Document:

EX-4.30

    
 Exhibit 4.30

 
 China Mobile Limited

 
 And

 
 China Mobile Communications Group
Co., Ltd.
  
 

 

  2020 Telecommunications Services Agreement 

 

  
 
 

  

 

  

	Table of Contents
	1.	Provision and Receipt of Telecommunications Services	1
	2.	The Services	1
	3.	The Basic Principles	2
	4.	Pricing Principles and Payment	3
	5.	Representations, Warranties and Undertakings	5
	6.	Term of this Agreement	6
	7.	Force Majeure	6
	8.	Confidentiality	6
	9.	Assignment	6
	10.	No Waiver	7
	11.	Notice	7
	12.	Applicable Law and Dispute Settlement	7
	13.	Miscellaneous	7
	Appendix 1: Planning, design and consultation of telecommunications projects	9
	Appendix 2: Construction of telecommunications projects and related services	11
	Appendix 3: Maintenance of telecommunications facilities and equipment	13

  

 

  

 

  

2020 Telecommunications Services Agreement 
  

This Agreement was entered into on 2 January 2020 by and between:

 

	A.	China Mobile Limited, a limited liability company incorporated and duly existing in accordance with Hong Kong law with its legal address at 60/F.,
The Center, 99 Queen’s Road Central, Hong Kong (hereinafter referred to as “Party A”); and 

  

	B.	China Mobile Communications Group Co., Ltd., a wholly state-owned limited liability company incorporated and duly existing in accordance with the
People’s Republic of China (hereinafter as “PRC”) law with its legal address at No.29, Jin Rong Avenue, Xi Cheng District, Beijing, the PRC (hereinafter referred to as “Party B”). 

  
 WHEREAS: 

 
 To facilitate the development of its mobile telecommunications
business and engage in normal production and operating activities in their normal operations, Party B and its relevant subsidiaries require certain telecommunications construction services from Party A and its relevant subsidiaries.

 
 THEREFORE, based on the principle of equally beneficiary to
each other, following amicable consultation, both Parties have concluded the following agreements:
  

	1.	Provision and Receipt of Telecommunications Services 

  

	 	1.1	Party A agrees to urge its relevant subsidiaries to provide telecommunications services to Party B and its relevant
subsidiaries in accordance with the terms and conditions hereof, and Party B agrees to urge its relevant subsidiaries to receive the telecommunications services provided by Party A and its subsidiaries in accordance with the terms and conditions
hereof. In this Agreement, the party and its relevant subsidiaries which are to provide services are collectively called as “the Providers”, while the party and its relevant subsidiaries that are to receive services provided are
collectively as “the Receivers”. 

  

	 	1.2	Each and all responsibilities, obligations and interests arising from the performance of this Agreement by the relevant
subsidiaries of both Parties hereto in accordance with the terms of this Agreement as the Providers and Receivers shall ultimately be performed and/or enjoyed by the practical Providers or Receivers respectively. 
	 	 	 
	2.	The Services 

 
 Pursuant to this Agreement, the Providers
shall provide the following telecommunications services:
  

	 	2.1	Planning, design and consultation of telecommunications projects 
	 	 	The telecommunications projects include, but not limited to, the construction of telecommunications
networks, ducts, base stations, cabling, expansion of network capacity and renovation, installation and commissioning of facilities. The services include, but not limited to, planning, design and consultation of telecommunications projects, specific
researches and demonstration of construction projects, compilation of project proposals, feasibility study reports and engineering design documentation.

  

 

  

 

  

	 	2.2	Construction of telecommunications projects 
	 	 	The telecommunications projects include, but not limited to, the construction of telecommunications networks, ducts, base
stations, expansion of network capacity and renovation. The services include, but not limited to, construction and preliminary stage testing of telecommunications projects, and equipment installation, repairs, decoration and other relevant services.

  

	 	2.3	Maintenance of telecommunications facilities and equipment 
	 	 	Telecommunications facilities and equipment include, but not limited to, fiber cables, towers, base stations, attached
buildings, watching towers, mark stones, ducts, signs, etc. Maintenance services include regular inspection, testing, routine maintenance and repairs, breakdown clearance, watching and emergent repairs and restoration to ensure the normal and smooth
operation of the Receivers’ facilities and equipment.

  

	3.	The Basic Principles 

  

	 	3.1	The terms and standards on which the Providers render the Telecommunications Services to the Receivers shall not be inferior
to those extended by the Providers to any third party for the same or similar services. 

  

	 	3.2	Under the circumstances where, without the Providers’ fault, the Providers are unable to provide or completely provide
the Telecommunications Services, the Providers shall give a notice to the Receivers in a timely manner, and shall use their best efforts to assist the Receivers to obtain the same or similar services from other sources. 

 

	 	3.3	The Telecommunications Services rendered under this Agreement shall be in conformity with relevant state-mandated standards
(if any). 

