Platinum International Biotech Co., LTD (Cayman Islands) (“Platinum”)

Platinum has authorized 500,000,000 ordinary shares with a par value of $0.0001 per share with 10,152,284 shares issued and outstanding at December 31, 2020.

On April 7, 2020 Platinum issued a total of 10,000,000 ordinary shares to six entities as follows:

Entity	Shares
1. Flydragon International Limited (controlled by Mr. Jun Wang)		3,466,000
2. Chinaone Technology Limited (controlled by Mr. Yang Wang)		1,667,000
3. Boao Biotech Limited (controlled by Mr. Yulin Cao)		2,167,000
4. Dragoncloud Technology Limited (controlled by Mr. Yang Wang)		500,000
5. Focus Draw Group Limited (controlled by Ms. Lina Liu)		1,200,000
6. Focusone Technology Group Limited (controlled by Mr. Jin Wei)		1,000,000
Total		10,000,000

On September 11, 2020 Platinum sold 152,284 ordinary shares to an investor for $750,000 cash.

Yubo International Biotech (Chengdu) Limited (“Yubo Chengdu”)

Yubo Chengdu has subscribed capital of $1,500,000 which has not yet been paid by its shareholder. The subscribed capital is due for payment on January 1, 2040.

Yubo International Biotech (Beijing) Limited (“Yubo Beijing”)

Yubo Beijing has subscribed capital of $1,531,722 (RMB 10,000,000), of which $127,592 (RMB 833,000) has not yet been paid by its shareholders as of December 31, 2020.

In 2019, a total of RMB 5,000,000 ($723,861 at the 6.9074 average exchange rate for the year ended December 31, 2019) was received from Mr. Jun Wang (RMB 2,000,000), Mr. Yang Wang ($1,250,000), Zhenxigu Medical Research Center LP, (RMB 1,250,000) and Borong Hongtai Asset Management LP (RMB 500,000).

In the year ended December 31, 2020, a total of RMB 4,167,000 ($617,580 at the 6.7473 average exchange rate for the year ended December 31, 2020) was received from Mr. Jun Wang (RMB 1,466,000), Mr. Yang Wang (RMB 917,000), Zhengxigu Medical Research Center LP (RMB 417,000), Borong Hongtai Asset Management LP (RMB 700,000), and Platinum Health Management (Tianjin) Center (LP) (RMB 667,000)

Restricted net assets

The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries or its VIE. Relevant PRC statutory laws and regulations permit payments of dividends by Yubo Chengdu and Yubo Beijing only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations and after it has met the PRC requirements for appropriation to statutory reserves. Paid in capital of the PRC subsidiary and VIE included in the Company’s consolidated net assets are also non-distributable for dividend purposes. The results of operations reflected in the accompanying consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of Yubo Chengdu and Yubo Beijing.

Yubo Chengdu and Yubo Beijing are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, Yubo Chengdu and Yubo Beijing may allocate a portion of its after-tax profits based on PRC accounting standards to an enterprise expansion fund and a staff bonus and welfare fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.

For the years ended December 31, 2020 and 2019, Yubo Beijing did not generate any profit and had negative retained earnings as of December 31, 2020. As a result, the Company has not accrued statutory reserve funds.

The ability of the Company’s PRC subsidiary and its VIE to make dividends and other payments to the Company may also be restricted by changes in applicable foreign exchange and other laws and regulations. Foreign currency exchange regulation in China is primarily governed by the following rules:

	·	Foreign Exchange Administration Rules (1996), as amended in August 2008, or the Exchange Rules;
	·	Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), or the Administration Rules.

Currently, under the Administration Rules, Renminbi is freely convertible for current account items, including the distribution of dividends, interest payments, trade and service related foreign exchange transactions, but not for capital account items, such as direct investments, loans, repatriation of investments and investments in securities outside of China, unless the prior approval of the State Administration of Foreign Exchange (the “SAFE”) is obtained and prior registration with the SAFE is made. Foreign-invested enterprises that need foreign exchange for the distribution of profits to its shareholders may affect payment from their foreign exchange accounts or purchase and pay foreign exchange rates at the designated foreign exchange banks to their foreign shareholders by producing board resolutions for such profit distribution. Based on their needs, foreign-invested enterprises are permitted to open foreign exchange settlement accounts for current account receipts and payments of foreign exchange along with specialized accounts for capital account receipts and payments of foreign exchange at certain designated foreign exchange banks.

Although the current Exchange Rules allow the convertibility of Chinese Renminbi into foreign currency for current account items, conversion of Chinese Renminbi into foreign exchange for capital items, such as foreign direct investment, loans or securities, requires the approval of SAFE, which is under the authority of the People’s Bank of China. These approvals, however, do not guarantee the availability of foreign currency conversion. The Company cannot be sure that it will be able to obtain all required conversion approvals for its operations or that the Chinese regulatory authorities will not impose greater restrictions on the convertibility of Chinese Renminbi in the future. Currently, all of the Company’s revenues are generated in Renminbi. Any future restrictions on currency exchanges may limit the Company’s ability to use its retained earnings generated in Renminbi to make dividends or other payments in U.S. dollars or fund possible business activities outside China.