Anhou’s current registered address is located at Room 2008-2010, No. 215 Jiangzhong Middle Road, Jianye District, Nanjing, Jiangsu Province, China, with 553.26 square meters (equivalent to approximately 5,955 square feet) of office space. The lease agreement is by and among Zheng Yong Xiang, Zhang Guo Qiang and Anhou. The term is from November 3, 2018 to November 2, 2024. Anhou paid the rent of its office space in Nanjing in the total amount of RMB 4,530,579 or approximately $647,799 during the fiscal year ended December 31, 2019.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
We have three operating subsidiaries in our Taiwan Segment and conduct brokerage and insurance agency services through the subsidiaries across Taiwan. Among the three operating subsidiaries, two of which were acquired through making capital contributions or an acquisition agreement during the years of 2018 and 2019. Furthermore, the Company through one of its subsidiaries entered into a joint venture agreement (the “Joint Venture Agreement”) with two parties in November 2019. Under the terms of the joint venture agreement, all parties agreed to contribute funds, human resources, and technology into Uniwill Insurance Broker Co., Ltd. (“Uniwill”, a wholly owned subsidiary incorporated in Taiwan). Under the terms of the agreement, a total of $13.3 million (NTD 400 million) will be injected to Uniwill if and when all of the conditions are met as set forth in the Joint Venture Agreement no later than December 31, 2021. On August 15, 2019, AIlife increased and completed the capital injections in Uniwill to the amount of $3.3 million. However, as of December 31, 2019, certain necessary regulatory approvals and legal procedures were to be completed. The procedures for changing the legal representative of Uniwill have been passed on January 6, 2020, but other procedures have not been completed yet as of the date of this report. Our goal in the Taiwan Segment is to enable synergies among group companies and generate revenues from marketing and making the technologies available to insurance intermediary companies through the new subsidiaries. Our revenue from the Taiwan Segment is about 90.8% of the total revenue of the Company for the year ended December 31, 2019. As of December 31, 2019, we had 51 sales and service outlets (including the headquarters) with 4,161 sales professionals and 250 administrative staff in the Taiwan segment.
Through our consolidated affiliated entities, we had two insurance agencies, one brokerage and 47 service outlets with 2,589 full-time sales professionals and 139 administrative staff in Nanjing, Henan, Sichuan, Jiangsu, Fujian and Guangdong Provinces in the PRC Segment as of December 31, 2019. Our PRC segment contributed 8.9% of total revenue of the Company for the year ended December 31, 2019.
Our Hong Kong Segment mainly consists of one operating subsidiary, which acts as a broker for reinsurance products and earns commissions on sales of insurance products from other insurers. As of December 31, 2019, we had one sales and service outlet (including the headquarters) with no sales professionals and one administrative staff in Hong Kong segment.
We review our 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 December 31, 2019 and 2018.
We adopted the new revenue standard ASC Topic 606, Revenue from Contracts with Customers, at the beginning of 2018, which requires that recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
We recognize revenue when control over services provided by the Company is transferred to the respective insurance company, whereby the transfer of control is considered complete when a policy becomes effective. When a policy is effective, the insurance company is obligated to pay the agreed-upon commission to the Company under the terms of its service agreement with the Company and such commission is recognized as revenue. Variable or contingent consideration is recognized when we conclude that is it probable that a significant reversal of revenue will not probably occur in subsequent periods.
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.
We adopted the new lease standard as of January 1, 2019 using a modified retrospective transition with no adjustment to its comparative periods in the year of transition. The Company has operating leases for its offices. We determine if an arrangement is a lease at inception of the contract and whether a contract is or contains a lease by determining whether it conveys the right to control the use of the identified asset for a period of time. If the contract provides us the right to substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset, we consider it to be, or contain, a lease. For leases with an initial term greater than 12 months, we record a right-of-use asset and a corresponding lease liability based on the present value of the minimum lease payments. The lease term used in the calculation of right-of-use assets and lease liabilities renewal and termination options that are reasonably certain to be exercised. Our leases do not provide an implicit borrowing rate, and we estimate the Company’s incremental borrowing rate to discount the lease payments based on information available at lease commencement.