  

	 	3.4	Provided that it is not prohibited by the laws and regulations, and with the prior consent of the Receivers, the Providers
may delegate third parties (including the subsidiaries, affiliates and other related companies of the Providers) to provide certain Telecommunications services specified under this Agreement to the Receivers on behalf of the Providers. The
Providers, however, shall ensure that any such third parties are qualified to provide such services mandated by the state and that the terms and standards on which the third parties render the Telecommunications Services shall not be inferior to
those committed by the Providers. Each and all responsibilities and obligations for the services rendered by the third parties shall ultimately and fully be taken by the Providers. The Providers shall bear any and all extra expenses incurred by
retaining any such third parties. 

  

	 	3.5	Should a breach of this Agreement by any Party cause a loss to the other Party, the breaching party shall be responsible for
the payment of damages to the other Party to compensate for the full amount of such loss. However, neither Party shall be liable for any loss caused by force majeure events.

 
 
 

  

 

  

	 	3.6	Each Party shall provide all reasonable and necessary assistance to the other Party during the course of the performance of
this Agreement. 

  

	 	3.7	Additional agreements on the Telecommunications Services specified under this Agreement are contained in Appendices I, II and
III attached to this Agreement. 

  

	 	3.8	Subject to this Agreement and its appendices, the relevant subsidiaries of the Parties may, pursuant to the practical
situation, execute an implementation details specifying the content, standards, scope, means of the services or any other particular requirements in relation to the provision of a certain specific service, within the scope granted respectively by
Party A and Party B. But, the content of the implementation details shall not exceed the scope of this Agreement and its appendices or have any conflict with this Agreement. 

 

	4.	Pricing Principles and Payment 

  

	 	4.1	Pricing Principles 

  

	 	4.1.1	The Providers and the Receivers shall strictly abide the Pricing Law, Provisions on The Explicit Price and Mark Of Goods
And Services, Budgets for Integrated Wiring System for Buildings and Building Clusters and Budgets for Installation of Mobile Communication Equipment (Edited) (Xin Bu Gui [2000] No.904), Notice on Further Deregulation on Pricing of Professional
Services for Construction Projects (Fa Gai Jia Ge [2015] No. 299), Notice on the Publishing of Budget Quota of Communication Construction Projects, Quota of Construction Fees and Construction Budgeting Rules (Gong Xin Bu Tong Xin [2016] No. 451)
and other laws and regulations, notify and enter into an agreement with the Providers about the project, contents, quality, pricing of the services. The services provided by the Providers shall conform the relevant national and industrial
standards and specifications, and meet the service contents and quality requirements agreed in the contracts. If the above pricing documents are superseded by other government documents, prices shall be negotiated and agreed upon by both Parties and
shall not be lower than the costs paid by the Providers or higher than the upper limits stipulated by the newly issued government documents. 
	 	4.1.2	As to the projects applicable to open tender, the Receivers shall procure the services hereunder by means of open tender. In
the process of tender, the Receivers will assess the prices, technical skills, comprehensive abilities and others, and determine the winning bidder with the expert panel review. In case that the winner belongs to the Providers, the Receivers shall
determine the service scope and pricing standards obtained by the Providers based on the assessment results. As to the projects inapplicable to open tender, the Receivers shall procure the services in reference with the tender procedures. No matter
which means of procurement are adopted, the Providers and Receivers shall abide the provisions stated in the above Article 4.1.1.

  

 

  

 

  

	 	 	
	 	4.2	Payment
	 	 	 
	 	4.2.1	Design Fees and Consultation Fees
	 	 	 
	 	(i)	Design fees and Consultation fees can be paid by instalments pursuant to the deliveries of the design documents in the
various stages or by one instalment upon the delivery of the final work.
	 	 	 
	 	(ii)	 The actual design fees shall be initially ratified pursuant to the design budgetary estimate and ultimately determined pursuant to
the final accounts, with a refund for any over-payment or an additional payment for any deficiency, as the case may be.

	 	 	 
	 	4.2.2	The Construction of Telecommunications Projects and Relevant Service Charges
	 	 	 
	 	(i)	The Receivers shall pay the Providers a sum equivalent to 10% of the total service charges within 7 working days after they
both have agreed on each particular item of services and signed the implementation details.
	 	 	 
	 	(ii)	During the course of the construction, the Providers shall, in accordance with the implementation details, regularly provide
the Receivers with a statement on the amount of work completed. The Receivers shall pay the Providers a sum equivalent to 70% of the total service charges within 10 working days upon the completion of all agreed works (except for the work of the
warranty period) by the Providers, and upon the receipt and verification by the Receivers of the final statement provided by the Providers;
	 	 	 
	 	(iii)	After the project has been inspected and accepted, the Providers shall, based on the time period stipulated under the
implementation details, provide the Receivers with the project account settlement documents. Within 20 working days upon receipt of the project account settlement documents and after the review by the Receivers, the Receivers shall pay the Providers
the balance of the service charges in accordance with the review results.
	 	 	 
	 	(iv)	 After the execution of the implementation details, if the amount of any work increases or decreases due to a change in the project
design, then based on the actual amount of work actually provided by the Providers, the service charges shall be adjusted in accordance with the pricing principles and standards stipulated in this Agreement and the implementation
details.

