AAGH 10-Q
America Great Health (AAGH)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
For the transition period from ______ to ______
Commission File No.
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A |
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes ☐
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Indicate the number of shares outstanding of each of the registrant’s
classes of common stock, as of the latest practicable date. The number of shares outstanding of the registrant’s common stock as
of August 4, 2026 was
AMERICA GREAT HEALTH AND SUBSIDIARIES
TABLE OF CONTENTS
| PART I – FINANCIAL INFORMATION | 1 | |
| ITEM 1 | Condensed Consolidated Financial Statements (Unaudited) | 2 |
| ITEM 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 19 |
| ITEM 3 | Quantitative and Qualitative Disclosures About Market Risk | 22 |
| ITEM 4 | Controls and Procedures | 23 |
| PART II – OTHER INFORMATION | 24 | |
| ITEM 1 | Legal Proceedings | 24 |
| ITEM 1A | Risk Factors | 24 |
| ITEM 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 24 |
| ITEM 3 | Defaults Upon Senior Securities | 24 |
| ITEM 4 | Mine Safety Disclosures | 24 |
| ITEM 5 | Other Information | 24 |
| ITEM 6 | Exhibits | 24 |
i
PART I – FINANCIAL INFORMATION
This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on management’s beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider” or similar expressions are used.
Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions. Our future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.
1
Item 1. Financial Statements
America Great Health and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited)
| March 31, | June 30, | |||||||
| 2026 | 2025 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Account receivable, net | ||||||||
| Inventory | ||||||||
| Prepaid and other assets | ||||||||
| TOTAL CURRENT ASSETS | ||||||||
| Right-of-use asset, net | ||||||||
| Other assets | ||||||||
| Property and equipment, net | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | $ | ||||||
| Tax payable | ||||||||
| Short term loan | ||||||||
| Wage and wage tax payable | ||||||||
| Other payable | ||||||||
| Due to related party | ||||||||
| Advances from customers | ||||||||
| Lease liability – current | ||||||||
| TOTAL CURRENT LIABILITIES | ||||||||
| Long term loan | ||||||||
| TOTAL LIABILITIES | ||||||||
| SHAREHOLDERS’ DEFICIT | ||||||||
| Redeemable, convertible preferred stock, | ||||||||
| Common stock, no par value, unlimited shares authorized; | ||||||||
| Additional paid-in capital | ||||||||
| Treasury stock, | ||||||||
| Accumulated other comprehensive income (loss) | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total deficit attributed to owners of the Company | ( | ) | ( | ) | ||||
| Non-Controlling interest | ( | ) | ( | ) | ||||
| TOTAL SHAREHOLDERS’ DEFICIT | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
America Great Health and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Loss
(unaudited)
| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Sales | $ | $ | $ | $ | ||||||||||||
| Cost of goods sold | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||
| Selling expense | ||||||||||||||||
| General and administrative expense | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expenses) | ||||||||||||||||
| Other income | ( | ) | ||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| ( | ) | ( | ) | ( | ) | |||||||||||
| Income before income taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| NET INCOME (LOSS) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
| BASIC AND DILUTED LOSS PER SHARE | $ | $ | $ | $ | ||||||||||||
| WEIGHTED-AVERAGE COMMON SHARES OUSTANDING BASIC AND DILUTED | ||||||||||||||||
| Non-controlling interest share of loss | ( | ) | ( | ) | ( | ) | ||||||||||
| Net income (loss) attributed to the owners of the Company | ( | ) | ( | ) | ( | ) | ||||||||||
| Foreign currency translation | ( | ) | ||||||||||||||
| Comprehensive income (loss) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
America Great Health and Subsidiaries
Condensed Consolidated Statement of Shareholders’ Deficit
For the three and nine months ended March 31, 2025 and 2024
(Unaudited)
| Total | ||||||||||||||||||||||||||||||||||||||||||||||||
| Deficit | ||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated | Attributable | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | Accumulated | to the | ||||||||||||||||||||||||||||||||||||||||||||||
| Additional | Comprehensive | Deficit | Owners | Non- | Total | |||||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Treasury Stock | paid-in | Income/ | During | of the | Controlling | Shareholders’ | ||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | (Loss) | Period | Company | Interest | Deficit | |||||||||||||||||||||||||||||||||||||
| Balance June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||
| Issuance of common stock for cash | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Gain/loss on exchange rate | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Balance September 30, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||
| Issuance of common stock for cash | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Gain/loss on exchange rate | - | - | - | - | - | - | - | ( | ) | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Balance December 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||
| Issuance of common stock for cash | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Gain/loss on exchange rate | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance March 31, 2025 | - | $ | - | $ | - | $ | - | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||
| Treasury shares | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Gain/loss on exchange rate | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | ( | ) | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||||
| Balance June 30, 2025 | - | $ | - | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||
| Gain/loss on exchange rate | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | ( | ) | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||||
| Balance September 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||
| Treasury stocks | - | - | - | ( | ) | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Gain/loss on exchange rate | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Net income | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Balance December 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Gain/loss on exchange rate | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Net income | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Balance March 31, 2026 | - | $ | - | - | - | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
