on august 27 , 2014 , we entered into a contribution agreement with cardigant neurovascular . pursuant to the contribution agreement , we assigned all our assets , properties , rights , title and interest used or held for use by our business , ( except for certain excluded assets set forth therein ) which was the treatment of atherosclerosis and plaque stabilization in both the coronary and peripheral vasculature using systemic and local delivery of large molecule therapeutics and peptide mimetics based on high density lipoprotein targets ( “ cardigant business ” ) . in consideration for such contribution of capital , cardigant neurovascular agreed to assume all our liabilities arising from the cardigant business prior to the date of the contribution agreement and thereafter with regard to certain contributed contracts . we granted cardigant neurovascular an exclusive option for a period of 6 months to purchase the excluded assets for $ 1. cardigant neurovascular exercised this option october 20 , 2014 and the excluded assets were assigned to cardigant neurovascular on october 20 , 2014. also on october 20 , 2014 , we acquired all the issued and outstanding shares of hong kong takung , a privately held hong kong corporation , pursuant to the share exchange agreement and hong kong takung became our wholly owned subsidiary in a reverse merger , or the “ merger ” . pursuant to the merger , all of the issued and outstanding shares of hong kong takung common stock were converted , at an exchange ratio of 10.4988-for-1 , into an aggregate of 8,399,040 shares ( 209,976,000 shares before the reverse stock split ) of our common stock and hong kong takung became a wholly owned subsidiary of us . the holders of our common stock as of immediately prior to the merger held an aggregate of 933,236 shares ( 23,330,662 shares before the reverse stock split ) of our common stock , the accompanying financial statements share and per share information has been retroactively adjusted to reflect the exchange ratio in the merger . subsequent to the merger , our name was changed from “ cardigant medical inc. , ” to “ takung art co. , ltd. ” hong kong takung is a limited liability company incorporated on september 17 , 2012 under the laws of hong kong , special administrative region , china . although hong kong takung was incorporated in 2012 , it did not commence business operations until late 2013. as a result of the transfer of the excluded assets pursuant to the contribution agreement and the acquisition of all the issued and outstanding shares of hong kong takung , we are no longer conducting the cardigant business and have now assumed hong kong takung 's business operations as it now our only operating wholly-owned subsidiary . hong kong takung operates an electronic online platform located at http : //en.takungae.com for artists , art dealers and art investors to offer and trade valuable artwork . through hong kong takung , we offer on-line listing and trading services that allow artists , art dealers and owners to access a much bigger art trading market where they can engage with a wide range of investors that they might not encounter without our platform . our platform also makes investment in high-end and expensive artwork more accessible to ordinary people without substantial financial resources . 46 we generate revenue from our services in connection with the offering and trading of artwork on our system , primarily consisting of listing fees , trading commissions and management fees . our headquarters are located in hong kong , special administrative region , people 's republic of china and we conduct our business primarily in hong kong and tianjin . our new principal executive offices are located at room 1105 wing on plaza , 62 mody road , tsim sha tsui , kowloon , hong kong . on july 28 , 2015 , hong kong takung incorporated a wholly owned subsidiary , shanghai takung , in shanghai free-trade zone ( sftz ) in shanghai , china , with a registered capital of $ 1 million . shanghai takung is engaged in providing services to its parent company hong kong takung by receiving deposits from and making payments to online artwork traders for and on behalf of hong kong takung . shanghai takung set up a new office in hangzhou , prc on november 20 , 2016 for technology development and it was closed on august 28 , 2018. on january 27 , 2016 , hong kong takung incorporated another subsidiary , takung cultural development ( tianjin ) co. , ltd ( “ tianjin takung ” ) , a limited liability company , with a registered capital of $ 1 million in tianjin pilot free trade zone in tianjin , people 's republic of china . tianjin takung provides technology development services to hong kong takung and shanghai takung , and also carries out marketing and promotion activities in mainland china . hong kong takung art holdings company limited ( “ takung art holdings ” ) was formed in hong kong on july 20 , 2018 and operates as a holding company to control an online platform for offering , selling and trading whole piece of artwork . we are in the midst of dissolving takung art holdings . its subsidiary , art era internet technology ( tianjin ) co. , ltd ( “ art era ” ) , has been dissolved . hong kong mq group limited ( “ hong kong mq ” ) was formed in hong kong on november 27 , 2018 and