	 	 	 
	 	4.2.3	Maintenance fee of Telecommunications Facilities and Equipment
	 	 	 
	 	(i)	Maintenance fees shall be paid monthly. The amount of advance payment for maintenance fees shall be calculated based on the
quantity of telecommunication facilities and equipment then actually maintained by the Providers.
	 	 	 
	 	(ii)	The Providers shall bear the relevant expenses for low-value and easily-worn utensils, tools, vehicles, transportation and
personnel incurred in providing maintenance services, while the Receivers shall bear the relevant expenses for back-up products, components, materials for emergent repairs and support fees charged by manufacturers as required by the Providers in
providing maintenance services.
	 	 	 
	 	(iii)	The Providers shall issue a valid receipt in a timely manner after having received any of the above payments from the
Receivers.
	 	 	 	 

  
 
 

  

 

  

	 	 	
	 	(iv) 	If the Receivers fail to make any payment to the Providers within such period as has been agreed upon by both Parties, the
Receivers shall pay the Providers a late payment penalty calculated at 0.03% of any due amount for each late payment day; if the late payment exceeds 60 days, the Providers may give the Receivers a written notice to terminate any further services.
If after 30 days from the receipt of the written notice by the Providers, the Receivers still have not paid the said service charges, then the Providers may, without prejudice to any other rights and obligations already accrued or incurred to it
under this Agreement, terminate the said services. Nonetheless, such termination of services shall not have any impact on the rights and obligations occurred hereunder between the Parties.

 

	5.	Representations, Warranties and Undertakings 
	 	 

	 	5.1	Each Party represents and warrants to the other Party that this Agreement is valid and equally binding on both Parties.

	 	 	 

	 	5.2	Both Parties warrant that their relevant subsidiaries to provide services possess all the qualifications and licenses
(including but not limited to the qualifications in relation to project construction, construction design) required by the relevant governmental regulatory authorities to provide the telecommunications services under this Agreement, and that the
said qualifications and licenses are all valid during the term of this Agreement. 
	 	 	 

	 	5.3	Both Parties shall ensure the recruitment of sufficient qualified employees by their relevant subsidiaries to provide
satisfactory telecommunications services stipulated under this Agreement. 
	 	 	 

	 	5.4	Both Parties shall ensure that the employees of their relevant subsidiaries are prepared to receive and provide sufficient
instructions and explanations relating to the telecommunications services under this Agreement, and that the services are rendered with reasonable care and skill, such that the services can meet the standards required by the Receivers. Both Parties
warrant that no harm will be caused to the Receivers by the acts or omissions of the Providers’ employees responsible for rendering the services. 
	 	 	 

	 	5.5	Both Parties warrant that they have obtained all necessary approvals or other governmental permits (if there are any
mandatory requirements for the telecommunications projects to be contracted to the other Party for design, consultation or building, and warrants to receive the construction licenses in a timely manner (as the case may be). 
	 	 	 

	 	5.6	Both Parties, as the Receivers, warrant that they will, in accordance with the provisions of this Agreement, accept the
telecommunications services rendered by the Providers, provide all necessary assistance and pay various charges, and that no harm will be caused to the Providers by the acts or omissions of the Receivers. 

 
 
 

  

 

  

	6.	Term of this Agreement 
	 	 
	 	6.1	This Agreement shall be valid until 31 December 2020 unless it has been renewed in accordance with Article 6.2
hereunder.
	 	 	 
	 	6.2	In compliance with or satisfies the relevant Listing Rules of the Stock Exchange of Hong Kong Limited, the relevant laws and
regulations of China, this Agreement shall be renewed automatically for one year upon its expiration of term or renewal terms unless any Parties notify the other Party to terminate the Agreement by a written notice no less than 60 days prior to the
end of term or renewal term. 

  

	7.	Force Majeure 
	 	 
	 	 If, due to a force majeure event, the occurrence of which is unpredictable and the consequences of which are unavoidable and insurmountable, either Party or
its subsidiaries is prevented from performing this Agreement in accordance with the agreed provisions, the affected Party shall immediately give notice to the other Party, and shall, within fifteen (15) days, provide the relevant detailed
information and valid documents evidencing the grounds for non-performance, partial performance, or withheld performance of the relevant obligations under this Agreement. Depending upon the extent to which the performance may be affected by the
force majeure event, both Parties shall discuss and agree whether or not to terminate, partially excuse, or delay the performance of the obligations concerned.

 

	8.	Confidentiality
	 	 
	 	 Unless otherwise required by the relevant laws or supervisory and regulatory authorities, neither Party (including but not limited to its relevant
subsidiaries) shall disclose to any other company, enterprise, organization or individual any information or data concerning the contents of this Agreement or relating to the business of the other Party, unless the prior written consent of the other
Party has been obtained (and such consent shall not be unreasonably refused or withheld).
  

	9.	Assignment
	 	 
	 	 Except for the cases stated in Article 3.4 hereof, without the prior written consent of the other Party, neither Party may assign or delegate to any third
party any or all right(s) or obligation(s) accruing to it or the Providers or the Receivers under this Agreement.
  

