash consisted of the following as of March 31, 2021 and December 31, 2020:

	March 31, 2021		December 31, 2020
Cash and cash equivalents:
Cash on hand and in banks	$	17,436,654	$	9,063,338
Time deposits - with original maturities less than three months (see Note 4)		—		—
		17,436,654		9,063,338
Restricted cash – noncurrent		65,499		66,490
Total cash, cash equivalents and restricted cash shown in the statements of cash flows	$	17,502,153	$	9,129,828

Noncurrent restricted cash includes a mandatory deposit in the bank in conformity with Provisions of the Supervision and Administration of Specialized Insurance Agencies in PRC, which is not allowed to be withdrawn without the permission of the regulatory commission, and a trust account held for the bonus accrued for officers of Law Insurance Broker Co., Limited ("Law Broker').

NOTE 4 – TIME DEPOSITS

	March 31, 2021		December 31, 2020
Total time deposits	$	53,749,018	$	53,339,508
Less: Time deposits – with original maturities less than three months (see Note 3)		—		—
Time deposits – original maturities over three months but less than one year	$	53,749,018	$	53,339,508

Time Deposits Pledged as Collateral

The Company had a total of $17,369,198 (NTD 494.4 million) and $15,930,161 (NTD 447.3 million) restricted time deposits, respectively, as of March 31, 2021 and December 31, 2020. As of March 31, 2021 and December 31, 2020, time deposits of $35,128 (NTD 1 million) and 35,616 (NTD 1 million) were pledged as collateral for the Company’s credit card, respectively. In addition, the Company had time deposits of $17,334,070 and $15,894,545 pledged as collateral for short-term loans, respectively, as of March 31, 2021 and December 31, 2020. See Note 5.

15

NOTE 5 – SHORT-TERM LOANS

The Company’s short-term loans consisted of the following as of March 31, 2021 and December 31, 2020:

		March 31, 2021				December 31, 2020
		Debt		Collateral		Debt		Collateral
Line of Credit	Collateral	balance		value		balance		value
$8.9 million (NTD 250 million) revolving line of credit with Cathay United Bank Company Limited (“CUB”); the loan bears interest at the higher of CUB's adjustable rates for loans plus a margin of 0.41% or the 1-month TAIBOR rate plus a margin of 0.8% and matures on May 4, 2021. The maturity date was extended to May 4, 2022.	Time deposits	$	7,745,471	$	7,745,471	$	6,019,108	$	6,019,108
$4.0 million revolving line of credit with O-Bank; the loan bears interest at the TAIFX3 rate plus a margin of 0.5% and matures on December 29, 2021	Time deposits		4,000,000		4,847,506		4,000,000		4,915,011
$1.6 million revolving line of credit with KGI; the loan bears interest at the LIBOR rate plus a margin of 0.9% and matures on February 18, 2022	Time deposits		—		—		2,100,000		2,443,003
$1.5 million revolving line of credit with CTBC Bank Co., Ltd. (“CTBC”); the loan bears interest at the CTBC’s cost of funds plus a negotiated margin on individual case basis and matures on August 28, 2021	Time deposits		1,500,000		1,500,000		1,200,000		1,384,833
$2.5 million revolving line of credit with Far Eastern International Bank (“FEIB”); the loan bears interest at the higher of LIBOR or TAIFX3 rate plus a margin of 0.7% and matures on December 17, 2021	Time deposits		1,990,000		2,241,093		840,000		1,132,590
$1.0 million revolving line of credit with E. Sun Bank (“E. Sun”); the loan bears interest at the higher of LIBOR or TAIFX3 rate plus a margin of 0.7% and matures on June 3, 2021	Time deposits		1,000,000		1,000,000		—		—
		$	16,235,471	$	17,334,070	$	14,159,108	$	15,894,545

Borrowings under the revolving credit agreements are generally due 90 days or less. Total interest expenses incurred from the credit facilities were $42,470 and $59,282 for the three months ended March 31, 2021 and 2020, respectively.

NOTE 6 – COMMISSIONS PAYABLE TO SALES PROFESSIONALS

Commissions payable to sales professionals consisted of the following as of March 31, 2021 and December 31, 2020:

	March 31, 2021		December 31, 2020
Taiwan	$	9,483,511	$	11,814,222
PRC		317,676		274,069
Hong Kong		—		—
Total commissions payable to sales professionals	$	9,801,187	$	12,088,291

Commissions payable to sales professionals are usually settled within twelve months.

NOTE 7 – OTHER CURRENT LIABILITIES

Other current liabilities were as follows, as of March 31, 2021 and December 31, 2020:

	March 31, 2021		December 31, 2020
Accrued bonus	$	5,432,444	$	7,854,488
Payroll payable and other benefits		1,746,549		1,767,417
Accrued business tax and tax withholdings		913,419		1,643,082
Accrued tax penalties		—		170,016
Other accrued liabilities		2,384,500		2,156,031
Total other current liabilities	$	10,476,912	$	13,591,034

16

Accrued Bonus

The Company’s foreign subsidiaries have various bonus plans, which provide cash awards to employees based upon their performance, and had accrued bonus of $3,269,661 and $5,948,157, respectively, related to cash awards to employees as of March 31, 2021 and December 31, 2020. The Company has other compensation plans solely provided by Law Broker to its officers. The compensation plans eligible to Law Broker’s officers include a surplus bonus based on a percentage of income after tax and other performance bonuses, such as retention and non-competition. For the three months ended March 31, 2021 and 2020, the bonus expenses to Law Broker’s officers under the compensation plans were $91,896 and $249,939, respectively.

As of March 31, 2021 and December 31, 2020, the Company had accrued bonus of $2,162,783 and $1,906,331 payable within next 12 months, and noncurrent accrued bonus of nil and $237,440, respectively, related to the compensation plans for Law Broker’s officers. See Note 14 for additional information of agreements with Law Broker’s officers.

NOTE 8 – OTHER LIABILITIES

The Company’s other liabilities consisted of the following as of March 31, 2021 and December 31, 2020: 

	March 31, 2021		December 31, 2020
Due to previous shareholders of AHFL	$	526,903	$	534,240
Net defined benefit liability		334,134		318,542
Accrued bonus - noncurrent (Note 7)		—		237,440
Total other liabilities	$	861,037	$	1,090,222

Due to Previous Shareholders of AHFL

Due to previous shareholders of AHFL is the entire remaining balance payable of the 2012 acquisition cost. On March 27, 2019, the Company and the selling shareholders of Action Holdings Financial Limited (“AHFL”) entered into a sixth amendment to the acquisition agreement, pursuant to which, the Company would make the cash payment in the amount of NTD15 million on or prior to March 31, 2021. In March 2021, the Company entered into a seventh amendment with the selling shareholders of AHFL to extend the repayment date to March 31, 2024. The amount consisted of 68% and 32% of payables due to related parties and third parties, respectively. As of March 31, 2021 and December 31, 2020, the amount due to previous shareholders of AHFL were $526,903 and $534,240, respectively. The change in amounts was due to foreign currency translation.

NOTE 9 – CONTRACTS WITH CUSTOMERS

Information about accounts receivable, contract assets, and contract liabilities from contracts with customers is as follows:

	March 31, 2021		December 31, 2020
Accounts receivable	$	18,744,199	$	25,346,250
Contract assets		97,480		—
Contract liabilities		1,103,987		1,119,361

Contract assets are the Company’s conditional rights to consideration for completed performance obligation and are in relation to the performance bonus to be rewarded based on the annual performance. The Company recognizes the contingent commission as a contract asset when the performance obligation is fulfilled, and the Company has not had the unconditional rights to the payment. As of March 31, 2021 and December 31, 2020, the Company had $97,480 and nil of contract assets, respectively.

17

Contract Liabilities – AIATW

On June 10, 2013, AHFL entered into a Strategic Alliance Agreement (the “Alliance Agreement”) with AIA International Limited Taiwan Branch (“AIATW”), the purpose of which is to promote life insurance products provided by AIATW within Taiwan by insurance agencies or brokerage companies affiliated with AHFL or China United. The original term of the Alliance Agreement was from June 1, 2013 to May 31, 2018. Pursuant to the terms of the Alliance Agreement, AIATW paid AHFL an execution fee of approximately $8,326,700 (NTD250,000,000, including the tax of NTD11,904,762, the “Execution Fee”), which is to be recorded as revenue upon fulfilling sales targets and the 13-month persistency ratio, as defined, over the next five years. The Execution Fee may be required to be recalculated if certain performance targets are not met by AHFL.

On September 30, 2014, AHFL entered into a Strategic Alliance Supplemental Agreement (the “First Amendment to the Alliance Agreement”) with AIATW. In the First Amendment to the Alliance Agreement, the performance targets and the provision about refunding the Execution Fee on a pro rata basis when the performance targets are not met were revised.

On January 6, 2016, AHFL entered into an Amendment No. 2 to the Alliance Agreement (the “Second Amendment to the Alliance Agreement”) with AIATW to further revise certain provisions in the Strategic Alliance Agreement and the previous amendment entered into by and between AHFL and AIATW. To the extent permitted by applicable laws and regulations, AHFL shall assist and encourage any insurance agency company or insurance brokerage company duly approved by the competent government authorities of Taiwan (the “Appointed Broker/Agent”), to cooperate with AIATW for the promotion of life insurance products of AIATW. Pursuant to the Second Amendment to the Alliance Agreement, the expiration date of the Strategic Alliance Agreement was extended from May 31, 2018 to December 31, 2021, and the effect of the Alliance Agreement during the period from October 1, 2014 to December 31, 2015 was suspended. In addition, both AHFL and AIATW agreed to adjust certain terms and conditions set forth in the Alliance Agreement, some of which are as follows: (i) expanding the scope of services to be provided by AHFL to AIATW to include, without limitation, assessment and advice on suitability of cooperative partners, advice on product strategies suitable for promotion channel development, advice on promotion/sales channel improvement, advice on promotion channel marketing and strategic planning, and promotion channel talent training; and (ii) removing certain provisions related to performance milestones and refund of Execution Fees. On March 15, 2016, AHFL issued a promise letter (the “2016 Letter”) to AIATW that AHFL is required to (i) fulfill sales targets and (ii) the 13-month persistency ratio.

On June 14, 2017, with AIATW’s consent, the 2016 Letter was revoked in order to conform with the latest terms and conditions regarding the cooperation between AHFL and AIATW as set forth in an Amendment No. 3 to the Alliance Agreement (the “Third Amendment to the Alliance Agreement”). Pursuant to the Third Amendment to the Alliance Agreement, both AHFL and AIATW agreed to adjust certain terms and conditions set forth this amendment, some of which included (i) except the first contract year (April 15^th, 2013 to September 30^th, 2014), the sales target of the alliance between the parties shall be changed to (a) value of new business (“VONB”) and (b) the 13-month persistency ratio; and (ii) AIATW will calculate and recognize the VONB and 13-month persistency ratio each contract year and inform the Company the result; and (iii) the Company agrees to return the basic business promotion fees to AIATW within thirty (30) days of receipt of the notice sent by AIATW if the Company fails to meet the targets set forth in the Third Amendment to the Alliance Agreement, AIATW reserves the right to offset such amount against the amount payable by it to the Company; and (iv) upon the termination of the Alliance Agreement and its amendments pursuant to the Section 8.2 of the Alliance Agreement, both parties agreed to calculate the amount to be returned or repaid, as applicable, based on the past and current contract years. The Company shall return the basic business execution fees at NTD50 million for the first contract year, NTD35 million for the second contract year, and NTD33 million for each contract year thereafter within one month after the termination.

The following table presents the amounts recognized as revenue and refund for each contract year:

Contract				Revenue			Revenue VAT		Refund			Refund VAT
Year	Period	Execution Fees		Amount			Amount		Amount			Amount
First	04/15/2013 - 09/30/2014	NTD	50,000,000	NTD	27,137,958	(1)	NTD	1,356,898	NTD	20,481,090	(1)	NTD	1,024,054
Second	01/01/2016 - 12/31/2016	NTD	35,000,000	NTD	12,855,000	(2)	NTD	642,750	NTD	20,478,333	(2)	NTD	1,023,917
Third	01/01/2017 - 12/31/2017	NTD	33,000,000	NTD	12,628,201	(3)	NTD	631,410	NTD	18,800,370	(3)	NTD	940,019
Fourth	01/01/2018 - 12/31/2018	NTD	33,000,000	NTD	11,228,600	(4)	NTD	561,429	NTD	20,199,971	(4)	NTD	1,010,000
Fifth	01/01/2019 - 12/31/2019	NTD	33,000,000	NTD	9,481,371	(5)	NTD	474,069	NTD	21,947,200	(5)	NTD	1,097,360
Sixth	01/01/2020 - 12/31/2020	NTD	33,000,000	NTD	12,223,829	(6)	NTD	611,191	NTD	19,204,743	(6)	NTD	960,237
Seventh	01/01/2021 - 12/31/2021	NTD	33,000,000	NTD	—	(7)	NTD	—	NTD	31,428,571	(7)	NTD	1,571,429
TOTAL		NTD	250,000,000	NTD	85,554,959		NTD	4,277,747	NTD	152,540,278		NTD	7,627,016

18

1) The revenue recognition for the first contract year is based on the annual first year premium (“AFYP”) set in Alliance Agreement, which is different from other contract years. From the second contract year to the seventh contract year, the revenue calculation is based on VONB. The Company recognized the first contract year’s revenue amount of $892,742 (NTD 27,137,958), net of Value-Added Tax (“VAT ") in 2017 due to uncertainty resolved after Amendment 3 went effective. Besides, on December 3, 2015 and February 23, 2016, the Company refunded the amounts of $160,573 (NTD4,761,905), net of VAT, and $530,056 (NTD15,719,185), net of VAT, to AIATW, respectively, due to the portion of performance sales targets not met during the first contract year based on original agreement and earlier amendments.

2) For the year ended December 31, 2016, the Company recognized the second contract year’s revenue amount of $422,883 (NTD 12,855,000), net of VAT, and refunded the amount of $690,537 (NTD 20,478,333), net of VAT, due to uncertainty resolved after Amendment 3 went effective.

3) For the year ended December 31, 2017, the Company recognized the third contract year’s revenue amount of $415,423 (NTD12,628,201), net of VAT, and refund amount of $633,955 (NTD18,800,370), net of VAT, for the same contract period based on the calculation of VONB and 13-month persistency.

4) For the year ended December 31, 2018, the Company recognized the fourth contract year’s revenue amount of $372,650 (NTD11,228,600), net of VAT, and refund amount of $670,389 (NTD 20,199,971), net of VAT, for the same contract period based on the calculation of VONB and 13-month persistency.

5) For the year ended December 31, 2019, the Company recognized the fifth contract year's revenue amount of $314,953 (NTD9,481,371), net of VAT, and refund the amount of $729,045 (NTD 21,947,200), net of VAT, for the same contract period based on the calculation of VONB and 13-month persistency.

6) For the year ended December 31, 2020, the Company recognized the sixth contract year’s revenue amount of $415,186 (NTD 12,223,829), net of VAT, and refund the amount of $652,294 (NTD 19,204,743), net of VAT, for the same contract period based on the calculation of VONB and 13-month persistency.

7) The Company estimated VONB and 13-month persistency ratio for the year ending December 31, 2021 and calculated the revenue amount to be nil for the year. The amount will be reassessed every quarter until receiving AIATW’s notice.

The Company recognized revenue of nil and $102,166 (NTD3,075,599), net of VAT for the three months ended March 31, 2021 and 2020 related to this agreement. As of March 31, 2021 and December 31, 2020, the Company had contract liabilities of $1,103,987 and $1,119,361, respectively, related to the Alliance Agreement.

NOTE 10 –LEASE

For the three months ended March 31, 2021 and 2020, the Company recorded its operating lease cost of $1,020,873 and $678,348, respectively.

Operating lease right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. As of March 31, 2021 and December 31, 2020, the operating lease right-of-use assets and lease liabilities were as follows:

	March 31, 2021		December 31, 2020
Right-of-use assets under operating leases	$	6,282,892	$	6,524,555
Operating lease liabilities – current		3,018,303		3,043,056
Operating lease liabilities – noncurrent		3,191,735		3,440,343

Lease term and discount rate

	March 31, 2021		December 31, 2020
Weighted average remaining lease term
Operating lease	2.48	years	2.64	years
Weighted average discount rate
Operating lease	3.64	%	3.15	%

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Supplemental cash flow information related to leases

	March 31, 2021		December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows related to operating leases	$	1,142,714	$	3,310,015
Amortization of right-of-use assets under operating leases		877,022		3,009,101

The minimum future lease payments as of March 31, 2021 are as follows:

	Amount
2021 (remainder of year)	$	2,469,856
2022		2,160,357
2023		1,155,709
2024		572,054
2025		101,832
Thereafter		—
Total minimum lease payments		6,459,808
Less: Interest		(249,770)
Present value of future minimum lease payments	$	6,210,038

NOTE 11 – NONCONTROLLING INTERESTS

Noncontrolling interests consisted of the following as of March 31, 2021 and December 31, 2020:

	% of Non-						Other
	Controlling		December 31,		Net Income		Comprehensive		March 31,
Name of Entity	Interests		2020		(Loss)		Loss		2021
Law Enterprise	34.05	%	$	(414,957)	$	(72,946)	$	(6,187)	$	(494,090)
Law Broker	34.05	%		25,177,272		1,404,896		(353,398)		26,228,770
Uniwill	50.00	%		(421,035)		267,364		(2,646)		(156,317)
Rays	1.00	%		(5,772)		(297)		—		(6,069)
PFAL	49.00	%		423,978		27,593		(767)		450,804
MKI	49.00	%		(732)		—		—		(732)
PA Taiwan	49.00	%		(163,013)		(214)		(77)		(163,304)
Total			$	24,595,741	$	1,626,396	$	(363,075)	$	25,859,062

	% of Non-								Other
	controlling		December 31,		Contribution		Net Income		Comprehensive		December 31,
Name of Entity	Interest		2019		/Acquisition		(Loss)		Income		2020
Law Enterprise	34.05	%	$	(204,964)	$	—	$	(241,231)	$	31,238	$	(414,957)
Law Broker	34.05	%		19,536,104		—		4,193,314		1,447,854		25,177,272
Uniwill	50.00	%		—		1,427,603		(1,918,023)		69,385		(421,035)
Rays	1.00	%		—		1,019		(6,791)		—		(5,772)
PFAL	49.00	%		351,278		—		71,713		987		423,978
MKI	49.00	%		283		—		(1,015)		—		(732)
PA Taiwan	49.00	%		(167,531)		—		4,227		291		(163,013)
PTC Nanjing	49.00	%		(2,644)		—		1,465		1,179		—
Total			$	19,512,526	$	1,428,622	$	2,103,659	$	1,550,934	$	24,595,741

20

NOTE 12 – INCOME TAX

The following table reconciles the Company’s statutory tax rates to effective tax rates for the three months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021		2020
US statutory rate	21	%	21	%
Tax rate difference	(2)	%	(2)	%
Tax base difference	—	%	1	%
Income tax on undistributed earnings	4	%	11	%
Change in valuation allowance	4	%	25	%
Utilization of deferred tax assets not previously recognized	(1)	%	—	%
Provision for uncertain tax position	—	%	19	%
Non-deductible and non-taxable items	1	%	2	%
True up of prior year income tax	(1)	%	—	%
Effective tax rate	26	%	77	%

The Company’s income tax expense is mainly generated by its subsidiaries in Taiwan. The Company’s subsidiaries in Taiwan are subject to the statutory tax rate on income reported in the statutory financial statements after appropriate adjustments at 20% and 5% of the tax on any undistributed earnings according to the Income Tax Law of Taiwan. As of March 31, 2021 and December 31, 2020, the Company had current tax payable of $4,151,716 and $2,978,618 for Taiwan income tax, respectively.