America Great Health and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(unaudited)
| Nine Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Loss on disposal of property and equipment | ||||||||
| Write-off of account payable | ( | ) | ||||||
| Payment of lease and rent | ( | ) | ( | ) | ||||
| Changes in operating Assets and Liabilities: | ||||||||
| Right of use asset – net | ||||||||
| Lease liabilities – net | ||||||||
| Accounts receivable – net | ||||||||
| Customer advance | ( | ) | ||||||
| Prepaid expenses and other assets | ( | ) | ||||||
| Inventory | ( | ) | ||||||
| Accounts payable and accrued expense | ||||||||
| Supplier advances | ||||||||
| Accrued interest for short term loan | ||||||||
| Accrued interest for long term loan | ||||||||
| Wage and wage tax payable | ||||||||
| Other payable | ||||||||
| Tax payable | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities | ||||||||
| Proceeds from disposal of property and equipment | ||||||||
| Net cash provided (used) by Investing Activities | ||||||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from issuance of common stock | ||||||||
| Proceeds of short term loan | ||||||||
| Repayment of short term loan | ( | ) | ||||||
| Interest payment to short term loan | ( | ) | ||||||
| Proceeds from long-term loan | ||||||||
| Advance from related party | ||||||||
| Repayment to related party | ( | ) | ( | ) | ||||
| Net cash provided (used) by financing activities | ||||||||
| Effect of exchange rate change on cash | ( | ) | ||||||
| Net decrease in cash | ( | ) | ( | ) | ||||
| Cash beginning of period | ||||||||
| Cash end of period | $ | $ | ||||||
| Interest paid | $ | $ | ||||||
| Taxes paid | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
AMERICA GREAT HEALTH AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 – NATURE OF BUSINESS
History and Organization
America Great Health, formerly Crown Marketing,
is a Wyoming corporation (the “Company”). A change of control of the Company was completed on January 19, 2017 from Jay Hooper,
the former officer and director of the Company and its former majority shareholder. Control was obtained by the sale of
On March 1, 2017, the Company filed with the Secretary of State of Wyoming an Articles of Amendment to change the corporate name from Crown Marketing to America Great Health.
On March 9, 2017, the Company formed a wholly owned subsidiary, America Great Health, under the laws of the State of California.
On June 24, 2019, the Company registered a wholly owned subsidiary in China, US-China Mega Beauty Health Industry Development Co., LTD. The subsidiary is mainly engaged in merger and acquisition, investment and financing, and marketing of medical equipment and health products in China.
On June 30, 2020, the Company and Purecell Group
(“Purecell”), a leading anti-aging medical institution in Australia, entered into a Cooperation Agreement, in which the Company
agreed to acquire
On December 7, 2020, the Company’s wholly-owned
Californian subsidiary, America Great Health, entered into a Cooperation Agreement with Brilliant Healthcare Limited (“Brilliant”)
pursuant to which the parties will establish a joint venture in China (the “JV Company”) for the purpose of promoting and
developing stem cell related product’s R&D, production, sales, raw material procurement, mergers and acquisitions, and consulting
services. After the formation of the JV company is completed, the Company shall invest US$
On May 18, 2021, the Company and David Tsai (“Dr. Tsai”), a pioneer in anti-cancer peptide research and invention in the United States, entered into a Cooperation Agreement, in which Dr. Tsai shall provide to the Company theories, technologies, methods, sources of raw materials, processing and production techniques, quality standards, quality control methods and other information and details related to his anti-cancer protein peptides, oral insulin and activation technology. Dr. Tsai shall also be responsible for the whole process of technology and product production, application and implementation, as well as professional technical support, consultation and cooperation in the process of product verification, publicity, promotion and sales. Currently, several patents are in the application process, and several products are in the process of getting ready for production.
6
On September 3, 2021, the Company entered into an Assets Acquisition
Agreement with Wang’s Property Investment & Management LLC to purchase
On November 4, 2021, the Company set up a
On November 11, 2021, America Great Health (the
“Company”) entered into an Advisory Committee Member Consulting Agreement with Dr. Kevin Buckman MD (“Consultant”).
Pursuant to the Agreement, Consultant is to provide advisory services, as a member to the Advisory Committee to the Board of Directors
of the Company, including without limitation, assisting GOF Biotechnologies Inc. in its new drug approval process for oral insulin and
Amylase X. Consultant shall be compensated with a warrant to purchase
On November 15, 2021, the Company set up a
On February 4, 2021, the Company set up a
On November 25,2022, the Company signed a supplementary
agreement with Men Hwei Tsai who is an unrelated party.
On November 26, 2022, the Company signed a supplementary
agreement with Men Hwei Tsai who is an unrelated party and transferred pending anti-dementia patent to Men Hwei Tsai for $
Going Concern
The accompanying condensed consolidated financial
statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities
and commitments in the normal course of business. As reflected in the accompanying condensed consolidated financial statements, the Company
has incurred recurring net losses. For the nine months ended March 31, 2026, the Company recorded a net income of $
7
During the year ended June 30, 2017, the Company’s former majority shareholder sold his shares to an investor group. The new owners’ plans to continue as a going concern revolve around its ability to achieve profitable operations, as well as raise the necessary capital to pay ongoing general and administrative expenses of the Company. The ability of the Company to continue as a going concern is dependent on securing additional sources of capital and the success of the Company’s plan. There is no assurance that the Company will be successful in raising the additional capital or in achieving profitable operations.
