FOUNTAIN HEALTHY AGING, INC. (formerly IMMUREBOOST, INC.)

(A Development Stage Company)

Unaudited Financial Statements

For the Three and Nine Months Ended September 30, 2009 and 2008,

and the Period of February 25, 2004 (date of inception)

through September 30, 2009

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FOUNTAIN HEALTHY AGING, INC. (formerly IMMUREBOOST, INC.)

 (A Development Stage Company)

Balance Sheets

See accompanying notes to financial statements.

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FOUNTAIN HEALTHY AGING, INC. (formerly IMMUREBOOST, INC.)

 (A Development Stage Company)

Statements of Cash Flows

(unaudited)

See accompanying notes to financial statements.

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FOUNTAIN HEALTHY AGING, INC. (formerly IMMUREBOOST, INC.)

 (A Development Stage Company)

Notes to Financial Statements (unaudited)

For the Three and Nine Months Ended September 30, 2009,

and the Period of February 25, 2004 (Inception) through September 30, 2009

1. Organization and Summary of Significant Accounting Policies

This summary of significant accounting policies of FOUNTAIN HEALTHY AGING, INC. (formerly IMMUREBOOST, INC.) (a development stage company) (“the Company”) is presented to assist in understanding the Company's financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the accompanying financial statements. The Company has realized minimal revenues from its planned principal business purpose and, accordingly, is considered to be in its development stage in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 915 (SFAS No. 7).  The Company has elected a fiscal year end of December 31.

Business Description

FOUNTAIN HEALTHY AGING, INC. is a Nevada corporation originally organized on February 25, 2004 to acquire timeshares and like entities and facilitate rentals and sales of the entities and travel packages via its full-service travel website.    On July 17, 2006, the Board of Directors voted to change the name of the Company to eSavingStore.com, Inc.  On June 5, 2007, the Board of Directors voted to change the name of the Company to Immureboost, Inc.  On August 18, 2007, the Company entered into an asset purchase agreement with Immureboost Inc., a Thailand company, with the intention to purchase intellectual property to develop products that affect the human body’s immune system.  No assets were ever acquired or stock issued as a result of this agreement, which was terminated.  

On August 27, 2008, the Company changed its name to Fountain Healthy Ageing, Inc.  On September 16, 2008, the Company changed the spelling to Fountain Healthy Aging, Inc. The Company has established a relationship with Natural Planet USA LLC, a California LLC (“Natural Planet”), under which the Company had acquired rights to distribute a number of anti-aging products developed by Natural Planet.  The Company is in the process of developing its business as a pioneering, science-based company that licenses and distributes effective, natural, and safe products that slow and delay the aging process and improve the symptoms associated with aging.  

Income Taxes

The Company recognizes the tax effects of transactions in the year in which such transactions enter into the determination of net income, regardless of when reported for tax purposes. Deferred taxes are provided in the financial statements under ASC Topic No. 740 (SFAS No. 109) to give effect to the resulting temporary differences which may arise from differences in the bases of fixed assets, depreciation methods, allowances, and start-up costs based on the income taxes expected to be payable in future years. Development stage deferred tax assets approximating $306,000 arising as a result of net operating loss carryforwards totaling $875,664 have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods.   The valuation allowance increased by approximately $14,600 and $122,800 during the Nine Months Ended September 30, 2009 and 2008, respectively.

Estimates

Preparation of financial statementsprepared in accordance with accounting principles generally accepted in the United States of America requires(“U.S. GAAP”) have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the use of estimates, such as depreciationCompany’s audited consolidated financial statements and valuation of timeshare points. Becausenotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (“SEC”) on March 31, 2022 (“2021 Form 10-K”).

The preparation of the usecondensed consolidated 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 assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates inherent inusing the financial reporting process,best information available at the time the estimates are made; however actual results could differ significantlymaterially from those estimates.

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FOUNTAIN HEALTHY AGING, INC. (formerly IMMUREBOOST, INC.)There is no change on the accounting policies from the year ended December 31, 2021.

 (A Development Stage Company)

The Company’s revenues primarily include Company sales, franchise fees and income and revenues from transactions with franchisees.

Notes

Product sales

Product sales represents the sale of “coffee tea” and “spirit” products. Such revenue is recognized net of value-added taxes, upon delivery at such time that title passes to Financial Statements (unaudited)the customers.

For

Franchise fees and income

Franchise fees and income primarily include upfront franchise fees, such as initial fees, pre-opening assistance to operate spirit stores, subsequent training provided to franchisees and renewal fees. The Company has determined that the Three and Nine Months Ended September 30, 2009,

services provided in exchange for upfront franchise fees are highly interrelated with the franchise rights. The franchise rights are accounted for as rights to access the Company’s symbolic intellectual property in accordance with ASC 606, and the Period of February 25, 2004 (Inception) to September 30, 2009

1. Organization and Summary of Significant Accounting Policies (continued)

Fixed Assets

Fixed assetsCompany recognizes upfront franchise fees received from a franchisee as revenue when performance obligations are stated at cost and consist of computers and other office equipment. Depreciationsatisfied in accordance with the franchise agreement or the renewal agreement. The franchise agreement term is computed using the accelerated double-declining method based on estimated useful lives oftypically 3 years.