WFOE and the Consolidated Affiliated Entities (“CAE”) in the PRC are governed by the Income Tax Law of PRC concerning private-run enterprises, which are generally subject to tax at 25% on income reported in the statutory financial statements after appropriate adjustments. WFOE and CAE had no income tax expenses for the three months ended March 31, 2021 and the year ended December 31, 2020 due to the loss positions.

The Company’s subsidiaries in Hong Kong are governed by the Inland Revenue Ordinance Tax Law of Hong Kong and are generally subject to a profit tax at the rate of 8.25% on the estimated assessable profits. As of March 31, 2021 and December 31, 2020, the Company had current tax payable of $18,627 and $13,613 for Hong Kong income tax.

The Company is subject to the statutory rate of 21% in the U.S. federal jurisdiction. The Company had no income tax expense for the three months ended March 31, 2021 and 2020 due to the loss positions and no GILTI tax obligation existed. The Company recognized a one-time transition tax of $1,199,195 in the year of 2018 based on the Company’s total post-1986 earnings and profits (“E&P”) that it previously deferred from U.S. income tax. As of March 31, 2021 and December 31, 2020, the Company had current tax payable of $95,936 and $153,787 and noncurrent tax payable of $719,515 and $719,515 for U.S. income tax.

As of March 31, 2020, the Company recorded an uncertain tax positions approximately of $277,000 related to withholding tax matters in the Taiwan Segment. During the three months ended March 31, 2020, the Company recognized interest and penalties of approximately $178,000, in selling, general and administrative expenses.

NOTE 13 – RELATED PARTY TRANSACTIONS

The following summarized the Company’s loans payable to related parties as of March 31, 2021 and December 31, 2020:

	March 31, 2021		December 31, 2020
Due to Ms. Lu (A shareholder of Anhou)	$	70,600	$	78,541
Others		6,231		15,506
Total	$	76,831	$	94,047

Amounts due to Ms. Lu were borrowings from Ms. Lu to support Anhou’s business operation. The amounts were non-interesting bearing and payable on demand.

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NOTE 14– COMMITMENTS AND CONTINGENCIES

Operating Leases

See future minimum annual lease payments in Note 10.

Time Deposits Pledged as Collateral

See time deposits pledged as collateral in Note 4 and 5.

Appointment agreement

On December 21, 2018, Law Broker entered into an appointment agreement with Shu-Fen, Lee (“Ms. Lee”), pursuant to which, she will have served as the president of Law Broker from December 21, 2018 to December 20, 2021. Ms. Lee’s primary responsibilities include 1) overall business planning, 2) implementation of resolution of the shareholders’ meeting or the board of directors, 3) the appointment and dismissal of the Law Broker’s employees and sales professionals, except for internal auditors, 4) financial management and application, 5) being the representative of Law Broker, 6) other matters assigned by the board of directors. According to the agreement, Ms. Lee’s compensation plan included: 1) base salary, 2) managerial allowance, 3) surplus bonus based on 1.25% of Law Broker’s income after tax, and 4) annual year-end bonus. For the three months ended March 31, 2021 and 2020, the Company has recorded the compensation expense of $62,208 and $50,436 under the appointment agreement, respectively.

Engagement agreement

On May 10, 2016, Law Broker entered into an engagement agreement with Hui-Hsien Chao ("Ms. Chao"), pursuant to which, she served as the general manager of Law Broker from December 29, 2015 to December 28, 2018. The engagement agreement with Ms. Chao was renewed in 2019 and her service period has extended to December 20, 2021. Ms. Chao's primary responsibilities are to assist Law Broker in operating and managing insurance agency business. According to the engagement agreement, Ms. Chao's bonus plan included: 1) execution, 2) long-term service fees, 3) pension and 4) non-competition. The payment of such bonuses will only occur upon satisfaction of certain condition, subject to the terms and conditions in the engagement agreement. Ms. Chao has acted as the general manager or in the equivalent position of Law Broker for a term of at least three years. For the three months ended March 31, 2021 and 2020, the Company has recorded the compensation expense of $29,689 and $75,772 under the appointment agreement, respectively.

NOTE 15 – SEGMENT REPORTING

The Company organizes and manages its business as three operating segments by operating geographic areas. The business of WFOE, CU Hong Kong and the CAE in PRC was managed and reviewed as PRC segment. The business of AHFL and its subsidiaries in Taiwan was managed and reviewed as Taiwan segment. The business of PFAL was managed and reviewed as Hong Kong segment. PRC and Taiwan segments retain majority of reported consolidated amounts.

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The geographical distributions of the Company’s financial information for the three months ended March 31, 2021 and 2020 were as follows:

	For three months ended March 31,
	2021		2020
Geographical Areas
Revenue
Taiwan	$	28,851,500	$	27,342,936
PRC		1,951,469		1,429,297
Hong Kong		110,985		68,619
Elimination adjustment		(383,837)		(317,642)
Total revenue	$	30,530,117	$	28,523,210
Income (loss) from operations
Taiwan	$	4,690,729	$	1,503,282
PRC		(3,918)		(31,113)
Hong Kong		61,493		23,653
Elimination adjustment		138,350		52,880
Total income from operations	$	4,886,654	$	1,548,702
Net income (loss)
Taiwan	$	3,933,490	$	345,266
PRC		46,918		(39,957)
Hong Kong		56,312		21,772
Elimination adjustment		62		9,204
Total net income(loss)	$	4,036,782	$	336,285

The geographical distribution of the Company’s financial information as of March 31, 2021 and December 31, 2020 were as follows:

	March 31, 2021		December 31, 2020
Geographical Areas
Reportable assets
Taiwan	$	174,507,496	$	171,037,252
PRC		12,930,173		13,149,306
Hong Kong		974,442		915,628
Elimination adjustment		(80,577,773)		(77,373,957)
Total reportable assets	$	107,834,338	$	107,728,229
Long-lived assets
Taiwan	$	1,990,118	$	2,198,739
PRC		168,704		175,748
Hong Kong		1,531		1,664
Elimination adjustment		(2,908)		(2,906)
Total long-lived assets	$	2,157,445	$	2,373,245
Capital investment
Taiwan	$	50,228	$	1,522,189
PRC		7,292		87,903
Hong Kong		—		1,576
Total capital investments	$	57,520	$	1,611,668

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NOTE 16 – SUBSEQUENT EVENTS

The Company has evaluated all other subsequent events through the date these consolidated financial statements were issued and determine that there were no subsequent events or transactions that require recognition or disclosures in the consolidated financial statements except for the follows:

On April 29, 2021, Rays Technology Co., Ltd. (“Rays”), a majority-owned subsidiary of the Company, received a Decision Letter dated April 27, 2021 from the Financial Supervisory Commission (Taiwan) (the “FSC”) stating that Rays was fined NTD900,000 (equivalent to approximately $32,233 USD) by the FSC for violating Article 167-1 Section 3 of the Insurance Act of Taiwan (the “Act”). On May 11, 2021, the FSC verbally informed Law Broker that it could expect a Decision Letter from the FSC stating that Law Broker was fined NTD1.7 million (equivalent to approximately $60,565 USD) and one-month correction period for violating the relevant laws and regulations of the Act. The two subsidiaries are in the process of remediating the noncompliance issues.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.

The following discussion of the results of operations and financial condition should be read in conjunction with our condensed consolidated financial statements and notes thereto included in Item 1 of this part. This report, including the information incorporated by reference, contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The use of any of the words “believe,” “expect,” “anticipate,” “plan,” “estimate,” and similar expressions are intended to identify such statements. Forward-looking statements include statements concerning our possible or assumed future results. The actual results that we achieve may differ materially from those discussed in such forward-looking statements due to the risks and uncertainties described in the Risk Factors section of this report, in Management’s Discussion and Analysis of Financial Condition and Results of Operations, and in other sections of this report, as well as in our annual report on Form 10-K. We undertake no obligation to update any forward-looking statements.

Overview

The Company primarily provides two broad categories of insurance products, life insurance products and property and casualty insurance products, in Taiwan and People’s Republic of China (“PRC”). The Company also provides reinsurance brokerage services and insurance consulting services in Hong Kong and Taiwan. The percentage of reinsurance brokerage services and insurance consulting services is less than 1% of our total revenue. The insurance products that the Company’s subsidiaries sell are underwritten by some of leading insurance companies in Taiwan and PRC, respectively.

(1) Life Insurance Products

Total revenue from Taiwan life insurance products were 88.1% and 89.7% of total revenue for the three months ended March 31, 2021 and 2020, respectively. Total revenue from PRC life insurance products were 6.0% and 4.8% of total revenue for the three months ended March 31, 2021 and 2020, respectively.

In addition to the periodic premium payment schedules, most of the individual life insurance products we distribute also allow the insured to choose to make a single, lump-sum premium payment at the beginning of the policy term. If a periodic payment schedule is adopted by the insured, a life insurance policy can generate periodic payment of fixed premiums to the insurance company for a specified period of time. This means that once the Company sells a life insurance policy with a periodic premium payment schedule, they will be able to derive commission and fee income from that policy for an extended period of time, sometimes up to 25 years. Because of this feature and the expected sustained growth of life insurance sales in China and Taiwan, we have focused significant resources ever since the incorporation of Anhou and Law Broker on developing our capability to distribute individual life insurance products with periodic payment schedules. We expect that sales of life insurance products will continuously be our primary source of revenue in the next several years.

(2) Property and Casualty Insurance Products

Total revenue from Taiwan property and casualty insurance products were 5.2% and 4.7% of total revenue for the three months ended March 31, 2021 and 2020, respectively. Total revenue from PRC property and casualty insurance products were 0.4% and 0.2% of total revenue for the three months ended March 31, 2021 and 2020, respectively.

As COVID-19 and its duration remain uncertain, we have been monitoring and will continue to measure and modify our business to protect our customers, sales professionals and employees. The extent of the COVID-19 impact to the Company will depend on numerous factors and developments. Consequently, any potential impacts of COVID-19 remain highly uncertain and cannot be predicted with confidence.

Critical Accounting Policies and Estimates

A critical accounting policy is one that is both important to the portrayal of our financial condition and results of operation and requires our management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We have had no changes to our Critical Accounting Policies as described in our most recent Form 10-K for the year ended December 31, 2020 and believe that of our significant accounting and reporting policies, the more critical policies include our accounting for revenue recognition, stock-based compensations, and estimate of income taxes. Our significant accounting policies are described in Note 2 of “Summary of Significant Accounting Policies” included within this Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission.

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Results of Operations- Three Months ended March 31, 2021 Compared to Three Months ended March 31, 2020

The following table shows the results of operations for the three months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021			2020
		(Unaudited)			(Unaudited)		Change			Percent
Revenue	$	30,530,117		$	28,523,210		$	2,006,907		7.0	%
Cost of revenue		18,973,432			19,499,924			(526,492)		(2.7)	%
Gross profit		11,556,685			9,023,286			2,533,399		28.1	%
Gross profit margin		37.9	%		31.6	%		6.3	%	19.9	%
Operating expenses:
Selling		579,777			490,030			89,747		18.3	%
General and administrative		6,090,254			6,984,554			(894,300)		(12.8)	%
Total operating expenses		6,670,031			7,474,584			(804,553)		(10.8)	%
Income from operations		4,886,654			1,548,702			3,337,952		215.5	%
Other income (expenses):
Interest income		83,998			110,891			(26,893)		(24.3)	%
Interest expenses		(42,470)			(59,282)			16,812		(28.4)	%
Foreign currency exchange gain (loss), net		328,466			(55,937)			384,403		(687.2)	%
Other – net		178,940			(96,802)			275,742		(284.9)	%
Total other income (expenses), net		548,934			(101,130)			650,064		(642.8)	%
Income before income taxes		5,435,588			1,447,572			3,988,016		275.5	%
Income tax expense		(1,398,806)			(1,111,287)			(287,519)		25.9	%
Net income		4,036,782			336,285			3,700,497		1,100.4	%
Net income attributable to the noncontrolling interests		(1,626,396)			(625,522)			(1,000,874)		160.0	%
Net income (loss) attributable to China United’s shareholders	$	2,410,386		$	(289,237)		$	2,699,623		(933.4)	%

Revenue

As a distributor of insurance products, we derive our revenue primarily from commissions and fees paid by insurance companies, typically calculated as a percentage of premiums paid by our customers to the insurance companies in among Taiwan, People’s Republic of China (“PRC”) and Hong Kong. We generate revenue primarily through our sales force, which consists of individual sales agents in our distribution and service network. For the three months ended March 31, 2021 and 2020, the revenues generated from our operations in Taiwan, PRC and Hong Kong are as follows:

Geographic Areas	Three Months Ended March 31,
	2021			2020			Change		Percent
Revenue
Taiwan segment	$	28,467,663		$	27,025,294		$	1,442,369	5.3	%
Percentage of revenue		93.2	%		94.7	%
PRC segment		1,951,469			1,429,297			522,172	36.5	%
Percentage of revenue		6.4	%		5.0	%
Hong Kong segment		110,985			68,619			42,366	61.7	%
Percentage of revenue		0.4	%		0.3	%
Total revenue	$	30,530,117		$	28,523,210		$	2,006,907	7.0	%

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Overall revenue from our Taiwan segment increased by $1.4 million from $27.0 million for the three months ended March 31, 2020 to $28.5 million for the three months ended March 31, 2021. Due to our continued growth in the sales of insurance products in the past years, we continue to receive more contingent commissions, which include trailing commissions, persistency rate linked bonuses and some other service allowance, for the three months ended March 31, 2021. However, the revenue growth was partially offset by decreases in the sales of long-term care and disability insurance products because of the discontinuations of these products in the year 2020.

Overall revenue from our PRC segment increased by $0.5 million to $2.0 million for the three months ended March 31, 2021 from $1.4 million for the three months ended March 31, 2020. Such increase in revenue of the PRC segment was mainly due to the adverse impact on the outbreak of COVID-19 that restricted to a significant extent our sales agents’ in-person selling activities in the first quarter of 2020. The operations in the PRC segment had been fully resumed in the second quarter of 2020.

The revenue in the Hong Kong Segment was primarily derived from reinsurance commission on sales of insurance products from other insurers to Taiwan Life Insurance Co., Ltd. (“Taiwan Life”) for risk management. Overall revenue from our Hong Kong segment for the three months ended March 31, 2021 remained consistent with the same period in 2020.

Cost of revenue and gross profit

The cost of revenue mainly consists of commissions paid to our sales professionals. The cost of revenue for the three months ended March 31, 2021 decreased by $0.5 million, to $19.0 million compared to $19.5 million for the three months ended March 31, 2020. Decreases in the cost of revenue were due to fewer insurance policies sold during the first quarter of 2021 compared to the same period of 2020, which result in a decrease in the direct commission costs paid to sales professionals for the first-year commissions.

Consequently, the gross profit margin increased from 31.6% for the three months ended March 31, 2020 to 37.9% for the three months ended March 31, 2021.

Selling expenses

Selling expenses were mainly incurred by Law Broker and Uniwill in connection with online marketing and advertising. Overall selling expenses for the three months ended March 31, 2021 remained consistent with the same period in 2020.

General and administrative expenses

General and administrative (“G&A”) expenses are principally comprised of salaries and benefits for our administrative staff, office rental expenses, travel expenses, depreciation and amortization, entertainment expenses, and professional service fees.

For the three months ended March 31, 2021, our G&A expenses were $6.1 million, reflecting a decrease of $0.9 million, compared with $7.0 million for the three months ended March 31, 2020. Our G&A expenses decreased for the three months ended March 31, 2021 because the Company recognized costs of $1.0 million related to stock-based compensation arrangements during the first quarter of 2020.

Other income (expenses)

Other income (expense) mainly consisted of interest income, interest expenses, gain or loss on valuation of financial assets, and foreign currency exchange gain or loss. Net other income for the three months ended March 31, 2021 was $0.5 million, reflecting an increase of $0.7 million, compared with net other expense of $0.1 million for the three months ended March 31, 2020. The increases in other income for the three months ended March 31, 2021 was due to foreign currency exchange gain recognized because of the depreciation of the New Taiwan Dollar against the US dollar during the first quarter of 2021.

Income tax expense

For the three months ended March 31, 2021, income tax expense was $1.4 million, reflecting an increase of 25.9%, compared with the income tax expense of $1.1 million for the three months ended March 31, 2020. The increase was mainly due to more taxes on undistributed earning accrued because of more revenues generated in the Taiwan segment during the first quarter of 2021.