The Company’s cash needs for the nine months
ended March 31, 2026 were primarily met by sales, loans and advances from the current majority shareholder. As of March 31, 2026, the
Company had a cash balance of $
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying Consolidated Financial Statements (CFS) were prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). CFS combines the financial information of a parent company and its subsidiaries into a single report. This report provides a comprehensive view of the entire organization’s financial performance.
The accompanying unaudited condensed consolidated financial statements of America Great Health, formerly Crown Marketing and Subsidiaries (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the Company’s financial position as of March 31, 2026, and its results of operations and cash flows for the nine months ended March 31, 2026 and 2025.
Basis of Consolidation
The Condensed Consolidated Financial Statements
includes the accounts of the Company and its current wholly owned subsidiaries, America Great Health in California (
The following table depicts the identity of the Company’s subsidiaries:
| Attributable | ||||||
| Place of | Equity | |||||
| Name of Subsidiary | Incorporation | Interest % | ||||
| America Great Health in California | ||||||
| GOF Biotechnologies in California | ||||||
| International Institute of Great Health in California | ||||||
| Nutrature Health LLC in California | ||||||
| Sijinsai in China | ||||||
| US-China Mega Beauty Health Industry Development Co., LTD | ||||||
| Peptide Life Inc in California | ||||||
Estimates
The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates include accounting for potential liabilities and the assumptions made in valuing stock instruments issued for services, debt and equity investment. Actual results could differ from those estimates.
Foreign Currency Translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing on the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at balance sheet dates. The resulting exchange differences are recorded in the statement of operations.
8
In accordance with ASC 830, “Translation of Financial Statements” the subsidiary’s assets and liabilities booked and recorded at the non-US local functional currency are generally translated into USD for consolidation purposes, using the exchange rate on the balance sheet date, and revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of foreign subsidiary’s financial statements are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.
The Company’s reporting currency is the United States Dollar (“USD”). The Company’s wholly owned subsidiary of US-China Mega Beauty Health Industry Development Co., LTD. maintains its books and records in its local currency. The Chinese Yuan (“RMB”), which is the functional currency as being the primary currency of the economic environment in which the subsidiary operates.
Below is a table with foreign exchange rates used for translation:
| March 31, 2026 | ||||
| Average Nine Months (average rate) | ||||
| Chinese Renminbi (RMB) | RMB | |||
| United States dollar ($) | $ | |||
| March 31, 2026 | ||||
| Nine Months Ended (Closing rate) | ||||
| Chinese Renminbi (RMB) | RMB | |||
| United States dollar ($) | $ | |||
Cash
The Company considers all highly liquid debt instruments purchased with maturity periods of six months or less to be cash equivalents. The carrying amounts reported in the accompanying balance sheet for cash and cash equivalents approximate their fair value. The Company’s bank account in the United States is protected by FDIC insurance.
The Company’s bank account in the
United States is protected by FDIC insurance. As of March 31, 2026 and June 30, 2025, the Company’s bank account in the United
States had $
Cash and marketable securities subject to contractual restrictions and not readily available are classified as Restricted cash and marketable securities.
Revenues
Revenue from sale of goods under Topic 606, Revenue from Contracts with Customers, is recognized in a manner that reasonably reflects the delivery of the Company’s products and services to customers in return for expected consideration and includes the following elements:
| ● | executed contract(s) with customers that the Company believes is legally enforceable; |
| ● | identification of performance obligation in the respective contract; |
| ● | determination of the transaction price for each performance obligation in the respective contract; |
| ● | allocation of the transaction price to each performance obligation; and |
| ● | recognition of revenue only when the Company satisfies each performance obligation. |
9
The Company sells health-related products through wholesale and retailers. The Company considers purchase orders to be a contract with a customer. Contracts with customers are considered to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than one year, and virtually all of the Company’s contracts are short-term. The Company recognizes revenue for the transfer of promised goods to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. The Company typically satisfies its performance obligations in contracts with customers upon shipment of the goods. The Company usually does not have any contract assets since the Company has an unconditional right to consideration when the Company has satisfied its performance obligation and payment from customers is not contingent on a future event. Generally, payment is due from customers within 40 to 60 days of the invoice date and 180 days for a major customer, and the contracts do not have significant financing components nor variable consideration. Returns and allowances are not a significant aspect of the revenue recognition process as historically they have been immaterial. All of the Company’s contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as a price per unit. All estimates are based on the Company’s historical experience; complete satisfaction of the performance obligation, and the Company’s best judgment at the time the estimate is made. Historically, sales returns have not significantly impacted on the Company’s revenue.
Product Revenue
The Company has one primary product category currently and a majority of the Company’s sales are for products sold at a point in time when shipped to customers, for which control is transferred to the customer as goods are delivered to the third-party carrier for shipment. The Company receives payment for the sale of products at the time customers place orders and payment is required prior to shipment. Any payment received prior to shipment is recognized as a contract liability under the account deferred revenue. The Company does not recognize assets associated with costs to obtain or fulfill a contract with a customer.