The following table shows the results of operations for the years ended December 31, 2019 and 2018:
Overall revenue from our Taiwan segment increased by $19.6 million from $67.5 million for the year ended December 31, 2018 to $87.1 million for the year ended December 31, 2019. The increase was mainly due to the combined effects of discontinuities of the long-term care products and an interest rate reduction in insurance liability reserves of life and saving insurances by Financial Supervisory Commission Taiwan. The long-term care products provided more favorable terms to individual customers was discontinued in the year of 2019 and the individual customers took advantage of the opportunity to lock in the policy prior to the discontinuities of the long-term care products. In the fourth quarter of 2019, Financial Supervisory Commission Taiwan announced to reduce the interest rate of life and saving insurance liability reserves starting in the year of 2020, leading to a market expectation that insurance premiums of the life and saving insurance would increase more than 5% compared to that in 2018 and therefore boosting the customers’ demand to purchase and lock in in insurance policies before the expected premium adjustment next year.
Overall revenue from our PRC segment decreased by $1.9 million (or 18.6%) to $8.5 million for the year ended December 31, 2019 from $10.5 million for the year ended December 31, 2018. Such decrease in revenue of the PRC segment was mainly due to the effect of the China Insurance Regulatory Commission’s Notice on Regulating Product Development and Design Behavior of Insurance Company (Circular 134), in which the benefit payments of endowment insurance and annuity insurance products were stipulated. The lower yield along with macroeconomic downturn decreased consumers’ demand of these products, which resulted in the negative growth in the insurance market. Under the circumstance, the Company made a more conservative business approach in the year of 2019 that further impacted the operating activities in our PRC segment.
In the year of 2018, one of our subsidiaries in the Hong Kong Segment became one of the brokers for reinsurance products of Taiwan Life Insurance Co., Ltd. (“Taiwan Life”). In the reinsurance arrangement, the Company earns commissions on sales of insurance products from other insurers to Taiwan Life for risk management. Starting in mid-year 2019, the economy in Hong Kong was affected by anti-government protests and resulted in a recession. Overall revenue from our Hong Kong segment decreased by $0.4 million (or 60.5%) from $0.7 million for the year ended December 31, 2018 to $0.3 million for the year ended December 31, 2019 as a result of the political and economic conditions in Hong Kong.
The cost of revenue mainly consists of commissions paid to our sales professionals. The Company initiated new incentive schemes and performance measures that are more aligned with the company’s long-term objectives in late 2017. Under the 2017 commission program, sales targets are divided into smaller and more attainable targets to improve the achievement rate.
Selling expenses were mainly incurred by Law Broker, in connection with online marketing and advertising. The selling expense for the year ended December 31, 2019 decreased by $0.9 million (or 24.0%) to $2.7 million, compared to $3.6 million for the year ended December 31, 2018. The selling expense decreased primarily because the Company sponsored an online reality show and provided an incentive program of Apple I-Pad for sales professionals to facilitate deeper brand engagement and attract young candidates in the year of 2018. The Company did not incur such expenses in the year of 2019.
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.
WFOE and the CAE in the PRC segment are governed by the Income Tax Law of the PRC concerning privately-run enterprises, which are generally subject to tax at 25% on income reported in the statutory financial statements after appropriated adjustments. According to the requirement of local tax authorities, the taxable income of Jiangsu Law was deemed to be 10% of total revenue, instead of actual income before income tax. The tax rate of Jiangsu Law is also 25%.
Our subsidiaries in Hong Kong segment are governed by the Inland Revenue Ordinance Tax Law of Hong Kong and are generally subject to a profits tax at the rate of 16.5% on the estimated assessable profits.
Net cash used in financing activities was $0.4 million for the year ended December 31, 2019 in comparison with net cash of $5.5 million provided by financing activities for the year ended December 31, 2018. The cash outflows from the financing activities was mainly due to the net repayments of revolving bank loans during the year ended December 31, 2019.
(2) Contractual obligations include obligations related to compensation plans with Law Broker’s officers, amount due to previous shareholders of AHFL, and a Strategic Alliance Agreement with AIATW.