Cash

Revenues from transactions with franchisees

Revenues from transactions with franchisees consist primarily of sales of spirit products. The Company sells and Cash Equivalentsdelivers spirit products to the franchisees. The performance obligations arising from such transactions are considered distinct from the franchise agreement as they are not highly dependent on the franchise agreement and the customer can benefit from the procurement service on its own. Revenue is recognized upon transfer of control over ordered items, generally upon delivery to the franchisees.

In determining the amount and timing of revenue from contracts with customers, the Company exercises significant judgment with respect to collectability of the amount; however, the timing of recognition does not require significant judgment, as it is based on either the franchise term or the date of product shipment, none of which require estimation.

The Company does not incur a significant amount of contract acquisition costs in conducting its franchising activities. The Company believes its franchising arrangements do not contain a significant financing component.

The Company’s revenue recognition policy is compliant with ASC 606, Revenue from Contracts with Customers, and revenue is recognized when a customer obtains control of promised goods and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount:

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery or service being rendered.

For all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adopted rules.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable. The Company assesses the probability of collection from each customer at the outset of the arrangement based on a number of factors, including the customer’s payment history and its current creditworthiness. If in management’s judgment collection is not probable, the Company does not record revenue until the uncertainty is removed.

Management performs ongoing credit evaluations, and the Company maintains an allowance for potential credit losses based upon its loss history and its aging analysis. The allowance for doubtful accounts is the Company’s best estimate of the amount of credit losses in existing accounts receivable. Management reviews the allowance for doubtful accounts each reporting period based on a detailed analysis of trade receivables. In the analysis, management primarily considers the age of the customer’s receivable and also considers the creditworthiness of the customer, the economic conditions of the customer’s industry, general economic conditions and trends, and the business relationship and history with its customers, among other factors. If any of these factors change, the Company may also change its original estimates, which could impact the level of the Company’s future allowance for doubtful accounts. If judgments regarding the collectability of receivables were incorrect, adjustments to the allowance may be required, which would reduce profitability.

Accounts receivable are recognized and carried at the original invoice amount less an allowance for any uncollectible amounts. An estimate for doubtful accounts receivable is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. No allowance for doubtful accounts was made for the nine months ended September 30, 2022 and 2021.

The following customers had an accounts receivable balance greater than 10% of total accounts receivable at September 30, 2022.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. This ASU requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. This Accounting Standards Update affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual rights to receive cash. For smaller public business entities, the amendments in this Update are effective for fiscal years beginning after January 1, 2023, including interim periods within those fiscal years. All entities may adopt the amendments in this Update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). The Company is in the process of evaluating the impact of the adoption of this pronouncement on its consolidated financial statements.

The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company’s financial statements.

The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy.

The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.

The Company’s reporting currency is the U.S. dollar. The functional currency of the parent company is the U.S. dollar and the functional currency of the Company’s operating subsidiaries is the Chinese Renminbi (“RMB”). For the purposesubsidiaries whose functional currencies are the RMB, all assets and liabilities are translated at exchange rates at the balance sheet date and revenue and expenses are translated at the average yearly exchange rates and equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustments to other comprehensive loss, a component of equity.

Financial instruments that potentially expose the Company to significant concentration of credit risk consist primarily of cash and cash equivalents, accounts receivable, other receivables and advance to suppliers. As of September 30, 2022 and December 31, 2021, substantially all of the statementsCompany’s cash and cash equivalents were deposited with financial institutions with high-credit ratings and quality. The Company did not have any customers constituting 10% or more of the net revenue in the nine months ended September 30, 2022 and 2021.

Contract liabilities primarily consist of deferred revenue related to prepaid coffee and spirit products and upfront franchise fees. Deferred revenue related to prepaid spirit products represents advance from franchisees for future supply of products which is expected to recognize as revenue in the next 12 months. Deferred revenue related to upfront franchise fees represents the training service to be delivered over the term of franchise agreement that as of September 30, 2022, the Company expects to recognize as revenue of $183,650 within the next 12 months.

The Company has elected, as a practical expedient, not to disclose the value of remaining performance obligations associated with the franchise agreement in exchange for franchise right and related training services. The remaining duration of the performance obligation is the remaining contractual term of each franchise agreement. Revenue from training services provided to franchisees is recognized upon the conduct and delivery of training.

As of September 30, 2022 and December 31, 2021, other receivables mainly consist of employees advance to be spent for company purposes and refundable rental deposits. The balances are unsecured, non-interest bearing and repayable on demand.

The suppliers require the Company to pay in advance for the purchase of liquor products. Such advance is appropriated against future purchase orders. These advances are interest free, unsecured and short-term in nature.

Depreciation expense for the three and nine months ended September 30, 2022 and 2021 was $30,256, $99,663, $31,609 and $55,833, respectively.