Shipping and handling activities are performed
by third-party carriers for shipment. The Company accounts for these activities as fulfilment costs.
| For the three months ended March 31, | For the nine months ended March 31, | |||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
| Amounts | Percentages | Amounts | Percentages | Amounts | Percentages | Amounts | Percentages | |||||||||||||||||||||||||
| USA | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||
| Asia | % | % | % | % | ||||||||||||||||||||||||||||
| $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||
The Company generated its revenue mostly from
Asia accounting for
Account Receivable
The Company has been developing its new products and launching large-scale production since November 2023. As of March 31, 2026 and June 30, 2025 net accounts receivable both amounted to $-.
The Company has not established a reserve for
uncollectible amounts on the newly launched products since the historical data on bad debts in the aging categories of the new products
could not support such estimates. For the nine months ended March 31, 2026 and year ended June 30, 2025, the Company has an allowance
for bad debt of $
Inventories
Inventories are stated at the lower cost (first-in,
first-out) or net realizable value. Adjustments to reduce the cost of inventory to its net realizable value are made, if required, for
estimated excess, obsolescence, or impaired balances. For the nine months ended March 31, 2026 and the year ended June 30, 2025, the
Company has $
As for the six months ended on March 31 2026 and the year ended June 30, 2025, inventories comprised:
| March 31, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Raw materials | $ | $ | ||||||
| Finished goods | ||||||||
| Inventory valuation reserve | ( | ) | ( | ) | ||||
| Subtotal | $ | $ | ||||||
Cost of Goods Sold
The cost of goods sold includes product costs only and is recorded in the same period in which related revenues have been recorded.
10
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets.
| Machinery and equipment |
As of the nine months ended March 31, 2026 and the end of fiscal year 2025, machinery and equipment at cost and accumulated depreciation were:
| March 31, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Machinery and equipment | $ | $ | ||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Subtotal | $ | $ | ||||||
During the three months ended March 31, 2026, the Company disposed
of certain obsolete machinery and equipment with a gross book value of $
Account payable
During the quarter ended December 31, 2025, the Company recognized
a non-recurring gain on the extinguishment of debt of $
The liabilities originated on December 23, 2021, and represented unpaid balances associated with two procurement orders facilitated through a third-party intermediary. The Company withheld payment due to unresolved product quality and performance issues. Since the inception of the obligations, neither the vendor nor the intermediary pursued collection efforts, and the intermediary is no longer reachable.
The Company is incorporated and operates in the State of California. Pursuant to California Code of Civil Procedure Section 337, actions arising from written contracts are generally subject to a four-year statute of limitations. As of December 31, 2025, the applicable statutory period expired without any legal action, formal demand, or other collection activity by the counterparty.
Based on management's evaluation of the facts and circumstances and
the expiration of the applicable statutory period, the Company concluded that the obligations were no longer enforceable and derecognized
the related liabilities in accordance with ASC 405-20, Extinguishments of Liabilities. Accordingly, the Company recognized a gain of
$
Equity Method Investments
We apply the equity method of accounting to investments when we have significant influence but not controlling interest in the investee. Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. The Company’s proportionate share of the net income (loss) resulting from these investments is reported under the line item captioned “equity investment” in our Consolidated Statements of Operations. The carrying value of our equity investments is reported in the equity investment method in the Consolidated Balance Sheets. The Company’s equity method investments are reported at cost and adjusted each period for the Company’s share of the investee’s income or loss and dividend paid, if any. The Company’s share of the investee’s income or loss is recorded on a one quarter lag for all equity method investments. The Company classifies distributions received from equity method investments using the cumulative earnings approach on the Consolidated Statements of Cash Flows. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable.
The investment in Purecell Group Pty Ltd was deconsolidated and as of November 11, 2025, the investment account has a zero balance.
11
Fair Value Measurements
Fair value measurements are determined using authoritative guidance issued by the FASB, with the exception of the application of the guidance to non-recurring, non-financial assets and liabilities as permitted. Fair value is defined in the authoritative guidance as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:
Level 1—Quoted prices in active markets for identical assets or liabilities.
Level 2—Inputs, other than the quoted prices in active markets, are observable either directly or indirectly.
Level 3—Unobservable inputs based on the Company’s assumptions.
The Company is required to use observable market data if available without undue cost and effort.
The Company’s financial instruments include cash and accounts payable. Management has estimated that the carrying amounts approximate their fair value due to the short-term nature.
Stock-based Compensations
The Company offers restricted stock-based compensation to the employees and contractors. All stock-based compensations are measured based on their values and are expensed over the period during which an employee or a contractor is required to provide service in exchange for the compensation.
Treasury Stock Shares
Treasury shares are recognized at acquisition
costs and are presented as a deduction from shareholder’s equity. Upon sale of treasury shares, the realized gain or loss is recognized
through the income statement as income or expense from financial assets. As of March 31, 2026 and June 30, 2025, there are
Loss per Share
Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the nine months ended March 31, 2026 and 2025, as there are no potential shares outstanding that would have a diluted effect.
Income Taxes
Income tax expense is based on pretax financial
accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between
the tax bases of assets and liabilities and their reported amounts. Valuation allowances are recorded to reduce deferred tax assets to
the amount that will more likely than not be realized. The Company records a valuation allowance against its deferred tax assets of $
The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes.