currently has no operations . on june 19 , 2019 , as a result of a private transaction , one ( 1 ) share of common stock of hong kong mq was transferred from ms. hiu ngai ma to the company . the net asset of hong kong mq was $ nil as of the acquisition date . story_separator_special_tag 52 gross profit gross profit was $ 1,311,437 for the year ended december 31 , 2019 , compared to $ 5,916,659 for the year ended december 31 , 2018. the decrease was primarily due to decreased revenue resulting from less artworks being listed on our platform as discussed above . gross profit margin decreased by 28.3 % to 41.3 % for the year ended december 31 , 2019 from 69.6 % for the year ended december 31 , 2018 , primarily due to the significant decline in listing revenue . operating expenses general and administrative expenses were $ 4,662,313 for the year ended december 31 , 2019 , compared to $ 11,324,469 for the year ended december 31 , 2018. the significant plunge in general and administrative expense by $ 6,662,156 was attributed to a decrease in salary and welfare by $ 3,074,609 due to the reduction in manpower since july 2018 , a decrease in insurance and rental expenses by $ 498,482 due to the relocation of our hong kong office to a non-central business district location , a decrease in legal and professional fees by $ 320,470 as we obtained discounts from our professional service providers , a decrease in traveling and accommodation expenses by $ 492,311 as a result of fewer marketing events , a decrease in non-deductible input vat by $ 218,008 , a decrease in consultancy fees by $ 982,917 as we had paid for consultants to assist us in business setup of our new subsidiaries and planning for new business in 2018 but we terminated most of the services by consultants in 2019 , a decrease in shares-based compensation by $ 161,268 due to forfeiture of the stock options , a decrease in depreciation by $ 125,922 due to the disposal of the leasehold improvements of our wholly-owned subsidiary in hong kong , a decline in research and development expenses by $ 355,691 due to the closure of our software development center in hangzhou , a decline in bad debt expense by $ 323,892 as the allowance we provided for the short-term borrowing to third parties in 2018 was higher than that in 2019 , which also caused a decrease in other expenses by $ 108,586. the following table sets forth the main components of our general and administrative expenses for the years ended december 31 , 2019 and 2018. replace_table_token_8_th 53 the company also incurred a total of $ 301,460 and $ 898,006 in selling expenses for the years ended december 31 , 2019 and 2018 , respectively . the decrease in selling expenses was due to fewer promotion and advertising events during 2019. total operating expenses for the year ended december 31 , 2019 were $ 4,963,773 , a decline of $ 7,611,371 compared to $ 12,575,144 for the same period in 2018. the significant plummet was driven by the decrease in general and administrative as well as selling expenses as discussed above . the plunge was also triggered by a decrease in an impairment loss of $ 352,669 that was recognized in 2018. the impairment loss included the written down of the value of our construction-in-progress of our software development of $ 195,377 by our subsidiary in shanghai due to the restructuring of our business in this subsidiary and impairment loss in the cost of e-commerce trading platform of $ 157,292 by our subsidiary in tianjin due to a decline in appetite for artwork in china for the year ended december 31 , 2018. other income ( loss ) and expenses other loss and expenses for the year ended december 31 , 2019 was $ 367,201 , compared to $ 1,453,379 for the same period in 2018. the significant decrease was primarily attributed to the exchange loss arising from the fluctuation of the exchange rate between rmb and the u.s. dollar . income tax expense the company 's effective tax rate varies due to its multiple jurisdictions in which the pretax book incomes or losses incur . the company was subject to a u.s. income tax rate of 21 % , hong kong profits tax rate at 8.25 % for the first hk $ 2 million ( approximately $ 255,261 ) assessable profits and at 16.5 % for assessable profits above hk $ 2 million ( approximately $ 255,261 ) ( 16.5 % prior to january 1 , 2018 ) and prc enterprise income tax rate at 25 % . on december 22 , 2017 , the u.s. government enacted comprehensive tax legislation commonly referred to as the tax cuts and jobs act ( the `` tax act `` ) . the tax act introduced significant changes to the u.s. income tax regulations . the tax act reduced the u.s. federal corporate income tax rate from 35 percent to 21 percent and created new tax rules on certain foreign-sourced earnings . except for the one-time deemed repatriation transition tax ( `` transition tax `` ) , most of these provisions go into effect starting january 1 , 2018. on december 22 , 2017 , staff accounting bulletin no . 118 ( “ sab118 ” ) was issued to provide guidance on accounting for the tax effects of the tax act . sab 118 provides a measurement period that should not extend beyond one year from the tax act enactment date for companies to complete the accounting under asc 740. as of december 22 , 2018 , the company has completed the assessment of the income tax effect of the tax act and there were no adjustments recorded to the provisional amounts . the global intangible low-taxed income ( gilti ) is a new provision introduced by the tax act . u.s. shareholders , who are domestic corporations , of controlled foreign corporations ( cfcs ) are eligible for up to an 80 % deemed paid foreign tax credit ( ftc ) and a 50 % deduction of the current year inclusion with the full amount of the section 78 gross-up subject