Amortization expense for the three and nine months ended September 30, 2022 and 2021 was $3,064, $7,038, $12,739 and $14,422, respectively.

The Company requires retail partners to sign cooperative agreement and to pay in advance for the supply of goods. Such advance is appropriated against future sales orders. These advances are interest free, unsecured and short-term in nature.

FHAI was incorporated in the State of Nevada. FHAI is an U.S. entity and is subject to the United States federal income tax. No provision for income taxes in the United States has been made as FHAI had no United States taxable income for the reporting periods.

WLJM Cayman was incorporated in Cayman Islands. Under the current tax laws of Cayman Islands, WLJM Cayman is not subject to tax on their income or capital gains. In addition, upon of dividends by WLJM Cayman to its shareholders, no Cayman Islands withholding tax will be imposed.

WLJM HK was incorporated in Hong Kong and is subject to an income tax rate of 16.5% for taxable income generated from operations in Hong Kong.

JYWM WFOE, Shenzhen Wei Lian, Dongguan Dishi, Shenzhen Nainiang and Nainiang Liquor were incorporated in the PRC and they are subject to profits tax rate at 25% for income generated and operation in the country.

The full realization of the tax benefit associated with the losses carried forward depends predominantly upon the Company’s ability to generate taxable income during the carry forward period.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.

The Company did not record deferred tax assets as of September 30, 2022 and December 31, 2021.

A reconciliation of tax expense from 25% statutory tax rates for the three and nine months ended September 30, 2022 and 2021 is as follows:

The Company has leases for the offices, factory and warehouse in the PRC, under operating leases expiring on various dates through June 2027, which is classified as operating leases. In June 2022, the Company entered into a new lease agreement for a lease term of five years upon the expiration of the lease term for an office in February 2022. In addition, the Company has entered into various leases with lease terms of 12 months that do not contain a purchase option in 2022. The Company has elected to apply the exemption on the lessee accounting model for all short-term leases and therefore the operating lease commitment of $62,470 to be paid within the next 12 months will be recognized as an expense on a straight-line basis over the lease term. For the long-term leases, there are no residual value guarantees and no restrictions or covenants imposed by the leases. Lease liabilities are measured at present value of the sum of remaining rental payments as of September 30, 2022, with discounted rate of 4.75%. A single lease cost is recognized over the lease term on a generally straight-line basis. All cash payments of operating lease cost are classified within operating activities in the statement of cash flows,flows. Rent expense for the Company considers all highly liquid debt instruments purchased with a maturity of Three Months or less to be cash equivalents. three and nine months ended September 30, 2022 and 2021 were $48,984, $234.063, $81,135 and $240,973, respectively. Depreciation expenses for the three and nine months ended September 30, 2022 and 2021 were $16,479, $25,725, nil and $nil, respectively.

The Company’s future minimum payments under long-term non-cancelable operating leases are as follows:

Other information:

The Company had $22the following balances with related parties:

The balances represent cash advance to the related parties. The balances are unsecured, non-interest bearing and $- inrepayable on demand. The Company made cash atadvance to the related parties during the nine months ended September 30, 20092022. for the payment of future business expenses incurred. The Company expects the balance will be fully utilized at the year-end.

The balances represent Company’s expenses paid on behalf by a related party. The balances are unsecured, non-interest bearing and December 31, 2008, respectively.repayable on demand.

Commitments consist of a non-cancelable consultancy service agreement entered into with a third-party for the provision of services related to the US listing with a contract sum of $1,200,000. The outstanding committed contract amount is $120,000. The terms of the agreement are for various milestones stages to be completed within two years through 2021 which has extended to 2022. Future commitments within one year as of September 30, 2022 was $120,000. No future commitments more than one year.

Except the above commitments and the operating lease commitment as disclosed at Note 14, there are no material commitments.

There are no subsequent events have occurred that would require recognition or disclosure in the financial statements.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

AdvertisingThe following management’s discussion and analysis should be read in conjunction with our financial statements and the notes thereto and the other financial information appearing elsewhere in this report. Our financial statements are prepared in U.S. dollars and in accordance with U.S. GAAP.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “pursue,” “expect,” “predict,” “project,” “goals,” “strategy,” “future,” “likely,” “forecast,” “potential,” “continue,” negatives thereof or similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding business strategies, macro-economic and sector-specific trends, future cash flows, financing plans, plans and objectives of management and any other statements which are not statements of historical facts.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual future results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, legal and regulatory changes in the jurisdictions in which we operate, volatility or decline in our stock price, potential fluctuation of our quarterly and annual financial and operational results, rapid adverse changes in markets, decline in demand for our goods and services, insufficient revenues to cover our operating costs and such other factors as identified in “Item 1A. Risk Factors” described in our most recent annual report on Form 10-K.

Readers are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the SEC. These reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of operations and prospects. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation, except as required by law, to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.