12
Recent Accounting Pronouncements
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements ("ASU 2025-11"). ASU 2025-11 is intended to improve the In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements ("ASU 2025-11"). ASU 2025-11 is intended to improve the interim reporting periods. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, and permits prospective or full retrospective adoption. The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements ("ASU 2025-12"). ASU 2025-12 addresses suggestions received from stakeholders regarding the Accounting Standards Codification and makes other incremental improvements to U.S. GAAP. The update represents changes to the Codification that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply. ASU 2025-12 is effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years. Entities are required to apply the amendments to ASC 260 retrospectively. All other amendments may be applied prospectively or retrospectively. Early adoption is permitted. The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures.
Management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures.
NOTE 3 – OTHER ASSETS
As of March 31, 2026 and June 30, 2025, other assets amounted to $
| March 31 | June 30, | |||||||
| 2026 | 2025 | |||||||
| Rent deposits | $ | $ | ||||||
| Total | $ | $ | ||||||
NOTE 4 – RELATED PARTY TRANSACTIONS
The Company’s current majority shareholder
advanced $
During the nine months ended March 31, 2026,
the Company’s current majority shareholder advanced $
As of March 31, 2026 and June 30, 2025, the Company
owed its current majority shareholder $
NOTE 5 – SHORT TERM LOAN
As of March 31, 2026 and June 30, 2025, short
term loan principals both amounted to $
Short Term Loans
| As of March 31, 2026 | As of June 30, 2025 | |||||||||||||||||||||||||||||||||||||
| Principal | Principal | |||||||||||||||||||||||||||||||||||||
| Balance | Total | Balance | Total | |||||||||||||||||||||||||||||||||||
| as of | Accrued | As of | as of | Accrued | as of | Annualized | ||||||||||||||||||||||||||||||||
| Maturity | July 1, | Interest | New | Interest | March 31, | July 1, | Interest | June 30, | percentage | |||||||||||||||||||||||||||||
| Receiving Date | Date | 2025 | Liability | Loan | Paid | 2026 | 2024 | Liability | 2025 | Rate | ||||||||||||||||||||||||||||
| 1/19/2023 | $ | $ | $ | $ | $ | $ | % | |||||||||||||||||||||||||||||||
| 2/25/2023 | % | |||||||||||||||||||||||||||||||||||||
| 3/1/2023 | % | |||||||||||||||||||||||||||||||||||||
| 3/1/2023 | % | |||||||||||||||||||||||||||||||||||||
| 3/1/2023 | % | |||||||||||||||||||||||||||||||||||||
| 3/1/2023 | % | |||||||||||||||||||||||||||||||||||||
| 11/26/2025 | % | |||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
13
NOTE 6 – LONG TERM LOAN
As of March 31, 2026 and June 30, 2025, long
term loan principal both amounted to $
As of March 31, 2026 and June 30, 2025, long term loan consisted of the following:
| As of March 31, 2026 | As of June 30, 2025 | |||||||||||||||||||||||
| Accrued | Accrued | |||||||||||||||||||||||
| Shares | Interest | Interest | ||||||||||||||||||||||
| pledged | Principal | Liability | Balance | Liability | Balance | |||||||||||||||||||
| Received long term loan on | $ | $ | $ | $ | $ | |||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Received long term loan on | ||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||
14
The principal balance, the scheduled principal payments, the schedule interest payments, and the weighted average interest rates of the long-term loan future maturities are as follows:
| Year Ending March 31 | Remaining Principal | Scheduled Principal Payments | Scheduled Interest Payments | Weighted Average Interest Rate | ||||||||||||
| 2027 | % | |||||||||||||||
| 2028 | % | |||||||||||||||
| 2029 | % | |||||||||||||||
| 2030 | % | |||||||||||||||
| 2031 | % | |||||||||||||||
NOTE 7 – CONVERTIBLE, REDEEMABLE PREFERRED STOCK
During the year ended June 30, 2016, the Company’s
Board of Directors authorized the creation of a series of preferred stock consisting of
The Series A is also subject to adjustments to the Conversion Rate. If the common stock issuable on conversion of the Series A is changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above), the holders of the Series A shall, upon its conversion, be entitled to receive, in lieu of the common stock which the holders would have become entitled to receive but for such change, a number of shares of such other class or classes of stock that would have been subject to receipt by the holders if they had exercised their rights of conversion of the Series A immediately before that change.
In August 2016, the Company filed an amendment
to its Articles of Incorporation to increase the number of authorized shares of Series A Preferred Stock from
There were
NOTE 8 – STOCK BASED COMPENSATION
The Company sometimes issues common stock to employees, contractors and consultants for services rendered.
The Company accounts for stock-based payments to employees, contractors and consultants by measuring the cost of services received in exchange for equity awards utilizing the grant date fair value of the awards, with the cost recognized as compensation expense.
The Company recognizes the fair value of stock-based compensation awards in payroll if it is for employees, and operating costs if it is for contractors and consultants, as appropriate, in the Company’s consolidated statements of operations.
No stock-based compensation shares were issued during the period.
