NOTE 20 - COMMITMENTS AND CONTINGENCIES Country Risk Our PRC subsidiaries are subject to laws and regulations applicable to various laws and regulations generally applicable to companies in China. As the Companys principal operations are conducted currently in the PRC, it is subject to contingencies and risks not typically associated with companies in North America and Western Europe. These risks include, among others, risks associated with the political, economic and legal environments and foreign currency exchange limitations encountered in the PRC. The Companys results of operations may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, among other things. In addition, all the Companys transactions in the PRC are denominated in RMB, which must be converted into other currencies before remittance from the PRC. Both conversion of RMB into foreign currencies and remittance of foreign currencies abroad require approval of the PRC government. Lease Sino Pride leases office space under an operating lease agreement which will expire on March 26, 2020. The future minimum rental payments are as follows: Twelve Months Ended March 31, 2020 323,673 $ 323,673 Legal Proceedings As of March 31, 2019, the Company had property financing agreements payable of $82,573,185, lease liabilities payable of $481,754, lease-back payables past due of $5,642,075, unpaid balances in connection with property buy-backs of $4,307,402. As of March 31, 2019, there were total of 534 lawsuits against the Company in Dalian City, China. Litigants claimed that the Company did not buy back the property pursuant to the sales contract or the Company did not pay the lease-back rental payments on time. These claims amounted to $24,839,711 (RMB 166,696,817) translated at the March 31, 2019 exchange rate). These payables were included in and reported under the caption of Property financing agreements payable, Lease liabilities payable and Other payables. In connection with the progress of these cases, the Company accrued $4,919,732 for possible extra litigation charges. The Company records the related attorney fees when invoiced. The attorney fees in connection with these cases was $0.00 and $66,434 for the three months ended March 31, 2019 and 2018, respectively. The nature of these lawsuits is to demand the Company buy-back property per agreements or to pay unpaid rent per lease-back agreements. The Company has been accruing the interest and included in property financing agreements payable and lease liabilities payable based on the lease agreements. The Company records the expired lease-back payables and unpaid buy-back payables in other payables and accrues additional estimated liabilities. The management believes that current recorded liabilities are reasonable estimates of the total final buy-back payments and total final lease-back payables. In the case of a reasonable possibility that a loss is to exceed the amount already recognized, the Company will accrue additional estimated liabilities when known. The Company intended to buy back these properties at a discounted price (compared to the price in the contract). The Company has intended to settle the balance due relating to lease-back payables with the owners of the lease-back properties. The Company has formed a task group and has been negotiating with the plaintiffs and other owners of the lease-back properties. Collateral of Companys Asset to Three Individuals On May 18, 2017, 140 square meters (1,507 square feet), owned by the Company was used as collateral to help an unrelated individual to borrow $720,150 (RMB5,000,000) under a one-year bank loan. There was no profit or gain for the Company to provide this collateral. The one-year period is now past due. The Company is exposed to the loss of this property if the individual is insolvent and fails to settle the bank loan. On May 18, 2017, the Company allowed one of its board members of DVPD to use 7 units of rental properties, totaling 138 square meters (1,485 square feet), owned by the Company as collateral to borrow $720,150 (RMB5,000,000) under one-year bank loan. There was no profit or gain for the Company to provide this collateral. The one-year loan is now past due. The Company is exposed to the loss of these properties if the individual is insolvent and fails to repay the bank loan. On May 18, 2017, the Company allowed one of its board members of DVPD to use 2 units of rental properties, totaling 15 square meters (161 square feet), owned by the Company as collateral to borrow $720,150 (RMB 5,000,000) under a one-year bank loan. There was no profit or gain for the Company to provide this collateral. The one-year period is past due. The Company is exposed to the loss of these properties if the individual is insolvent and fails to settle the bank loan.