Unless otherwise indicated by the context, references to the “Company, “we,” “us,” “our” in this report are to the combined business of Microalliance Group Inc., a Nevada corporation, and its consolidated subsidiaries.

Overview

The Company generally expenses advertising costsis primarily engaged in offering two types of products: coffee and liquor. The Company, through its subsidiaries in China, develops, produces, markets and sells flagship “coffee tea” products, which are innovative specialty coffee products with Chinese black tea’s taste, as incurred. No advertising costs were incurred duringwell as black coffee products and other coffee products. We sell our coffee products wholesale to retail partners and corporate customers, and we also sell directly to consumers in the periodPRC via our e-commerce channels. We commit to build the first brand of February 25, 2004 (inception)“coffee tea” culture in the PRC. As of the date of this report, we have entered into franchise agreements with a large number of franchisees relating to the distribution, marketing and sale of our coffee products. Our coffee product offerings consist of five different coffee products.

Our liquor products are sold across China through sales agents, distributors and franchisees. Our licensed “Nainiang Liquor” retail stores have opened in a dozen of cities in China, such as Beijing, Shanghai, Shenzhen, Xiamen, Chongqing, Chengdu, Kunming, Foshan, Zhaoqing, Huangshan, Jingzhou and Baoding, to mainly market and sell our proprietary brand liquor products to consumers. We supply the licensed retail stores with our liquor products and maintain quality and uniformity throughout the licensed stores by requiring uniform retail prices, providing continual trainings, periodic field visits by our marketing personnel and holding annual and special meetings of franchisees. Such retail stores launch marketing initiatives like tasting events to increase our brand awareness and promote sales. We currently sell six liquor products, including featured “coffee spirit” products and vintage “Baijiu” products. Our “coffee spirit” products are independently innovated by us which we believe are unique in China, with premium quality, good taste and a healthy profit margin. Our “Baijiu” (a type of Chinese liquor made from whole grain with alcohol content of 40-60%) products have excellent quality and we own a large stock of vintage Baijiu whose value grows as they age. As of September 30, 2009.2022, we had RMB114,774,000 (approximately $16.1 million) of such vintage Baijiu in stock based on the historical purchase cost. The liquor market size is massive which generates more revenues than the coffee business.

COVID-19 Impact

Our coffee factory in Dongguan as well as offices, contracted liquor producers and licensed “Nainiang Liquor” retail stores in Shenzhen have been subject to temporary closures from time to time due to COVID-19 resurgences and local containment measures beginning in the first quarter of 2022. Consumer demand for liquor products has dropped during lockdown periods as a result of social distancing policies and reduced gatherings. In addition, our plan to expand internationally has largely stalled due to the COVID-19 pandemic. It remains difficult to predict the full impact of the COVID-19 pandemic on the broader economy and our coffee and liquor businesses in particular.

Critical Accounting Policies and Use of Estimates

We prepare our consolidated financial statements in conformity with U.S. GAAP, which requires management to make certain estimates and to apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared. On a regular basis, we review our accounting policies and how they are applied and disclosed in our condensed consolidated financial statements. Actual results could differ from those estimates made by management.

We believe that of our significant accounting policies, which are described in Note 3 to our consolidated financial statements, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.

Revenue Recognition

The Company’s revenues primarily include Company sales, franchise fees and income and revenues from transactions with franchisees.

Product sales

Product sales represent the sale of “coffee tea” and “spirit” products. Such revenue is recognized net of value-added taxes, upon delivery at such time that title passes to the customers.

As described

Franchise fees and income

Franchise fees and income primarily include upfront franchise fees, such as initial fees, pre-opening assistance to operate spirit stores, subsequent training provided to franchisees and renewal fees. The Company has determined that the services provided in Noteexchange for upfront franchise fees are highly interrelated with the franchise rights. The franchise rights are accounted for as rights to access the Company’s symbolic intellectual property in accordance with ASC 606, and the Company recognizes upfront franchise fees received from a franchisee as revenue when performance obligations are satisfied in accordance with the franchise agreement or the renewal agreement. The franchise agreement term is typically 3 years.

Revenues from transactions with franchisees

Revenues from transactions with franchisees consist primarily of sales of spirit products. The Company sells and delivers spirit products to the franchisees. The performance obligations arising from such transactions are considered distinct from the franchise agreement as they are not highly dependent on the franchise agreement and the customer can benefit from the procurement service on its own. Revenue is recognized upon transfer of control over ordered items, generally upon delivery to the franchisees.

In determining the amount and timing of revenue from contracts with customers, the Company exercises significant judgment with respect to collectability of the amount; however, the timing of recognition does not require significant judgment, as it is based on either the franchise term or the date of product shipment, none of which require estimation.

The Company does not incur a significant amount of contract acquisition costs in conducting its franchising activities. The Company believes its franchising arrangements do not contain a significant financing component.

The Company’s revenue recognition policy is compliant with ASC 606, Revenue from Contracts with Customers, and revenue is recognized when a customer obtains control of promised goods and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount:

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery or service being rendered.