sources of liquidity the cash and restricted cash balance as of december 31 , 2019 was $ 21,829,154. out of this amount , we had $ 825,886 denominated in u.s. dollars deposited in the financial institutions in the united states , hong kong and prc , $ 1,163,168 dominated in hk $ in hong kong financial institutions , and $ 19,834,157 dominated in rmb in the financial institutions in the prc . during the year ended december 31 , 2019 , net cash generated from operating activities totaled $ 9,841,840 which includes the cash inflows from the following : an increase in client deposits by $ 11,855,739 placed by the customers for upcoming transactions , non-cash item such as depreciation , $ 597,654 , decrease in prepayment and other current assets , $ 386,557 , collection from accounts receivable , $ 568,757 , an increase in lease liabilities , current , $ 166,987 , an increase in lease liabilities , noncurrent , $ 48,856 , and repayments from related party , $ 340,044. the cash inflows were offset by the net loss , $ 4,092,806. net cash generated from investing activities totaled $ 224,608. the cash inflows from investing activities included the repayment of loans from third party , $ 2,380,065 , offset by the outflow of loans made to third parties , $ 2,080,211 and purchase of property and equipment , $ 75,246. net cash used in financing activities totaled $ 699,526 was resulted from the repayment of loans to third parties , $ 2,499,500 , offset by proceeds from short-term borrowings , $ 1,799,974. the resulting change in cash for the period was an increase of $ 9,305,068. the cash balance at the beginning of the period was $ 12,524,086. the cash balance on december 31 , 2019 was $ 21,829,154. the cash and restricted cash balance as of december 31 , 2018 was $ 12,524,086. out of this amount , we had $ 53,037 denominated in u.s. dollars deposited in the financial institutions in the united states , $ 695,329 denominated in hk $ in hong kong financial institutions , $ 2,512,382 and $ 760,841 denominated in u.s. dollars deposited in the financial institutions in hong kong and china respectively


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```sources of liquidity the cash and restricted cash balance as of december 31 , 2019 was $ 21,829,154. out of this amount , we had $ 825,886 denominated in u.s. dollars deposited in the financial institutions in the united states , hong kong and prc , $ 1,163,168 dominated in hk $ in hong kong financial institutions , and $ 19,834,157 dominated in rmb in the financial institutions in the prc . during the year ended december 31 , 2019 , net cash generated from operating activities totaled $ 9,841,840 which includes the cash inflows from the following : an increase in client deposits by $ 11,855,739 placed by the customers for upcoming transactions , non-cash item such as depreciation , $ 597,654 , decrease in prepayment and other current assets , $ 386,557 , collection from accounts receivable , $ 568,757 , an increase in lease liabilities , current , $ 166,987 , an increase in lease liabilities , noncurrent , $ 48,856 , and repayments from related party , $ 340,044. the cash inflows were offset by the net loss , $ 4,092,806. net cash generated from investing activities totaled $ 224,608. the cash inflows from investing activities included the repayment of loans from third party , $ 2,380,065 , offset by the outflow of loans made to third parties , $ 2,080,211 and purchase of property and equipment , $ 75,246. net cash used in financing activities totaled $ 699,526 was resulted from the repayment of loans to third parties , $ 2,499,500 , offset by proceeds from short-term borrowings , $ 1,799,974. the resulting change in cash for the period was an increase of $ 9,305,068. the cash balance at the beginning of the period was $ 12,524,086. the cash balance on december 31 , 2019 was $ 21,829,154. the cash and restricted cash balance as of december 31 , 2018 was $ 12,524,086. out of this amount , we had $ 53,037 denominated in u.s. dollars deposited in the financial institutions in the united states , $ 695,329 denominated in hk $ in hong kong financial institutions , $ 2,512,382 and $ 760,841 denominated in u.s. dollars deposited in the financial institutions in hong kong and china respectively