	10.	No Waiver
	 	 
	 	 Unless otherwise provided by law, any failure to exercise, or delay in exercising any right, power or privilege to which a Party is entitled under this
Agreement shall not be construed as a waiver of such right, power, or privilege, and any partial exercise of such right, power, or privilege shall not prejudice the future exercise of such right, power, or privilege.

 

	11.	 Notice
	 	 
	 	 Any notice related to this Agreement shall be made in writing and delivered in person, or by facsimile, email or post. Any notice shall be deemed as delivered
at the time of delivery, if delivered in person; or at the time when the facsimile machine or computer indicates successful submission, if delivered by facsimile or email; or on the fifth working day (not accounting statutory holidays) after it has
been posted, if delivered by post. Any notice is effective upon delivery. 

  
 
 

  

 

  

	12.	Applicable Law and Dispute Settlement

  

	 	12.1	This Agreement shall be governed by, and interpreted and enforced, in accordance with the PRC law. 

 

	 	12.2	Any dispute between the Parties relating to the validity, interpretation or performance of this Agreement shall be settled
through amicable consultation. Should the Parties fail to resolve the dispute within 30 days from the date of the occurrence of the dispute, then such dispute shall be submitted to China International Economy and Trade Arbitration Commission for
arbitration in Beijing in accordance with the then effective arbitration rules of that Commission. The arbitration award shall be final and binding on both Parties. Except for the matter of dispute that is submitted for arbitration, all the
remaining parts of this Agreement shall remain valid and effective during the arbitration. 

  

	13.	Miscellaneous 

  

	 	13.1	The appendices constitute a part of this Agreement and have equal legal validity. Following discussion and agreement by both
Parties, this Agreement and its appendices may be amended or supplemented by both Parties. Any amendment or supplement shall take effect after execution by the legal representatives or their authorized representatives of both Parties and after the
affixation of the official seals or special stamps for contract, with all necessary approvals obtained according to relevant regulatory requirements (including but not limited to meeting or satisfying the regulatory requirements set out in the Hong
Kong Listing Rules). Amendments or supplements to this Agreement are of the same effect with this Agreement.
	 	 	 
	 	13.2	This Agreement is severable. If any provision of this Agreement is determined to be invalid, unlawful or unenforceable, the
validity and enforcement of other provisions shall not be affected. 
	 	 	 
	 	13.3	This Agreement can be executed separately by counterparts. The duly executed counterparts constitute a valid agreement. If
the Agreement is executed by counterparts, it shall be construed as duly executed after the both Parties have successfully transmitted their signed counterparts to each other by facsimile. 
	 	 	 
	 	13.4	This Agreement is written in Chinese and executed in four (4) original counterparts, two of which shall be retained by
each Party. Each original counterpart has the equal legal validity. 
	 	 	 
	 Appendix 1: Planning, design and consultation of telecommunications projects

Appendix 2: Construction of telecommunications projects and related services

Appendix 3: Maintenance of telecommunications facilities and equipment

 
 
 

  

 

  

	CHINA MOBILE LIMITED	 
	 	 	 
	By:	/s/ HUANG Jie	 
	 	Legal representative/authorized representative	 
	 	 	 

 
 CHINA MOBILE COMMUNICATIONS GROUP CO.,
LTD. 

	 	 	 
	By:	/s/ GAO Songge	 
	 	Legal representative/authorized representativeExhibit 10.1

 

MDJM LTD Reports
2019 Financial Results

 

TIANJIN, China,
Apr. 28, 2020 /PRNewswire/ -- MDJM LTD (Nasdaq: MDJH) (the “Company” or “MDJH”), an integrated real estate
services company in China, today announced its financial results for the 12 months ended December 31, 2019.

  

	 	 	For the Year Ended December 31,	 
	($'000, except per share data)	 	2019	 	 	2018	 	 	% Change	 
	Revenue	 	$	5,680	 	 	$	2,408	 	 	 	135.8	%
	Operating expenses	 	$	5,321	 	 	$	2,973	 	 	 	79.0	%
	Income (loss) from operations	 	$	359	 	 	$	(564	)	 	 	163.7	% 
	Operating income (loss) margin	 	 	6.3	%	 	 	-23.4	%	 	 	126.9	%
	Net profit (loss) attributable to MDJH	 	$	453	 	 	$	(516	)	 	 	187.8	% 
	Net profit (loss) per share	 	$	0.04	 	 	$	(0.05	)	 	 	180.0	% 

  

* pp: percentage
points 

 

	 	·	Revenue increased by 135.8% to $5.68 million for 2019, primarily attributable to contribution from new projects acquired since 2018.
	 	·	The Company sold 1,960 units of properties for an aggregate of 186,971 square meters and $612.47 million in total sales value with an average commission rate of 0.94% in 2019, compared to 620 units for an aggregate of 86,533 square meters and $273.57 million in total sales value with an average commission rate of 0.87% in 2018.
		·	Operating expenses increased by 79.0%
to $5.32 million for 2019. The increase primarily resulted from increased payroll expenses and professional fees for being a Nasdaq
listed public company since January 2019. 
		·	Operating margin was 6.3% for 2019, compared
to operating loss margin of 23.4% for 2018. The improvement primarily resulted from increased revenue that more than offset increased
operating expenses.
		·	Net income attributable to shareholders
was $0.45 million, or earnings per share of $0.04, for 2019. This compared to net loss attributable to shareholders of $0.52 million,
or net loss per share of $0.05, for 2018. 
		·	As of December 31, 2019, the Company had
17 outstanding projects with total sales value of $1.11 billion and total square meters of 316,699.