27

Liquidity and Capital Resources

The following table represents a comparison of the net cash provided by operating activities, net cash provided by (used in) investing activities and net cash provided by financing activities for the three-month periods ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021		2020		Change		Percent
Net cash provided by operating activities	$	6,445,228	$	3,340,811	$	3,104,417	92.9	%
Net cash provided by (used in) investing activities		199,142		(5,335,582)		5,534,724	(103.7)	%
Net cash provided by financing activities		2,171,143		1,579,759		591,384	37.4	%

Operating activities

Net cash provided by operating activities during the three months ended March 31, 2021 was $6.4 million, an increase of 92.9% in comparison with $3.3 million net cash provided by operating activities during the three months ended March 31, 2020. The increase was mainly due to a strong business performance for the three months ended March 31, 2021 compared with that of the same period in 2020.

Investing activities

Net cash provided by investing activities was $0.2 million during the three months ended March 31, 2021 as compared with the net cash used in investing activities of $5.3 million for the three months ended March 31, 2020. Increases in the cash inflows for the investing activities resulted from sales of stock mutual funds during the first quarter of 2021.

Financing activities

Net cash provided by financing activities was $2.2 million during the three months ended March 31, 2021, which increased by $0.6 million from $1.6 million during the same period of 2020. The increase was mainly due to increases in the net proceeds from additional borrowings under the revolving credit agreements during the first quarter of 2021.

Contractual Obligations

There have been no significant changes to the Company’s contractual obligations as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Off Balance Sheet Arrangements

The Company had no off-balance sheet arrangements as of March 31, 2021.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

As a smaller reporting company as defined by Rule 12b-2 of the Exchange Act, we are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit of possible controls and procedures.

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Under the supervision and with the participation of management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of March 31, 2021. This conclusion was based on the material weaknesses in our internal control over financial reporting described in Part II, Item 9A, “Controls and Procedures” of our auunal report on Form 10-K for the year ended December 31, 2020. The material weaknesses have not been remediated as of March 31, 2021. We continue working the remediation of the material weakness, we may determine to take additional measures to address our control deficiencies. The material weakness will continue to exist until the remediation steps identified in our 2020 Form 10-K are fully implemented and concluded to be operating effectively.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis. If not remediated, the material weaknesses in our internal control over financial reporting described in the Form 10-K for the year of 2020 could result in a material misstatement of our annual or interim consolidated financial statements that would not be prevented or detected on a timely basis.

Changes in Internal Control over Financial Reporting

During the fiscal quarter ended March 31, 2021, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II.  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

During the three months ended March 31, 2021, we were not aware of any such legal proceedings or claims that we believed would have a material adverse effect on our business, financial condition or operating results. From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

On April 29, 2021, Rays Technology Co., Ltd. (“Rays”), a majority-owned subsidiary of the Company, received a Decision Letter dated April 27, 2021 from the Financial Supervisory Commission (Taiwan) (the “FSC”) stating that Rays was fined NTD900,000 (equivalent to approximately $32,233 USD) by the FSC for violating Article 167-1 Section 3 of the Insurance Act of Taiwan (the “Act”). The FSC found that from 2019 to 2021 Rays used its website “Triple-I” and its point system thereon to facilitate certain insurance sales and charged the points from certain participating insurance salespersons on the Triple-I point system once clients purchased insurance products from those insurance salespersons. The FSC found that Rays’ operations through the Triple-I website constituted insurance brokerage services but Rays did not have the proper insurance brokerage license while operating the Triple-I website.

On May 11, 2021, the FSC verbally informed Law Broker that it could expect a Decision Letter from the FSC stating that Law Broker was fined NTD1.7 million (equivalent to approximately $60,565 USD) and one-month correction period for violating the relevant laws and regulations of the Act. The FSC found that from 2011 to 2020 Law Broker charged advertising fees and business promotion fees pursuant to certain contracts and agreements with some of its strategic insurance companies and such charges exceeded the scope of remuneration for insurance-related services allowed for Law Broker. The FSC found that such business practices of Law Broker’s did not comply with Article 9 of the Act and Section 11 of Article 49 of the Regulations Governing Insurance Brokers.

29

The Company’s two subsidiaries, Rays and Law Broker, are in the process of adjusting their business models to regain compliance with the relevant laws and regulations and will pay the respective fines within the prescribed periods.

ITEM 1A. RISK FACTORS.

As a smaller reporting company, we are not required to make disclosure under this item.

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

Not applicable during this reporting period.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable during this reporting period.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable during this reporting period.

ITEM 6. EXHIBITS

Exhibit
Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
32.1*	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*The certifications attached as Exhibits 32.1 and 32.2 accompany this quarterly report on Form 10-Q pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	China United Insurance Service, Inc.
Date: May 17, 2021	By:	/s/ Yi-Hsiao Mao
	Name:	Yi-Hsiao Mao
	Its:	Chief Executive Officer
		(Principal Executive Officer)
Date: May 17, 2021	By:	/s/ Mei-Kuan Yeh
	Name:	Mei-Kuan Yeh
	Its:	Chief Financial Officer
		(Principal Financial and Accounting Officer)

31

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

I, Yi-Hsiao Mao, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of China United Insurance Service, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 17, 2021	/s/ Yi-Hsiao Mao
	Yi-Hsiao Mao
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

I, Mei-Kuan (Joyce) Yeh, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of China United Insurance Service, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 17, 2021	/s/ Mei-Kuan (Joyce) Yeh
	Mei-Kuan (Joyce) Yeh
	Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(SUBSECTIONS (a) AND (b) OF SECTION 1350, CHAPTER 63 OF TITLE 18,

UNITED STATES CODE)

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of Title 18, United States Code), the undersigned officer of China United Insurance Service, Inc. (the “Company”), does hereby certify with respect to the Quarterly Report of the Company on Form 10-Q for the period ended March 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 17, 2021	/s/ Yi-Hsiao Mao
	Yi-Hsiao Mao
	Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(SUBSECTIONS (a) AND (b) OF SECTION 1350, CHAPTER 63 OF TITLE 18,

UNITED STATES CODE)

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of Title 18, United States Code), the undersigned officer of China United Insurance Service, Inc. (the “Company”), does hereby certify with respect to the Quarterly Report of the Company on Form 10-Q for the period ended March 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 17, 2021	/s/ Mei-Kuan (Joyce) Yeh
	Mei-Kuan (Joyce) Yeh
	Chief Financial Officer
	(Principal Accounting Officer)

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2021	May 10, 2021
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2021
Entity File Number	000-54884
Entity Registrant Name	China United Insurance Service, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	30-0826400
Entity Address, Address Line One	7F, No. 311 Section 3
Entity Address, Address Line Two	Nan-King East Road
Entity Address, City or Town	Taipei City
Entity Address, Country	TW
City Area Code	8862
Local Phone Number	87126958
Title of 12(b) Security	N/A
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
No Trading Symbol Flag	true
Entity Common Stock, Shares Outstanding		29,421,736
Entity Central Index Key	0001512927
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Current assets
Cash and cash equivalents	$ 17,436,654	$ 9,063,338
Time deposits	53,749,018	53,339,508
Accounts receivable	18,744,199	25,346,250
Contract assets	97,480	0
Marketable securities	0	1,272,573
Other current assets	1,332,842	1,491,168
Total current assets	91,360,193	90,512,837
Right-of-use assets under operating leases	6,282,892	6,524,555
Property and equipment, net	2,157,445	2,373,245
Intangible assets, net	330,273	381,747
Long-term investments	2,636,257	2,835,095
Restricted cash - noncurrent	65,499	66,490
Deferred tax assets	866,702	1,021,890
Other assets	4,135,077	4,012,370
TOTAL ASSETS	107,834,338	107,728,229
Current liabilities
Commissions payable to sales professionals	9,801,187	12,088,291
Short-term loans	16,235,471	14,159,108
Contract liabilities	1,103,987	1,119,361
Income tax payable - current	4,266,279	3,146,018
Operating lease liabilities - current	3,018,303	3,043,056
Due to related parties	76,831	94,047
Other current liabilities	10,476,912	13,591,034
Total current liabilities	44,978,970	47,240,915
Income tax payable - noncurrent	719,515	719,515
Operating lease liabilities - noncurrent	3,191,735	3,440,343
Other liabilities	861,037	1,090,222
TOTAL LIABILITIES	49,751,257	52,490,995
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, par value $0.00001, 10,000,000 authorized, 1,000,000 issued and outstanding as of March 31, 2021 and December 31, 2020, respectively	10	10
Common stock, par value $0.00001, 100,000,000 authorized, 29,421,736 issued and outstanding as of March 31, 2021 and December 31, 2020, respectively	294	294
Additional paid-in capital	8,190,449	8,190,449
Statutory reserves	9,463,903	9,463,903
Retained earnings	11,507,794	9,097,408
Accumulated other comprehensive income	3,061,569	3,889,429
Total stockholders' equity attributable to China United's shareholders	32,224,019	30,641,493
Noncontrolling interests	25,859,062	24,595,741
TOTAL STOCKHOLDERS' EQUITY	58,083,081	55,237,234
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 107,834,338	$ 107,728,229

XML

CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares	Mar. 31, 2021	Dec. 31, 2020
CONSOLIDATED BALANCE SHEETS
Preferred stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred Stock, shares issued	1,000,000	1,000,000
Preferred Stock, shares outstanding	1,000,000	1,000,000
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	29,421,736	29,421,736
Common stock, shares outstanding	29,421,736	29,421,736

XML

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Revenue	$ 30,530,117	$ 28,523,210
Cost of revenue	18,973,432	19,499,924
Gross profit	11,556,685	9,023,286
Operating expenses:
Selling	579,777	490,030
General and administrative	6,090,254	6,984,554
Total operating expenses	6,670,031	7,474,584
Income from operations	4,886,654	1,548,702
Other income (expenses):
Interest income	83,998	110,891
Interest expenses	(42,470)	(59,282)
Foreign currency exchange gain (loss), net	328,466	(55,937)
Other - net	178,940	(96,802)
Total other income (expenses), net	548,934	(101,130)
Income before income tax	5,435,588	1,447,572
Income tax expense	(1,398,806)	(1,111,287)
Net income	4,036,782	336,285
Less: net income attributable to noncontrolling interests	(1,626,396)	(625,522)
Net income (loss) attributable to China United's shareholders	2,410,386	(289,237)
Other comprehensive items, net of tax:
Foreign currency translation loss	(1,191,299)	(567,633)
Other	364	(57)
Total other comprehensive loss	(1,190,935)	(567,690)
Comprehensive income (loss)	2,845,847	(231,405)
Less: comprehensive income attributable to noncontrolling interests	(1,263,321)	(390,854)
Comprehensive income (loss) attributable to China United's shareholders	$ 1,582,526	$ (622,259)
Weighted average shares outstanding:
Basic and diluted	29,421,736	29,421,736
Earnings (Loss) per share attributable to common stockholders of China United:
Basic and diluted	$ 0.079	$ (0.010)

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)	Common Stock [Member]	Preferred Stock [Member]	Additional Paid-in Capital [Member]	Statutory Reserves [Member]	Accumulated Other Comprehensive Income [Member]	Retained Earnings [Member]	Parent [Member]	Noncontrolling Interests [Member]	Total
Balance at Dec. 31, 2019	$ 294	$ 10	$ 8,190,449	$ 8,228,904	$ 417,015	$ 9,402,294	$ 26,238,966	$ 19,512,526	$ 45,751,492
Balance (in shares) at Dec. 31, 2019	29,421,736	1,000,000
Issuance of preferred stock-based compensation								980,466	980,466
Foreign currency translation gain					(332,984)		(332,984)	(234,649)	(567,633)
Other comprehensive loss					(38)		(38)	(19)	(57)
Net (loss) income						(289,237)	(289,237)	625,522	336,285
Balance at Mar. 31, 2020	$ 294	$ 10	8,190,449	8,228,904	83,993	9,113,057	25,616,707	20,883,846	46,500,533
Balance (in shares) at Mar. 31, 2020	29,421,736	1,000,000
Balance at Dec. 31, 2019	$ 294	$ 10	8,190,449	8,228,904	417,015	9,402,294	26,238,966	19,512,526	45,751,492
Balance (in shares) at Dec. 31, 2019	29,421,736	1,000,000
Business acquisition									1,428,622
Balance at Dec. 31, 2020	$ 294	$ 10	8,190,449	9,463,903	3,889,429	9,097,408	30,641,493	24,595,741	55,237,234
Balance (in shares) at Dec. 31, 2020	29,421,736	1,000,000
Foreign currency translation gain					(828,100)		(828,100)	(363,199)	(1,191,299)
Other comprehensive loss					240		240	124	364
Net (loss) income						2,410,386	2,410,386	1,626,396	4,036,782
Balance at Mar. 31, 2021	$ 294	$ 10	$ 8,190,449	$ 9,463,903	$ 3,061,569	$ 11,507,794	$ 32,224,019	$ 25,859,062	$ 58,083,081
Balance (in shares) at Mar. 31, 2021	29,421,736	1,000,000

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities:
Net (loss) income	$ 4,036,782	$ 336,285
Adjustment to reconcile net income to net cash provided by operating activities:
Noncash stock-based compensation	0	980,466
Depreciation and amortization	301,618	201,522
Amortization of bond premium	58	66
Gain on sales of financial assets	(140,913)	0
Loss on valuation of financial assets	150,992	170,530
Loss on disposals of equipment	77	7,346
Deferred income tax	80,710	(251,548)
Changes in operating assets and liabilities:
Accounts receivable	6,353,128	7,596,492
Contract assets	(98,867)	(221,848)
Other assets	33,244	(235,848)
Other assets	(58,712)	(156,709)
Commission payable to sales professionals	(2,154,109)	(4,171,583)
Income tax payable	1,171,156	1,306,071
Other current liabilities	(3,012,677)	(2,005,065)
Other liabilities	(217,259)	(215,366)
Net cash provided by operating activities	6,445,228	3,340,811
Cash flows from investing activities:
Cash received from issuance of preferred stock	0	319
Purchases of time deposits	(23,561,920)	(22,634,176)
Proceeds from maturities of time deposits	22,403,564	18,441,127
Purchases of marketable securities	0	(940,268)
Proceeds from sales of marketable securities	1,424,798	0
Proceeds from disposal of equipment	0	2,879
Purchase of equipment	(57,520)	(195,976)
Purchase of intangible assets	(9,780)	(9,487)
Net cash provided by (used in) investing activities	199,142	(5,335,582)
Cash flows from financing activities:
Proceeds from short-term loans	6,324,770	22,800,000
Repayment of short-term loans	(4,140,000)	(21,300,000)
Proceeds from related party borrowings	(13,627)	79,759
Net cash provided by (used in) financing activities	2,171,143	1,579,759
Foreign currency translation	(443,188)	(142,027)
Net increase (decrease) in cash, cash equivalents and restricted cash	8,372,325	(557,039)
Cash, cash equivalents and restricted cash, beginning balance	9,129,828	12,658,500
Cash, cash equivalents and restricted cash, ending balance	17,502,153	12,101,461
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	40,886	58,926
Income tax paid	$ 0	$ 0

XML

ORGANIZATION AND PRINCIPAL ACTIVITIES

3 Months Ended

Mar. 31, 2021

ORGANIZATION AND PRINCIPAL ACTIVITIES

ORGANIZATION AND PRINCIPAL ACTIVITIES

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES

China United Insurance Service, Inc. (“China United” or “CUII”), its subsidiaries and variable-interest entities (collectively referred to herein as the “Company”) primarily engage in insurance brokerage and insurance agency services. The Company markets and sells to customers two broad categories of insurance products: life insurance products and property and casualty insurance products, both focused on meeting the particular insurance needs of individuals. The insurance products the Company sells are underwritten by some of the leading insurance companies in Taiwan and China. The Company manages its business through three geographic operating segments, Taiwan, the PRC, and Hong Kong. The Company’s common stock currently trades over the counter on the OTCQB under the ticker symbol “CUII.”

The corporate structure as of March 31, 2021 is as follows:

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The condensed consolidated financial statements include the accounts of China United, its subsidiaries and variable interest entities as shown in the corporate structure in Note 1. All significant intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to the consolidated financial statements for prior year to the current year’s presentation. Such reclassifications have no effect on net income as previously reported.

Basis of Presentation

The condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement of the financial statements have been included. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

These condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2020, which were included in the Company’s 2020 Annual Report on Form 10-K (“2020 Form 10-K”). The accompanying consolidated balance sheet as of December 31, 2020, has been derived from the Company’s audited consolidated financial statements as of that date.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto. Actual results may differ from those estimates and assumptions.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable includes commission receivables stated at net realizable values. The Company reviews its accounts receivable regularly to determine if a bad debt allowance is necessary at each quarter-end. Management reviews the composition of accounts receivable and analyzes the age of receivables outstanding, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the necessity of making such allowance. No allowance was deemed necessary as of March 31, 2021 and December 31, 2020.

Foreign Currency Transactions

China United’s financial statements are presented in U.S. dollars ($), which is the China United’s reporting and functional currency. The functional currencies of the China United’s subsidiaries are New Taiwan dollar (“NTD”), China yuan (“RMB”) and Hong Kong dollar (“HKD”). The resulting translation adjustments are reported under other comprehensive income. Gains and losses resulting from the translation of foreign currency transactions are reflected in the consolidated statements of operations and other comprehensive income (loss). Monetary assets and liabilities denominated in foreign currency are translated at the functional currency using the rate of exchange prevailing at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the consolidated statements of operations and other comprehensive income (loss).

The Company translates the assets and liabilities into U.S. dollars using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from NTD, RMB and HKD into U.S. dollars are recorded in stockholders’ equity as part of accumulated other comprehensive income. The exchange rates used for condensed consolidated financial statements are as follows:

	Average Rate for the three months ended
	March 31,
	2021		2020
Taiwan dollar (NTD)	NTD	28.06892	NTD	30.10404
China yuan (RMB)	RMB	6.48199	RMB	6.97985
Hong Kong dollar (HKD)	HKD	7.75690	HKD	7.77046
United States dollar ($)	$	1.00000	$	1.00000

	Exchange Rate at
	March 31, 2021		December 31, 2020
Taiwan dollar (NTD)	NTD	28.46825	NTD	28.07725
China yuan (RMB)	RMB	6.55363	RMB	6.52765
Hong Kong dollar (HKD)	HKD	7.77422	HKD	7.75249
United States dollar ($)	$	1.00000	$	1.00000

Earnings (Loss) Per Share

Basic earnings (loss) per common share (“EPS”) is computed by dividing net income attributable to the common shareholders of the Company by the weighted-average number of common shares outstanding. Diluted EPS is computed in the same manner as basic EPS, except the number of shares includes additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued.

