Company Formation and Structure - The company was incorporated on December 4, 2018, under the name "Advancement International Limited" and changed its name to "Wunong Net Technology Company Limited" on August 19, 2019[92]. - The company has a variable interest entity structure to control Wunong Shenzhen due to PRC legal restrictions on foreign ownership in telecommunications services[96]. - The company was incorporated in the British Virgin Islands on December 4, 2018, and operates through Wunong Technology (Shenzhen) Co., Ltd., which focuses on providing clean food to customers in China[184]. - Wunong Shenzhen has a registered capital of RMB 5,000,000 (approximately $707,500) and was established on June 16, 2015[184]. - The company has entered into various contractual agreements to maintain effective control over Wunong Shenzhen, ensuring it receives substantially all economic benefits[184]. Financial Performance - Total revenue for the fiscal year ended December 31, 2021, was $12,258,451, with $8,290,771 from online sales, $3,854,760 from offline sales, and $100,945 from restaurants[102]. - Net revenue decreased by $9.8 million, or 45%, from $22.1 million for the year ended December 31, 2020, to $12.3 million for the year ended December 31, 2021[197]. - The decrease in revenue was primarily due to the impact of COVID-19 and limited transportation, which caused insufficient supply of food products[197]. - The company reported a comprehensive loss of $715,313 for 2021, compared to a loss of $2,423,847 in 2020[198]. - The net loss attributable to the owners' company for 2021 was $1,081,946, a 51% improvement from a loss of $2,218,062 in 2020[198]. Acquisitions and Investments - The company acquired 100% of Wunong Technology (Liaoning) Co., Ltd on January 8, 2021, which has a registered capital of RMB 8.88 million (approximately $1.372 million)[94]. - On March 31, 2022, the company agreed to acquire 100% of Yundian BVI for a total consideration of $8.1 million, to be paid in Ordinary Shares at a price of $0.9 per share[94]. - The company sold 51% equity interests in Baode Supply Chain (Shenzhen) Co., Ltd for RMB 200,000 (approximately $31,405) on December 28, 2021[94]. - A Share Purchase Agreement was entered into for the acquisition of Yundian BVI for a total consideration of $8.1 million, to be paid in ordinary shares at a price of $0.9 per share[195]. - The company ceased to hold shares in Baode Supply Chain (Shenzhen) Co., Ltd after selling its 51% equity interest for RMB 200,000 (approximately $31,405) on December 28, 2021[188]. Market and Product Strategy - The company plans to open approximately 168 franchise experience stores by December 31, 2022, with 51 stores already launched across 8 provinces in China[103]. - The company has refined its restaurant model into a "community experience store" to enhance product experience and customer service[119]. - The company does not grow or manufacture food products, sourcing all items from suppliers[102]. - The company aims to provide customers with green, organic, and pollution-free food as part of its mission[184]. - The company launched its first experience store in Yangxian and 50 franchise experience stores across 8 provinces in China, with plans to open about 168 more by December 31, 2022[116]. Customer Engagement and Sales Channels - As of December 31, 2021, the company had over 682,147 registered users on its online sales platform, with approximately 69,730 monthly active users[104]. - The company generates revenue from the sale of food products, including custom pre-sales, and began offline sales in the second half of 2020, primarily selling meat and vegetables to enterprise customers[106]. - The experience store model allows customers to experience food products personally and order through the online platform, aiming to establish an offline supply chain system[116]. - The company has launched a sales platform on WeChat, facilitating easy shopping and sharing among customers, which is expected to expand the customer base[134]. - The company recognizes social media as a key driver for growth, directly linking increased sales to new customer acquisition through social media promotions[136]. Regulatory and Compliance - The company has adopted policies to comply with cybersecurity laws and protect customer data, with oversight from the board of directors[121]. - The Food Business License system requires all enterprises engaging in food production and operation in China to obtain a license, valid for five years[160]. - The PRC Cyber Security Law mandates that personal information and important data collected by critical information infrastructure operators must be stored in China[176]. - The company requires suppliers to provide various licenses and qualifications, which are verified against PRC government websites to ensure compliance with national standards[116]. - The company is subject to PRC regulations that restrict the payment of dividends from its subsidiaries, which may impact future dividend distributions[269]. Corporate Governance - The company has established three board committees: an audit committee, a compensation committee, and a nominating and corporate governance committee[245]. - The board of directors consists of five members, with directors re-elected at the annual general meeting of shareholders[240]. - The company has adopted a Code of Business Conduct and Ethics applicable to key executive officers, available on its corporate website[246]. - The company has not established a formal policy for determining executive compensation, relying instead on independent evaluations by the board[240]. - The Chief Executive Officer, Xinliang Zhang, has an annual base salary of $300,000, while the Chief Financial Officer, Junjun Li, has an annual base salary of $1,000[242][243]. Shareholder Information - The company is authorized to issue an unlimited number of Ordinary Shares, with 32,968,755 Ordinary Shares issued and outstanding as of the date of the annual report[259]. - Major shareholders include CEDE & CO with 5,999,910 shares (18.20%), Union International Company Limited with 5,100,051 shares (15.47%), and Kindness Global Company Limited with 4,350,043 shares (13.19%)[260]. - The ordinary shares began trading on the NASDAQ Capital Market on December 15, 2020, under the symbol "WNW"[270]. - The company has never declared a dividend and does not anticipate doing so in the foreseeable future[268]. - Shareholders holding 30% or more of voting rights can request a meeting of shareholders[279].
Meiwu Technology(WNW) - 2021 Q4 - Annual Report