UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.20549

FORM 10-Q

(Mark one)

For the quarterly period ended NovemberJune 30, 20172023

Commission file number 0-17284

AIXIN LIFE INTERNATIONAL, INC.

MERCARI COMMUNICATIONS GROUP, LTD.

(Exact name of registrant as specified in its charter)

Hongxing International Business Building 2, 14^th FL, No. 69 Qingyun South Ave., Jinjiang District

Chengdu City, Sichuan Province, China

(Address of principal executive offices)

1120 Avenue of the Americas, 4th floor, New York, NY 1003686-313-6732526

(Former Address of principal executive offices)

86-400-6260600

(Issuer’s telephone number)

Securities Registered Pursuant to Section 12(g) 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 [X] ☒ No [  ]☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X] ☐ No [  ] ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting 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 7(a)(2)(B) [  ]☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [X] ☐ No [  ] ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date: As of January 5, 2018,August 11, 2023, there were outstanding 317,988,08924,999,842 shares of the registrant’s common stock.

MERCARI COMMUNICATIONS GROUP, LTD.

FORM 10-Q

November 30, 2017

INDEX

AIXIN LIFE INTERNATIONAL, INC.

FORM 10-Q

June 30, 2023

INDEX

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION

This Quarterly Reportreport contains forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 about Mercari Communications Group, Ltd. (the “Company,” “Mercari,” “we,” “us,”assumptions and “our”) that are subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on forward-looking statements. Forward-looking statements include, information concerning future financial performance, business strategy, projected plans and objectives. Statements preceded by, followed by or that otherwise include the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “may increase,” “may fluctuate” and similar expressions of future or conditional verbs such as “will,” “should,” “would,” and “could” are generally forward-lookingamong other things, statements relating to:

Also, forward-looking statements represent our estimates and should consider all uncertainties and risks throughout this report. The statements are representativeassumptions only as of the date they are made. The Company undertakesof this report. You should read this report and the documents that we reference and filed as exhibits to the report completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update any forward-looking statement.

These forward-looking statements implicitly and explicitly, includepublicly, or to update the assumptions underlying the statements and other information with respect to the Company’s beliefs, plans, objectives, goals, expectations, anticipations, estimates, financial condition, results of operations, future performance and business, including management’s expectations and estimates with respect to revenues, expenses, return on equity, return on assets, asset quality and other financial data.

Although the Company believes the expectations reflected in the forward-looking statements are reasonable, these statements involve risks and uncertainties that are subject to change based on various important factors, some of which are beyond the control of the Company. The following factors, among others, could cause the Company’s results or financial performance to differ materially from its goals, plans, objectives, intentions, expectations and other forward-looking statements:

All forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no obligation to revise or update this Quarterly Report on Form 10-Q to reflect events or circumstances after the date hereof. New factors emerge from time to time, and it is not possible for us to predict which factors, if any, will arise. In addition, the Company cannot assess the impact of each factor on the Company’s business or the extent to which any factor, or combination of factors, may causereasons actual results tocould differ materially from those containedanticipated in any forward-looking statements.statements, even if new information becomes available in the future.

Use of Certain Defined Terms

Except where the context otherwise requires and for the purposes of this report only:

the “Company,” “we,” “us,” and “our” refer to AiXin Life International., Inc. (“AiXin”) and its subsidiaries.

“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

“Hong Kong” refers to the Hong Kong Special Administrative Region of the People’s Republic of China;

“PRC,” “China,” and “Chinese,” refer to the People’s Republic of China (excluding Hong Kong and Taiwan);

“Renminbi” and “RMB” refer to the legal currency of China;

“Securities Act” refers to the Securities Act of 1933, as amended; and

“US dollars,” “dollars” and “$” refer to the legal currency of the United States.

PART I - FINANCIAL INFORMATION

Item 1. Financial StatementsAIXIN LIFE INTERNATIONAL, INC.

MERCARI COMMUNICATIONS GROUP, LTD

CONSOLIDATED BALANCE SHEETS

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

MERCARI COMMUNICATIONS GROUP, LTDAIXIN LIFE INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

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

MERCARI COMMUNICATIONS GROUP, LTDAIXIN LIFE INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWSSTOCKHOLDERS’ EQUITY (DEFICIT)

(UNAUDITED)

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

AIXIN LIFE INTERNATIONAL, INC.

MERCARI COMMUNICATIONS GROUP, LTD.CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 2017 (UNAUDITED) AND MAY 31, 2017

NOTE 1 - 1. ORGANIZATION AND SUMMARYDESCRIPTION OF SIGNIFICANT ACCOUNTING POLICIESBUSINESS

Organization

Mercari Communications Group, Ltd.Aixin Life International, Inc. (the “Company” or “Aixin Life” or “we”) was incorporated under the laws of the State of Colorado on December 30, 1987. From 1988 until 1990,On February 2, 2017, Mr. Quanzhong Lin (Mr. Lin) purchased 65.0% of the Company’s outstanding shares from China Concentric Capital Group for $300,000, pursuant to a Stock Purchase Agreement dated December 21, 2016, which resulted in a change in control of the Company.