For all reporting periods, the Company has acquirednot disclosed the value of unsatisfied performance obligations for all product revenue contracts with an interest in a timeshare property. Revenues were originally intendedoriginal expected length of one year or less, which is an optional exemption that is permitted under the adopted rules.

Contract liabilities primarily consist of deferred revenue related to prepaid spirit products and upfront franchise fees. Deferred revenue related to prepaid spirit products represents advance from franchisees for future supply of products which is expected to be recognized upon saleas revenue in the next 12 months. Deferred revenue related to upfront franchise fees represents the training service to be delivered over the term of timeshare points redeemable for utilizationfranchise agreement that as of the property, or when the Company performs other travel related services. The Company has recognized minimalSeptember 30, 2022, we expect to recognize revenue of $4,000 from its initial intended business purpose since inception through September 30, 2009.  

The Company has established a relationship with Natural Planet USA LLC, a California LLC (“Natural Planet”), under which$183,650 within the Company had acquired rights to distribute a number of anti-aging products developed by Natural Planet.  The Company is in the process of developing its businessnext 12 months.

We have elected, as a pioneering, science-based company that licenses and distributes effective, natural, and safe products that slow and delaypractical expedient, not to disclose the aging process and improve the symptomsvalue of remaining performance obligations associated with aging.  As such, the Company is evaluating its revenue-generating opportunities and will establish a revenue recognition policy once these opportunities have been determined.

Earnings (Loss) Per Share

The computation of net income (loss) per share of common stock is based on the weighted average number of shares outstanding during the period presented. There were no potentially dilutive common share equivalents outstanding during the periods shown and, accordingly, the computation of net loss per share on a fully dilutive basis is the same as basic net loss per share.

2.  Related Party Transactions

On April 22, 2004, the Company entered into a consultingfranchise agreement with an entity affiliated with its former president/director. The entity was engaged to perform consulting services and provide office space for the Company for a term of six months commencing April 22, 2004, in exchange for $15,000. Onfranchise right and related training services. The remaining duration of the performance obligation is the remaining contractual term of each franchise agreement. Revenue from training services provided to franchisees is recognized upon the conduct and delivery of training.

Concentrations of Credit Risk

Financial instruments that potentially expose us to significant concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. As of September 30, 2022 and December 31, 2021, substantially all of our cash and cash equivalents were deposited with financial institutions with high-credit ratings and quality. The following customers had an accounts receivable balance greater than 10% of total accounts receivable at September 30, 2004,2022 and December 31, 2021.

We did not have customers constituting 10% or more of the president/director resignednet revenues in the nine months ended September 30, 2022 and 2021.

Recently Issued and Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. This ASU requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from his positionthe amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. This Accounting Standards Update affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual rights to receive cash. For smaller public business entities, the amendments in this Update are effective for fiscal years beginning after January 1, 2023, including interim periods within those fiscal years. All entities may adopt the amendments in this Update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). We are currently evaluating the impact of the adoption of this pronouncement on its consolidated financial statements.

We review new accounting standards as issued. We have not identified any other new standards that we believe will have a significant impact on our financial statements.

Results of Operations

The following discussion should be read in conjunction with the Company.  condensed consolidated financial statements of Microalliance Group Inc. attached hereto for the three and nine months ended September 30, 2022 and 2021.

For

Comparison of Three Months Ended September 30, 2022 and 2021

Revenue

We generated $3,776,384 in revenue for the three months ended September 30, 2022 compared to $15,045,396 for the three months ended September 30, 2022, a decrease in total revenues of $11,269,012 or 74.9% compared with the three months ended September 30, 2021.

The decrease was mainly due to the outbreaks of additional variants of COVID-19 which are more transmissible (like the Omicron variant and the two sub-variants: BA.1 and BA.2.) or result in more severe sickness (like the Delta variant) having caused negative impacts to our business since January 2022. The Chinese government has been taking actions to contain COVID-19 such as re-imposing previously lifted measures or putting in place additional restrictions including lockdowns of the Guangdong province which is our largest market and Shanghai municipality which is our second largest market to slow the spread of COVID-19. The full-scale lockdown in Shanghai since the end of March for ‘societal zero-Covid’ pursuit to track every Omicron case has led to the dramatic drop in our revenue in Shanghai. In addition, the outbreaks of Omicron in Shenzhen from time to time have triggered selective lockdowns of compounds and multiple rounds of mass testing, as the Chinese government continues maintaining its strict zero-Covid policy. The district where our office building is located was being locked down, which have banned all persons from entering, and our operations were severely impacted. Our revenue in Guangdong dropped sharply compared to the same period of February 25, 2004 (inception) through April 22, 2004 (see above paragraph),2021. The closure of Shanghai and Shenzhen has seen many Chinese are losing their incomes and their lifestyle has changed such that their spending on coffee and liquor products are dramatically reduced. As of the date of this report, China’s daily Covid cases jumped to the highest in more than six months, and the outbreaks have flared across different cities in China. We expect that strict virus controls will be in place, and the Chinese economy and our business will only be gradually recovering from recent surges of COVID-19 cases in 2023.