As the holders of preferred stock of the Company are entitled to share equally with the holders of common stock, on a per share basis, in such dividends and other distributions of cash, property or shares of stock of the Company as may be declared by the board of directors, the preferred stock is treated as a participating security. When calculating the basic earnings per common share, the two-class method is used to allocate earnings to common stock and participating security as required by FASB ASC Topic 260, “Earnings Per Share.” As of March 31, 2021 and 2020, the Company does not have any potentially dilutive instrument.

Fair Value of Financial Instruments

Fair value accounting establishes a framework for measuring fair value and expands disclosure about fair value measurements. Fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the financial instruments.

● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

The following table summarizes financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020:

	March 31, 2021
	Fair Value						Carrying
	Level 1		Level 2		Level 3		Value
Assets
Total time deposits	$	53,749,018	$	—	$	—	$	53,749,018
Long-term investments:
REITs		1,286,159		—		—		1,286,159
Total assets measured at fair value	$	55,035,177	$	—	$	—	$	55,035,177

	December 31, 2020
	Fair Value						Carrying
	Level 1		Level 2		Level 3		Value
Assets
Total cash equivalents and time deposits	$	53,339,508	$	—	$	—	$	53,339,508
Marketable securities :
Stock Mutual funds		1,272,573		—		—		1,272,573
Long-term investments:
Government bonds held for available -for -sale		—		107,096		—		107,096
REITs		1,359,100		—		—		1,359,100
Total assets measured at fair value	$	55,971,181	$	107,096	$	—	$	56,078,277

The carrying amounts of current financial assets and liabilities in the consolidated balance sheets for cash equivalents and time deposits, approximate fair value due to the short-term duration of those instruments.

Marketable securities and long-term investments in REITs – The fair values of mutual funds and REITs were valued based on quoted market prices in active markets.

Government bonds – The fair value of government bonds is valued based on theoretical bond price in the Taipei Exchange.  

According to Taiwan Regulations Governing Deposit of Bond and Acquirement of Insurance by Insurance Agents, Insurance Brokers and Insurance Surveyors (“RGDBAI”) Article 3 and 4, Law Broker is required to maintain a minimum of NTD 3,000,000 ($105,381 and $106,848 as of March 31, 2021 and December 31, 2020, respectively) restricted balance in a separate account or government bonds issued by the central government in order to maintain its insurance license. The government bonds matured on March 17, 2021 and the amortized cost of the bonds was nil and $106,906 (NTD 3,001,620) as of March 31, 2021 and December 31, 2020, respectively. The Company will purchase a similar investment after the maturity of the bonds to maintain the insurance license.

Concentration of Risk

The Company maintains cash with banks in the USA, People’s Republic of China (“PRC”), Hong Kong, and Taiwan. Should any bank holding the Company’s cash become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose all or part of its cash deposit with that bank; however, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. In Taiwan, a depositor has up to NTD3,000,000 insured by Central Deposit Insurance Corporation (“CDIC”). In China, a depositor has up to RMB500,000 insured by the People’s Bank of China Financial Stability Bureau (“FSD”). In Hong Kong, a depositor has up to HKD500,000 insured by Hong Kong Deposit Protection Board (“DPB”). In the United States, the standard insurance amount is $250,000 per depositor in a bank insured by the Federal Deposit Insurance Corporation (“FDIC”).

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, time deposits, restricted cash, register capital deposit and accounts receivable. As of March 31, 2021 and December 31, 2020, approximately $2,215,000 and $2,229,000 of the Company’s cash and cash equivalents, time deposits, and registered capital deposits held by financial institutions, was insured, and the remaining balance of approximately $71,987,000 and $63,222,000, was not insured. With respect to accounts receivable, the Company generally does not require collateral and does not have an allowance for doubtful accounts.

For the three months ended March 31, 2021 and 2020, the Company’s revenues from sale of insurance policies underwritten by these companies were:

	Three months ended March 31,
	2021				2020
			% of Total				% of Total
	Amount		Revenue		Amount		Revenue
Taiwan Life Insurance Co., Ltd.	$	7,231,458	24	%	$	5,592,675	20	%
TransGlobe Life Insurance Inc.		6,600,629	22	%		4,995,954	18	%
Farglory Life Insurance Co., Ltd.		4,519,841	15	%		3,379,091	12	%
Shin Kong Life Insurance Co., Ltd.		(*)	(*)			3,062,062	11	%

(*) The related revenues for the three months ended had not exceeded 10% or more of the consolidated revenues.

As of March 31, 2021 and December 31, 2020, the Company’s accounts receivable from these companies were:

	March 31, 2021				December 31, 2020
			% of Total				% of Total
			Accounts				Accounts
	Amount		Receivable		Amount		Receivable
Taiwan Life Insurance Co., Ltd	$	5,103,386	27	%	$	4,557,862	18	%
TransGlobe Life Insurance Inc.		4,118,134	22	%		7,761,664	31	%
Farglory Life Insurance Co., Ltd.		2,046,970	11	%		2,787,586	11	%

The Company’s operations are in the PRC, Hong Kong and Taiwan. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic, foreign currency exchange and legal environments in the PRC, Hong Kong and Taiwan, and by the state of each economy. The Company’s results of operations may be adversely affected by changes in the political and social conditions in the PRC, Hong Kong and Taiwan, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.

Stock-Based Compensation

The Company accounts for equity-based compensation cost in accordance with ASC 718, Compensation-Stock Compensation after adoption of ASC 2018-07, which requires the measurement and recognition of compensation expense related to the fair value of equity-based compensation awards that are ultimately expected to vest. Stock-based compensation expense recognized includes the compensation cost for all share-based compensation payments granted to employees and nonemployees, net of estimated forfeitures, over the employees requisite service period or the non-employee performance period based on the grant date fair value estimated in accordance with the provisions of ASC 718. ASC 718 is also applied to awards modified, repurchased, or cancelled during the periods reported. Compensation costs for awards granted to nonemployees under Uniwill for the three months ended March 31, 2021 and 2020 were nil and $980,466, respectively.

Income Taxes

The Company records income tax expense using the asset-and-liability method of accounting for deferred income taxes. Under this method, deferred taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance if, based on available evidence, it is more likely than not that the deferred tax assets will not be realized.

When tax returns are filed, it is likely some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits are classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of operations and other comprehensive income (loss).

New Accounting Pronouncements and Other Guidance

New Accounting Pronouncements Effective January 1, 2021:

Income Tax

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes which is intended to simplify various aspects related to accounting for income taxes. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted. The Company adopted this standard in the beginning of January 1, 2021, and the adoption did not have any significant impact on the Company’s condensed consolidated financial statements.

Equity Securities, Equity-method Investments and Certain Derivatives

In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The guidance provides clarification of the interaction of rules for equity securities, the equity method of accounting and forward contracts and purchase options on certain types of securities. ASU 2020-01 is effective for the Company in the first quarter of 2021. The adoption did not have any significant impact on the Company’s condensed consolidated financial statements.

Accounting Standards Issued but Not Yet Adopted:

Credit Losses

In June 2016, the FASB issued ASU No. 2016-13, (FASB ASC Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, rather than the “incurred loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments.

In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company believes the adoption of ASU No. 2016-13 will not have a material impact on its financial position and results of operations.

Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The standard provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions in which the reference LIBOR or another reference rate are expected to be discontinued as a result of the Reference Rate Reform. The standard is effective for all entities. The standard may be adopted as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 through December 31, 2022. We are currently evaluating the effects of the standard on our consolidated financial statements and related disclosures.

Convertible Debt, and Derivatives and Hedging

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, to improve financial reporting associated with accounting for convertible instruments and contracts in an entity's own equity. ASU 2020-06 will be effective for the Company in the first quarter of 2022. The Company is currently evaluating the amended guidance and the impact on its consolidated financial statements and related disclosures.

The management does not believe that other than disclosed above, accounting pronouncements the recently issued but not yet adopted will have a material impact on its financial position results of operations or cash flows.

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CASH, CASH EQUIVALENTS AND RESTRICTED CASH

3 Months Ended

Mar. 31, 2021

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

NOTE 3 – CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Cash, cash equivalents and restricted cash consisted of the following as of March 31, 2021 and December 31, 2020:

	March 31, 2021		December 31, 2020
Cash and cash equivalents:
Cash on hand and in banks	$	17,436,654	$	9,063,338
Time deposits - with original maturities less than three months (see Note 4)		—		—
		17,436,654		9,063,338
Restricted cash – noncurrent		65,499		66,490
Total cash, cash equivalents and restricted cash shown in the statements of cash flows	$	17,502,153	$	9,129,828

Noncurrent restricted cash includes a mandatory deposit in the bank in conformity with Provisions of the Supervision and Administration of Specialized Insurance Agencies in PRC, which is not allowed to be withdrawn without the permission of the regulatory commission, and a trust account held for the bonus accrued for officers of Law Insurance Broker Co., Limited ("Law Broker').

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TIME DEPOSITS

3 Months Ended

Mar. 31, 2021

TIME DEPOSITS

TIME DEPOSITS

NOTE 4 – TIME DEPOSITS

	March 31, 2021		December 31, 2020
Total time deposits	$	53,749,018	$	53,339,508
Less: Time deposits – with original maturities less than three months (see Note 3)		—		—
Time deposits – original maturities over three months but less than one year	$	53,749,018	$	53,339,508

Time Deposits Pledged as Collateral

The Company had a total of $17,369,198 (NTD 494.4 million) and $15,930,161 (NTD 447.3 million) restricted time deposits, respectively, as of March 31, 2021 and December 31, 2020. As of March 31, 2021 and December 31, 2020, time deposits of $35,128 (NTD 1 million) and 35,616 (NTD 1 million) were pledged as collateral for the Company’s credit card, respectively. In addition, the Company had time deposits of $17,334,070 and $15,894,545 pledged as collateral for short-term loans, respectively, as of March 31, 2021 and December 31, 2020. See Note 5.

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SHORT-TERM LOANS

3 Months Ended

Mar. 31, 2021

SHORT-TERM LOANS

SHORT-TERM LOANS

NOTE 5 – SHORT-TERM LOANS

The Company’s short-term loans consisted of the following as of March 31, 2021 and December 31, 2020:

		March 31, 2021				December 31, 2020
		Debt		Collateral		Debt		Collateral
Line of Credit	Collateral	balance		value		balance		value
$8.9 million (NTD 250 million) revolving line of credit with Cathay United Bank Company Limited (“CUB”); the loan bears interest at the higher of CUB's adjustable rates for loans plus a margin of 0.41% or the 1-month TAIBOR rate plus a margin of 0.8% and matures on May 4, 2021. The maturity date was extended to May 4, 2022.	Time deposits	$	7,745,471	$	7,745,471	$	6,019,108	$	6,019,108
$4.0 million revolving line of credit with O-Bank; the loan bears interest at the TAIFX3 rate plus a margin of 0.5% and matures on December 29, 2021	Time deposits		4,000,000		4,847,506		4,000,000		4,915,011
$1.6 million revolving line of credit with KGI; the loan bears interest at the LIBOR rate plus a margin of 0.9% and matures on February 18, 2022	Time deposits		—		—		2,100,000		2,443,003
$1.5 million revolving line of credit with CTBC Bank Co., Ltd. (“CTBC”); the loan bears interest at the CTBC’s cost of funds plus a negotiated margin on individual case basis and matures on August 28, 2021	Time deposits		1,500,000		1,500,000		1,200,000		1,384,833
$2.5 million revolving line of credit with Far Eastern International Bank (“FEIB”); the loan bears interest at the higher of LIBOR or TAIFX3 rate plus a margin of 0.7% and matures on December 17, 2021	Time deposits		1,990,000		2,241,093		840,000		1,132,590
$1.0 million revolving line of credit with E. Sun Bank (“E. Sun”); the loan bears interest at the higher of LIBOR or TAIFX3 rate plus a margin of 0.7% and matures on June 3, 2021	Time deposits		1,000,000		1,000,000		—		—
		$	16,235,471	$	17,334,070	$	14,159,108	$	15,894,545

Borrowings under the revolving credit agreements are generally due 90 days or less. Total interest expenses incurred from the credit facilities were $42,470 and $59,282 for the three months ended March 31, 2021 and 2020, respectively.

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COMMISSIONS PAYABLE TO SALES PROFESSIONALS

3 Months Ended

Mar. 31, 2021

COMMISSIONS PAYABLE TO SALES PROFESSIONALS

COMMISSIONS PAYABLE TO SALES PROFESSIONALS

NOTE 6 – COMMISSIONS PAYABLE TO SALES PROFESSIONALS

Commissions payable to sales professionals consisted of the following as of March 31, 2021 and December 31, 2020:

	March 31, 2021		December 31, 2020
Taiwan	$	9,483,511	$	11,814,222
PRC		317,676		274,069
Hong Kong		—		—
Total commissions payable to sales professionals	$	9,801,187	$	12,088,291

Commissions payable to sales professionals are usually settled within twelve months.

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OTHER CURRENT LIABILITIES

3 Months Ended

Mar. 31, 2021

OTHER CURRENT LIABILITIES

OTHER CURRENT LIABILITIES

NOTE 7 – OTHER CURRENT LIABILITIES

Other current liabilities were as follows, as of March 31, 2021 and December 31, 2020:

	March 31, 2021		December 31, 2020
Accrued bonus	$	5,432,444	$	7,854,488
Payroll payable and other benefits		1,746,549		1,767,417
Accrued business tax and tax withholdings		913,419		1,643,082
Accrued tax penalties		—		170,016
Other accrued liabilities		2,384,500		2,156,031
Total other current liabilities	$	10,476,912	$	13,591,034

Accrued Bonus

The Company’s foreign subsidiaries have various bonus plans, which provide cash awards to employees based upon their performance, and had accrued bonus of $3,269,661 and $5,948,157, respectively, related to cash awards to employees as of March 31, 2021 and December 31, 2020. The Company has other compensation plans solely provided by Law Broker to its officers. The compensation plans eligible to Law Broker’s officers include a surplus bonus based on a percentage of income after tax and other performance bonuses, such as retention and non-competition. For the three months ended March 31, 2021 and 2020, the bonus expenses to Law Broker’s officers under the compensation plans were $91,896 and $249,939, respectively.

As of March 31, 2021 and December 31, 2020, the Company had accrued bonus of $2,162,783 and $1,906,331 payable within next 12 months, and noncurrent accrued bonus of nil and $237,440, respectively, related to the compensation plans for Law Broker’s officers. See Note 14 for additional information of agreements with Law Broker’s officers.

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OTHER LIABILITIES

3 Months Ended

Mar. 31, 2021

OTHER LIABILITIES

OTHER LIABILITIES

NOTE 8 – OTHER LIABILITIES

The Company’s other liabilities consisted of the following as of March 31, 2021 and December 31, 2020: 

	March 31, 2021		December 31, 2020
Due to previous shareholders of AHFL	$	526,903	$	534,240
Net defined benefit liability		334,134		318,542
Accrued bonus - noncurrent (Note 7)		—		237,440
Total other liabilities	$	861,037	$	1,090,222

Due to Previous Shareholders of AHFL

Due to previous shareholders of AHFL is the entire remaining balance payable of the 2012 acquisition cost. On March 27, 2019, the Company and the selling shareholders of Action Holdings Financial Limited (“AHFL”) entered into a sixth amendment to the acquisition agreement, pursuant to which, the Company would make the cash payment in the amount of NTD15 million on or prior to March 31, 2021. In March 2021, the Company entered into a seventh amendment with the selling shareholders of AHFL to extend the repayment date to March 31, 2024. The amount consisted of 68% and 32% of payables due to related parties and third parties, respectively. As of March 31, 2021 and December 31, 2020, the amount due to previous shareholders of AHFL were $526,903 and $534,240, respectively. The change in amounts was due to foreign currency translation.

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CONTRACTS WITH CUSTOMERS

3 Months Ended

Mar. 31, 2021

CONTRACTS WITH CUSTOMERS

CONTRACTS WITH CUSTOMERS

NOTE 9 – CONTRACTS WITH CUSTOMERS

Information about accounts receivable, contract assets, and contract liabilities from contracts with customers is as follows:

	March 31, 2021		December 31, 2020
Accounts receivable	$	18,744,199	$	25,346,250
Contract assets		97,480		—
Contract liabilities		1,103,987		1,119,361

Contract assets are the Company’s conditional rights to consideration for completed performance obligation and are in relation to the performance bonus to be rewarded based on the annual performance. The Company recognizes the contingent commission as a contract asset when the performance obligation is fulfilled, and the Company has not had the unconditional rights to the payment. As of March 31, 2021 and December 31, 2020, the Company had $97,480 and nil of contract assets, respectively.

Contract Liabilities – AIATW

On June 10, 2013, AHFL entered into a Strategic Alliance Agreement (the “Alliance Agreement”) with AIA International Limited Taiwan Branch (“AIATW”), the purpose of which is to promote life insurance products provided by AIATW within Taiwan by insurance agencies or brokerage companies affiliated with AHFL or China United. The original term of the Alliance Agreement was from June 1, 2013 to May 31, 2018. Pursuant to the terms of the Alliance Agreement, AIATW paid AHFL an execution fee of approximately $8,326,700 (NTD250,000,000, including the tax of NTD11,904,762, the “Execution Fee”), which is to be recorded as revenue upon fulfilling sales targets and the 13-month persistency ratio, as defined, over the next five years. The Execution Fee may be required to be recalculated if certain performance targets are not met by AHFL.

On September 30, 2014, AHFL entered into a Strategic Alliance Supplemental Agreement (the “First Amendment to the Alliance Agreement”) with AIATW. In the First Amendment to the Alliance Agreement, the performance targets and the provision about refunding the Execution Fee on a pro rata basis when the performance targets are not met were revised.