On December 12, 2017, pursuant to a Share Exchange Agreement, in consideration for all of the outstanding shares of AiXin (BVI) International Group Co., Ltd. a British Virgin Islands corporation (“AiXin BVI”), the Company provided educationalissued to Mr. Lin, the sole stockholder of AiXin BVI, shares of common stock then representing 71% of the outstanding of common stock of the Company.

As a result of the Share Exchange, AiXin BVI became the Company’s wholly-owned subsidiary, and the Company now owns all of the outstanding shares of HK AiXin International Group Co., Limited, a Hong Kong limited company (“AiXin HK”), which in turn owns all of the outstanding shares of Chengdu AiXinZhonghong Biological Technology Co., Ltd., a Chinese limited company (“AiXinZhonghong”), which markets and sells premium-quality nutritional products counseling, seminar programs,in China.

AiXin BVI was incorporated on September 21, 2017 as a holding company and publicationsAiXin HK was established in Hong Kong on February 25, 2016 as an intermediate holding company. AiXinZhonghong was established in the People’s Republic of China (“PRC”) on March 4, 2013, and on May 27, 2017, the local government of the PRC issued a certificate of approval regarding the foreign ownership of AiXinZhonghong by AiXin HK. Neither AiXin BVI nor AiXin HK had operations prior to December 12, 2017.

For accounting purposes, the acquisition of AiXin BVI was accounted for as a reverse acquisition and treated as a recapitalization of the Company effected by a share exchange, with AiXin BVI as the accounting acquirer. Since neither AiXin BVI nor AiXin HK had operations prior to December 12, 2017, the historical consolidated financial statements of AiXinZhonghong are now the historical consolidated financial statements of the Company. The assets and liabilities of AiXinZhonghong were brought forward at their book value and no goodwill was recognized.

Effective February 1, 2018, the Company changed its name to AiXin Life International, Inc. (“Aixin Life”).

The Company, through its indirectly owned AiXinZhonghong subsidiary, develops and distributes consumer products by offering a line of nutritional products. The Company sells the products through exhibition events, conferences, and person-to-person marketing. Beginning in 2019, the Company began to provide advertising services to clients who engaged the Company to help distribute their products. The Company’s business mainly focuses on a proactive approach to its customers such as newslettershosting events for clients, which it believes is ideally suited to adults agedmarketing its products because sales of nutrition products are strengthened by ongoing personal contact and support, coaching and education of its clients, as to the benefits of a healthy and active lifestyle.

On May 25, 2021, AiXin HK entered into an Equity Transfer Agreement (the “Hotel Purchase Agreement”) with Chengdu Aixin Shangyan Hotel Management Co., Ltd (“Aixin Shangyan Hotel”), and its two shareholders Quanzhong Lin and Yirong Shen (“Transferor”). Pursuant to the Hotel Purchase Agreement, Aixin Life purchased 100% ownership of Aixin Shangyan Hotel from Transferor. Eighty percent of the equity of Aixin Shangyan Hotel was owned by Mr. Lin, and the remaining balance was owned by Ms. Shen. Under the terms of the Hotel Purchase Agreement, Aixin Life purchased all of the outstanding equity of Aixin Shangyan Hotel for a purchase price of RMB 7,598,887, or approximately $1.16 million (the “Transfer Price”). The Transfer Price will be reduced by an amount equal to any amounts paid or distributed by Aixin Shangyan Hotel to the Transferor after December 31, 2020 and will be increased by an amount equal to any amounts contributed to Aixin Shangyan Hotel by the Transferor after December 31, 2020. The acquisition was completed in July 2021.

On June 2, 2021, AiXin HK entered into an Equity Transfer Agreement (the “Pharmacies Purchase Agreement”) with Chengdu Aixintang Pharmacy Co., Ltd. and certain affiliated entities, each of which operates a pharmacy (together, “Aixintang Pharmacies”) and its three shareholders, Quanzhong Lin, Ting Li and Xiao Ling Li (“Transferor”). Mr. Lin owned in excess of 95% of the outstanding equity the Aixintang Pharmacies. The remaining equity interest was owned by Ting Li and Xiao Ling Li. Pursuant to the Pharmacies Purchase Agreement, AiXin HK purchased all of the outstanding equity of Aixintang Pharmacies for an aggregate purchase price of RMB 34,635,845, or approximately US$5.31 million (the “Transfer Price”). The Transfer Price will be reduced by an amount equal to any amounts paid or distributed by any of the Aixintang Pharmacies to the Transferor after December 31, 2020 and increased by an amount contributed to any of the Aixintang Pharmacies by the Transferor after such date. The acquisition was completed in September 2021.