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 Suspicious Activity Report : on august 27 , 2014 , we entered into a contribution agreement with cardigant neurovascular . pursuant to the contribution agreement , we assigned all our assets , properties , rights , title and interest used or held for use by our business , ( except for certain excluded assets set forth therein ) which was the treatment of atherosclerosis and plaque stabilization in both the coronary and peripheral vasculature using systemic and local delivery of large molecule therapeutics and peptide mimetics based on high density lipoprotein targets ( “ cardigant business ” ) . in consideration for such contribution of capital , cardigant neurovascular agreed to assume all our liabilities arising from the cardigant business prior to the date of the contribution agreement and thereafter with regard to certain contributed contracts . we granted cardigant neurovascular an exclusive option for a period of 6 months to purchase the excluded assets for $ 1. cardigant neurovascular exercised this option october 20 , 2014 and the excluded assets were assigned to cardigant neurovascular on october 20 , 2014. also on october 20 , 2014 , we acquired all the issued and outstanding shares of hong kong takung , a privately held hong kong corporation , pursuant to the share exchange agreement and hong kong takung became our wholly owned subsidiary in a reverse merger , or the “ merger ” . pursuant to the merger , all of the issued and outstanding shares of hong kong takung common stock were converted , at an exchange ratio of 10.4988-for-1 , into an aggregate of 8,399,040 shares ( 209,976,000 shares before the reverse stock split ) of our common stock and hong kong takung became a wholly owned subsidiary of us . the holders of our common stock as of immediately prior to the merger held an aggregate of 933,236 shares ( 23,330,662 shares before the reverse stock split ) of our common stock , the accompanying financial statements share and per share information has been retroactively adjusted to reflect the exchange ratio in the merger . subsequent to the merger , our name was changed from “ cardigant medical inc. , ” to “ takung art co. , ltd. ” hong kong takung is a limited liability company incorporated on september 17 , 2012 under the laws of hong kong , special administrative region , china . although hong kong takung was incorporated in 2012 , it did not commence business operations until late 2013. as a result of the transfer of the excluded assets pursuant to the contribution agreement and the acquisition of all the issued and outstanding shares of hong kong takung , we are no longer conducting the cardigant business and have now assumed hong kong takung 's business operations as it now our only operating wholly-owned subsidiary . hong kong takung operates an electronic online platform located at http : //en.takungae.com for artists , art dealers and art investors to offer and trade valuable artwork . through hong kong takung , we offer on-line listing and trading services that allow artists , art dealers and owners to access a much bigger art trading market where they can engage with a wide range of investors that they might not encounter without our platform . our platform also makes investment in high-end and expensive artwork more accessible to ordinary people without substantial financial resources . 46 we generate revenue from our services in connection with the offering and trading of artwork on our system , primarily consisting of listing fees , trading commissions and management fees . our headquarters are located in hong kong , special administrative region , people 's republic of china and we conduct our business primarily in hong kong and tianjin . our new principal executive offices are located at room 1105 wing on plaza , 62 mody road , tsim sha tsui , kowloon , hong kong . on july 28 , 2015 , hong kong takung incorporated a wholly owned subsidiary , shanghai takung , in shanghai free-trade zone ( sftz ) in shanghai , china , with a registered capital of $ 1 million . shanghai takung is engaged in providing services to its parent company hong kong takung by receiving deposits from and making payments to online artwork traders for and on behalf of hong kong takung . shanghai takung set up a new office in hangzhou , prc on november 20 , 2016 for technology development and it was closed on august 28 , 2018. on january 27 , 2016 , hong kong takung incorporated another subsidiary , takung cultural development ( tianjin ) co. , ltd ( “ tianjin takung ” ) , a limited liability company , with a registered capital of $ 1 million in tianjin pilot free trade zone in tianjin , people 's republic of china . tianjin takung provides technology development services to hong kong takung and shanghai takung , and also carries out marketing and promotion activities in mainland china . hong kong takung art holdings company limited ( “ takung art holdings ” ) was formed in hong kong on july 20 , 2018 and operates as a holding company to control an online platform for offering , selling and trading whole piece of artwork . we are in the midst of dissolving takung art holdings . its subsidiary , art era internet technology ( tianjin ) co. , ltd ( “ art era ” ) , has been dissolved . hong kong mq group limited ( “ hong kong mq ” ) was formed in hong kong on november 27 , 2018 and currently has no operations . on june 19 , 2019 , as a result of a private transaction , one ( 1 ) share of common stock of hong kong mq was transferred from ms. hiu ngai ma to the company . the net asset of hong kong mq was $ nil as of the acquisition date . story_separator_special_tag 52 gross profit gross profit was $ 1,311,437 for the year ended december 31 , 2019 , compared to $ 5,916,659 for the year ended december 31 , 2018. the decrease was primarily due to decreased