15
NOTE 9 – TREASURY STOCK SHARES
On January 22, 2024, the Company issued
On April 14, 2025, the Company issued
As a result, the Company recorded
NOTE 10 – COMMON STOCK SHARES
As of March 31, 2026 and June 30, 2025, the Company had both
NOTE 11 – EQUITY INVESTMENT
On June 30, 2020, the Company and Purecell Group
(“Purecell”), a leading anti-aging medical institution in Australia, entered into a Cooperation Agreement, in which the Company
agreed to acquire
On May 11, 2021, Aussie Produce PTY LTD (“AP”)
signed agreement with Purecell to invest $
In November 11, 2025, the Company and Purecell reached a mutual share
reversal and termination of the Cooperation Agreement and both companies had agreed the resignations of the Directors by December 31,
2025. This means that Purecell will return the number of shares
As of the deconsolidation date of November 11, 2025, the value of the investment in Purecell in the Company’s book is $-.
The following table summarizes the income statement of Purecell.
| From | From | |||||||
| July 1, 2025 to | July 1, 2024 to | |||||||
| November 11, 2025 | June 30, 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Sales | $ | $ | ||||||
| Gross profit | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| $ | ( | ) | $ | ( | ) | |||
The following table provides the summary
of balance sheet information for Purecell. Because the
| As of | As of | |||||||
| November 11, | June 30, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Total assets | $ | $ | ||||||
| Net assets | ||||||||
| Beginning balance of investment, May 11, 2021 | ||||||||
| Loss on equity investment – accumulated | $ | ( | ) | ( | ) | |||
| Ending balance of investment | ||||||||
16
NOTE 12 – INCOME TAXES
As of March 31, 2026, the Company had
federal and California income tax net operating loss carryforwards of approximately $
Uncertain Tax Positions
Interest associated with unrecognized tax benefits are classified as income tax, and penalties are classified in selling, general and administrative expenses in the statements of operations. For the nine months ended March 31, 2026 and 2025, the Company had unrecognized tax benefits and related interest and penalties expenses. Currently, the Company is not subject to examination by major tax jurisdictions.
NOTE 13 – LEASE
The Company has a month-to-month leases
agreement with GKT, Alhambra, LP after the prior lease expired on November 30, 2023. The current monthly rent including monthly management
fee is $
The Company has entered into an operating lease
agreement with SoCal Industrial LLC, Irwindale. The lease term of the office space is from June 1, 2024 to May 31, 2026, no further lease
was entered after May 31, 2026. The current monthly rent including monthly management fee is $
Operating lease right-of-use assets and liabilities
commencing are recognized at commencement date based on the present value of lease payments over the lease term. For the nine months
and three months ended March 31, 2026, the Company recognized approximately $
Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments.
Information related to the Company’s operating ROU assets and related lease liabilities are as follows:
Nine months ended March 31, 2026 | ||||
| Cash paid for operating lease liabilities | $ | |||
| Weighted-average remaining lease term | ||||
| Weighted-average discount rate | % | |||
| Minimum future lease payments | $ | |||
The following table presents the amortization of the Company’s lease liabilities under ASC 842 for each of the following years ending March 31:
| 2026 | ||||
| Total minimum payments | ||||
| Less: imputed interest | ( | ) | ||
| Total lease liability | ||||
| Less: short-term lease liability | ( | ) | ||
| Long-term lease liability | $ |
17
NOTE 14 – CONCENTRATION
Business segments
The Company's operations are just organized into one business segment based on the nature of products and services offered. Summary operating results for each of its products were as follows:
| Three months Ended March 31, | Nine months Ended March 31, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Sales | ||||||||||||||||
| Anti-Aging & Immune Support | $ | $ | $ | $ | ||||||||||||
| Targeted System Support | ||||||||||||||||
| Herbal Insulin Support | ||||||||||||||||
| Total sales | $ | $ | $ | $ | ||||||||||||
| Cost of Goods Sold | ||||||||||||||||
| Anti-Aging & Immune Support | $ | $ | $ | $ | ||||||||||||
| Targeted System Support | ||||||||||||||||
| Herbal Insulin Support | ||||||||||||||||
| Total cost of goods sold | $ | $ | $ | $ | ||||||||||||
| Gross Profit | ||||||||||||||||
| Anti-Aging & Immune Support | $ | $ | $ | $ | ||||||||||||
| Targeted System Support | ||||||||||||||||
| Herbal Insulin Support | ||||||||||||||||
| Total gross profit | $ | $ | $ | $ | ||||||||||||
| Selling Expense | ||||||||||||||||
| Anti-Aging & Immune Support | $ | $ | $ | $ | ||||||||||||
| Targeted System Support | ||||||||||||||||
| Herbal Insulin Support | ||||||||||||||||
| Total selling expense | $ | $ | $ | $ | ||||||||||||
Major customers
For the three months ended March 31, 2026,
For the nine months ended March 31, 2026,
| For the three months ended March 31, | For the nine months ended March 31, | |||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
| Amounts | Percentages | Amounts | Percentages | Amounts | Percentages | Amounts | Percentages | |||||||||||||||||||||||||
| Customer A | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||
| Customer B | % | % | % | % | ||||||||||||||||||||||||||||
| Customer C | % | % | % | % | ||||||||||||||||||||||||||||
| Customer D | % | % | - | % | % | |||||||||||||||||||||||||||
| Customer E | % | % | % | % | ||||||||||||||||||||||||||||
| Customer F | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||
Major suppliers
For the three months ended March 31, 2026 and
2025, the Company has
For the nine months ended March 31, 2026, the
Company had
| For the three months ended March 31, | For the nine months ended March 31, | |||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
| Amounts | Percentages | Amounts | Percentages | Amounts | Percentages | Amounts | Percentages | |||||||||||||||||||||||||
| Supplier A | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||
| Supplier B | % | % | ||||||||||||||||||||||||||||||
| Supplier C | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||
NOTE 15 – SUBSEQUENT EVENTS
In November 2025, the Company and Purecell reached a mutual share
reversal and termination of the Cooperation Agreement and both companies had agreed the resignations of the Directors by December 31,
2025. This means that Purecell will return the number of shares
18
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward Looking Statement Notice
Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Crown Marketing, (“we”, “us”, “our” or the “Company”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Quarterly Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.