In January 2011, through Zhengzhou Zhonglian Hengfu Business Consulting Co., Limited (“WFOE”), a wholly owned Hong Kong based subsidiary of CU Hong Kong, the Company entered a series of agreements (“VIE agreements”) with Law Anhou Insurance Agency Co., Limited (“Anhou”) that established, among other things, an exclusive business cooperation agreement. Prior to the VIE agreements with WFOE, Anhou owned 100% interest of Sichuan Kangzhuang Insurance Agency Co., Limited (“Sichuan Kangzhuang”) and 100% interest of Jiangsu Law Insurance Brokers Co., Limited. Both subsidiaries are also engaged in selling life and property casualty insurance products in the PRC. With the establishment of VIE, the Company expanded business operations into Peoples’ Republic of China (“PRC” or “China”).
Through the acquisition of AHFL in August 2012, the Company indirectly owns 65.95% interest of Law Enterprise Co., Limited (“Law Enterprise”) and Law Insurance Broker Co., Limited (“Law Broker”), which is 100% owned subsidiary of Law Enterprise. Both companies are engaging in business in insurance brokerage and insurance agency services across Taiwan, where the majority of revenue is generated.
In July 2018, the Company completed its acquisition of Kao Te Insurance Broker (“KT Broker”) for its existing brokerage licenses. Under Taiwanese law, the brokerage license is undetachable from the legal entity and the entity itself cannot be dissolved, so the Company renamed KT Broker to Joint Insurance Broker Co., Limited (“JIB”) to serve as a holding entity for the brokerage licenses. The Company has no intention of operating the existing business of KT Broker nor retain any of its sales personnel, therefore the Company accounted the acquisition as assets purchase in accordance with FASB ASC Topic 805.
The accompanying 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 the consolidation. The Company consolidates variable interest entities where it has been determined that the Company is the primary beneficiary of those entities' operations. 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.
Noncontrolling interest consists of direct and indirect equity interest in AHFL and its subsidiaries arising from the acquisition of AHFL by CUII and acquisition of PFAL by AHFL in August 2012 and April 2014, respectively.
The Company invests part of its excessive cash in equity securities and money market funds. Such investments are grouped under other current assets in the consolidated balance sheets. Trading securities represent securities bought and held primarily for sale in the near-term to generate income on short-term price differences and are stated at fair value. Realized and unrealized gains and losses are recorded in other income (expense). As of December 31, 2019 and 2018, the Company had marketable securities of $290,153 and $30,800 under other current assets.
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 December 31, 2019 and 2018.
Long-term investments include government bonds held as available-for-sale, investment in real estate investment trusts (“REITs”) measured at fair value through net income, and equity investments under cost method. Available-for-sale investments are carried at fair value and unrealized gains and losses as a result of changes in the fair value are recorded as a separate component within accumulated other comprehensive income in the accompanying consolidated balance sheets.
The Company expenses all advertising costs, which include promotions and branding, as incurred. The Company incurred $238,648 and $749,563 in advertising and marketing costs during the years ended December 31, 2019 and 2018, respectively.
The Company is obligated to pay commissions to its sales professionals when an insurance policy becomes effective. The Company recognizes commission revenue granted from insurance companies on a gross basis, and the commissions paid to its sales professionals are recognized as cost of revenue.
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, time deposits, restricted cash and cash equivalents, register capital deposits and accounts receivable. As of December 31, 2019, and 2018, approximately $2,293,000 and $1,751,000 of the Company’s cash and cash equivalents, time deposits, restricted cash and cash equivalents, and register capital deposits held by financial institutions, was insured, and the remaining balance of approximately $50,108,000 and $44,289,000, was not insured. With respect to accounts receivable, the Company generally does not require collateral and does not have collectability concern.
The Company determines if an arrangement is a lease at inception of the contract and whether a contract is or contains a lease by determining whether it conveys the right to control the use of the identified asset for a period of time. If the contract provides us the right to substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset, we consider it to be, or contain, a lease. The Company records a right-of-use asset and a corresponding lease liability based on the present value of the minimum lease payments. The lease term used in the calculation of right-of-use assets and lease liabilities include renewal and termination options that are reasonably certain to be exercised. Leases with an initial term of twelve months or less are not recorded on the consolidated balance sheet and the related lease expense is recognized on a straight-line basis over the lease term. Our leases do not provide an implicit borrowing rate, and we estimate the Company’s incremental borrowing rate to discount the lease payments based on information available at lease commencement.
The Company managed and reviewed its business as three operating segments. The business of WFOE, CU Hong Kong and the Company’s Consolidated Affiliated Entities (“CAE”) in PRC was managed and reviewed as the 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. The PRC and Taiwan segments are substantially all of the reported consolidated amounts.
