America Great Health 10-Q/A for FY2021 Q3
America Great Health (AAGH)
About this 10-Q/A
America Great Health filed this 10-Q/A on January 13, 2022, covering the quarter ended March 31, 2021 (FY2021 Q3).
Headline figures
Quarter ended March 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $195.54K
- compared with $0 a year earlier
- Net loss
- $49.22K
- compared with a net loss of $2741 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Amendment No. 1)
| | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File No.
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
| ( (Registrant’s telephone number, including area code) |
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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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 | |
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| 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 ☐
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 December 6, 2021 was
Explanatory Note
This Amendment No. 1 on Form 10-Q/A for the quarter ended March 31, 2021,amends the Form 10-Q that was originally filed with the U.S. Securities Exchange Commission on July 13, 2021 (the “Original Filing”). The sole purpose of this Amendment No. 1 is to correct the balance sheet as of March 31, 2021, and the consolidated statements of operations and cash flows for the nine months ended March 31, 2021, for the issuance of shares for compensation. The compensation is recorded at fair market value of $0.00001 per share based on a valuation report prepared by a third party valuation firm instead of based on the stock trading price on the grant date. The effect of the change resulted in a decrease in net loss. The following financial statements and disclosures were impacted from fair market value of each share:
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The consolidated balance sheet as of March 31, 2021, and the related consolidated statements of operations and cash flows for the periods then ended. |
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NOTE 5 – SHAREHOLDERS’ DEFICIT |
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NOTE 7 – INCOME TAXES |
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NOTE 9 - SUBSEQUENT EVENTS |
AMERICA GREAT HEALTH AND SUBSIDIARIES
TABLE OF CONTENTS
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PART I – FINANCIAL INFORMATION |
4 |
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ITEM 1 |
Condensed Consolidated Financial Statements (As Restated) (Unaudited) |
4 |
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ITEM 2 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
16 |
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ITEM 3 |
18 |
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ITEM 4 |
18 |
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PART II – OTHER INFORMATION |
19 |
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ITEM 1 |
19 |
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ITEM 1A |
19 |
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ITEM 2 |
19 |
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ITEM 3 |
19 |
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ITEM 4 |
19 |
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ITEM 5 |
19 |
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ITEM 6 |
19 |
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PART I – FINANCIAL INFORMATION
This Amendment No, 1 to our Quarterly Report on Form 10-Q/A 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.
Item 1. Financial Statements
America Great Health and Subsidiaries (fka “Crown Marketing”)
Condensed Consolidated Balance Sheets
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March 31, 2021 |
June 30, 2020 |
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(As Restated) |
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(Unaudited) |
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ASSETS |
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CURRENT ASSETS |
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Cash |
$ | $ | ||||||
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Inventory |
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Other receivable |
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TOTAL CURRENT ASSETS |
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Right-of-use asset |
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TOTAL ASSETS |
$ | $ | ||||||
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LIABILITIES AND SHAREHOLDERS' DEFICIT |
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CURRENT LIABILITIES |
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Accounts payable and accrued expense |
$ | $ | ||||||
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Income tax payable |
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Due to related party |
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Lease liability |
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TOTAL CURRENT LIABILITIES |
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Lease liability - non current |
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TOTAL LIABILITIES |
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SHAREHOLDERS' DEFICIT |
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| Redeemable, convertible preferred stock, Series A voting preferred stock, |
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| Common stock, no par value, unlimited shares authorized; |
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Additional paid-in capital |
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Accumulated deficit |
( |
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( |
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TOTAL SHAREHOLDERS' EQUITY(DEFICIT) |
( |
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( |
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TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT |
$ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
America Great Health and Subsidiaries (fka “Crown Marketing”)
Condensed Consolidated Statements of Operations
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Three Months Ended March 31, |
Nine Months Ended March 31, |
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2021 (As Restated) |
2020 |
2021 (As Restated) |
2020 |
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(Unaudited) |
(Unaudited) |
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Sales |
$ | $ | $ | $ | ||||||||||||
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Cost of goods sold |
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Gross profit |
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Selling, general and administrative expenses |
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Professional fee |
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Other |
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Loss from operations |
( |
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( |
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( |
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( |
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Other income (expenses) |
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Interest expense |