revenue resulting from less artworks being listed on our platform as discussed above . gross profit margin decreased by 28.3 % to 41.3 % for the year ended december 31 , 2019 from 69.6 % for the year ended december 31 , 2018 , primarily due to the significant decline in listing revenue . operating expenses general and administrative expenses were $ 4,662,313 for the year ended december 31 , 2019 , compared to $ 11,324,469 for the year ended december 31 , 2018. the significant plunge in general and administrative expense by $ 6,662,156 was attributed to a decrease in salary and welfare by $ 3,074,609 due to the reduction in manpower since july 2018 , a decrease in insurance and rental expenses by $ 498,482 due to the relocation of our hong kong office to a non-central business district location , a decrease in legal and professional fees by $ 320,470 as we obtained discounts from our professional service providers , a decrease in traveling and accommodation expenses by $ 492,311 as a result of fewer marketing events , a decrease in non-deductible input vat by $ 218,008 , a decrease in consultancy fees by $ 982,917 as we had paid for consultants to assist us in business setup of our new subsidiaries and planning for new business in 2018 but we terminated most of the services by consultants in 2019 , a decrease in shares-based compensation by $ 161,268 due to forfeiture of the stock options , a decrease in depreciation by $ 125,922 due to the disposal of the leasehold improvements of our wholly-owned subsidiary in hong kong , a decline in research and development expenses by $ 355,691 due to the closure of our software development center in hangzhou , a decline in bad debt expense by $ 323,892 as the allowance we provided for the short-term borrowing to third parties in 2018 was higher than that in 2019 , which also caused a decrease in other expenses by $ 108,586. the following table sets forth the main components of our general and administrative expenses for the years ended december 31 , 2019 and 2018. replace_table_token_8_th 53 the company also incurred a total of $ 301,460 and $ 898,006 in selling expenses for the years ended december 31 , 2019 and 2018 , respectively . the decrease in selling expenses was due to fewer promotion and advertising events during 2019. total operating expenses for the year ended december 31 , 2019 were $ 4,963,773 , a decline of $ 7,611,371 compared to $ 12,575,144 for the same period in 2018. the significant plummet was driven by the decrease in general and administrative as well as selling expenses as discussed above . the plunge was also triggered by a decrease in an impairment loss of $ 352,669 that was recognized in 2018. the impairment loss included the written down of the value of our construction-in-progress of our software development of $ 195,377 by our subsidiary in shanghai due to the restructuring of our business in this subsidiary and impairment loss in the cost of e-commerce trading platform of $ 157,292 by our subsidiary in tianjin due to a decline in appetite for artwork in china for the year ended december 31 , 2018. other income ( loss ) and expenses other loss and expenses for the year ended december 31 , 2019 was $ 367,201 , compared to $ 1,453,379 for the same period in 2018. the significant decrease was primarily attributed to the exchange loss arising from the fluctuation of the exchange rate between rmb and the u.s. dollar . income tax expense the company 's effective tax rate varies due to its multiple jurisdictions in which the pretax book incomes or losses incur . the company was subject to a u.s. income tax rate of 21 % , hong kong profits tax rate at 8.25 % for the first hk $ 2 million ( approximately $ 255,261 ) assessable profits and at 16.5 % for assessable profits above hk $ 2 million ( approximately $ 255,261 ) ( 16.5 % prior to january 1 , 2018 ) and prc enterprise income tax rate at 25 % . on december 22 , 2017 , the u.s. government enacted comprehensive tax legislation commonly referred to as the tax cuts and jobs act ( the `` tax act `` ) . the tax act introduced significant changes to the u.s. income tax regulations . the tax act reduced the u.s. federal corporate income tax rate from 35 percent to 21 percent and created new tax rules on certain foreign-sourced earnings . except for the one-time deemed repatriation transition tax ( `` transition tax `` ) , most of these provisions go into effect starting january 1 , 2018. on december 22 , 2017 , staff accounting bulletin no . 118 ( “ sab118 ” ) was issued to provide guidance on accounting for the tax effects of the tax act . sab 118 provides a measurement period that should not extend beyond one year from the tax act enactment date for companies to complete the accounting under asc 740. as of december 22 , 2018 , the company has completed the assessment of the income tax effect of the tax act and there were no adjustments recorded to the provisional amounts . the global intangible low-taxed income ( gilti ) is a new provision introduced by the tax act . u.s. shareholders , who are domestic corporations , of controlled foreign corporations ( cfcs ) are eligible for up to an 80 % deemed paid foreign tax credit ( ftc ) and a 50 % deduction of the current year inclusion with the full amount of the section 78 gross-up subject