Cost of Revenue

Cost of revenue was $1,755,692 for the three months ended September 30, 2022 compared to $4,430,256 for the three months ended September 30, 2021, a decrease in cost of revenue by $2,674,564 or 60.4%. The cost of revenue consists of the cost of raw materials and cost of manufactured goods sold to customers, including labor cost, rental expense, research and development costs, etc. The decrease in the cost of raw materials was relatively in line with the decrease in revenue, whereas the decrease in labor cost and rental expenses was less than the decrease in revenue due to the fixed costs in nature. Depending on the development of the COVID-19 situation in China, we will explore possibilities to streamline our manpower and will evaluate the impact of any redundancy plans.

Gross profit

Gross profit for the three months ended September 30, 2022 was $2,020,692 compared with $10,615,140 for the three months ended September 30, 2021. The gross profit margin was 53.5% for the three months ended September 30, 2022 compared to 70.6% for the three months ended September 30, 2021. Such decrease was due to a lower margin for the liquor products, which comprise a larger portion of our sales during the three months ended September 30, 2022 as compared with the same period of July 20062021.

Operating Expenses

Selling and marketing expenses

Our selling expenses for the three months ended September 30, 2022 and 2021 were $213,220 and $219,006, respectively. The selling and marketing expenses decreased $5,786 or 2.6%. Selling expenses consist primarily of salary and welfare for sales staff, advertising expense and exhibition expense. Although our revenue dropped, the labor costs and other fixed costs were stable due to inflation, which led to the present, office spaceslight decrease of selling and services have been provided without chargemarketing expenses.

General and administrative expenses

By far the most significant component of our operating expenses for both the three months ended September 30, 2022 and 2021 was general and administrative expenses of $233,874 and $525,927, respectively. The following table sets forth the main components of our general and administrative expenses for the three months ended September 30, 2022 and 2021.

General and administrative expenses decreased by $292,053 or 55.5% from $525,927 for the Company's CEO. Such costs are not significantthree months ended September 30, 2021 to $233,874 for the three months ended September 30, 2022. The decrease in consultancy fee for the three months ended September 30, 2022 was mainly due to the absence of legal and professional fees and business consultancy fees incurred during the same period of 2021 in connection with the acquisition of Nainiang Liquor on June 3, 2021, including the filing of the corresponding Form 8-K containing the audited financial statements of Nainiang Liquor on August 16, 2021. 

Net Profit

We reported a net profit of $7,319,062 for the three months ended September 30, 2021 compared to a net profit of $1,200,669 for the three months ended September 30, 2022, a decrease of $6,118,393 or 83.6%. The decrease was primarily attributable to the fact that our gross profit has dropped significantly whereas the selling and have not been reflected therein.administrative expenses decreased by only 40.0% due to some costs and expenses being fixed costs in nature.

10

FOUNTAIN HEALTHY AGING, INC. (formerly IMMUREBOOST, INC.)

  (A Development Stage Company)

Notes to Financial Statements (unaudited)

Comparison of Nine Months Ended September 30, 20092022 and 2021

2.  Related Party Transactions (continued)

In February 2007, the Company’s then sole Officer (“the Former Officer”) loaned the Company $300 to pay for operating expenses.  Upon the resignation from his positions with the Company effective August 28, 2008, the Former Officer forgave the amounts owed to him.  The Company has written off the debt to additional paid-in capital.Revenue

On July 6, 2007, the Company entered into an employment agreement with the Officer, whereby the Officer would perform various services for the CompanyWe generated $14,404,949 in exchange for annual Officer compensation of 300,000 Euros, plus 100,000 Euros for annual Director's fees.  The compensation was translated from Euros into US dollars using a weighted average exchange rate pro-rated for the period of July 2007 through June 2008, resulting in $156,266 compensation expenserevenue for the nine months ended September 30, 2008, and total accrued compensation of $592,873 at September 30, 2008.  The agreement also entitled the Officer2022 compared to stock options pursuant to a separate agreement, which was never executed.  In August 2008, the Officer resigned from his positions with the Company and released all claims he had against the Company for debts owed to him. Thus, $592,873 in accrued compensation and $32,000 in notes payable (plus $2,133 in accrued interest) from 2007 were written off to additional paid-in capital during the quarter ended September 30, 2008.

In August 2008, a company affiliated with the Company’s CEO advanced the Company $8,400.  In November and December 2008, the Company’s CEO advanced the Company $10,550.  The notes total $18,950, carry an interest rate of 4.25%, and are due on demand (See Note 6).  

During the quarter ended September 30, 2009, the Company’s CEO incurred $2,564 in reimbursable expenses incurred in the Company’s behalf, on which interest has not been imputed due to its immaterial affect on the financials.