( |
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( |
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( |
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( |
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( |
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( |
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( |
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Loss before income taxes |
( |
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( |
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( |
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( |
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Income tax provision |
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NET LOSS |
$ | ( |
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$ | ( |
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$ | ( |
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$ | ( |
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BASIC AND DILUTED LOSS PER SHARE |
$ | ( |
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$ | ( |
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$ | ( |
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$ | ( |
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WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING BASIC AND DILUTED |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
America Great Health and Subsidiaries (fka “Crown Marketing”)
Consolidated Statement of Shareholders' Deficit
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Common Stock |
Additional |
Accumulated |
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Shares |
Amount |
Paid-in Capital |
Deficit |
Total |
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Balance, June 30, 2019 |
$ | - | $ | $ | ( |
) |
$ | ( |
) |
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Imputed interest |
- | - | ||||||||||||||||||
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Net loss |
- | - | - | ( |
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( |
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Balance, December 31, 2019 (Unaudited) |
- | ( |
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( |
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Imputed interest |
- | - | - | |||||||||||||||||
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Net loss |
- | - | - | ( |
) |
( |
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Balance, March 31, 2020 (Unaudited) |
$ | - | $ | $ | ( |
) |
$ | ( |
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Balance, June 30, 2020 |
$ | - | $ | $ | ( |
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$ | ( |
) |
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Imputed interest |
- | - | - | |||||||||||||||||
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Net loss |
- | - | - | ( |
) |
( |
) |
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Balance, December 31, 2020 (Unaudited) |
- | ( |
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( |
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Issuance of common stock for compensation |
- | - | ||||||||||||||||||
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Imputed interest |
- | - | - | |||||||||||||||||
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Net loss |
- | - | - | ( |
) |
( |
) |
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Balance, March 31, 2021 (As Restated) (Unaudited) |
$ | - | $ | $ | ( |
) |
$ | ( |
) |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
America Great Health and Subsidiaries (fka “Crown Marketing”)
Condensed Consolidated Statements of Cash Flows
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Nine Months Ended March 31 |
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2021(As Restated) |
2020 |
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(Unaudited) |
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Cash Flows from Operating Activities |
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Net loss |
$ | ( |
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$ | ( |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Stock compensation |
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Imputed interest |
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Changes in operating Assets and Liabilities: |
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Other receivable |
( |
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Inventory |
( |
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Accounts payable and accrued expense |
( |
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( |
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Income tax payable |
( |
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Net cash used in operating activities |
( |
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( |
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Cash Flows from Investing Activities |
- | - | ||||||
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Cash Flows from Financing Activities |
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Advances from related party |
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Repayment to related party |
( |
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( |
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Net cash provided by financing activities |
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Net increase (decrease) in cash |
( |
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Cash beginning of period |
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Cash end of period |
$ | $ | ||||||
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Interest paid |
$ | $ | ||||||
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Taxes paid |
$ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
AMERICA GREAT HEALTH AND SUBSIDIARIES
FORMERLY CROWN MARKETING AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 – BASIS OF PRESENTATION
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, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the nine months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending June 30, 2021.
Nature of the Business
Through December 31, 2016, the Company’s primary business activity was the sale of various consumer products and accessories. 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 the 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, Meizhong 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, America Great Health, a California Corporation (“AAGH California”), a wholly owned subsidiary of the Company, entered into a Cooperation Agreement (the “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, row material procumbent, mergers and acquisitions, and consulting services. As of the time of filing these financial statements with the Company’s quarterly report, the formation of the JV Company has not been completed. After the formation of the JV company is completed, the Company shall invest USD $
Restatement Effect on Financial Statements
The following table illustrates the impact of the restatement of fair market value of share and the restated unaudited consolidated balance sheet, the unaudited statement of operations and unaudited statement of cash flows for the period ended March 31, 2021.
