Item 8.01 Other Events

On May 27, 2021, Shanghai No. 2 Intermideate Court entered a verdict of the second trial raised in the January 16, 2020 lawsuit which supported the first verdict in Decemember, 2020 and was filed against the Company and Shanghai Hongfu, one of HQDA's subsidiaries, by Shanghai Qiao Hong Real Estate, Ltd and its subsidiaries (the "Plaintiff") for breach of contract and non-payment of an installment pursuant to an Asset Purchase Agreement entered into between the Company and the Plaintiff on April 2, 2018. The Court ordered HQDA to pay to the plaintiff a total of RMB 68,400,000. Although the verdict was unexpected, the Company was prepared for such event. It is a substantial amount, but it will not impact on the Company moving forward with its Global Wellness Alliance business which is the Company's main goal platform to be established in the near future. Since the Company now partially owns the assets purchased from the Plaintiff, it is looking into ways to utilize the assets in a meaningful and profitable enterprise.

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