 

“Following
a setback in 2018 against the backdrop of Chinese government’s tightening policies and regulations implemented in the real
estate market, we made a strong comeback in 2019 with the returns of both top-line growth and profitability, thanks to increased
sale volume as well as improvement in average commission rate in our primary real estate agency service business,” said Mr.
Siping Xu, Chairman and Chief Executive Officer of the Company.

 

“The Tianjin
market remained our stronghold, and we made inroads into the Yangzhou, Chengdu, and Suzhou markets with each contributing 9%, 5%,
and 3% of total revenue, respectively, in 2019. Our efforts in continuing to diversify our business also started to pay off with
the real estate consulting services business growing by 199.5% and contributing 2.7% of total revenue in 2019. We also made progress
in our tourism development services initiative with the signing of framework and cooperation agreements with several local governments
and third parties. Looking ahead, despite the near-term challenges brought by the COVID-19 pandemic, we are confident in our long-term
prospectus and strategy and look forward to another strong year in 2020,” concluded, Mr. Xu.

  

     

     

    

 

Financial Results
for the Full Year of 2019

 

Revenue

 

For the 12 months
ended December 31, 2019, revenue increased by $3.27 million, or 135.8%, to $5.68 million from $2.41 million for 2018. The increase
of revenue was primarily attributable to new projects acquired since 2018. During 2019, the Company facilitated sales of 1,960
units of properties for an aggregate of 186,971 square meters and RMB 4.27 billion ($612.47 million) in total sales value with
an average commission rate of 0.94%, compared to completed sales of 620 units for an aggregate of 86,533 square meters and RMB
1.88 billion ($273.57 million) in total sale value with an average commission rate of 0.87% for 2018.

 

As of December 31, 2019, the Company had
17 outstanding projects, including six ongoing projects from existing developer clients, five from new projects from existing developer
clients and six from new clients/developers. These outstanding projects have total sales value of RMB7.70 billion (or $1.11 billion)
and total square meters of 316,699. If all of the current outstanding projects were to be completed, the Company’s estimated
revenues from such projects would be approximately $10 million based on contracted commission rates. However, since a project will
normally take two to three years to be completed, and given the nature of its industry and the volatility of the market, the Company
cannot be certain of the length of time each project will take to complete, or whether the projects will be completed at all.

  

Operating Expenses

 

	 	 	For the Year Ended December 31,	 
	($'000)	 	2019	 	 	2018	 	 	% Change	 
	Selling expenses	 	$	187	 	 	$	82	 	 	 	127.0	%
	Payroll, payroll taxes and others	 	 	3,711	 	 	 	2,215	 	 	 	67.5	%
	Professional fees	 	 	634	 	 	 	-	 	 	 	100	% 
	Operating lease expense	 	 	185	 	 	 	142	 	 	 	30.2	%
	Depreciation and amortization	 	 	15	 	 	 	13	 	 	 	20.7	%
	(Reduction) provision for doubtful accounts, net	 	 	(39	)	 	 	(146	)	 	 	-73.4	%
	Other general and administrative	 	 	629	 	 	 	667	 	 	 	-5.8	%
	Total operating expenses	 	$	5,321	 	 	$	2,973	 	 	 	79.0	%

   

Selling expenses
increased by $0.10 million, or 127.0%, to $0.19 million for 2019 from $0.08 million for 2018. The increase of selling expenses
was in line with the increased revenue in 2019.

 

Payroll, payroll taxes and others increased
by $1.50 million, or 67.5%, to $3.71 million for 2019 from $2.21 million for 2018. Employee compensation is tied to sales. Sales
related compensation, such as bonus and commission, increased as a result of the increased revenue in 2019.

 

Professional fees were $0.63 million for
2019, compared to $nil for 2018. The increase in professional fees resulted from being a U.S. public traded company since January
2019. Professional fees consist of legal, U.S. GAAP audit, consulting, investors relations, and other U.S. SEC filing related fees.
Professional fees incurred in 2018 were included in offering costs, which was offset with additional paid in capital received in
the Company’s initial public offering.

 

Operating lease
expenses increased by $0.04 million, or 30.2%, to $0.18 million for 2019 from $0.14 million for 2018. The Company leases its offices
under various non-cancelable lease agreements. As of December 31, 2019, it had one long-term lease which became effective on January
1, 2019 and will be valid through December 31, 2023. For other leases with lease terms of 12 months or less, the Company made an
election to not recognize lease assets and lease liabilities.

 

Depreciation and amortization expense increased
to $0.02 million for 2019 from $0.01 million for 2018. The increase resulted from new purchases of fixed assets in the amount of
$0.07 million during 2019.