Effects on the previously issued financial statements are as follows:
(A) the issuance of shares for compensation is recorded at fair market value of $
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As Previously |
Adjustment |
As Restated |
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Consolidated Balance Sheet at March 31, 2021: |
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Additional paid-in capital |
A | $ | $ | ( |
) |
$ | |||||||
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Accumulated deficit |
A | $ | ( |
) | $ | ( |
) |
$ | ( |
) | |||
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Consolidated Statements of Operations for three months ended March 31, 2021: |
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Professional fee |
B | $ | $ | ( |
) |
$ | |||||||
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Total Selling, general and administrative expenses |
B | $ | $ | ( |
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$ | |||||||
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Loss from operations |
B | $ | ( |
) | $ | $ | ( |
) | |||||
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Loss before income taxes |
B | $ | ( |
) | $ | ( |
) | ||||||
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Net loss |
B | $ | ( |
) | $ | $ | ( |
) | |||||
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Consolidated Statements of Operations for nine months ended March 31, 2021: |
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Professional fee |
B | $ | $ | ( |
) |
$ | |||||||
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Total Selling, general and administrative expenses |
B | $ | $ | ( |
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$ | |||||||
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Loss from operations |
B | $ | ( |
) | $ | $ | ( |
) | |||||
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Loss before income taxes |
B | $ | ( |
) | $ | ( |
) | ||||||
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Net loss |
B | $ | ( |
) | $ | $ | ( |
) | |||||
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Consolidated Statement of Cash Flows for nine months ended March 31, 2021: |
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Net loss |
B | $ | ( |
) | $ | ( |
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Stock Compensation |
B | $ | $ | ( |
) | $ | |||||||
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, 2021, the Company recorded a net loss of $
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 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.
Our cash needs for the nine months ended March 31, 2021 were primarily met by loans and advances from current majority shareholder. As of March 31, 2021, we had a cash balance of $
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying CFS were prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”).
Basis of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its current wholly owned subsidiary, America Great Health in California. Intercompany transactions and accounts have been eliminated in consolidation.
Estimates
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.
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, 2021 and 2020, 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 a valuation allowance against its deferred tax assets as of March 31, 2021 and June 30, 2020.
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
In July 2017, the FASB issued Accounting Standards Update 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II)”, which is the replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The amendments in Part I of this Update that relate to the recognition, measurement, and earnings per share of certain freestanding equity-classified financial instruments that include down round features affect entities that present earnings per share in accordance with the guidance in Topic 260, Earnings Per Share. The amendments in Part II of this Update do not have an accounting effect. The amendments in Part I of the update are effective for fiscal year, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is assessing the impact to its accounting practices and financial reporting procedures as a result of the issuance of this standard.
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or is not believed by management to have a material impact on the Company’s present or future consolidated financial statements.
NOTE 3 – RELATED PARTY TRANSACTIONS
During the nine months ended March 31, 2021, the Company's current majority shareholder advanced $
Currently the Company is using a premises for free, the premises is leased by a company owned by its current majority shareholder.
NOTE 4 – 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 1,000,000 to
There were no preferred shares outstanding as of March 31, 2021 and June 30, 2020.
NOTE 5 – SHAREHOLDERS’ DEFICIT
At March 31, 2021 and June 30, 2020, the Company had
On January 22, 2021, the Company issued an aggregate of
On March 10, 2021, the Company issued an aggregate of
NOTE 6 – JOINT VENTURE
On March 5th, 2018, America Great Health, a California Corporation (“AAGH California”), a wholly owned subsidiary of the Company, entered into a Sino-foreign Co-operative Joint Venture Contract (the “JV Agreement”) with Guangzhou Bona Biotechnology Co., Ltd. (“Bona”) pursuant to which the parties will establish a joint venture (the “JV Company”) for the purpose of promoting and developing sales channels for health and cosmetics related products supplied by AAGH California in the mainland of the People’s Republic of China, the Hong Kong Special Administration Region and the Macau Special Administration Region (together, the “China Market”).
Pursuant to the JV Agreement, AAGH California and Bona will each own
The following table summarizes the income statement of Pomeikang.
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From date of equity investment to 12/31/2018 |
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Sales |
$ | |||
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Gross profit |
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Net loss |
( |
) |
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49% share |
( |
) |
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The following table provides the summary of balance sheet information for Pomeikang.
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As of December 31, 2018 |
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Total assets |
$ | |||
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Net assets |
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Ending balance of investment account before written off |
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Difference |
( |
) |
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The difference of $
There was no operation during the period from October 1, 2018 to December 31, 2018, therefore at December 31, 2018, the Company decided to no longer participate in Pomeikang’s operations. As a result, a loss on disposal of investment of $
NOTE 7 – INCOME TAXES
As of March 31, 2021, 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, 2021 and 2020, the Company had no unrecognized tax benefits and related interest and penalties expenses. Currently, the Company is not subject to examination by major tax jurisdictions.