As disclosed in our prior 10-K, the auditor issued a disclaimer of opinion due to insufficient evidence on expenses, opening balances, and the Purecell investment. We are addressing these items. These issues did not materially affect the current interim financial statements.
Overview of Business
Our mission is to invest in innovative technologies integrated with business development in the healthcare ecosystem.
We are focused on protein and peptide small molecular drugs research and development, diagnostic and medical devices with AI cloud computing, cell therapy and regenerational medicine and supplements manufacturing and sales.
On September 3, 2021, the Company entered into an Assets Acquisition Agreement with Wang’s Property Investment & Management LLC to purchase 53 units in 19 real estate properties appraised at $7,626,286.37 for a purchase price of $7,000,000, The purchase price shall be paid as follows: (i) $1,000,000 on execution of the Agreement, (ii) $2,000,000 within 60 days thereof and (iii) the remainder by April 10, 2022. The Agreement is subject to customary closing conditions, including, satisfactory due diligence. On September 9, 2021, the Company entered into a Supplemental Assets Acquisition Agreement with Wang’s Property Investment & Management LLC to amend and clarify that (i) it was purchasing 19 real estate properties which includes 53 units appraised at $7,626,286.37 for a purchase price of $7,000,000 and (ii) that it will waive and not conduct due diligence in order for the transaction to proceed. The acquisition has not been consummated. With the asset acquisition from Wang’s Property Investment & Management LLC, the Company will diversify its business into property investment and management. By the end of May 2022, the Company ceased the acquisition of Wang’s Property Investment & Management LLC.
Results of Operations
Results of Operations for the three and nine months ended March 31, 2026 compared to the three and nine months ended March 31, 2025.
Sales were $26,143 and $56,148 for the three months ended March 31, 2026 and 2025, respectively. The decrease is mainly due to the absence of major wholesale accounts within the U.S. markets For the nine months ended March 31, 2026 and 2025, sales were $258,802 and $287,213, respectively. The temporary gap in bulk wholesale orders within the U.S. market was the key factor leading to the significant year-over-year revenue contraction.
Costs of goods sold were $3,610 and $6,331 for the three months ended March 31, 2026 and 2025, respectively. The decrease was primarily driven by the decline in sales volume. For the nine months ended March 31, 2026 and 2025, Costs of goods sold were $87,054 and $25,508, respectively. The increase in the cost of goods sold was mainly due to launch sales of the products wholesale with lower gross profit margin.
Gross profit were $22,533 and $49,817 for the three months ended March 31, 2026 and 2025, respectively. For the nine months ended March 31, 2026 and 2025, Gross profit were $171,748 and $261,705, respectively.
Operating expenses incurred were $96,308 and $135,136 for the three months ended March 31, 2026 and 2025, respectively. For the nine months ended March 31, 2026 and 2025 operating expenses were $447,682 and $538,397, respectively. The decrease was in general and administrative expense, mainly due to decreased payroll, auditing expense, and professional expense.
Net income (loss) for the three months ended March 31, 2026 and 2025 were ($166,216) and ($158,377), respectively. For the nine months ended March 31, 2026 and 2025, net income (loss) were were $861,105 and ($499,046), respectively. The increase in net income was mainly due to recognizing a non-recurring gain on the extinguishment of debt of $1,395,000 in the prior quarter.
19
Liquidity and Capital Resources
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditure.
The accompanying consolidated financial statements have been prepared on a going concerning basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, the Company has incurred recurring net losses. For the nine months ended March 31, 2026, the Company recorded a net income of $861,105, cash used to fund operating activities of $80,272 and at March 31, 2026, had a shareholders’ deficit of $4,880,635. For the nine months ended March 31, 2025 the Company recorded a net loss of $499,046, cash used to fund operating activities of $60,297 and at March 31, 2025, had a shareholders’ deficit of $5,523,154. These factors create substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
The Company is raising additional capital to achieve profitable operations.
Our cash needs for the nine months ended March 31, 2026 were primarily met by short term loans and advances from current majority shareholder. As of March 31, 2026, we had a cash balance of $29,346. Our new majority shareholders will need to provide parts of our working capitals going forward.
Liquidity and Capital Resources for the nine months ended March 31, 2026 compared to the nine months ended March 31, 2025.
| For the Nine Months Ended | ||||||||
| March 31 | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Net cash used in operating activities | $ | (80,272 | ) | $ | (60,297 | ) | ||
| Net cash provided by investing activities | 11,000 | - | ||||||
| Net cash provided by financing activities | 52,475 | 43,314 | ||||||
| Effect of exchange rate change on cash | 2,087 | (1,080 | ) | |||||
| Net decrease in cash | (14,710 | ) | (18,063 | ) | ||||
| Cash beginning of period | 44,056 | 54,943 | ||||||
| Cash end of period | $ | 29,346 | $ | 36,880 | ||||
Operating Activities
Net cash used in operating activities was $80,272 for the nine months ended March 31, 2026, an increase of $19,975 compared to cash used in operating activities of $60,297 for the nine months ended March 31, 2025. The increase in net cash used in operating activities was mainly due to the increase of customer advance for the nine months ended March 31, 2026 compared to the same period in 2025.