 

     

     

    

 

Reversal of allowance for doubtful accounts
was $0.04 million for 2019, compared to $0.15 million for 2018.

 

Other general
and administrative expenses decreased by $0.04 million, or 5.8%, to $0.63 million for 2019 from $0.67 million for 2018. The decrease
resulted from reduced office expenses.

 

As a result, total
operating expenses increased by $2.35 million, or 79.0%, to $5.32 million for 2019 from $2.97 million for 2018. The increase in
operating expenses was primarily related to increased payroll expenses and professional fees as mentioned above.

 

Operating margin
was 6.3% for 2019, compared to operating loss margin of 23.4% for 2018. The improvement in operating margin resulted from increased
revenue that more than offset increased operating expenses.

 

Other Income

 

Total other income,
including gain on disposal of asset, interest income and others, increased by $0.02 million, or 58.8%, to $0.04 million for 2019
from $0.03 million for 2018.

 

Income (Loss)
before Income Tax

 

Income before
income tax was $0.40 million for 2019, compared to loss before income tax of $0.54 million for 2018.

 

The Company paid
income tax of $0.10 million in 2019, compared to $nil in 2018.

 

Net Income
(Loss)

 

Net income was
$0.30 million for 2019, compared to net loss of $0.54 million for 2018. After deduction of noncontrolling interest, net income
attributable to shareholders was $0.45 million, or earnings per share of $0.04, for 2019. This compared to net loss attributable
to shareholders of $0.52 million, or net loss per share of $0.05, for 2018.

 

Financial Conditions

 

As of December
31, 2019, the Company had cash and cash equivalents of $6.55 million, compared to $6.69 million as of December 31, 2018. Account
receivable was $2.16 million at December 31, 2019, compared to $1.77 million as of December 31, 2018. As of December 31, 2019,
the Company had current assets of $8.84 million and current liabilities of $0.69 million, leading to working capital of $8.15 million,
compared to current assets, current liabilities and working capital of $8.74 million, $0.71 million and $8.03 million, respectively,
as of December 31, 2018.

 

Net cash used
in operating activities was $1,501 for 2019, compared to $0.64 million for 2018. Net cash used in investing activities was $0.19
million for 2019, compared to $1,215 for 2018. Net cash provided by financing activities was $0.07 million for 2019, compare to
$4.10 million for 2018. The Company received net proceeds of $4.10 million and $0.07 million from the first and second closing
of its initial public offering in late 2018 and January 2019, respectively.

 

Recent Developments

 

Because of the
quarantines and travel restrictions mandated by the Chinese government in response to COVID-19, from the end of January to mid-March
of 2020, many real estate projects the Company was promoting and selling were suspended, which adversely impacted its business
during that period. However, because the Company’s operating income and earnings have historically been lower during the
first quarter than other quarters due to the winter and the Chinese New Year holiday period, the Company believes this seasonality
partially mitigated the adverse impact on its full-year operating results. Starting from the end of March 2020, these real estate
projects began to reopen. Although the Company believes its operations have resumed to the level before the COVID-19 outbreak as
of April 2020 and even though it currently expects to continue the promotion and sales of real estate projects as it typically
did, to the extent that COVID-19 further impacts its promotion and sale of real estate projects, its financial condition, results
of operations, and cash flows could be adversely affected.

 

     

     

    

 

About MDJM LTD

 

With branch offices
in Tianjin, Chengdu, Suzhou, and Yangzhou, China, MDJM provides primary real estate agency services to real estate developer clients,
as well as as-needed real estate consulting and independent training services. The Company also provides tourism development services,
including real estate marketing and planning services, real estate agency services, and advertisement planning services. For more
information regarding the Company, please visit: http://ir.mdjhchina.com.

 

Forward-Looking Statements

 

This announcement
contains forward-looking statements. All statements other than statements of historical fact in this announcement are forward-looking
statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations
and projections about future events and financial trends that the Company believes may affect its financial condition, results
of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases
such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,”
 “intend,” “plan,” “believe,” “potential,” “continue,” “is/are
likely to” or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect
subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company
believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations
will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated
results and encourages investors to review other factors that may affect its future results in the Company’s annual report
on Form 20-F and in its other filings with the Securities and Exchange Commission.