NOTE 8 – LEASE
The Company has entered into an operating leases agreement with GKT, Alhambra, LP. The lease term of the office space is from December 1, 2020 to November 30, 2023. The current monthly rent including monthly management fee is $
Operating lease right-of-use assets and liabilities commencing after December 1, 2020 are recognized at commencement date based on the present value of lease payments over the lease term. For the nine months ended March 31, 2021, 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:
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Nine Months Ended |
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Cash paid for operating lease liabilities |
$ | |||
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Weighted-average remaining lease term |
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Weighted-average discount rate |
% |
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Minimum future lease payments |
$ | |||
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2021 |
$ | |||
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2022 |
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2023 |
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2024 |
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2025 |
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Total |
$ |
NOTE 9 – SUBSEQUENT EVENTS
In June 2021, the JV Company was established in Hainan, China, fully known as Sijinsai (Hainan) Biological Tech Ltd. On July 9, 2021, the Company paid the first investment of $
On September 3, 2021, America Great Health (the “Company”) entered into an Assets Acquisition Agreement with Wang’s Property Investment & Management LLC to purchase
On September 9, 2021, America Great Health (the “Company”) entered into an Agreement with Wang’s Property Investment & Management LLC (“Wang”) to purchase some real estate properties held by Wang for a purchase price of $7,000,000. The Company and Wang have both agreed that they will not conduct due diligence in order for the transaction to proceed (the “transaction”, the “Agreement”). As of the reporting date, the Company has not made any payment for the transaction and the transaction has not completed.
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
1) Shares issued for merger & acquisition
Investment in Imedipus Inc.
On January 30, 2020, the Company and Imediplus Inc. (“Imediplus”), a leading medical institution in Taiwan, entered into a Cooperation Agreement, in which the Company agreed to acquire
On April 6, 2021, the Company issued
Investment in Purecell Group
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 $
2) Shares issued for stock compensation
On April 7, 2021, the Company issued an aggregate of
On May 5, 2021, the Company issued an aggregate of
On May 18, 2021, the Company issued an aggregate of
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 of relevant 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. As consideration, the Company agreed to grant
On May 26, 2021, the Company issued an aggregate of
On June 18, 2021, the Company issued an aggregate of
3) Shares issued for loan as collateral
In May 2021, the Company issued
In June 2021, the Company issued an aggregate of
On May 31, 2021, the Company signed a loan agreement of $
In October 2021, the Company issued
On October 28, 2021, the Company issued
In November 2021, the Company issued
In November 2021, the Company signed
The Company received the proceed of $
The Company received the proceed of $
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.
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 16,155,746,000 shares of Company common stock from Mr. Hooper to an investor group led by Mike Q. Wang. In connection with the change of control, the Company sold to its former majority shareholder a subsidiary for $100 and another subsidiary in exchange for the cancellation of all payables and accrued expenses. After December 31, 2016, the Company’s operations are determined and structured by the new investor group. As such, the Company accounted for all of its assets, liabilities and results of operations up to January 1, 2017 as discontinued operations.
On March 1, 2017, the Company filed with the Secretary of State of the 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, Meizhong Health Industry Development Co., Ltd. The subsidiary is mainly engaged in mergers and acquisitions, investments and financings, 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 51% of the equity of Purecell. As consideration for the acquisition, the Company shall issue 510,000,000 shares of common stock to Purecell’s nominated trustee. Upon completion of the acquisition transaction, Purecell shall remain autonomous in its day to day operation, including recruiting and retaining management team members. On February 10, 2021, the Company completed its financial and legal due diligence. This transaction was completed in May 2021.
On December 7, 2020, the Company’s Californian subsidiary 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, row material procumbent, mergers and acquisitions, and consulting services. After the formation of the JV Company is completed, the Company shall invest US$4.2 million in the JV Company within the next 24 months for 60% equity ownership of the JV Company. Brilliant shall transfer its patented technology to the JV Company as its capital contribution, to account for 40% equity ownership in the JV Company. In June 2021, the JV Company was established in Hainan, China as “Sijinsai (Hainan) Biological Tech Ltd.” On July 9, 2021, the Company paid the first investment of $50,000.
Overview of Business
Our mission is to invest in innovative technologies intergrated 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.