On January 6, 2016, AHFL entered into an Amendment No. 2 to the Alliance Agreement (the “Second Amendment to the Alliance Agreement”) with AIATW to further revise certain provisions in the Strategic Alliance Agreement and the previous amendment entered into by and between AHFL and AIATW. To the extent permitted by applicable laws and regulations, AHFL shall assist and encourage any insurance agency company or insurance brokerage company duly approved by the competent government authorities of Taiwan (the “Appointed Broker/Agent”), to cooperate with AIATW for the promotion of life insurance products of AIATW. Pursuant to the Second Amendment to the Alliance Agreement, the expiration date of the Strategic Alliance Agreement was extended from May 31, 2018 to December 31, 2021, and the effect of the Alliance Agreement during the period from October 1, 2014 to December 31, 2015 was suspended. In addition, both AHFL and AIATW agreed to adjust certain terms and conditions set forth in the Alliance Agreement, some of which are as follows: (i) expanding the scope of services to be provided by AHFL to AIATW to include, without limitation, assessment and advice on suitability of cooperative partners, advice on product strategies suitable for promotion channel development, advice on promotion/sales channel improvement, advice on promotion channel marketing and strategic planning, and promotion channel talent training; and (ii) removing certain provisions related to performance milestones and refund of Execution Fees. On March 15, 2016, AHFL issued a promise letter (the “2016 Letter”) to AIATW that AHFL is required to (i) fulfill sales targets and (ii) the 13-month persistency ratio.

On June 14, 2017, with AIATW’s consent, the 2016 Letter was revoked in order to conform with the latest terms and conditions regarding the cooperation between AHFL and AIATW as set forth in an Amendment No. 3 to the Alliance Agreement (the “Third Amendment to the Alliance Agreement”). Pursuant to the Third Amendment to the Alliance Agreement, both AHFL and AIATW agreed to adjust certain terms and conditions set forth this amendment, some of which included (i) except the first contract year (April 15^th, 2013 to September 30^th, 2014), the sales target of the alliance between the parties shall be changed to (a) value of new business (“VONB”) and (b) the 13-month persistency ratio; and (ii) AIATW will calculate and recognize the VONB and 13-month persistency ratio each contract year and inform the Company the result; and (iii) the Company agrees to return the basic business promotion fees to AIATW within thirty (30) days of receipt of the notice sent by AIATW if the Company fails to meet the targets set forth in the Third Amendment to the Alliance Agreement, AIATW reserves the right to offset such amount against the amount payable by it to the Company; and (iv) upon the termination of the Alliance Agreement and its amendments pursuant to the Section 8.2 of the Alliance Agreement, both parties agreed to calculate the amount to be returned or repaid, as applicable, based on the past and current contract years. The Company shall return the basic business execution fees at NTD50 million for the first contract year, NTD35 million for the second contract year, and NTD33 million for each contract year thereafter within one month after the termination.

The following table presents the amounts recognized as revenue and refund for each contract year:

Contract				Revenue			Revenue VAT		Refund			Refund VAT
Year	Period	Execution Fees		Amount			Amount		Amount			Amount
First	04/15/2013 - 09/30/2014	NTD	50,000,000	NTD	27,137,958	(1)	NTD	1,356,898	NTD	20,481,090	(1)	NTD	1,024,054
Second	01/01/2016 - 12/31/2016	NTD	35,000,000	NTD	12,855,000	(2)	NTD	642,750	NTD	20,478,333	(2)	NTD	1,023,917
Third	01/01/2017 - 12/31/2017	NTD	33,000,000	NTD	12,628,201	(3)	NTD	631,410	NTD	18,800,370	(3)	NTD	940,019
Fourth	01/01/2018 - 12/31/2018	NTD	33,000,000	NTD	11,228,600	(4)	NTD	561,429	NTD	20,199,971	(4)	NTD	1,010,000
Fifth	01/01/2019 - 12/31/2019	NTD	33,000,000	NTD	9,481,371	(5)	NTD	474,069	NTD	21,947,200	(5)	NTD	1,097,360
Sixth	01/01/2020 - 12/31/2020	NTD	33,000,000	NTD	12,223,829	(6)	NTD	611,191	NTD	19,204,743	(6)	NTD	960,237
Seventh	01/01/2021 - 12/31/2021	NTD	33,000,000	NTD	—	(7)	NTD	—	NTD	31,428,571	(7)	NTD	1,571,429
TOTAL		NTD	250,000,000	NTD	85,554,959		NTD	4,277,747	NTD	152,540,278		NTD	7,627,016

1) The revenue recognition for the first contract year is based on the annual first year premium (“AFYP”) set in Alliance Agreement, which is different from other contract years. From the second contract year to the seventh contract year, the revenue calculation is based on VONB. The Company recognized the first contract year’s revenue amount of $892,742 (NTD 27,137,958), net of Value-Added Tax (“VAT ") in 2017 due to uncertainty resolved after Amendment 3 went effective. Besides, on December 3, 2015 and February 23, 2016, the Company refunded the amounts of $160,573 (NTD4,761,905), net of VAT, and $530,056 (NTD15,719,185), net of VAT, to AIATW, respectively, due to the portion of performance sales targets not met during the first contract year based on original agreement and earlier amendments.

2) For the year ended December 31, 2016, the Company recognized the second contract year’s revenue amount of $422,883 (NTD 12,855,000), net of VAT, and refunded the amount of $690,537 (NTD 20,478,333), net of VAT, due to uncertainty resolved after Amendment 3 went effective.

3) For the year ended December 31, 2017, the Company recognized the third contract year’s revenue amount of $415,423 (NTD12,628,201), net of VAT, and refund amount of $633,955 (NTD18,800,370), net of VAT, for the same contract period based on the calculation of VONB and 13-month persistency.

4) For the year ended December 31, 2018, the Company recognized the fourth contract year’s revenue amount of $372,650 (NTD11,228,600), net of VAT, and refund amount of $670,389 (NTD 20,199,971), net of VAT, for the same contract period based on the calculation of VONB and 13-month persistency.

5) For the year ended December 31, 2019, the Company recognized the fifth contract year's revenue amount of $314,953 (NTD9,481,371), net of VAT, and refund the amount of $729,045 (NTD 21,947,200), net of VAT, for the same contract period based on the calculation of VONB and 13-month persistency.

6) For the year ended December 31, 2020, the Company recognized the sixth contract year’s revenue amount of $415,186 (NTD 12,223,829), net of VAT, and refund the amount of $652,294 (NTD 19,204,743), net of VAT, for the same contract period based on the calculation of VONB and 13-month persistency.

7) The Company estimated VONB and 13-month persistency ratio for the year ending December 31, 2021 and calculated the revenue amount to be nil for the year. The amount will be reassessed every quarter until receiving AIATW’s notice.

The Company recognized revenue of nil and $102,166 (NTD3,075,599), net of VAT for the three months ended March 31, 2021 and 2020 related to this agreement. As of March 31, 2021 and December 31, 2020, the Company had contract liabilities of $1,103,987 and $1,119,361, respectively, related to the Alliance Agreement.

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LEASE

3 Months Ended

Mar. 31, 2021

LEASE

LEASE

NOTE 10 –LEASE

For the three months ended March 31, 2021 and 2020, the Company recorded its operating lease cost of $1,020,873 and $678,348, respectively.

Operating lease right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. As of March 31, 2021 and December 31, 2020, the operating lease right-of-use assets and lease liabilities were as follows:

	March 31, 2021		December 31, 2020
Right-of-use assets under operating leases	$	6,282,892	$	6,524,555
Operating lease liabilities – current		3,018,303		3,043,056
Operating lease liabilities – noncurrent		3,191,735		3,440,343

Lease term and discount rate

	March 31, 2021		December 31, 2020
Weighted average remaining lease term
Operating lease	2.48	years	2.64	years
Weighted average discount rate
Operating lease	3.64	%	3.15	%

Supplemental cash flow information related to leases

	March 31, 2021		December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows related to operating leases	$	1,142,714	$	3,310,015
Amortization of right-of-use assets under operating leases		877,022		3,009,101

The minimum future lease payments as of March 31, 2021 are as follows:

	Amount
2021 (remainder of year)	$	2,469,856
2022		2,160,357
2023		1,155,709
2024		572,054
2025		101,832
Thereafter		—
Total minimum lease payments		6,459,808
Less: Interest		(249,770)
Present value of future minimum lease payments	$	6,210,038

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NON-CONTROLLING INTERESTS

3 Months Ended

Mar. 31, 2021

NON-CONTROLLING INTERESTS

NON-CONTROLLING INTERESTS

NOTE 11 – NONCONTROLLING INTERESTS

Noncontrolling interests consisted of the following as of March 31, 2021 and December 31, 2020:

	% of Non-						Other
	Controlling		December 31,		Net Income		Comprehensive		March 31,
Name of Entity	Interests		2020		(Loss)		Loss		2021
Law Enterprise	34.05	%	$	(414,957)	$	(72,946)	$	(6,187)	$	(494,090)
Law Broker	34.05	%		25,177,272		1,404,896		(353,398)		26,228,770
Uniwill	50.00	%		(421,035)		267,364		(2,646)		(156,317)
Rays	1.00	%		(5,772)		(297)		—		(6,069)
PFAL	49.00	%		423,978		27,593		(767)		450,804
MKI	49.00	%		(732)		—		—		(732)
PA Taiwan	49.00	%		(163,013)		(214)		(77)		(163,304)
Total			$	24,595,741	$	1,626,396	$	(363,075)	$	25,859,062

	% of Non-								Other
	controlling		December 31,		Contribution		Net Income		Comprehensive		December 31,
Name of Entity	Interest		2019		/Acquisition		(Loss)		Income		2020
Law Enterprise	34.05	%	$	(204,964)	$	—	$	(241,231)	$	31,238	$	(414,957)
Law Broker	34.05	%		19,536,104		—		4,193,314		1,447,854		25,177,272
Uniwill	50.00	%		—		1,427,603		(1,918,023)		69,385		(421,035)
Rays	1.00	%		—		1,019		(6,791)		—		(5,772)
PFAL	49.00	%		351,278		—		71,713		987		423,978
MKI	49.00	%		283		—		(1,015)		—		(732)
PA Taiwan	49.00	%		(167,531)		—		4,227		291		(163,013)
PTC Nanjing	49.00	%		(2,644)		—		1,465		1,179		—
Total			$	19,512,526	$	1,428,622	$	2,103,659	$	1,550,934	$	24,595,741

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INCOME TAX

3 Months Ended

Mar. 31, 2021

INCOME TAX

INCOME TAX

NOTE 12 – INCOME TAX

The following table reconciles the Company’s statutory tax rates to effective tax rates for the three months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021		2020
US statutory rate	21	%	21	%
Tax rate difference	(2)	%	(2)	%
Tax base difference	—	%	1	%
Income tax on undistributed earnings	4	%	11	%
Change in valuation allowance	4	%	25	%
Utilization of deferred tax assets not previously recognized	(1)	%	—	%
Provision for uncertain tax position	—	%	19	%
Non-deductible and non-taxable items	1	%	2	%
True up of prior year income tax	(1)	%	—	%
Effective tax rate	26	%	77	%

The Company’s income tax expense is mainly generated by its subsidiaries in Taiwan. The Company’s subsidiaries in Taiwan are subject to the statutory tax rate on income reported in the statutory financial statements after appropriate adjustments at 20% and 5% of the tax on any undistributed earnings according to the Income Tax Law of Taiwan. As of March 31, 2021 and December 31, 2020, the Company had current tax payable of $4,151,716 and $2,978,618 for Taiwan income tax, respectively.

WFOE and the Consolidated Affiliated Entities (“CAE”) in the PRC are governed by the Income Tax Law of PRC concerning private-run enterprises, which are generally subject to tax at 25% on income reported in the statutory financial statements after appropriate adjustments. WFOE and CAE had no income tax expenses for the three months ended March 31, 2021 and the year ended December 31, 2020 due to the loss positions.

The Company’s subsidiaries in Hong Kong are governed by the Inland Revenue Ordinance Tax Law of Hong Kong and are generally subject to a profit tax at the rate of 8.25% on the estimated assessable profits. As of March 31, 2021 and December 31, 2020, the Company had current tax payable of $18,627 and $13,613 for Hong Kong income tax.

The Company is subject to the statutory rate of 21% in the U.S. federal jurisdiction. The Company had no income tax expense for the three months ended March 31, 2021 and 2020 due to the loss positions and no GILTI tax obligation existed. The Company recognized a one-time transition tax of $1,199,195 in the year of 2018 based on the Company’s total post-1986 earnings and profits (“E&P”) that it previously deferred from U.S. income tax. As of March 31, 2021 and December 31, 2020, the Company had current tax payable of $95,936 and $153,787 and noncurrent tax payable of $719,515 and $719,515 for U.S. income tax.

As of March 31, 2020, the Company recorded an uncertain tax positions approximately of $277,000 related to withholding tax matters in the Taiwan Segment. During the three months ended March 31, 2020, the Company recognized interest and penalties of approximately $178,000, in selling, general and administrative expenses.

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RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2021

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 13 – RELATED PARTY TRANSACTIONS

The following summarized the Company’s loans payable to related parties as of March 31, 2021 and December 31, 2020:

	March 31, 2021		December 31, 2020
Due to Ms. Lu (A shareholder of Anhou)	$	70,600	$	78,541
Others		6,231		15,506
Total	$	76,831	$	94,047

Amounts due to Ms. Lu were borrowings from Ms. Lu to support Anhou’s business operation. The amounts were non-interesting bearing and payable on demand.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2021

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 14– COMMITMENTS AND CONTINGENCIES

Operating Leases

See future minimum annual lease payments in Note 10.

Time Deposits Pledged as Collateral

See time deposits pledged as collateral in Note 4 and 5.

Appointment agreement

On December 21, 2018, Law Broker entered into an appointment agreement with Shu-Fen, Lee (“Ms. Lee”), pursuant to which, she will have served as the president of Law Broker from December 21, 2018 to December 20, 2021. Ms. Lee’s primary responsibilities include 1) overall business planning, 2) implementation of resolution of the shareholders’ meeting or the board of directors, 3) the appointment and dismissal of the Law Broker’s employees and sales professionals, except for internal auditors, 4) financial management and application, 5) being the representative of Law Broker, 6) other matters assigned by the board of directors. According to the agreement, Ms. Lee’s compensation plan included: 1) base salary, 2) managerial allowance, 3) surplus bonus based on 1.25% of Law Broker’s income after tax, and 4) annual year-end bonus. For the three months ended March 31, 2021 and 2020, the Company has recorded the compensation expense of $62,208 and $50,436 under the appointment agreement, respectively.

Engagement agreement

On May 10, 2016, Law Broker entered into an engagement agreement with Hui-Hsien Chao ("Ms. Chao"), pursuant to which, she served as the general manager of Law Broker from December 29, 2015 to December 28, 2018. The engagement agreement with Ms. Chao was renewed in 2019 and her service period has extended to December 20, 2021. Ms. Chao's primary responsibilities are to assist Law Broker in operating and managing insurance agency business. According to the engagement agreement, Ms. Chao's bonus plan included: 1) execution, 2) long-term service fees, 3) pension and 4) non-competition. The payment of such bonuses will only occur upon satisfaction of certain condition, subject to the terms and conditions in the engagement agreement. Ms. Chao has acted as the general manager or in the equivalent position of Law Broker for a term of at least three years. For the three months ended March 31, 2021 and 2020, the Company has recorded the compensation expense of $29,689 and $75,772 under the appointment agreement, respectively.

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SEGMENT REPORTING

3 Months Ended

Mar. 31, 2021

SEGMENT REPORTING

SEGMENT REPORTING

NOTE 15 – SEGMENT REPORTING

The Company organizes and manages its business as three operating segments by operating geographic areas. The business of WFOE, CU Hong Kong and the CAE in PRC was managed and reviewed as PRC segment. The business of AHFL and its subsidiaries in Taiwan was managed and reviewed as Taiwan segment. The business of PFAL was managed and reviewed as Hong Kong segment. PRC and Taiwan segments retain majority of reported consolidated amounts.

The geographical distributions of the Company’s financial information for the three months ended March 31, 2021 and 2020 were as follows:

	For three months ended March 31,
	2021		2020
Geographical Areas
Revenue
Taiwan	$	28,851,500	$	27,342,936
PRC		1,951,469		1,429,297
Hong Kong		110,985		68,619
Elimination adjustment		(383,837)		(317,642)
Total revenue	$	30,530,117	$	28,523,210
Income (loss) from operations
Taiwan	$	4,690,729	$	1,503,282
PRC		(3,918)		(31,113)
Hong Kong		61,493		23,653
Elimination adjustment		138,350		52,880
Total income from operations	$	4,886,654	$	1,548,702
Net income (loss)
Taiwan	$	3,933,490	$	345,266
PRC		46,918		(39,957)
Hong Kong		56,312		21,772
Elimination adjustment		62		9,204
Total net income(loss)	$	4,036,782	$	336,285

The geographical distribution of the Company’s financial information as of March 31, 2021 and December 31, 2020 were as follows:

	March 31, 2021		December 31, 2020
Geographical Areas
Reportable assets
Taiwan	$	174,507,496	$	171,037,252
PRC		12,930,173		13,149,306
Hong Kong		974,442		915,628
Elimination adjustment		(80,577,773)		(77,373,957)
Total reportable assets	$	107,834,338	$	107,728,229
Long-lived assets
Taiwan	$	1,990,118	$	2,198,739
PRC		168,704		175,748
Hong Kong		1,531		1,664
Elimination adjustment		(2,908)		(2,906)
Total long-lived assets	$	2,157,445	$	2,373,245
Capital investment
Taiwan	$	50,228	$	1,522,189
PRC		7,292		87,903
Hong Kong		—		1,576
Total capital investments	$	57,520	$	1,611,668

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2021

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 16 – SUBSEQUENT EVENTS

The Company has evaluated all other subsequent events through the date these consolidated financial statements were issued and determine that there were no subsequent events or transactions that require recognition or disclosures in the consolidated financial statements except for the follows:

On April 29, 2021, Rays Technology Co., Ltd. (“Rays”), a majority-owned subsidiary of the Company, received a Decision Letter dated April 27, 2021 from the Financial Supervisory Commission (Taiwan) (the “FSC”) stating that Rays was fined NTD900,000 (equivalent to approximately $32,233 USD) by the FSC for violating Article 167-1 Section 3 of the Insurance Act of Taiwan (the “Act”). On May 11, 2021, the FSC verbally informed Law Broker that it could expect a Decision Letter from the FSC stating that Law Broker was fined NTD1.7 million (equivalent to approximately $60,565 USD) and one-month correction period for violating the relevant laws and regulations of the Act. The two subsidiaries are in the process of remediating the noncompliance issues.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

Principles of Consolidation

The condensed consolidated financial statements include the accounts of China United, its subsidiaries and variable interest entities as shown in the corporate structure in Note 1. All significant intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to the consolidated financial statements for prior year to the current year’s presentation. Such reclassifications have no effect on net income as previously reported.