 

For more information, please contact
Investor Relations at:

 

Tony Tian, CFA 

Weitian Group
LLC

Email: ttian@weitianco.com

Phone: +1-732-910-9692

 

     

     

    

 

MDJM LTD and Subsidiaries

Consolidated Statements of Operations
and Comprehensive Income (Loss)

For the Years Ended December 31,

 

	 	 	2019	 	 	2018	 	 	2017	 
	Revenue	 	$	5,679,977	 	 	$	2,408,448	 	 	$	5,532,244	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Operating Expenses:	 	 	 	 	 	 	 	 	 	 	 	 
	Selling expenses	 	 	186,641	 	 	 	82,225	 	 	 	263,797	 
	Payroll, payroll taxes and others	 	 	3,710,697	 	 	 	2,214,975	 	 	 	3,067,837	 
	Professional fees	 	 	634,372	 	 	 	-	 	 	 	-	 
	Operating leases expenses	 	 	184,802	 	 	 	141,959	 	 	 	115,615	 
	Depreciation and amortization	 	 	15,180	 	 	 	12,575	 	 	 	7,232	 
	Reduction for doubtful accounts, net	 	 	(38,883	)	 	 	(146,174	)	 	 	194,149	 
	Other general and administrative	 	 	628,608	 	 	 	667,267	 	 	 	293,931	 
	Total Operating Expenses	 	 	5,321,417	 	 	 	2,972,827	 	 	 	3,942,561	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Income (loss) from Operations	 	 	358,560	 	 	 	(564,379	)	 	 	1,589,683	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Other income:	 	 	 	 	 	 	 	 	 	 	 	 
	Gain on disposal of asset	 	 	1,705	 	 	 	-	 	 	 	(1,213)	 
	Gain on foreign currency exchange	 	 	12,072	 	 	 	-	 	 	 	-	 
	Loss on disposal of subsidiary	 	 	(4,970	)	 	 	-	 	 	 	-	 
	Interest income	 	 	30,662	 	 	 	26,565	 	 	 	32,112	 
	Other income (expense)	 	 	2,707	 	 	 	-	 	 	 	(57,028	)
	Total other income	 	 	42,176	 	 	 	26,565	 	 	 	(26,129	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Income (loss) before income tax	 	 	400,736	 	 	 	(537,814	)	 	 	1,563,554	 
	Income tax	 	 	(101,372	)	 	 	-	 	 	 	(396,552	)
	Net income (loss)	 	 	299,364	 	 	 	(537,814	)	 	 	1,167,002	 
	Net loss attributable to noncontrolling interest	 	 	(153,742	)	 	 	(21,843	)	 	 	-	 
	Net income (loss) attributable to MDJM Ltd shareholders	 	$	453,106	 	 	$	(515,971	)	 	$	1,167,002	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net income (loss) per ordinary share attributable to MDJM Ltd shareholders	 	$	0.04	 	 	$	(0.05	)	 	$	0.11	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Weighted-average shares outstanding, basic and diluted	 	 	11,640,661	 	 	 	10,400,408	 	 	 	10,380,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Comprehensive income (loss):	 	 	 	 	 	 	 	 	 	 	 	 
	Net income (loss)	 	$	299,364	 	 	$	(537,814	)	 	$	1,167,002	 
	Other comprehensive income (loss), net of tax:	 	 	 	 	 	 	 	 	 	 	 	 
	Change in foreign currency translation adjustments	 	 	(53,156	)	 	 	(170,344	)	 	 	270,019	 
	Total other comprehensive income (loss)	 	 	246,208	 	 	 	(708,158	)	 	 	1,437,021	 
	Comprehensive loss attributable to noncontrolling interest	 	 	(2,398	)	 	 	(823	)	 	 	-	 
	Comprehensive income (loss) attributable to MDJM Ltd shareholders	 	$	248,606	 	 	$	(707,335	)	 	$	1,437,021	 

  

     

     

    

 

MDJM LTD and Subsidiaries

Consolidated Balance Sheets

As of December 31,

 

	 	 	2019	 	 	2018	 
	Assets	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Current Assets	 	 	 	 	 	 	 	 
	Cash and cash equivalents	 	$	6,552,677	 	 	$	6,692,557	 
	Accounts receivable, net of allowance for doubtful accounts $10,774 and $49,963, respectively	 	 	2,155,158	 	 	 	1,767,804	 
	Other receivables	 	 	69,977	 	 	 	38,701	 
	Prepaid expenses	 	 	60,020	 	 	 	235,642	 
	Prepaid income tax	 	 	-	 	 	 	3,620	 
	Total Current Assets	 	 	8,837,832	 	 	 	8,738,324	 
	 	 	 	 	 	 	 	 	 
	Property and equipment, net	 	 	70,154	 	 	 	21,302	 
	 	 	 	 	 	 	 	 	 
	Other Assets	 	 	 	 	 	 	 	 
	Deferred tax assets	 	 	33,440	 	 	 	135,471	 
	Operating lease assets, net	 	 	391,871	 	 	 	-	 
	Other receivable - long term	 	 	99,532	 	 	 	-	 
	Total Other Assets	 	 	524,843	 	 	 	135,471	 
	 	 	 	 	 	 	 	 	 
	Total Assets	 	$	9,432,829	 	 	$	8,895,097	 
	 	 	 	 	 	 	 	 	 
	Liabilities and Equity	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Current Liabilities:	 	 	 	 	 	 	 	 
	Accounts payable and accrued liabilities	 	$	460,690	 	 	$	575,087	 
	VAT and other taxes payable	 	 	107,662	 	 	 	137,695	 
	Deferred income	 	 	26,429	 	 	 	-	 
	Operating lease liabilities, current	 	 	91,737	 	 	 	-	 
	Total Current Liabilities	 	 	686,518	 	 	 	712,782	 
	 	 	 	 	 	 	 	 	 