3.  Intangible Asset and Note Payable – Timeshare

Shortly after inception, the Company acquired an undivided interest in the Wyndham Vacation Resorts (formerly Fairfield Resorts, Inc.) (WVR) timeshare resort, along with the rights to participate in timeshare use, or to allow certain others the use, of a specified number of days lodging in WVR timeshare properties. The timeshare interest was being financed by WVR, but the Company defaulted on its payments during 2008, which compelled WVR to foreclose on the mortgage and revoke the timeshare interest.  In light of the Company’s new business direction, the Company had been seeking to dispose of the intangible asset.  As a result, the carrying value of the asset was impaired down to $0 during the fourth quarter of 2008.   Upon foreclosure in March 31, 2009, the loan had a carrying value of $21,438, which has been included in other income on the statement of operations.

4.  Stockholders' Deficit

The Board of Directors authorized a 30:1 forward stock split on July 1, 2006, a 2:1 reverse stock split on June 12, 2007, and a 2:1 forward split on December 22, 2009.  These footnotes and the accompanying financial statements have been retroactively restated to include the effects of the splits.  The following transactions comprise the 101,950,000 and 101,850,000 shares of common stock issued and outstanding at September 30, 2009 and December 31, 2008, respectively.

During March and April 2004, the Company issued common stock for cash in accordance with separate private offering memorandums as follows:  

Number of shares

Price per share

Cash received

27,000,000

$

.0000335

$

900

28,500,000

.000335

9,500

30,000,000

.001

30,000

11,400,000

.00165

19,000

4,800,000

.00335

16,000

101,700,000

$

75,400

11

FOUNTAIN HEALTHY AGING, INC. (formerly IMMUREBOOST, INC.)

 (A Development Stage Company)

Notes to Financial Statements (unaudited)

For the Three and Nine Months Ended September 30, 2009,

and the Period of February 25, 2004 (Inception) to September 30, 2009

4.  Stockholders' Equity (continued)

Pursuant to a Form 8-K filed with the SEC on July 28, 2006, the Board of Directors voted to increase the Company’s authorized common shares from 75,000,000 to 1,000,000,000 shares.

On October 1, 2006, the Company issued 150,000 shares of common stock at $.00335 per share to its transfer agent for $500 in services.

On July 4 and July 14, 2009, the Company issued to two unaffiliated investors, 100,000 total shares of common stock at $.25 per share for $25,000 in cash.

5.  Going Concern and Liquidity Considerations

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business.  As of September 30, 2009, the Company has a working capital deficit of $147,480 and an accumulated deficit of $875,664.  Unanticipated costs and expenses or the inability to generate revenues could require additional financing, which would be sought through bank borrowings, equity or debt financing, or asset sales. To the extent financing is not available, the Company may not be able to, or may be delayed in, developing its services and meeting its obligations.

The Company will continue to evaluate its projected expenditures relative to its available cash and to evaluate additional means of financing in order to satisfy its working capital and other cash requirements. The accompanying financial statements do not reflect any adjustments that might result from the outcome of these uncertainties.

6.

Notes Payable

12

13

 Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.  

Fountain Healthy Aging, Inc. (formerly Immureboost, Inc.) was incorporated in the State of Nevada on February 25, 2004.  Since its inception, the Company has not been involved in any bankruptcy, receivership or similar proceedings.  It has not undergone any material reclassification, merger, consolidation, or purchase or sale of a significant amount of assets in the ordinary course of business.

GENERAL

Prior to August 18, 2007, the Company was in the business of providing travel bookings and timeshare rentals and sales. Fountain Healthy Aging, Inc. (formerly Immureboost, Inc) was formed on February 25, 2004, under the name Celtic Cross, Ltd. as a “For Profit” corporation$28,915,041 for the purpose of acquiring the timeshare entities discussed herein, and additional like entities going forward including a full sales and service website.  The Company has elected a fiscal year end of December 31.

On July 17, 2006, the Board of Directors voted to change the name of the Company to eSavingStore.com, Inc. to more accurately reflect the Company’s business plan.  On July 5, 2007, the stockholders of the Company approved the name change to Immureboost, Inc.  On August 27, 2008, the Company changed its name to Fountain Healthy Aging, Inc.  On August 18, 2007, the Company entered into an Asset Purchase Agreement (“Agreement”) with Immureboost of Thailand, a Thai corporation (the "Seller") which develops processes, products, and pharmaceuticals that interact with the immune system. Under the terms of the Agreement, the Company would have acquired certain assets of the Seller, including patents and trademarks. In consideration of these assets, certain stockholders of the Seller would have received twenty million three hundred seventy thousand (20,370,000) "restricted shares" (as that term is defined in Rule 144 of the Securities Act of 1933; the "Act") of the Company's Common Stock.  No assets were ever acquired or stock issued as a result of this agreement, which was declared terminated on or about August 19, 2008

During the final quarter of 2008, the Company established a relationship with Natural Planet USA, Inc. (formerly Natural Planet USA), a California corporation (“Natural Planet”), under which the Company will acquire rights to distribute a number of anti-aging products developed by Natural Planet.  The Company is in the process of developing its business as a pioneering, science-based company that licenses and distributes effective, natural and safe products that slow and delay the aging process and improve the symptoms associated with aging.