Investing Activities
Net cash generated in investing activities was $11,000 and $- for the nine months ended March 31, 2026 and March 31, 2025, respectively. The increase was due to the Company disposal of certain obsolete machinery and equipment with a gross book value of $69,881 and related accumulated depreciation of $50,343.
20
Financing Activities
Net cash provided from financing activities was $52,475 for the nine months ended March 31, 2026, compared to $43,314 net cash provided from financing activities for the nine months ended March 31, 2025. The increase in net cash provided from financing activities for the nine months ended March 31, 2026 was primarily attributable to a new loan of $50,000 obtained in the last quarter.
Financial Position
As of March 31, 2026, the Company had $29,346 in cash, negative working capital of $2,478,411 and total deficit attributable to owners of the Company of $4,797,818. As of June 30, 2025, we had $44,056 in cash, negative working capital of $3,584,235 and total deficit attributable to owners of the Company of $5,661,210.
Critical Accounting Policies and Estimates
Estimates
The preparation of these consolidated financial statements (“CFS”) in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of net sales and expenses during the reported periods. Actual results may differ from those estimates, and such differences may be material to the financial statements. The more significant estimates and assumptions by management include, among others, the fair value of shares of common stock issued for services. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.
Revenues
Revenue from sale of goods under Topic 606, Revenue from Contracts with Customers, is recognized in a manner that reasonably reflects the delivery of the Company’s products and services to customers in return for expected consideration and includes the following elements: date
| ● | executed contract(s) with customers that the Company believes is legally enforceable; |
| ● | identification of performance obligation in the respective contract; |
| ● | determination of the transaction price for each performance obligation in the respective contract; |
| ● | allocation of the transaction price to each performance obligation; and |
| ● | recognition of revenue only when the Company satisfies each performance obligation. |
Inventories
Inventories are stated at the lower cost (first-in, first-out) or net realizable value. Adjustments to reduce the cost of inventory to its net realizable value are made, if required, for estimated excess, obsolescence, or impaired balances. For the nine months ended March 31, 2026 and June 30, 2025, the Company has made provision of $9,000 both for inventory in regard to slow moving or obsolete items. As of March 31, 2026 and June 30, 2025, net inventories amounted to $97,539 and $164,651, respectively.
Fair Value Measurements
Fair value measurements are determined using authoritative guidance issued by the FASB, with the exception of the application of the guidance to non-recurring, non-financial assets and liabilities as permitted. Fair value is defined in the authoritative guidance as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:
Level 1—Quoted prices in active markets for identical assets or liabilities.
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Level 2—Inputs, other than the quoted prices in active markets, are observable either directly or indirectly.
Level 3—Unobservable inputs based on the Company’s assumptions.
The Company is required to use observable market data if available without undue cost and effort.
The Company’s financial instruments include cash and accounts payable. Management has estimated that the carrying amounts approximate their fair value due to the short-term nature.
Loss per Share
Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the nine months ended March 31, 2026 and 2025, as there are no potential shares outstanding that would have a dilutive effect.
Income Taxes
Income tax expense is based on pretax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. The Company recorded the valuation allowance against its deferred tax assets of $7,784,371 as of March 31, 2026 and $8,645,476 as of June 30, 2025.
The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes.
Recent Accounting Pronouncements
See Footnote 2 of the financial statements for a discussion of recently issued accounting standards.
Contractual Obligations and Off-Balance Sheet Arrangements
We do not have any contractual obligations or off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
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Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of December 31, 2025. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that our disclosure and controls are not designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) a lack of accounting staff and resources with appropriate knowledge of generally accepted accounting principles in the United States (“U.S. GAAP”) and SEC reporting and compliance requirements; (3) a lack of independent directors and (4) a lack of an effective review process by the accounting manager and management.
Management believes that the material weaknesses set forth in above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors’ results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.
Changes in Internal Controls
There have been no changes in our internal controls over financial reporting during the period ended March 31, 2026 that have materially affected or are reasonably likely to materially affect our internal controls.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
We are not a party to or otherwise involved in any legal proceedings.
In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, other than as set forth herein, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.
Item 1A. Risk Factors.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Not applicable.
Item 3. Defaults Upon Senior Securities.
There have been no events which are required to be reported under this Item.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Item 6. Exhibits and Financial Statement Schedules
| 31.1 | Certification of President, Chief Financial Officer, and Secretary. Filed herewith. | |
| 32.1 | Certification pursuant to 18 U.S.C. Section 1350 of President, Chief Financial Officer, and Secretary. Filed herewith. | |
| 101.INS* | Inline XBRL Instance Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Definition | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| AMERICA GREAT HEALTH | ||
| Dated: August 5, 2026 | By: | /s/ Mike Q. Wang |
| Mike Q. Wang | ||
| Chief Financial Officer | ||
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