NOTE 1  ORGANIZATION AND DESCRIPTION OF BUSINESS Dogness (International) Corporation (Dogness or the Company), is a limited liability company established under the laws of the British Virgin Islands (BVI) on July 11, 2016 as a holding company. The Company, through its subsidiaries, is primarily engaged in the design, manufacturing and sales of various types of pet leashes, pet collars, pet harnesses and retractable leashes with products being sold all over the world mainly through distributions by large retailers. Mr. Silong Chen, the Chairman of the Board and Chief Executive Officer (CEO) of the Company is the controlling shareholder (the  Controlling Shareholder) of the Company by virtue of his ownership of 9,069,000 Class B common shares, which carry three votes per share and, in the aggregate have more than half of the voting power of all common shares. Reorganization A Reorganization of the legal structure was completed on January 9, 2017. The Reorganization involved the incorporation of Dogness, a BVI holding company; and Dogness Intelligence Technology (Dongguan) Co., Ltd. (Dongguan Dogness), a holding company established under the laws of the Peoples Republic of China (PRC); and the transfer of Dogness (Hong Kong) Pet Products Co., Ltd. (HK Dogness), Jiasheng Enterprise (Hong Kong) Co., Limited (HK Jiasheng), and Dongguan Jiasheng Enterprise Co., Ltd. (Dongguan Jiasheng; collectively, the Transferred Entities) from the Controlling Shareholder to Dogness and Dongguan Dogness. Prior to the reorganization, the Transferred Entities equity interests were 100% controlled by the Controlling Shareholder. On November 24, 2016, the Controlling Shareholder transferred his 100% ownership interest in Dongguan Jiasheng to Dongguan Dogness, which is 100% owned by HK Dogness and considered a wholly foreign-owned entity (WFOE) in PRC. On January 9, 2017, the Controlling Shareholder transferred his 100% equity interests in HK Dogness and HK Jiasheng to Dogness. After the reorganization, Dogness ultimately owns 100% equity interests of the entities mentioned above. Since the Company and its wholly-owned subsidiaries are effectively controlled by the same Controlling Shareholder before and after the reorganization, they are considered under common control. The above-mentioned transactions were accounted for as a recapitalization. The consolidation of the Company and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements. On December 18, 2017, the Company completed its initial public offering (IPO) of 10,913,631 Class A common shares at a public offering price of $5.00 per share. The gross proceeds were approximately $54.6 million before deducting the placement agents commissions and other offering expenses, resulting in net proceeds of approximately $50.2 million. In connection with the offering, the Companys Class A common shares began trading on the NASDAQ Global Market on December 20, 2017 under the symbol DOGZ. In January 2018, the Company formed a Delaware limited liability company, Dogness Group LLC (Dogness Group), with its operation focusing primarily on pet product sales in the U.S. In February 2018, Dogness Overseas Ltd (Dogness Overseas) was established in the British Virgin Islands as a holding company. Dogness Overseas owns all of the interests in Dogness Group. On March 16, 2018 (the Acquisition Date), the Company entered into a share purchase agreement to acquire 100% of the equity interests in Zhangzhou Meijia Metal Product Co., Ltd (Meijia) from its original shareholder, Long Kai (Shenzheng) Industrial Co., Ltd (Longkai), for a total cash consideration of approximately RMB 71.0 million ($10.7 million) (the Acquisition). After the acquisition, Mejia became the Companys wholly-owned subsidiary. On July 6, 2018, Dogness Intelligence Technology Co., Ltd. (Intelligence Guangzhou) was incorporated under the laws of PRC in Guangzhou City of Guangdong Province in China with a total registered capital of RMB 80 million (approximately $11.8 million). One of the Companys subsidiaries, Dongguan Jiasheng, owns 58% of Intelligence Guangzhou, with the remaining 42% ownership interest owned by two unrelated entities . Intelligence Guangzhou had immaterial operation since its inception and will be the research and manufacturing facility for the Companys fast growing intelligent pet products. On February 5, 2019, in order to expand into the Japanese market and expedite the development of new smart pet products, Dogness Japan Co. Ltd. (Dogness Japan) was incorporated in Japan. The Company invested $250,000 for 51% ownership interest in Dogness Japan, with the remaining 49% owned by an unrelated individual.