· Exclusive Business Cooperation Agreement (“EBCA” or the “Agreement”) through which: (1) WFOE has the right to provide Anhou with complete technical support, business support and related consulting services during the term of this Agreement; (2) Anhou agrees to accept all the consultations and services provided by WFOE. Anhou further agrees that unless with WFOE’s prior written consent, during the term of this Agreement, Anhou shall not directly or indirectly accept the same or any similar consultations and/or services provided by any third party and shall not establish similar cooperation relationship with any third party regarding the matters contemplated by this Agreement; (3) Anhou shall pay WFOE fees equal to 90% of the net income of Anhou, and the payment is quarterly, and (4) WFOE retains all exclusive and proprietary rights and interests in all rights, ownership, interests and intellectual properties arising out of or created during the performance of this Agreement.
As a result of the capital increase and the share transfer, on October 24, 2013, WFOE, Anhou and Anhou Existing Shareholders entered into a series of variable interest agreements (the “Second VIE Agreements”), including Power of Attorneys, Exclusive Option Agreements, Share Pledge Agreements, in the same form as the First VIE Agreements, other than the change of shareholder names and their respective shareholdings. The First VIE Agreements were terminated by and among WFOE, Anhou and Anhou Original Shareholders on the same date. The EBCA executed by and between WFOE and Anhou on January 17, 2011 remains in full effect.
b) The equity investment or some part thereof is returned to the equity investors, and other interests become exposed to expected losses of the legal entity.
c) The legal entity undertakes additional activities or acquires additional assets, beyond those anticipated at the later of the inception of the entity or the latest reconsideration event, that increase the entity’s expected losses.
d) The legal entity receives an additional equity investment that is at risk, or the legal entity curtails or modifies its activities in a way that decreases its expected losses.
The Company reviews the VIE’s status on an annual basis. For the years ended December 31, 2019 and 2018, no event including a)-d) above took place that would change the Company’s primary beneficiary status.
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.
On December 14, 2018, the Company purchased a commercial paper of $654,006 (NTD 20.0 million) with a maturity of 25 days and 0.70% interest rate annum.
As of December 31, 2018, restricted cash equivalents of $3,320,802 (NTD101.5 million) were time deposits with original maturities less than three months and pledged to satisfy the requirements of certain debt agreements.
As of December 31, 2019 and 2018, the Company had time deposits of $11,920,632 (NTD 357.0 million) and $5,404,889 (NTD 165.2 million) pledged as collateral for short-term loans. See Note 8.
Property and equipment consisted of the following, as of December 31, 2019 and 2018:
As of December 31, 2019 and 2018, the Company’s intangible assets consisted the following:
Amortization expense was $241,193 and $261,392 for the years ended December 31, 2019 and 2018, respectively.
As of December 31, 2019 and 2018, the Company’s long-term investments consisted the following:
The change in carrying value of equity investment between the two years resulted from the fluctuation of exchange rates. The Company received $311,350 and $354,224 dividend income distributed from the investee for the years ended December 31, 2019 and 2018, respectively.
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 ($100,156 and $98,152 as of December 31, 2019 and 2018, 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 are valued based on theoretical bond price in Taipei Exchange.
REITs are valued based on quoted market prices in the active market of Taiwan. The fair value of REITs as of December 31, 2019 and 2018 were $1,308,711 and $1,120,239, respectively. Unrealized gains (losses) included in earnings for assets held at the end of the reporting period were $188,472 and $(220,596) for the years ended December 31, 2019 and 2018, respectively.
The Company’s short-term loans consisted of the following as of December 31, 2019 and 2018:
In September 2017, CUII entered into a line of credit agreement with FEIB, which matures on January 8, 2021, and borrowings under the revolving credit facility bear interest at the higher of LIBOR or TAIFX3 rate plus a margin of 0.85%. As of December 31, 2019 and 2018, the outstanding balance of the revolving credit facility were $2,500,000 with an interest rate of 3.05% and $2,000,000 with an interest rate of 3.95%, respectively. The borrowing is secured by a total amount of $3,064,787 (NTD 91.8 million) of time deposits.
Law Broker entered into a credit agreement with FEIB providing for a $2.6 million (NTD 80 million) revolving credit facility, which matures January 8, 2021. As of December 31, 2019 and 2018, the outstanding loan under this credit agreement was nil.