	Long-term operating lease liabilities	 	 	247,382	 	 	 	-	 
	 	 	 	 	 	 	 	 	 
	Total Liabilities	 	 	933,900	 	 	 	712,782	 
	 	 	 	 	 	 	 	 	 
	Equity:	 	 	 	 	 	 	 	 
	Ordinary shares: 50,000,000 shares authorized, par value: $0.001 per share, 11,640,820 and 11,621,459 shares issued and outstanding as of December 31, 2019 and 2018, respectively	 	 	11,641	 	 	 	11,621	 
	Additional paid in capital	 	 	6,734,681	 	 	 	6,664,295	 
	Statutory reserve	 	 	262,954	 	 	 	232,542	 
	Retained earnings	 	 	1,948,804	 	 	 	1,526,110	 
	Accumulated other comprehensive loss	 	 	(280,345	)	 	 	(229,587	)
	Total MDJM Ltd stockholders’ equity	 	 	8,677,735	 	 	 	8,204,981	 
	Noncontrolling interest	 	 	(178,806	)	 	 	(22,666	)
	Total Liabilities and Equity	 	$	9,432,829	 	 	$	8,895,097	 

 

     

     

    

 

MDJM LTD and Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended December 31,

  

	 	 	2019	 	 	2018	 	 	2017	 
	Cash Flows from Operating Activities:	 	 	 	 	 	 	 	 	 	 	 	 
	Net income (loss)	 	$	299,364	 	 	$	(537,814	)	 	$	1,167,002	 
	Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:	 	 	 	 	 	 	 	 	 	 	 	 
	Depreciation and amortization	 	 	15,180	 	 	 	12,575	 	 	 	7,232	 
	(Reduction) increase of provision for doubtful accounts	 	 	(38,883	)	 	 	(146,174	)	 	 	194,149	 
	Gain on foreign currency exchange	 	 	(12,072	)	 	 	-	 	 	 	-	 
	(Gain) loss on disposal of assets	 	 	(1,705	)	 	 	-	 	 	 	1,213	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Decrease in deferred tax assets	 	 	101,166	 	 	 	72,975	 	 	 	102,099	 
	Changes in operating assets and liabilities:	 	 	 	 	 	 	 	 	 	 	 	 
	(Increase) decrease in accounts receivables	 	 	(374,592	)	 	 	(83,189	)	 	 	516,593	 
	(Increase) decrease in other receivables	 	 	(4,630	)	 	 	41,441	 	 	 	103,603	 
	Decrease (increase) in prepaid expense	 	 	120,907	 	 	 	(150,273	)	 	 	(297,392	)
	Decrease (increase) in prepaid income tax	 	 	3,605	 	 	 	(3,762	)	 	 	-	 
	(Decrease) increase in accounts payable and accrued expenses	 	 	(107,980	)	 	 	131,876	 	 	 	(430,286	)
	(Decrease) increase in VAT and other tax payable	 	 	(28,518	)	 	 	18,843	 	 	 	(50,753	)
	Increase in deferred income	 	 	26,657	 	 	 	-	 	 	 	-	 
	Net Cash (Used in) Provided by Operating Activities	 	 	(1,501	)	 	 	(643,502	)	 	 	1,313,460	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Cash Flows from Investing Activities:	 	 	 	 	 	 	 	 	 	 	 	 
	Purchase of property and equipment	 	 	(66,354	)	 	 	(1,215	)	 	 	(19,659	)
	Advance made to deconsolidated subsidiary	 	 	(127,804	)	 	 	-	 	 	 	-	 
	Proceeds from disposal of asset	 	 	3,330	 	 	 	-	 	 	 	-	 
	Net Cash Used in Investing Activities	 	 	(190,828	)	 	 	(1,215	)	 	 	(19,659	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Cash Flows from Financing Activities:	 	 	 	 	 	 	 	 	 	 	 	 
	Proceeds from initial public offering - net of offering costs of $26,399, $2,103,816 and $0, respectively	 	 	70,406	 	 	 	4,103,479	 	 	 	-	 
	Net Cash Provided by Financing Activities	 	 	70,406	 	 	 	4,103,479	 	 	 	-	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Effect of exchange rate changes on cash and cash equivalents	 	 	(17,957	)	 	 	116,055	 	 	 	161,593	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net (decrease) increase in cash and cash equivalents	 	 	(139,880	)	 	 	3,574,817	 	 	 	1,455,394	 
	Cash and cash equivalents - beginning of the year	 	 	6,692,557	 	 	 	3,117,740	 	 	 	1,662,346	 
	Cash and cash equivalents - end of the year	 	$	6,552,677	 	 	$	6,692,557	 	 	$	3,117,740	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Supplemental Disclosure Cash Flow Information:	 	 	 	 	 	 	 	 	 	 	 	 
	Cash paid for:	 	 	 	 	 	 	 	 	 	 	 	 
	Interest	 	$	-	 	 	$	-	 	 	$	-	 
	Income taxes	 	$	-	 	 	$	271,817	 	 	$	294,454

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