Results of Operations
Results of Operations for the three and nine months ended March 31, 2021 compared to the three and nine months ended March 31, 2020.
Sales amounted to $195,535 and $0 for the three months ended March 31, 2021 and 2020, respectively. Sales amounted to $195,671 and $0 for the nine months ended March 31, 2021 and 2020, respectively. The increase is of sales for the comparative relevant periods is from the sale of products purchased from the open market to a customer who accounted for 99% of our total sales in the three months ended March 31, 2021.
Cost of goods sold amounted to $143,905 and $0 for the three months ended March 31, 2021 and 2020, respectively. Cost of goods sold amounted to $144,049 and $0 for the nine months ended March 31, 2021 and 2020, respectively. The increase of cost of goods sold is due to increased sales.
Gross profit amounted to $51,630 and $0 for the three months ended March 31, 2021 and 2020, respectively. Gross profit amounted to $51,622 and $0 for the nine months ended March 31, 2021 and 2020, respectively. The increase of gross profit is due to increased sales.
Operating expenses incurred for the three months ended March 31, 2021 and 2020 were $98,688 and $1,482, respectively. Operating expenses incurred for the nine months ended March 31, 2021 and 2020 were $134,502 and $13,621, respectively. The increase over the relevant periods was mainly due to increased professional fees.
Our net loss for the three months ended March 31, 2021 and 2020 was $49,215 and $2,741, respectively. Our net loss for the nine months ended March 31, 2021 and 2020 was $88,155 and $18,052, respectively. The increase in net loss was mainly due to increased professional fees.
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 expenditures.
The accompanying 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 consolidated financial statements, the Company has incurred recurring net losses. For the nine months ended March 31, 2020, the Company recorded a net loss of $18,052, used cash to fund operating activities of $17,108, and cash provided by financing activities of $17,090. For the nine months ended March 31, 2021, the Company recorded a net loss of $88,155, used cash to fund operating activities of $97,025, and cash provided by financing activities of $122,112. 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 management’s plans to continue as a going concern revolve around its ability to achieve profitable operations, as well as raise 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.
Our cash needs for the nine months ended March 31, 2021 were primarily met by loans and advances from current majority shareholder. As of March 31, 2021, we had a cash balance of $25,253. Our new majority shareholders will need to provide all of our working capitals going forward.
Primarily as a result of our recurring losses and our lack of liquidity, we received a report from our independent registered public accounting firm for our financial statements for the year ended June 30, 2020 that includes an explanatory paragraph describing the uncertainty as to our ability to continue as a going concern.
Financial Position
As of March 31, 2021, we had $25,253 in cash, negative working capital of $346,654 and an accumulated deficit of $3,374,797.
Critical Accounting Policies and Estimates
Estimates
The preparation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America 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.
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.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based upon an evaluation of the effectiveness of our disclosure controls and procedures performed by our Chief Executive Officer (who is also our Chief Financial Officer) as of the end of the period covered by this report, our Chief Executive Officer/Chief Financial Officer concluded that our disclosure controls and procedures were not effective as a result of a weakness in the design of internal control over financial reporting identified below.
As used herein, “disclosure controls and procedures” mean controls and other procedures of our Company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Controls
There have been no changes in our internal controls over financial reporting during the period ended March 31, 2021 that have materially affected or are reasonably likely to materially affect our internal controls.
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.
None.
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.
None.
Item 6. Exhibits and Financial Statement Schedules
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31.1 |
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32.1 |
Certification pursuant to 18 U.S.C. Section 1350 of CEO and CFO. Filed herewith. |
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101.INS* |
XBRL Instance Document |
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101.SCH* |
XBRL Taxonomy Extension Schema Document |
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101.CAL* |
XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF* |
XBRL Taxonomy Extension Definition Linkbase Definition |
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101.PRE* |
XBRL Taxonomy Extension Presentation Linkbase Document |
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101.LAB* |
XBRL Taxonomy Extension Label Linkbase Document |
*XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. In accordance with SEC Release 33-8238, Exhibit 32.1 is furnished and not filed.
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.
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AMERICA GREAT HEALTH |
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Dated: January 10, 2022 |
By: |
/s/ Mike Wang |
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Mike Wang |
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President, Chief Executive Officer and Chief Financial Officer |
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