Basis of Presentation

Basis of Presentation

The condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement of the financial statements have been included. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

These condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2020, which were included in the Company’s 2020 Annual Report on Form 10-K (“2020 Form 10-K”). The accompanying consolidated balance sheet as of December 31, 2020, has been derived from the Company’s audited consolidated financial statements as of that date.

Use of Estimates

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto. Actual results may differ from those estimates and assumptions.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable includes commission receivables stated at net realizable values. The Company reviews its accounts receivable regularly to determine if a bad debt allowance is necessary at each quarter-end. Management reviews the composition of accounts receivable and analyzes the age of receivables outstanding, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the necessity of making such allowance. No allowance was deemed necessary as of March 31, 2021 and December 31, 2020.

Foreign Currency Transactions

Foreign Currency Transactions

China United’s financial statements are presented in U.S. dollars ($), which is the China United’s reporting and functional currency. The functional currencies of the China United’s subsidiaries are New Taiwan dollar (“NTD”), China yuan (“RMB”) and Hong Kong dollar (“HKD”). The resulting translation adjustments are reported under other comprehensive income. Gains and losses resulting from the translation of foreign currency transactions are reflected in the consolidated statements of operations and other comprehensive income (loss). Monetary assets and liabilities denominated in foreign currency are translated at the functional currency using the rate of exchange prevailing at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the consolidated statements of operations and other comprehensive income (loss).

The Company translates the assets and liabilities into U.S. dollars using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from NTD, RMB and HKD into U.S. dollars are recorded in stockholders’ equity as part of accumulated other comprehensive income. The exchange rates used for condensed consolidated financial statements are as follows:

	Average Rate for the three months ended
	March 31,
	2021		2020
Taiwan dollar (NTD)	NTD	28.06892	NTD	30.10404
China yuan (RMB)	RMB	6.48199	RMB	6.97985
Hong Kong dollar (HKD)	HKD	7.75690	HKD	7.77046
United States dollar ($)	$	1.00000	$	1.00000

	Exchange Rate at
	March 31, 2021		December 31, 2020
Taiwan dollar (NTD)	NTD	28.46825	NTD	28.07725
China yuan (RMB)	RMB	6.55363	RMB	6.52765
Hong Kong dollar (HKD)	HKD	7.77422	HKD	7.75249
United States dollar ($)	$	1.00000	$	1.00000

Earnings (Loss) Per Share

Earnings (Loss) Per Share

Basic earnings (loss) per common share (“EPS”) is computed by dividing net income attributable to the common shareholders of the Company by the weighted-average number of common shares outstanding. Diluted EPS is computed in the same manner as basic EPS, except the number of shares includes additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued.

As the holders of preferred stock of the Company are entitled to share equally with the holders of common stock, on a per share basis, in such dividends and other distributions of cash, property or shares of stock of the Company as may be declared by the board of directors, the preferred stock is treated as a participating security. When calculating the basic earnings per common share, the two-class method is used to allocate earnings to common stock and participating security as required by FASB ASC Topic 260, “Earnings Per Share.” As of March 31, 2021 and 2020, the Company does not have any potentially dilutive instrument.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Fair value accounting establishes a framework for measuring fair value and expands disclosure about fair value measurements. Fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the financial instruments.

● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

The following table summarizes financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020:

	March 31, 2021
	Fair Value						Carrying
	Level 1		Level 2		Level 3		Value
Assets
Total time deposits	$	53,749,018	$	—	$	—	$	53,749,018
Long-term investments:
REITs		1,286,159		—		—		1,286,159
Total assets measured at fair value	$	55,035,177	$	—	$	—	$	55,035,177

	December 31, 2020
	Fair Value						Carrying
	Level 1		Level 2		Level 3		Value
Assets
Total cash equivalents and time deposits	$	53,339,508	$	—	$	—	$	53,339,508
Marketable securities :
Stock Mutual funds		1,272,573		—		—		1,272,573
Long-term investments:
Government bonds held for available -for -sale		—		107,096		—		107,096
REITs		1,359,100		—		—		1,359,100
Total assets measured at fair value	$	55,971,181	$	107,096	$	—	$	56,078,277

The carrying amounts of current financial assets and liabilities in the consolidated balance sheets for cash equivalents and time deposits, approximate fair value due to the short-term duration of those instruments.

Marketable securities and long-term investments in REITs – The fair values of mutual funds and REITs were valued based on quoted market prices in active markets.

Government bonds – The fair value of government bonds is valued based on theoretical bond price in the Taipei Exchange.  

According to Taiwan Regulations Governing Deposit of Bond and Acquirement of Insurance by Insurance Agents, Insurance Brokers and Insurance Surveyors (“RGDBAI”) Article 3 and 4, Law Broker is required to maintain a minimum of NTD 3,000,000 ($105,381 and $106,848 as of March 31, 2021 and December 31, 2020, respectively) restricted balance in a separate account or government bonds issued by the central government in order to maintain its insurance license. The government bonds matured on March 17, 2021 and the amortized cost of the bonds was nil and $106,906 (NTD 3,001,620) as of March 31, 2021 and December 31, 2020, respectively. The Company will purchase a similar investment after the maturity of the bonds to maintain the insurance license.

Concentration of Risk

Concentration of Risk

The Company maintains cash with banks in the USA, People’s Republic of China (“PRC”), Hong Kong, and Taiwan. Should any bank holding the Company’s cash become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose all or part of its cash deposit with that bank; however, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. In Taiwan, a depositor has up to NTD3,000,000 insured by Central Deposit Insurance Corporation (“CDIC”). In China, a depositor has up to RMB500,000 insured by the People’s Bank of China Financial Stability Bureau (“FSD”). In Hong Kong, a depositor has up to HKD500,000 insured by Hong Kong Deposit Protection Board (“DPB”). In the United States, the standard insurance amount is $250,000 per depositor in a bank insured by the Federal Deposit Insurance Corporation (“FDIC”).

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, time deposits, restricted cash, register capital deposit and accounts receivable. As of March 31, 2021 and December 31, 2020, approximately $2,215,000 and $2,229,000 of the Company’s cash and cash equivalents, time deposits, and registered capital deposits held by financial institutions, was insured, and the remaining balance of approximately $71,987,000 and $63,222,000, was not insured. With respect to accounts receivable, the Company generally does not require collateral and does not have an allowance for doubtful accounts.

For the three months ended March 31, 2021 and 2020, the Company’s revenues from sale of insurance policies underwritten by these companies were:

	Three months ended March 31,
	2021				2020
			% of Total				% of Total
	Amount		Revenue		Amount		Revenue
Taiwan Life Insurance Co., Ltd.	$	7,231,458	24	%	$	5,592,675	20	%
TransGlobe Life Insurance Inc.		6,600,629	22	%		4,995,954	18	%
Farglory Life Insurance Co., Ltd.		4,519,841	15	%		3,379,091	12	%
Shin Kong Life Insurance Co., Ltd.		(*)	(*)			3,062,062	11	%

(*) The related revenues for the three months ended had not exceeded 10% or more of the consolidated revenues.

As of March 31, 2021 and December 31, 2020, the Company’s accounts receivable from these companies were:

	March 31, 2021				December 31, 2020
			% of Total				% of Total
			Accounts				Accounts
	Amount		Receivable		Amount		Receivable
Taiwan Life Insurance Co., Ltd	$	5,103,386	27	%	$	4,557,862	18	%
TransGlobe Life Insurance Inc.		4,118,134	22	%		7,761,664	31	%
Farglory Life Insurance Co., Ltd.		2,046,970	11	%		2,787,586	11	%

The Company’s operations are in the PRC, Hong Kong and Taiwan. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic, foreign currency exchange and legal environments in the PRC, Hong Kong and Taiwan, and by the state of each economy. The Company’s results of operations may be adversely affected by changes in the political and social conditions in the PRC, Hong Kong and Taiwan, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.

Stock-Based Compensation

Stock-Based Compensation

The Company accounts for equity-based compensation cost in accordance with ASC 718, Compensation-Stock Compensation after adoption of ASC 2018-07, which requires the measurement and recognition of compensation expense related to the fair value of equity-based compensation awards that are ultimately expected to vest. Stock-based compensation expense recognized includes the compensation cost for all share-based compensation payments granted to employees and nonemployees, net of estimated forfeitures, over the employees requisite service period or the non-employee performance period based on the grant date fair value estimated in accordance with the provisions of ASC 718. ASC 718 is also applied to awards modified, repurchased, or cancelled during the periods reported. Compensation costs for awards granted to nonemployees under Uniwill for the three months ended March 31, 2021 and 2020 were nil and $980,466, respectively.

Income Taxes

Income Taxes

The Company records income tax expense using the asset-and-liability method of accounting for deferred income taxes. Under this method, deferred taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance if, based on available evidence, it is more likely than not that the deferred tax assets will not be realized.

When tax returns are filed, it is likely some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits are classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of operations and other comprehensive income (loss).

New Accounting Pronouncements and Other Guidance

New Accounting Pronouncements and Other Guidance

New Accounting Pronouncements Effective January 1, 2021:

Income Tax

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes which is intended to simplify various aspects related to accounting for income taxes. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted. The Company adopted this standard in the beginning of January 1, 2021, and the adoption did not have any significant impact on the Company’s condensed consolidated financial statements.

Equity Securities, Equity-method Investments and Certain Derivatives

In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The guidance provides clarification of the interaction of rules for equity securities, the equity method of accounting and forward contracts and purchase options on certain types of securities. ASU 2020-01 is effective for the Company in the first quarter of 2021. The adoption did not have any significant impact on the Company’s condensed consolidated financial statements.

Accounting Standards Issued but Not Yet Adopted:

Credit Losses

In June 2016, the FASB issued ASU No. 2016-13, (FASB ASC Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, rather than the “incurred loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments.

In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company believes the adoption of ASU No. 2016-13 will not have a material impact on its financial position and results of operations.

Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The standard provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions in which the reference LIBOR or another reference rate are expected to be discontinued as a result of the Reference Rate Reform. The standard is effective for all entities. The standard may be adopted as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 through December 31, 2022. We are currently evaluating the effects of the standard on our consolidated financial statements and related disclosures.

Convertible Debt, and Derivatives and Hedging

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, to improve financial reporting associated with accounting for convertible instruments and contracts in an entity's own equity. ASU 2020-06 will be effective for the Company in the first quarter of 2022. The Company is currently evaluating the amended guidance and the impact on its consolidated financial statements and related disclosures.

The management does not believe that other than disclosed above, accounting pronouncements the recently issued but not yet adopted will have a material impact on its financial position results of operations or cash flows.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of Intercompany Foreign Currency Balances

	Average Rate for the three months ended
	March 31,
	2021		2020
Taiwan dollar (NTD)	NTD	28.06892	NTD	30.10404
China yuan (RMB)	RMB	6.48199	RMB	6.97985
Hong Kong dollar (HKD)	HKD	7.75690	HKD	7.77046
United States dollar ($)	$	1.00000	$	1.00000

	Exchange Rate at
	March 31, 2021		December 31, 2020
Taiwan dollar (NTD)	NTD	28.46825	NTD	28.07725
China yuan (RMB)	RMB	6.55363	RMB	6.52765
Hong Kong dollar (HKD)	HKD	7.77422	HKD	7.75249
United States dollar ($)	$	1.00000	$	1.00000

Schedule of assets and liabilities measured at fair value on a recurring basis

The following table summarizes financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020:

	March 31, 2021
	Fair Value						Carrying
	Level 1		Level 2		Level 3		Value
Assets
Total time deposits	$	53,749,018	$	—	$	—	$	53,749,018
Long-term investments:
REITs		1,286,159		—		—		1,286,159
Total assets measured at fair value	$	55,035,177	$	—	$	—	$	55,035,177

	December 31, 2020
	Fair Value						Carrying
	Level 1		Level 2		Level 3		Value
Assets
Total cash equivalents and time deposits	$	53,339,508	$	—	$	—	$	53,339,508
Marketable securities :
Stock Mutual funds		1,272,573		—		—		1,272,573
Long-term investments:
Government bonds held for available -for -sale		—		107,096		—		107,096
REITs		1,359,100		—		—		1,359,100
Total assets measured at fair value	$	55,971,181	$	107,096	$	—	$	56,078,277

Schedule Of Revenue From Insurance Services

For the three months ended March 31, 2021 and 2020, the Company’s revenues from sale of insurance policies underwritten by these companies were:

	Three months ended March 31,
	2021				2020
			% of Total				% of Total
	Amount		Revenue		Amount		Revenue
Taiwan Life Insurance Co., Ltd.	$	7,231,458	24	%	$	5,592,675	20	%
TransGlobe Life Insurance Inc.		6,600,629	22	%		4,995,954	18	%
Farglory Life Insurance Co., Ltd.		4,519,841	15	%		3,379,091	12	%
Shin Kong Life Insurance Co., Ltd.		(*)	(*)			3,062,062	11	%

(*) The related revenues for the three months ended had not exceeded 10% or more of the consolidated revenues.

Schedule Of Accounts Receivable From Related Parties

As of March 31, 2021 and December 31, 2020, the Company’s accounts receivable from these companies were:

	March 31, 2021				December 31, 2020
			% of Total				% of Total
			Accounts				Accounts
	Amount		Receivable		Amount		Receivable
Taiwan Life Insurance Co., Ltd	$	5,103,386	27	%	$	4,557,862	18	%
TransGlobe Life Insurance Inc.		4,118,134	22	%		7,761,664	31	%
Farglory Life Insurance Co., Ltd.		2,046,970	11	%		2,787,586	11	%

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CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Tables)

3 Months Ended

Mar. 31, 2021

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Schedule of cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash consisted of the following as of March 31, 2021 and December 31, 2020:

	March 31, 2021		December 31, 2020
Cash and cash equivalents:
Cash on hand and in banks	$	17,436,654	$	9,063,338
Time deposits - with original maturities less than three months (see Note 4)		—		—
		17,436,654		9,063,338
Restricted cash – noncurrent		65,499		66,490
Total cash, cash equivalents and restricted cash shown in the statements of cash flows	$	17,502,153	$	9,129,828

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TIME DEPOSITS (Tables)

3 Months Ended

Mar. 31, 2021

TIME DEPOSITS

Schedule of time deposits

	March 31, 2021		December 31, 2020
Total time deposits	$	53,749,018	$	53,339,508
Less: Time deposits – with original maturities less than three months (see Note 3)		—		—
Time deposits – original maturities over three months but less than one year	$	53,749,018	$	53,339,508

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SHORT-TERM LOANS (Tables)

3 Months Ended

Mar. 31, 2021

SHORT-TERM LOANS

Schedule of short-term loans

The Company’s short-term loans consisted of the following as of March 31, 2021 and December 31, 2020:

		March 31, 2021				December 31, 2020
		Debt		Collateral		Debt		Collateral
Line of Credit	Collateral	balance		value		balance		value
$8.9 million (NTD 250 million) revolving line of credit with Cathay United Bank Company Limited (“CUB”); the loan bears interest at the higher of CUB's adjustable rates for loans plus a margin of 0.41% or the 1-month TAIBOR rate plus a margin of 0.8% and matures on May 4, 2021. The maturity date was extended to May 4, 2022.	Time deposits	$	7,745,471	$	7,745,471	$	6,019,108	$	6,019,108
$4.0 million revolving line of credit with O-Bank; the loan bears interest at the TAIFX3 rate plus a margin of 0.5% and matures on December 29, 2021	Time deposits		4,000,000		4,847,506		4,000,000		4,915,011
$1.6 million revolving line of credit with KGI; the loan bears interest at the LIBOR rate plus a margin of 0.9% and matures on February 18, 2022	Time deposits		—		—		2,100,000		2,443,003
$1.5 million revolving line of credit with CTBC Bank Co., Ltd. (“CTBC”); the loan bears interest at the CTBC’s cost of funds plus a negotiated margin on individual case basis and matures on August 28, 2021	Time deposits		1,500,000		1,500,000		1,200,000		1,384,833
$2.5 million revolving line of credit with Far Eastern International Bank (“FEIB”); the loan bears interest at the higher of LIBOR or TAIFX3 rate plus a margin of 0.7% and matures on December 17, 2021	Time deposits		1,990,000		2,241,093		840,000		1,132,590
$1.0 million revolving line of credit with E. Sun Bank (“E. Sun”); the loan bears interest at the higher of LIBOR or TAIFX3 rate plus a margin of 0.7% and matures on June 3, 2021	Time deposits		1,000,000		1,000,000		—		—
		$	16,235,471	$	17,334,070	$	14,159,108	$	15,894,545

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COMMISSIONS PAYABLE TO SALES PROFESSIONALS (Tables)

3 Months Ended

Mar. 31, 2021

COMMISSIONS PAYABLE TO SALES PROFESSIONALS

Schedule of commissions payable to professionals

Commissions payable to sales professionals consisted of the following as of March 31, 2021 and December 31, 2020:

	March 31, 2021		December 31, 2020
Taiwan	$	9,483,511	$	11,814,222
PRC		317,676		274,069
Hong Kong		—		—
Total commissions payable to sales professionals	$	9,801,187	$	12,088,291

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OTHER CURRENT LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2021

OTHER CURRENT LIABILITIES

Schedule of other current liabilities

Other current liabilities were as follows, as of March 31, 2021 and December 31, 2020:

	March 31, 2021		December 31, 2020
Accrued bonus	$	5,432,444	$	7,854,488
Payroll payable and other benefits		1,746,549		1,767,417
Accrued business tax and tax withholdings		913,419		1,643,082
Accrued tax penalties		—		170,016
Other accrued liabilities		2,384,500		2,156,031
Total other current liabilities	$	10,476,912	$	13,591,034

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OTHER LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2021

OTHER LIABILITIES

Schedule of other noncurrent liabilities

The Company’s other liabilities consisted of the following as of March 31, 2021 and December 31, 2020: 

	March 31, 2021		December 31, 2020
Due to previous shareholders of AHFL	$	526,903	$	534,240
Net defined benefit liability		334,134		318,542
Accrued bonus - noncurrent (Note 7)		—		237,440
Total other liabilities	$	861,037	$	1,090,222

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CONTRACTS WITH CUSTOMERS (Tables)

3 Months Ended

Mar. 31, 2021

CONTRACTS WITH CUSTOMERS

Schedule of revenue recognition guidance

	March 31, 2021		December 31, 2020
Accounts receivable	$	18,744,199	$	25,346,250
Contract assets		97,480		—
Contract liabilities		1,103,987		1,119,361

Schedule of recognized of revenue and refund

The following table presents the amounts recognized as revenue and refund for each contract year:

Contract				Revenue			Revenue VAT		Refund			Refund VAT
Year	Period	Execution Fees		Amount			Amount		Amount			Amount
First	04/15/2013 - 09/30/2014	NTD	50,000,000	NTD	27,137,958	(1)	NTD	1,356,898	NTD	20,481,090	(1)	NTD	1,024,054
Second	01/01/2016 - 12/31/2016	NTD	35,000,000	NTD	12,855,000	(2)	NTD	642,750	NTD	20,478,333	(2)	NTD	1,023,917
Third	01/01/2017 - 12/31/2017	NTD	33,000,000	NTD	12,628,201	(3)	NTD	631,410	NTD	18,800,370	(3)	NTD	940,019
Fourth	01/01/2018 - 12/31/2018	NTD	33,000,000	NTD	11,228,600	(4)	NTD	561,429	NTD	20,199,971	(4)	NTD	1,010,000
Fifth	01/01/2019 - 12/31/2019	NTD	33,000,000	NTD	9,481,371	(5)	NTD	474,069	NTD	21,947,200	(5)	NTD	1,097,360
Sixth	01/01/2020 - 12/31/2020	NTD	33,000,000	NTD	12,223,829	(6)	NTD	611,191	NTD	19,204,743	(6)	NTD	960,237
Seventh	01/01/2021 - 12/31/2021	NTD	33,000,000	NTD	—	(7)	NTD	—	NTD	31,428,571	(7)	NTD	1,571,429
TOTAL		NTD	250,000,000	NTD	85,554,959		NTD	4,277,747	NTD	152,540,278		NTD	7,627,016

1) The revenue recognition for the first contract year is based on the annual first year premium (“AFYP”) set in Alliance Agreement, which is different from other contract years. From the second contract year to the seventh contract year, the revenue calculation is based on VONB. The Company recognized the first contract year’s revenue amount of $892,742 (NTD 27,137,958), net of Value-Added Tax (“VAT ") in 2017 due to uncertainty resolved after Amendment 3 went effective. Besides, on December 3, 2015 and February 23, 2016, the Company refunded the amounts of $160,573 (NTD4,761,905), net of VAT, and $530,056 (NTD15,719,185), net of VAT, to AIATW, respectively, due to the portion of performance sales targets not met during the first contract year based on original agreement and earlier amendments.

2) For the year ended December 31, 2016, the Company recognized the second contract year’s revenue amount of $422,883 (NTD 12,855,000), net of VAT, and refunded the amount of $690,537 (NTD 20,478,333), net of VAT, due to uncertainty resolved after Amendment 3 went effective.

3) For the year ended December 31, 2017, the Company recognized the third contract year’s revenue amount of $415,423 (NTD12,628,201), net of VAT, and refund amount of $633,955 (NTD18,800,370), net of VAT, for the same contract period based on the calculation of VONB and 13-month persistency.

4) For the year ended December 31, 2018, the Company recognized the fourth contract year’s revenue amount of $372,650 (NTD11,228,600), net of VAT, and refund amount of $670,389 (NTD 20,199,971), net of VAT, for the same contract period based on the calculation of VONB and 13-month persistency.

5) For the year ended December 31, 2019, the Company recognized the fifth contract year's revenue amount of $314,953 (NTD9,481,371), net of VAT, and refund the amount of $729,045 (NTD 21,947,200), net of VAT, for the same contract period based on the calculation of VONB and 13-month persistency.

6) For the year ended December 31, 2020, the Company recognized the sixth contract year’s revenue amount of $415,186 (NTD 12,223,829), net of VAT, and refund the amount of $652,294 (NTD 19,204,743), net of VAT, for the same contract period based on the calculation of VONB and 13-month persistency.

7) The Company estimated VONB and 13-month persistency ratio for the year ending December 31, 2021 and calculated the revenue amount to be nil for the year. The amount will be reassessed every quarter until receiving AIATW’s notice.

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LEASE (Tables)

3 Months Ended

Mar. 31, 2021

LEASE

Schedule of operating lease right-of-use assets and lease liabilities

	March 31, 2021		December 31, 2020
Right-of-use assets under operating leases	$	6,282,892	$	6,524,555
Operating lease liabilities – current		3,018,303		3,043,056
Operating lease liabilities – noncurrent		3,191,735		3,440,343

Schedule of lease term and discount rate

	March 31, 2021		December 31, 2020
Weighted average remaining lease term
Operating lease	2.48	years	2.64	years
Weighted average discount rate
Operating lease	3.64	%	3.15	%

Schedule of supplemental cash flow information related to leases

Supplemental cash flow information related to leases

	March 31, 2021		December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows related to operating leases	$	1,142,714	$	3,310,015
Amortization of right-of-use assets under operating leases		877,022		3,009,101

Schedule of future minimum rental payments

The minimum future lease payments as of March 31, 2021 are as follows:

	Amount
2021 (remainder of year)	$	2,469,856
2022		2,160,357
2023		1,155,709
2024		572,054
2025		101,832
Thereafter		—
Total minimum lease payments		6,459,808
Less: Interest		(249,770)
Present value of future minimum lease payments	$	6,210,038

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NON-CONTROLLING INTERESTS (Tables)

3 Months Ended

Mar. 31, 2021

NON-CONTROLLING INTERESTS

Schedule of non-controlling interests

	% of Non-						Other
	Controlling		December 31,		Net Income		Comprehensive		March 31,
Name of Entity	Interests		2020		(Loss)		Loss		2021
Law Enterprise	34.05	%	$	(414,957)	$	(72,946)	$	(6,187)	$	(494,090)
Law Broker	34.05	%		25,177,272		1,404,896		(353,398)		26,228,770
Uniwill	50.00	%		(421,035)		267,364		(2,646)		(156,317)
Rays	1.00	%		(5,772)		(297)		—		(6,069)
PFAL	49.00	%		423,978		27,593		(767)		450,804
MKI	49.00	%		(732)		—		—		(732)
PA Taiwan	49.00	%		(163,013)		(214)		(77)		(163,304)
Total			$	24,595,741	$	1,626,396	$	(363,075)	$	25,859,062

	% of Non-								Other
	controlling		December 31,		Contribution		Net Income		Comprehensive		December 31,
Name of Entity	Interest		2019		/Acquisition		(Loss)		Income		2020
Law Enterprise	34.05	%	$	(204,964)	$	—	$	(241,231)	$	31,238	$	(414,957)
Law Broker	34.05	%		19,536,104		—		4,193,314		1,447,854		25,177,272
Uniwill	50.00	%		—		1,427,603		(1,918,023)		69,385		(421,035)
Rays	1.00	%		—		1,019		(6,791)		—		(5,772)
PFAL	49.00	%		351,278		—		71,713		987		423,978
MKI	49.00	%		283		—		(1,015)		—		(732)
PA Taiwan	49.00	%		(167,531)		—		4,227		291		(163,013)
PTC Nanjing	49.00	%		(2,644)		—		1,465		1,179		—
Total			$	19,512,526	$	1,428,622	$	2,103,659	$	1,550,934	$	24,595,741

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INCOME TAX (Tables)

3 Months Ended

Mar. 31, 2021

INCOME TAX

Schedule of reconciles the Company's statutory tax rates to effective tax rates

The following table reconciles the Company’s statutory tax rates to effective tax rates for the three months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021		2020
US statutory rate	21	%	21	%
Tax rate difference	(2)	%	(2)	%
Tax base difference	—	%	1	%
Income tax on undistributed earnings	4	%	11	%
Change in valuation allowance	4	%	25	%
Utilization of deferred tax assets not previously recognized	(1)	%	—	%
Provision for uncertain tax position	—	%	19	%
Non-deductible and non-taxable items	1	%	2	%
True up of prior year income tax	(1)	%	—	%
Effective tax rate	26	%	77	%

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RELATED PARTY TRANSACTIONS (Tables)

3 Months Ended

Mar. 31, 2021

RELATED PARTY TRANSACTIONS

Schedule of due to related parties

The following summarized the Company’s loans payable to related parties as of March 31, 2021 and December 31, 2020:

	March 31, 2021		December 31, 2020
Due to Ms. Lu (A shareholder of Anhou)	$	70,600	$	78,541
Others		6,231		15,506
Total	$	76,831	$	94,047

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SEGMENT REPORTING (Tables)

3 Months Ended

Mar. 31, 2021

SEGMENT REPORTING

Schedule of revenue by major customers by reporting segments

	For three months ended March 31,
	2021		2020
Geographical Areas
Revenue
Taiwan	$	28,851,500	$	27,342,936
PRC		1,951,469		1,429,297
Hong Kong		110,985		68,619
Elimination adjustment		(383,837)		(317,642)
Total revenue	$	30,530,117	$	28,523,210
Income (loss) from operations
Taiwan	$	4,690,729	$	1,503,282
PRC		(3,918)		(31,113)
Hong Kong		61,493		23,653
Elimination adjustment		138,350		52,880
Total income from operations	$	4,886,654	$	1,548,702
Net income (loss)
Taiwan	$	3,933,490	$	345,266
PRC		46,918		(39,957)
Hong Kong		56,312		21,772
Elimination adjustment		62		9,204
Total net income(loss)	$	4,036,782	$	336,285

Schedule of long-lived assets

The geographical distribution of the Company’s financial information as of March 31, 2021 and December 31, 2020 were as follows:

	March 31, 2021		December 31, 2020
Geographical Areas
Reportable assets
Taiwan	$	174,507,496	$	171,037,252
PRC		12,930,173		13,149,306
Hong Kong		974,442		915,628
Elimination adjustment		(80,577,773)		(77,373,957)
Total reportable assets	$	107,834,338	$	107,728,229
Long-lived assets
Taiwan	$	1,990,118	$	2,198,739
PRC		168,704		175,748
Hong Kong		1,531		1,664
Elimination adjustment		(2,908)		(2,906)
Total long-lived assets	$	2,157,445	$	2,373,245
Capital investment
Taiwan	$	50,228	$	1,522,189
PRC		7,292		87,903
Hong Kong		—		1,576
Total capital investments	$	57,520	$	1,611,668

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Details)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
New Taiwan dollar (NTD)
Foreign Currency Average Rate Translation	28.06892	30.10404
Foreign Currency Exchange Rate, Translation	28.46825		28.07725
China yuan (RMB)
Foreign Currency Average Rate Translation	6.48199	6.97985
Foreign Currency Exchange Rate, Translation	6.55363		6.52765
Hong Kong dollar (HKD)
Foreign Currency Average Rate Translation	7.75690	7.77046
Foreign Currency Exchange Rate, Translation	7.77422		7.75249
United States dollar ($)
Foreign Currency Average Rate Translation	1.00000	1.00000
Foreign Currency Exchange Rate, Translation	1.00000		1.00000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value of Financial Instruments (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Total time deposits	$ 53,749,018	$ 53,339,508
Total cash equivalents and time deposits		53,339,508
Marketable securities
Stock Mutual funds		1,272,573
Long-term investment:
Government bonds held for available-for-sale		107,096
REITs	1,286,159	1,359,100
Total assets measured at fair value	55,035,177	56,078,277
Fair Value, Inputs, Level 1
Total time deposits	53,749,018
Total cash equivalents and time deposits		53,339,508
Marketable securities
Stock Mutual funds		1,272,573
Long-term investment:
REITs	1,286,159	1,359,100
Total assets measured at fair value	$ 55,035,177	55,971,181
Fair Value, Inputs, Level 2
Long-term investment:
Government bonds held for available-for-sale		107,096
Total assets measured at fair value		$ 107,096

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Risk (Revenue) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Concentration Risk [Line Items]
Amount of Revenue	$ 30,530,117	$ 28,523,210
Revenues | Customer concentration | Taiwan Life Insurance Co., Ltd
Concentration Risk [Line Items]
Amount of Revenue	$ 7,231,458	$ 5,592,675
Concentration risk percentage	24.00%	20.00%
Revenues | Customer concentration | TransGlobe Life Insurance Inc
Concentration Risk [Line Items]
Amount of Revenue	$ 6,600,629	$ 4,995,954
Concentration risk percentage	22.00%	18.00%
Revenues | Customer concentration | Farglory Life Insurance Co., Ltd.
Concentration Risk [Line Items]
Amount of Revenue	$ 4,519,841	$ 3,379,091
Concentration risk percentage	15.00%	12.00%
Revenues | Customer concentration | Shin Kong Life Insurance Co., Ltd.
Concentration Risk [Line Items]
Amount of Revenue		$ 3,062,062
Concentration risk percentage		11.00%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Risk ( Accounts Receivable) (Details) - Credit concentration - Accounts receivable - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Taiwan Life Insurance Co., Ltd
Concentration Risk [Line Items]
Accounts Receivable, Net	$ 5,103,386	$ 4,557,862
Percentage of accounts receivable	27.00%	18.00%
TransGlobe Life Insurance Inc
Concentration Risk [Line Items]
Accounts Receivable, Net	$ 4,118,134	$ 7,761,664
Percentage of accounts receivable	22.00%	31.00%
Farglory Life Insurance Co., Ltd.
Concentration Risk [Line Items]
Accounts Receivable, Net	$ 2,046,970	$ 2,787,586
Percentage of accounts receivable	11.00%	11.00%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details)	3 Months Ended
	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)	Mar. 31, 2021 TWD ($)	Mar. 31, 2021 CNY (¥)	Mar. 31, 2021 HKD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 TWD ($)
Disclosure of Summary Of Significant Accounting Policies
Regulatory Requirements Minimum Amount	$ 105,381		$ 3,000,000			$ 106,848
Cost or Amortized Cost	0					106,906	$ 3,001,620
Cash, Uninsured Amount	$ 250,000
Tax Benefit Percentage Expected to be Realized Upon Settlement	50.00%		50.00%	50.00%	50.00%
Revenue	$ 30,530,117	$ 28,523,210
Compensation costs for awards granted to nonemployees	62,208	50,436
Taiwan
Disclosure of Summary Of Significant Accounting Policies
Cash, FDIC Insured Amount			$ 3,000,000
CHINA
Disclosure of Summary Of Significant Accounting Policies
Cash, FDIC Insured Amount | ¥				¥ 500,000
HONG KONG
Disclosure of Summary Of Significant Accounting Policies
Cash, FDIC Insured Amount					$ 500,000
Credit concentration
Disclosure of Summary Of Significant Accounting Policies
Cash, FDIC Insured Amount	2,215,000					2,229,000
Cash, Uninsured Amount	71,987,000					$ 63,222,000
Uniwill
Disclosure of Summary Of Significant Accounting Policies
Compensation costs for awards granted to nonemployees	$ 0	$ 980,466

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CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash on hand and in banks	$ 17,436,654	$ 9,063,338
Time deposits - with original maturities less than three months (see Note 4)	0
Total cash and cash equivalents	17,436,654	9,063,338
Restricted cash - noncurrent	65,499	66,490
Total cash, cash equivalents and restricted cash shown in the statements of cash flows	$ 17,502,153	$ 9,129,828	$ 12,101,461	$ 12,658,500

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TIME DEPOSITS (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
TIME DEPOSITS
Total time deposits	$ 53,749,018	$ 53,339,508
Less: Time deposits - original maturities less than three months (see Note 3)	0
Time deposits - original maturities over three months but less than one year	$ 53,749,018	$ 53,339,508

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TIME DEPOSITS - Additional Information (Details) $ in Millions	Mar. 31, 2021 USD ($)	Mar. 31, 2021 TWD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 TWD ($)
TIME DEPOSITS
Restricted Time Deposits	$ 17,369,198	$ 494.4	$ 15,930,161	$ 447.3
Time Deposits, Pledged As Collateral For Credit Card	35,128	$ 1.0	35,616	$ 1.0
Restricted Cash	$ 17,334,070		$ 15,894,545