Law Broker entered into a credit agreement with CTBC providing for a $3.3 million (NTD 100 million) revolving credit facility, which matures on August 31, 2020. As of December 31, 2019 and 2018, the outstanding loan under this credit agreement was nil.
Law Broker entered into another credit agreement with KGI providing for a $1.6 million (NTD 50 million), and the agreement matures on October 2, 2020. The borrowing is secured by a total amount of $1,786,660 (RMB 12 million) of time deposits. As of December 31, 2019 and 2018, the outstanding loan under this credit agreement was nil.
On July 20, 2016, Anhou entered into another loan agreement (“Loan B”) with an individual third party. Loan B bears an interest rate of 8% per annum and interest is payable annually. The outstanding balance of Loan B was $111,976 (RMB 770,000) as of December 31, 2018 and the Company paid off the total outstanding loan balance and accrued interest in May 2019.
Total interest expenses for the long-term loans were $7,066 and $18,450, respectively, for the years ended December 31, 2019 and 2018.
Commissions payable to professionals consisted of the following as of December 31, 2019 and 2018:
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.
The Company has other compensation plans solely provided by Law Broker to its officers.
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 AHFL entered into a sixth amendment to the acquisition agreement, pursuant to which, the Company will make the cash payment in the amount of NTD15 million on or prior to March 31, 2021. As of December 31, 2019 and 2018, the amount due to previous shareholders of AHFL were $500,782 and $480,559, respectively.
On January 28, 2011, the Company increased the number of authorized shares of common stock from 30,000,000 to 100,000,000 and authorized 10,000,000 shares of preferred stock with $0.00001 par value. It currently has 1,000,000 shares of Series A Preferred Stock (“Series A Stock”) issued and outstanding as of December 31, 2019 and 2018. The Series A Stock has the following rights and preferences:
Noncontrolling interests consisted of the following as of December 31, 2019 and 2018:
In May 2014, the FASB issued new accounting guidance - ASU No. 2014-09, (FASB ASC Topic 606), Revenue from Contracts with Customers related to revenue from contracts with customers. The core principle of the Standard is that recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new guidance requires that companies disclose the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the new guidance effective January 1, 2018, using the modified retrospective method, which applies the new guidance beginning in the year of adoption, with the cumulative effect of initially applying the guidance recognized as an adjustment to retained earnings at January 1, 2018.
For the years ended December 31, 2019 and 2018, the Company recorded revenue of $95,919,338 and $78,667,731, respectively. Disaggregation information of revenue is disclosed in Note 21.
The Company recorded operating lease cost of $2,202,195 for the year ended December 31, 2019.
Rental expenses for the years ended December 31, 2018 was $2,720,365. As of December 31, 2018, total future minimum annual lease payments under operating leases were as follows:
Provision (benefit) for income taxes for the year ended December 31, 2019 consisted of:
The 2017 Tax Act also creates a new requirement that certain income (i.e., GILTI) earned by controlled foreign corporations (“CFCs”) must be included currently in the gross income of the CFCs’ U.S. shareholder. GILTI is the excess of the shareholder’s net CFC tested income over the net deemed tangible income return, which is currently defined as the excess of (1) 10 percent of the aggregate of the U.S. shareholder’s pro rata share of the qualified business asset investment of each CFC with respect to which it is a U.S. shareholder over (2) the amount of certain interest expense taken into account in the determination of net CFC-tested income. For the year ended December 31, 2019 and 2018, no GILTI tax obligation existed and no GILTI tax expense was recorded.
For the year ended December 31, 2019 and 2018, the Company did not have any unrecognized tax benefits.
Amounts due to Mr. Mao were associated with funding provided by Mr. Mao for the formation of our subsidiaries in China in 2011. As of December 31, 2019 and 2018, the amounts of $373,183 and 391,311 were non-interesting bearing and payable on demand. The change in amounts owed to Mr. Mao from December 31, 2018 to December 31, 2019 was due to foreign currency translation.
In determining the appropriate levels, the Company performs a detailed analysis of the assets and liabilities that are measured and reported on a fair value basis. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3.
The following table summarize financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 and 2018:
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.
The geographical distributions of the Company’s financial information for the years ended December 31, 2019 and 2018 were as follows: