UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

Tianan Technology Park

13/F Headquarters Center Building 16

555 Panyu North Ave, Panyu District, Guangzhou City, China

(Address of principal executive offices, including zip code.)

+86 (20) 2982 9356

(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:

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 ☐ No

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 ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ☐ Yes ☒ No

31,518,466 shares common stock issued and outstanding as of May 23, 2023.

HUAIZHONG HEALTH GROUP, INC.

FORM 10-Q

FOR THE PERIOD ENDED JANUARY 31, 2023

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HUAIZHONG HEALTH GROUP, INC.

Balance Sheets

(Unaudited)

The accompanying notes to the unaudited financial statements are an integral part of these statements.

HUAIZHONG HEALTH GROUP, INC.

Statements of Operations

(Unaudited)

The accompanying notes to the unaudited financial statements are an integral part of these statements.

HUAIZHONG HEALTH GROUP, INC.

Statements of Changes in Stockholders’ Deficit

(Unaudited)

For the Three Months Ended January 31, 2023

For the Three Months Ended January 31, 2022

The accompanying notes to the unaudited financial statements are an integral part of these statements.

HUAIZHONG HEALTH GROUP, INC.

Statements of Cash Flows

(Unaudited)

The accompanying notes to the unaudited financial statements are an integral part of these statements.

HUAIZHONG HEALTH GROUP, INC.

Notes to the Unaudited Financial Statements

January 31, 2023

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation of Unaudited Interim Financial Statements

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the unaudited interim financial statements 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 adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the unaudited interim financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. The accompanying unaudited interim financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K, for the year ended October 31, 2022, as filed with the SEC on March 27, 2023.

Use of Estimates

The preparation of financial statements in conformity 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 disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

Reclassification

Certain accounts from prior periods have been reclassified to conform to the current period presentation.

NOTE 2 - GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of January 31,2023, the Company has suffered recurring losses from operations, has an accumulated deficit of $379,127 and has not earned any revenues. The Company intends to fund operations through equity financing arrangements and related party advances, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending October 31, 2023.

The ability of the Company to emerge from an early stage is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. In response to these problems, management intends to raise additional funds through public or private placement offerings.

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. 

NOTE 3 - RELATED PARTY TRANSACTIONS

During the three months ended January 31,2023 and 2022, the Company’s sole officer advanced to the Company an amount of $0 and $9,675 by paying for expenses on behalf of the Company. As of January 31, 2023, and October 31, 2022, the Company was obligated to the officer, for an unsecured, non-interest-bearing demand loan with a balance of $70,922, respectively. 

Other

The Company does not own or lease property or lease office space. The office space used by the Company was arranged by the CEO and President, of the Company to use at no charge.

NOTE 4 - SUBSEQUENT EVENTS

The Company has evaluated subsequent events from January 31, 2023, through the date these financial statements were issued and determined no additional events to disclose, except as follows:

The Company’s sole officer and director advanced to the Company an amount of $18,000 by paying operating expenses on behalf of the Company.

On March 27, 2023, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Sannong Youxuan (BVI) Limited (“Target”), and Sannong Youxuan Holdings Limited, the sole shareholder of the Target (the “Seller”), pursuant to which, among other things and subject to the terms and conditions contained therein, the Company agreed to effect an acquisition of the Target by acquiring from the Seller 100% of the ordinary shares issued and outstanding of the Target. The target is engaged in the business of software development, block chain technology and mobile application development.

Pursuant to the Share Exchange Agreement, in exchange for the acquisition of 100% of the ordinary shares   issued and outstanding of the Target, the Company issued an aggregate of 1,000,000 shares of common stock, par value $0.001 per share, of the Company to the Seller. At the closing of the acquisition, the Company entered into a lock-up agreement with the Seller with respect to the exchange shares, pursuant to which the Sellers agreed, subject to certain exceptions, not to transfer the exchange shares, or publicly disclose the intention to do so, from the closing of the acquisition until the six months anniversary of the closing.

The Share Exchange Agreement contains customary representations and warranties made by the Company, on the one hand, and the Target and the Seller on the other hand, made solely for the benefit of the other, which in certain cases are subject to specified exceptions and qualifications contained in the Share Exchange Agreement or in information provided pursuant to certain disclosure schedules to the Share Exchange Agreement.

At the date of filing this Financial Statements, the acquisition was not completed and the shares has not been issued.

Prior to the acquisition of the Target on March 27, 2023, the Company was considered a shell company. Effective on March 27, 2023, upon the closing of the acquisition of the Target, the Company has changed its status as a shell company and is no longer deemed to be a shell company.

The operations of the Target were fully integrated into the Company since March 27, 2023. Target was formed in 2016 and has been active in the business of supplemental nutrition products distribution. Since Target’s acquisition by the Company, Target has continued to its operations.

As a result of the continuing operations of the Target as a wholly owned subsidiary of the Company, the Company has become an operating entity and, thus, not an entity with “no or nominal operations”. Therefore, the Company no longer meets the SEC definition of a Shell Company.

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

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.

CERTAIN TERMS USED IN THIS REPORT

As used in this annual report, the terms “we”, “us”, “our”, “Huaizhong”, mean Huaizhong Health Group, Inc.”., unless the context clearly requires otherwise.

Item 1. Business

Overview

Huaizhong Heath Group, Inc. is a for profit corporation established under the corporation laws in the State of Nevada, United States of America on September 12, 2013, originally incorporated as Adaiah Distribution, Inc. Effective December 15, 2020, the company changed its name to Huaizhong Health Group, Inc. The Company’s fiscal year end is October 31.

The Company was in the development phase of its custom pillow distribution business. During the third fiscal quarter ending July 31, 2018, the Company had ceased its operations of its Pillow manufacturing and sales.

We have since changed our focus to looking for other business opportunities to implement and/or operating companies with which to engage in a business combination.

Our address is Tianan Technology Park, 13/F Headquarter, Center Building 16, 555 Panyu North Ave., Panyu District, Guangzhou City, China. Our telephone number is +86 (20) 2982-9356.

We have not ever declared bankruptcy, been in receivership, or involved in any kind of legal proceeding. 

Prior to the acquisition of Sannong Youxuan (BVI) Limited (“Target’) on March 27, 2023, the Company was considered a shell company. Effective on March 27, 2023, upon the closing of the acquisition of the Target, the Company has changed its status as a shell company and is no longer deemed to a shell company.

The operations of the Target were fully integrated into the Company since March 27, 2023. The Target was formed in 2016 and has been active in the business of supplemental nutrition products distribution. Since the Target’s acquisition by the Company, the Target has continued to its operations.

As a result of the continuing operations of the Target as a wholly owned subsidiary of the Company, the Company has become an operating entity and, thus, not an entity with “no or nominal operations”. Therefore, the Company no longer meets the SEC definition of a Shell Company.

The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include but are not limited to those discussed below and elsewhere in this report. Our unaudited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

Plan of Operations and Cash Requirements

We are no longer attempting to implement our original business plan. We now intend to look for other business opportunities to implement and/or operating companies with which to engage in a business combination. We do not intend, at this time, to restrict our focus to opportunities or business combinations in any specific industry. Instead, our focus will be on achieving long-term growth potential.

The analysis of new business opportunities will be undertaken by, or under the supervision of, the Company’s management. While the Company has limited assets and no operating revenues, the Company has unrestricted flexibility in seeking, analyzing and participating in potential business opportunities and/or combinations in any type of business, industry or geographical location. In its efforts, the Company will consider the following kinds of factors:

(a) potential for growth, indicated by new technology, anticipated market expansion or new products.

(b) competitive position as compared to other operations of similar size and experience within the industry segment as well as within the industry as a whole.

(c) strength and diversity of management, either in place or scheduled for recruitment.

(d) capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources.

(e) the cost of participation by the Company as compared to the perceived tangible and intangible values and potentials.

(f) the extent to which the business opportunity can be advanced; and

(g) the accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items.

In applying the foregoing criteria, not one of which will be controlling, management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available data. Potentially available opportunities may occur in many different industries, and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Due to the Registrant’s limited capital available for investigation, the Registrant may not discover or adequately evaluate adverse facts about the opportunity to be acquired. In addition, we will be competing against other entities that possess greater financial, technical and managerial capabilities for identifying and completing the implementation of any opportunities and/or business combinations.

Results of Operations

The following summary of our results of operations should be read in conjunction with our financial statements for the period ended January 31, 2023, which are included herein.

Our operating results for the three months ended January 31, 2023, and 2022 and the changes between those periods for the respective items are summarized as follows:

Results of Operations for the Three months ended January 31, 2023, and 2022

During the three months ended January 31, 2023, and 2022, no operating revenues were recorded.

We had a net loss of $10,550 and $9,725 for the three months ended January 31, 2023, and 2022, respectively. The increase in net loss of $825 was primarily due to an increase in operating expenses of $825.

Operating expenses for the three months ended January 31, 2023, and 2022 were $10,550 and $9,725, respectively.

During the three months ended January 31, 2023, the operating expenses, were primarily attributed to professional fees of $9,800, for maintaining reporting status with the Securities and Exchange Commission (“SEC”) and general administrative expenses of $750.

During the three months ended January 31, 2022, the operation expenses were primarily attributed to professional fees of $9,725 for maintaining reporting status with the Securities and Exchange Commission (“SEC”).

Balance Sheet Data:

As of January 31, 2023, our current assets were $500, and our current liabilities were $90,522 which resulted in working capital deficiency of $90,022.

As of January 31, 2023, current liabilities were comprised of $19,600 in accounts payable and $70,922 in due to related party, compared to $9,800 in accounts payable and $70,922 in due to related party as of October 31, 2022.

As of January 31, 2023, our working capital deficiency increased by $10,550 from $79,472 as of October 31, 2022, to $90,022, primarily due to an increase in current liabilities of $9,800 and a decrease in current assets of $750.

Cash Flow Data:

Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities. For the three months ended January 31, 2023, net cash flows used in operating activities was $0, consisting of a net loss of $10,550, reduced by an increase in accounts payable of $9,800 and a decrease in prepaid expenses of $750. For the three months ended January 31, 2022, net cash flows used in operating activities was $9,675, consisting of a net loss of $9,725, reduced by an increase in accounts payable of $50.

Cash Flows used in Investing Activities

During the three months ended January 31, 2023, and 2022, we had no cash used in investing activities.

Cash Flows from Financing Activities

During the three months ended January 31,2023 and 2022, the Company’s sole officer and director advanced to the Company an amount of $0 and $9,675 by paying for expenses on behalf of the Company. 

Going Concern

As of January 31, 2023, our Company had a net loss of $10,550 and has earned no operating revenues. Our Company intends to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending October 31, 2023. The ability of our Company to emerge from the development stage is dependent upon, among other things, obtaining additional financing to continue operations, and development of our business plan. In response to these problems, management

intends to raise additional funds through public or private placement offerings or through debt financing. These factors, among others, raise substantial doubt about our Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe there are no material estimates or assumptions with levels of subjectivity and judgement necessary to be considered critical accounting policies.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Use of Estimates

The preparation of financial statements in conformity 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 disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company,” we are not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the 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 an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of January 31, 2023. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms as a result of the following material weaknesses: (1) lack of a functioning audit committee, (2) lack of a majority of outside directors on our Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; and (4) management is dominated by two individuals without adequate compensating controls.

A “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements would not be prevented or detected on a timely basis.

We expect to be materially dependent upon a third party to provide us with accounting consulting services for the foreseeable future. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP, there are no assurances that the material weaknesses in our disclosure controls and procedures and internal control over financial reporting will not result in errors in our financial statements which could lead to a restatement of those financial statements.

Changes in Internal Controls

There have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the period ended January 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time we may become involved in various legal proceedings that arise in the ordinary course of business, including actions related to our intellectual property. Although the outcomes of these legal proceedings cannot be predicted with certainty, we are currently not aware of any such legal proceedings or claims that we believe, either individually or in the aggregate, will have a material adverse effect on our business, financial condition, or results of operations.

ITEM 1A. RISK FACTORS

As a “smaller reporting company,” we are not required to provide the information required by this Item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS.

The following exhibits are included as part of this report:

 _____________

* Filed herewith

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.