NOTE 10 - EQUITY TRANSACTIONS

Capital reduction of VIE, Beijing Jiucheng

Upon formation, Meng contributed RMB 30,000,000 ($4,800,811) and Jiuyuan contributed RMB 70,000,000 ($11,201,893) for a total of RMB 100,000,000 ($16,002,704) to Beijing Jiucheng. As Beijing Jiucheng’s main revenue source is from intermediary services and management was not anticipating to make significant capital expenditures, on February 15, 2017, the Board of directors of Beijing Jiucheng proposed to reduce the capital. Upon approval by the majority shareholders and Board of Directors of Beijing Jiucheng, on February 15, 2017, Beijing Jiucheng reduced the contributed capital from RMB 100,000,000 ($16,002,704) to RMB 20,000,000 ($4,482,799). Beijing Jiucheng has obtained the new business license reflecting the change. Capital reduction made subsequent to December 31, 2016 for the two shareholders are as follows:

In RMB:

	Formation		Capital Reduction			After Reduction		Ownership
Meng		30,000,000		(24,000,000	)		6,000,000		30	%
Jiuyuan		70,000,000		(56,000,000	)		14,000,000		70	%
		100,000,000		(80,000,000	)		20,000,000		100	%

In USD:

	Formation		Capital Reduction			After Reduction		Ownership
Meng		4,800,811		(3,455,971	)		1,344,840		30	%
Jiuyuan		11,201,893		(8,063,934	)		3,137,959		70	%
		16,002,704		(11,519,905	)		4,482,799		100	%

A debt transfer agreement was signed between Meng and Jiuyuan on February 28, 2017. Pursuant to the terms of the agreement, Jiuyuan agreed to transfer to Meng a total of RMB 56,340,519 ($8,112,967) owed by Beijing Jiucheng.

On February 28, 2017, a debt offset agreement was signed between Beijing Jiucheng and Meng and pursuant to the terms of this agreement, the amount due to Jiuyuan which was transferred to Meng plus Meng’s portion of the capital reduction were offset by the amount due from Meng. As a result of the capital reduction, the debt offset agreement and repayment received, the amount due from related parties, Meng that was reclassified as contra-equity account at December 31, 2016 has been repaid and reduced to zero by $11,519,905 during the first quarter ended March 31, 2017.

Subscription receivable of the subsidiaries’ paid in capital

As of March 31, 2018 and December 31, 2017, the subscription receivable of the subsidiaries’ paid in capital (I JIU JIU and Ruixiang) was $51,289.

Reverse merger

On November 10, 2017, Jiucaitong, I JIU JIU Limited (“I JIU JIU”), the holding company of Ruixiang Technology Group,Ltd. (“Rui Xiang”), and the shareholders of I JIU JIU entered into the Share Exchange Agreement, which closed on the same date. Pursuant to the terms of the Share Exchange Agreement, Jiucaitong exchanged 8,000,000 shares of their common stock for all of the outstanding capital stock of I JIU JIU with the result that I JIU JIU became a wholly owned subsidiary of Jiucaitong.

Pursuant to the Merger, all of the issued and outstanding shares of I JIU JIU common stock were converted, at an exchange ratio of 160-for-1, into an aggregate of 8,000,000 shares of the Company or Jiucaitong, formerly known as Spirit International Inc. common stock and I JIU JIU became a wholly owned subsidiary of the Company or Jiucaitong. The holders of the Company’s common stock as of immediately prior to the Merger held an aggregate of 5,110,000 shares and in connection with the Share Exchange Agreement, the Company’s former majority shareholder, Kimho Consultants Company Limited, (“Kimho” or the “Majority Shareholder”) entered into a share cancellation agreement with I JIU JIU’s stockholders whereby Kimho, owning an aggregate of 4,000,000 shares of the Company’s Common Stock agreed to cancel all its 4,000,000 shares of Common Stock in exchange of $440,000 paid by I JIU JIU’s stockholders (“Share Cancellation”).

The common stocks as of March 31, 2018 and December 31, 2017 were 9,110,000 shares.