NOTE 7 — LONG-TERM PREPAYMENT

In 2021, for the purpose of construction of our new facility (NOTE 5 — PROPERTY, PLANT AND EQUIPMENT, NET), the Company prepaid equipment of RMB225,000 (equivalent to $32,618) to an external equipment provider, and prepaid construction in progress of RMB20,319,674 (equivalent to $2,945,734) and RMB11,001,014 (equivalent to $1,594,812) to two third party constructors. Due to the delayed of construction work incomplete, the Company reclassified the above amount to long-term prepayment. Upon the completion of the new facility, the management will reclass them to property, plant and equipment.