On September 14, 2009, the Company entered into an agreement to acquire the entire outstanding stock of Natural Planet on a date to be agreed between the Company and the shareholders of Natural Planet.  As at September 30, 2009, this acquisition had not been completed.  The acquisition will be completed upon the payment of the purchase price by the Company to the shareholders of Natural Planet.

In June of 2004, the Company acquired an undivided interest in the Wyndham Vacation Resorts (formerly Fairfield Resorts, Inc.) (WVR) timeshare resort, along with the rights to participate in timeshare use, or to allow certain others the use, of a specified number of days lodging in WVR timeshare properties. The purchase price of $33,100 was being financed by WVR at 10.99% annual interest on a ten-year loan. The maintenance at the WVR facilities are the responsibility of WVR, however, the Company had previously paid a monthly fee to WVR for this service. The Company was unable to maintain the loan and maintenance payments and was unsuccessful in its attempts to sell this interest.  During the first quarter of 2009, WVR foreclosed on the loan and reclaimed the timeshare interest.  

RESULTS OF OPERATIONS

The Company has generated $4,000 in revenues since inception, and has an accumulated deficit of $875,664.  During the threenine months ended September 30, 20092021, a decrease in total revenues of $14,510,092 or 50.2% compared with the nine months ended September 30, 2021.

The decrease was mainly due to the outbreaks of additional variants of COVID-19 which are more transmissible (like the Omicron variant and 2008,the two sub-variants: BA.1 and BA.2.) or result in more severe sickness (like the Delta variant) having caused negative impacts to our business since January 2022. The Chinese government has been taking actions to contain COVID-19 such as re-imposing previously lifted measures or putting in place additional restrictions including lockdowns of the Guangdong province which is our largest market and Shanghai municipality which is our second largest market to slow the spread of COVID-19. The full-scale lockdown in Shanghai since the end of March for ‘societal zero-Covid’ pursuit to track every Omicron case has led to the dramatic drop in our revenue in Shanghai. In addition, the outbreaks of Omicron in Shenzhen from time to time have triggered selective lockdowns of compounds and multiple rounds of mass testing, as the Chinese government continues maintaining its strict zero-Covid policy. The district where our office building is located was being locked down, which have banned all persons from entering, and our operations were severely impacted. Our revenue in Guangdong dropped sharply compared to the same period of 2021. The closure of Shanghai and Shenzhen has seen many Chinese are losing their incomes and their lifestyle has changed such that their spending on coffee and liquor products are dramatically reduced. As of the date of this report, China’s daily Covid cases jumped to the highest in more than six months, and the outbreaks have flared across different cities in China. We expect that strict virus controls will be in place, and the Chinese economy and our business will only be gradually recovering from recent surges of COVID-19 cases in 2023.

Cost of Revenue

Cost of revenue was $4,936,469 for the nine months ended September 30, 2022 compared to $8,141,174 for the nine months ended September 30, 2021. The decrease of cost of revenue was $3,204,705 or 39.4%. The cost of revenue consists of the cost of raw materials and cost of manufactured goods sold to customers, including labor cost, rental expense, research and development costs, etc. The decrease in the cost of raw materials was relatively in line with the decrease in revenue, whereas the decrease in labor cost and rental expenses was less than the decrease in revenue due to the fixed costs in nature. In addition, we completed the acquisition of Nainiang Liquor on June 3, 2021 and thus, since the third quarter of 2021, we incurred $37,751significant labor costs due to the increase of headcount through the business acquisition. Depending on the development of the COVID-19 situation in China, we will explore possibilities to streamline our manpower and $8,741will evaluate the impact of any redundancy plans.

Gross profit

Gross profit for the nine months ended September 30, 2022 was $9,468,480 compared with $20,773,867 for the nine months ended September 30, 2021. The decrease in operating expenses andgross profit margin from 71.8% for the nine months ended September 30, 2021 to 65.7% for the nine months ended September 30, 2022 was due to a lower margin for the liquor products, which comprise a larger portion of our sales during the nine months ended September 30, 20092022 as compared with the same period of 2021.

Operating Expenses

Selling and 2008,marketing expenses

Our selling expenses for the nine months ended September 30, 2022 and 2021 was $576,917 and $392,350, respectively. Selling expenses consist primarily of salary and welfare for sales staff, advertising expense and exhibition expense. The increase in selling and marketing expenses was $184,567 or 47.0%. Although our revenue dropped, the labor costs and other fixed costs have been rising due to inflation, which led to the increase of selling and marketing expenses. In addition, we incurred $58,330more expenses since the third quarter of 2021 as a result of the consolidation of the results of Nainiang Liquor through the business acquisition on June 3, 2021.

General and $342,919administrative expense

By far the most significant component of our operating expenses for both the nine months ended September 30, 2022 and 2021 was general and administrative expenses of $1,178,206 and $1,087,491, respectively. The following table sets forth the main components of our general and administrative expenses for the nine months ended September 30, 2022 and 2021.