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SHORT-TERM LOANS (Details) $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)	Mar. 31, 2021 TTD ($)	Dec. 31, 2020 USD ($)
Short-term Debt [Line Items]
Line of Credit, Current	$ 16,235,471			$ 14,159,108
Collateral value	17,334,070			15,894,545
Total short term loans	16,235,471			14,159,108
Credit facility, O-Bank
Short-term Debt [Line Items]
Line of Credit, Current	4,000,000			4,000,000
Collateral value	4,847,506			4,915,011
Credit facility, CUB
Short-term Debt [Line Items]
Line of Credit, Current	7,745,471			6,019,108
Collateral value	7,745,471			6,019,108
Line of Credit Facility, Maximum Borrowing Capacity	8,900,000		$ 250
Credit facility, KGI
Short-term Debt [Line Items]
Line of Credit, Current				2,100,000
Collateral value				2,443,003
Credit Facility E Sun Bank
Short-term Debt [Line Items]
Line of Credit, Current	1,000,000
Collateral value	1,000,000
Credit facility, FEIB
Short-term Debt [Line Items]
Line of Credit, Current	1,990,000			840,000
Collateral value	2,241,093			1,132,590
Credit facility, CTBC
Short-term Debt [Line Items]
Line of Credit, Current	1,500,000			1,200,000
Collateral value	$ 1,500,000			$ 1,384,833
Adjustable rates for loans | Credit facility, CUB
Short-term Debt [Line Items]
Debt Instrument, Description of Variable Rate Basis	0.41%
1 month TAIBOR rate | Credit facility, CUB
Short-term Debt [Line Items]
Debt Instrument, Description of Variable Rate Basis	0.80%
O Bank [Member]
Short-term Debt [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 4,000,000.0
Debt Instrument, Description of Variable Rate Basis	0.50%
CTBC Bank [Member]
Short-term Debt [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,500,000
Eastern International Bank [Member]
Short-term Debt [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 2,500,000
Eastern International Bank [Member] | LIBOR
Short-term Debt [Line Items]
Debt Instrument, Description of Variable Rate Basis	0.70%
KGI Commercial Bank Co Ltd [Member]
Short-term Debt [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,600,000
Interest Expense, Short-term Borrowings	$ 42,470	$ 59,282
KGI Commercial Bank Co Ltd [Member] | LIBOR
Short-term Debt [Line Items]
Debt Instrument, Description of Variable Rate Basis	0.90%
E Sun Bank [Member]
Short-term Debt [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,000,000.0
E Sun Bank [Member] | LIBOR
Short-term Debt [Line Items]
Debt Instrument, Description of Variable Rate Basis	0.70%

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COMMISSIONS PAYABLE TO SALES PROFESSIONALS (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Commissions payable to sales professionals	$ 9,801,187	$ 12,088,291
Taiwan
Commissions payable to sales professionals	9,483,511	11,814,222
PRC
Commissions payable to sales professionals	317,676	274,069
Hong Kong
Commissions payable to sales professionals	$ 0	$ 0

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OTHER CURRENT LIABILITIES (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
OTHER CURRENT LIABILITIES
Accrued bonus	$ 5,432,444	$ 7,854,488
Payroll payable and other benefits	1,746,549	1,767,417
Accrued business tax and tax withholdings	913,419	1,643,082
Accrued tax penalties	0	170,016
Other accrued liabilities	2,384,500	2,156,031
Total other current liabilities	$ 10,476,912	$ 13,591,034

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OTHER CURRENT LIABILITIES - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Debt Instrument [Line Items]
Accrued bonus current	$ 5,432,444		$ 7,854,488
Accrued bonus non current	0		237,440
Accrued bonus amount	3,269,661		5,948,157
Compensation Plan [Member]
Debt Instrument [Line Items]
Accrued bonus current	2,162,783		1,906,331
Accrued bonus non current	0		$ 237,440
Bonus expense	$ 91,896	$ 249,939

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OTHER LIABILITIES - Other noncurrent liabilities (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
OTHER LIABILITIES
Unearned revenue - noncurrent (Note 10)	$ 1,103,987	$ 1,119,361
Due to previous shareholders of AHFL	526,903	534,240
Net defined benefit liability	334,134	318,542
Accrued bonus-noncurrent (Note 7)	0	237,440
Total other liabilities	$ 861,037	$ 1,090,222

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OTHER LIABILITIES - Additional Information (Details) $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Mar. 27, 2019 TWD ($)
OTHER LIABILITIES
Payables due to related parties	68.00%
Due to related parties and third parties	32.00%
Amount due to previous shareholders to AHFL	$ 526,903	$ 534,240	$ 15

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CONTRACTS WITH CUSTOMERS - Contract balance (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
CONTRACTS WITH CUSTOMERS
Accounts receivable	$ 18,744,199	$ 25,346,250
Contract assets	97,480	0
Contract liabilities	$ 1,103,987	$ 1,119,361

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CONTRACTS WITH CUSTOMERS - Revenue and refund for each contract (Details)		3 Months Ended				12 Months Ended
	Jun. 14, 2017 TWD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2021 TWD ($)	Mar. 31, 2020 USD ($)	Mar. 31, 2020 TWD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 TTD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 TWD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 TWD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2017 TWD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 TWD ($)	Mar. 31, 2021 TWD ($)	Dec. 31, 2020 TWD ($)	Dec. 31, 2019 TWD ($)	Dec. 31, 2018 TWD ($)	Dec. 31, 2017 TWD ($)	Dec. 31, 2016 TWD ($)	Feb. 23, 2016 USD ($)	Feb. 23, 2016 TWD ($)	Dec. 03, 2015 USD ($)	Dec. 03, 2015 TWD ($)	Jun. 10, 2013 USD ($)	Jun. 10, 2013 TWD ($)
Basic Business Promotion Fees	$ 33,000,000
Revenue Amount		$ 0		$ 102,166	$ 3,075,599
Contract liabilities - noncurrent		$ 1,103,987					$ 1,119,361
Strategic Alliance Agreement [Member]
Execution Fees																	$ 250,000,000
Revenue Amount			$ 85,554,959
Revenue VAT Amount			$ 4,277,747
Refund Amount																	152,540,278
Refund VAT Amount																	7,627,016
Strategic Alliance Agreement [Member]
Execution Fees																											$ 8,326,700	$ 250,000,000
Revenue Amount						$ 0
Refund Amount																												$ 11,904,762
First Year [Member]
Basic Business Promotion Fees	50,000,000
First Year [Member] | Strategic Alliance Agreement [Member]
Contract Initiation Date		Apr. 15, 2013	Apr. 15, 2013
Contract Maturity Date		Sep. 30, 2014	Sep. 30, 2014
Execution Fees																	50,000,000
Revenue Amount			$ 27,137,958
Revenue VAT Amount			1,356,898
Refund Amount																	20,481,090
Refund VAT Amount																	1,024,054
First Year [Member] | Strategic Alliance Agreement [Member]
Revenue Amount		$ 892,742	$ 27,137,958
Second Year [Member]
Basic Business Promotion Fees	$ 35,000,000
Second Year [Member] | Strategic Alliance Agreement [Member]
Contract Initiation Date		Jan. 01, 2016	Jan. 01, 2016
Contract Maturity Date		Dec. 31, 2016	Dec. 31, 2016
Execution Fees																	35,000,000
Revenue Amount			$ 12,855,000
Revenue VAT Amount			$ 642,750
Refund Amount																	20,478,333
Refund VAT Amount																	1,023,917
Second Year [Member] | Strategic Alliance Agreement [Member]
Revenue Amount															$ 422,883	$ 12,855,000
Refund Amount															$ 690,537							$ 20,478,333
Third Year [Member] | Strategic Alliance Agreement [Member]
Contract Initiation Date		Jan. 01, 2017	Jan. 01, 2017
Contract Maturity Date		Dec. 31, 2017	Dec. 31, 2017
Execution Fees																	33,000,000
Revenue Amount			$ 12,628,201
Revenue VAT Amount			$ 631,410
Refund Amount																	18,800,370
Refund VAT Amount																	940,019
Third Year [Member] | Strategic Alliance Agreement [Member]
Revenue Amount													$ 415,423	$ 12,628,201
Refund Amount													$ 633,955								$ 18,800,370
Fourth Year [Member] | Strategic Alliance Agreement [Member]
Contract Initiation Date		Jan. 01, 2018	Jan. 01, 2018
Contract Maturity Date		Dec. 31, 2018	Dec. 31, 2018
Execution Fees																	33,000,000
Revenue Amount			$ 11,228,600
Revenue VAT Amount			$ 561,429
Refund Amount																	20,199,971
Refund VAT Amount																	1,010,000
Fourth Year [Member] | Strategic Alliance Agreement [Member]
Revenue Amount											$ 372,650	$ 11,228,600
Refund Amount											$ 670,389									$ 20,199,971
Fifth Year [Member] | Strategic Alliance Agreement [Member]
Contract Initiation Date		Jan. 01, 2019	Jan. 01, 2019
Contract Maturity Date		Dec. 31, 2019	Dec. 31, 2019
Execution Fees																	33,000,000
Revenue Amount			$ 9,481,371
Revenue VAT Amount			$ 474,069
Refund Amount																	21,947,200
Refund VAT Amount																	1,097,360
Fifth Year [Member] | Strategic Alliance Agreement [Member]
Revenue Amount									$ 314,953	$ 9,481,371
Refund Amount									$ 729,045										$ 21,947,200
Sixth Year [Member] | Strategic Alliance Agreement [Member]
Contract Initiation Date		Jan. 01, 2020	Jan. 01, 2020
Contract Maturity Date		Dec. 31, 2020	Dec. 31, 2020
Execution Fees																	33,000,000
Revenue Amount			$ 12,223,829				415,186	$ 12,223,829
Revenue VAT Amount			$ 611,191
Refund Amount							$ 652,294										19,204,743	$ 19,204,743
Refund VAT Amount																	960,237
Seventh Year [Member] | Strategic Alliance Agreement [Member]
Contract Initiation Date		Jan. 01, 2021	Jan. 01, 2021
Contract Maturity Date		Dec. 31, 2021	Dec. 31, 2021
Execution Fees																	33,000,000
Revenue Amount			$ 0
Revenue VAT Amount			$ 0
Refund Amount																	31,428,571
Refund VAT Amount																	$ 1,571,429
AIATW [Member]
Refund Amount																							$ 530,056	$ 15,719,185	$ 160,573	$ 4,761,905

XML

LEASE - Operating lease right-of-use assets and lease liabilities (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
LEASE
Right-of-use assets under operating leases	$ 6,282,892	$ 6,524,555
Operating lease liabilities - current	3,018,303	3,043,056
Operating lease liabilities - noncurrent	$ 3,191,735	$ 3,440,343

XML

LEASE - Lease term and discount rate (Details)	Mar. 31, 2021	Dec. 31, 2020
LEASE
Weighted average remaining lease term, Operating lease	2 years 6 months 14 days	2 years 10 months 28 days
Weighted average discount rate, Operating lease	3.64%	3.15%

XML

LEASE - Supplemental cash flow information related to leases (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows related to operating leases	$ 1,142,714	$ 3,310,015
Amortization of right-of-use assets under operating leases	$ 877,022	$ 3,009,101

XML

LEASE - Minimum future lease payments (Details)	Mar. 31, 2021 USD ($)
LEASE
2021 (reminder of year)	$ 2,469,856
2022	2,160,357
2023	1,155,709
2024	572,054
2025	101,832
Total minimum lease payments	6,459,808
Less: Interest	(249,770)
Present value of future minimum lease payments	$ 6,210,038

XML

LEASE - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
LEASE
Operating Lease, Cost	$ 1,020,873	$ 678,348

XML

NON-CONTROLLING INTERESTS (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2019
Non-Controlling Interests [Line Items]
Contribution			$ 1,428,622
Net Income (Loss)	$ 1,626,396	$ 625,522	2,103,659
Other Comprehensive Income (Loss)	(363,075)		1,550,934
Noncontrolling Interests	$ 25,859,062		$ 24,595,741	$ 19,512,526
Law Enterprise [Member]
Non-Controlling Interests [Line Items]
% of Non-controlling Interests	34.05%		34.05%
Contribution			$ 0
Net Income (Loss)	$ (72,946)		(241,231)
Other Comprehensive Income (Loss)	(6,187)		31,238
Noncontrolling Interests	$ (494,090)		$ (414,957)	(204,964)
Law Broker
Non-Controlling Interests [Line Items]
% of Non-controlling Interests	34.05%		34.05%
Contribution			$ 0
Net Income (Loss)	$ 1,404,896		4,193,314
Other Comprehensive Income (Loss)	(353,398)		1,447,854
Noncontrolling Interests	$ 26,228,770		$ 25,177,272	19,536,104
PFAL [Member]
Non-Controlling Interests [Line Items]
% of Non-controlling Interests	49.00%		49.00%
Contribution			$ 0
Net Income (Loss)	$ 27,593		71,713
Other Comprehensive Income (Loss)	(767)		987
Noncontrolling Interests	$ 450,804		$ 423,978	351,278
Uniwill
Non-Controlling Interests [Line Items]
% of Non-controlling Interests	50.00%		50.00%
Contribution			$ 1,427,603
Net Income (Loss)	$ 267,364		(1,918,023)
Other Comprehensive Income (Loss)	(2,646)		69,385
Noncontrolling Interests	$ (156,317)		$ (421,035)	0
Rays
Non-Controlling Interests [Line Items]
% of Non-controlling Interests	1.00%		1.00%
Contribution			$ 1,019
Net Income (Loss)	$ (297)		(6,791)
Other Comprehensive Income (Loss)	0		0
Noncontrolling Interests	$ (6,069)		$ (5,772)	0
MKI [Member]
Non-Controlling Interests [Line Items]
% of Non-controlling Interests	49.00%		49.00%
Contribution			$ 0
Net Income (Loss)			(1,015)
Other Comprehensive Income (Loss)	$ 0		0
Noncontrolling Interests	$ (732)		$ (732)	283
PA Taiwan [Member]
Non-Controlling Interests [Line Items]
% of Non-controlling Interests	49.00%		49.00%
Contribution			$ 0
Net Income (Loss)	$ (214)		4,227
Other Comprehensive Income (Loss)	(77)		291
Noncontrolling Interests	$ (163,304)		$ (163,013)	(167,531)
PTC Nanjing [Member]
Non-Controlling Interests [Line Items]
% of Non-controlling Interests			49.00%
Contribution			$ 0
Net Income (Loss)			1,465
Other Comprehensive Income (Loss)			1,179
Noncontrolling Interests			$ 0	$ (2,644)

XML

INCOME TAX - Effective Income tax rate reconciliation (Details)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
INCOME TAX
US statutory rate	21.00%	21.00%
Tax rate difference	(2.00%)	(2.00%)
Tax base difference	0.00%	1.00%
Income tax on undistributed earnings	4.00%	11.00%
Change in valuation allowance	4.00%	25.00%
Utilization of deferred tax assets not previously recognized	(1.00%)	0.00%
Provision for uncertain tax position	0.00%	19.00%
Non-deductible and non-taxable items	1.00%	2.00%
True up of prior year income tax	(1.00%)	0.00%
Effective tax rate	26.00%	77.00%

XML

INCOME TAX - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Schedule of Income Tax [Line Items]
Tax per financial statements	26.00%	77.00%
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent	4.00%	25.00%
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate	21.00%	21.00%
Undistributed Earnings, Diluted	$ 1,199,195
Income Tax Expense (Benefit)	1,398,806	$ 1,111,287
Accrued Income Taxes, Noncurrent	719,515		$ 719,515
Accrued Income Taxes, Current	4,266,279		3,146,018
Taxes Payable, Current	$ 95,936		153,787
Uncertain tax positions		277,000
Unrecognized Tax Benefits, Income Tax Penalties Expense		$ 178,000
New Taiwan dollar (NTD)
Schedule of Income Tax [Line Items]
Additional Income Tax Rate On Undistributed Earnings	5.00%
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate	20.00%
Taxes Payable, Current	$ 4,151,716		2,978,618
Hong Kong
Schedule of Income Tax [Line Items]
Tax per financial statements	8.25%
Taxes Payable, Current	$ 18,627		$ 13,613
Subsidiary [Member]
Schedule of Income Tax [Line Items]
Tax per financial statements	25.00%

XML

RELATED PARTY TRANSACTIONS - Due to related parties (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Related Party Transaction [Line Items]
Due to related parties, Total	$ 76,831	$ 94,047
Ms.Lu [Member]
Related Party Transaction [Line Items]
Due to related parties, Total	70,600	78,541
Others [Member]
Related Party Transaction [Line Items]
Due to related parties, Total	$ 6,231	$ 15,506

XML

COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
COMMITMENTS AND CONTINGENCIES
Surplus Bonus Percentage	1.25%
Compensation expenses	$ 62,208	$ 50,436
Performance Bonus	$ 29,689	$ 75,772
Number of years	3 years

XML

SEGMENT REPORTING - Revenue by major customers by reporting segments (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenue
Revenue	$ 30,530,117	$ 28,523,210
Income (loss) from operations
Total income from operations	4,886,654	1,548,702
Net income (loss)
Total net income	4,036,782	336,285
Elimination adjustment
Revenue
Revenue	(383,837)	(317,642)
Income (loss) from operations
Total income from operations	138,350	52,880
Net income (loss)
Total net income	62	9,204
New Taiwan dollar (NTD)
Revenue
Revenue	28,851,500	27,342,936
Income (loss) from operations
Total income from operations	4,690,729	1,503,282
Net income (loss)
Total net income	3,933,490	345,266
PRC
Revenue
Revenue	1,951,469	1,429,297
Income (loss) from operations
Total income from operations	(3,918)	(31,113)
Net income (loss)
Total net income	46,918	(39,957)
Hong Kong
Revenue
Revenue	110,985	68,619
Income (loss) from operations
Total income from operations	61,493	23,653
Net income (loss)
Total net income	$ 56,312	$ 21,772

XML

SEGMENT REPORTING - Long term liabilities (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Long-lived assets
Total long-lived assets	$ 2,157,445	$ 2,373,245
Reportable assets
Total reportable assets	107,834,338	107,728,229
Capital Investment
Total capital investments	57,520	1,611,668
Elimination adjustment
Long-lived assets
Total long-lived assets	(2,908)	(2,906)
Reportable assets
Total reportable assets	(80,577,773)	(77,373,957)
New Taiwan dollar (NTD)
Long-lived assets
Total long-lived assets	1,990,118	2,198,739
Reportable assets
Total reportable assets	174,507,496	171,037,252
Capital Investment
Total capital investments	50,228	1,522,189
PRC
Long-lived assets
Total long-lived assets	168,704	175,748
Reportable assets
Total reportable assets	12,930,173	13,149,306
Capital Investment
Total capital investments	7,292	87,903
Hong Kong
Long-lived assets
Total long-lived assets	1,531	1,664
Reportable assets
Total reportable assets	974,442	915,628
Capital Investment
Total capital investments	$ 0	$ 1,576

XML

SUBSEQUENT EVENTS (Details) - Subsequent Event	May 11, 2021 TWD ($)	May 11, 2021 USD ($)	Apr. 27, 2021 TWD ($)	Apr. 27, 2021 USD ($)
Subsequent Event [Line Items]
Financial Supervisory commission			$ 900,000	$ 32,233
Law Broker fine	$ 1,700,000	$ 60,565
Correction period for violating	1 month	1 month