On July 19, 2022, HK Aixin entered into an Equity Transfer Agreement with Yunnan Shengshengyuan Technology Co., Ltd, (“Yunnan Shengshengyuan”) and Yun Chen (together, the “Sellers”), the shareholders of Yunnan Runcangsheng Technology Company Ltd. (“Runcangsheng”). Yunnan Shengshengyuan owns in excess of 95% of the outstanding equity of Runcangsheng. The remaining equity interest is owned by Yun Chen. Pursuant to the Transfer Agreement, HK Aixin agreed to purchase all of the outstanding equity of Runcangsheng for an aggregate purchase price of $4,418,095 (RMB 31,557,820), adjusted by $116,802 the amount equal to the initial net worth minus the audited net worth. In addition to transferring their respective equity interest in Runcangsheng by the Sellers, both Sellers agree to forgive any loans Runcangsheng due to them. The acquisition was completed on September 30, to 50.2022 (see Note 17).

On February 17, 2023, the Company effected a 1 for 2 reverse stock split. As a result of the reverse split, every two shares of the Company’s issued and outstanding common stock will be automatically combined and converted into one issued and outstanding share of common stock, par value $0.00001 per share. The Company financedhas approximately 24,999,842 shares of outstanding common stock after the effect of reverse stock split and the elimination of fractional shares. All share and earnings per share information has been retroactively adjusted to reflect the reverse stock split.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements are prepared in conformity with U.S. Generally Accepted Accounting Principles (“US GAAP”). The functional currency of AiXinZhonghong, Aixin Shangyan Hotel, Aixintang Pharmacies, and Runcangsheng is the Chinese Renminbi (“RMB”). The accompanying consolidated financial statements are translated from RMB and presented in U.S. dollars (“USD”).

The consolidated financial statements include the accounts of the Company and its businesscurrent wholly owned subsidiaries, AiXin HK, AiXinZhonghong, Aixin Shangyan Hotel, Aixintang Pharmacies, and Runcangsheng. Intercompany transactions and accounts were eliminated in consolidation. These unaudited interim financial statements should be read in conjunction with private offeringsthe annual consolidated financial statements and the accompanying notes contained in our Annual Report on Form 10-K for the year ended December 31, 2022.

Unaudited Interim Financial Information

These unaudited interim financial statements have been prepared in accordance with GAAP for interim financial reporting and the rules and regulations of securities, shareholder loans, and with an underwritten initial public offering of securities registered with the Securities and Exchange Commission (“SEC”). The Company’s business failedthat permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally included in 1990. The Company ceasedfinancial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, all operations from 1990 to 2001 and was dormant. During the period the Company was dormant, it did not file required reports with the SEC under the Securities Exchange Actadjustments of 1934, as amended (“Exchange Act”). On August 3, 2004, the shareholdersa normal recurring nature necessary for a fair presentation of the Company approved a planfinancial position, results of quasi-reorganization which calledoperations and cash flows for a restatementthe periods presented have been made. The results of accountsoperations for the interim periods presented are not necessarily indicative of the results to eliminatebe expected for the accumulated deficit and related capital accounts on the Company’s balance sheet. The quasi-reorganization was effective March 1, 2004. Since March 1, 2004, the Company is in the development stage, and has not commenced planned principal operations. The Company has no products or services as of November 30, 2017.year ending December 31, 2023.

Going Concern

Going Concern

The accompanying consolidated financial statements werehave been prepared on a going concern basis, which contemplates the basisrealization of accounting principles applicable to a “going concern”, which assume that the Company will continue in operation for at least one year and will be able to realize its assets and discharge itsthe satisfaction of liabilities in the normal course of operations.business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Company’s ability to operate profitably, to generate cash flows from operations, and to pursue financing arrangements to support its working capital requirements.

SeveralThe Company has suffered losses from operations of $104,768 and $739,238 for the three months ended June 30, 2023 and 2022, and $656,738 and $1,511,392 for the six months ended June 30, 2023 and 2022, respectively, and used net cash in operating activities of $350,760 and $771,496 for the six months ended June 30, 2023 and 2022, respectively, and has an accumulated deficit of $15,757,028 as of June 30, 2023. These facts and conditions and events castraise substantial doubt about the Company’s ability to continue as a “goinggoing concern.” The Company has incurred net From January 1, 2023 through June 30, 2023, the Company’s cash and cash equivalents decreased from $510,128 to $316,905 mainly due to operating losses, of $54,387 for and the six months ended November 30, 2017, has no revenues and requires additional financing in orderuse of cash to finance its business activities on an ongoing basis. The Company’s future capital requirements will depend on numerous factors including, but not limited to, continued progress in finding a merger candidate and the pursuit of business opportunities. In the interim, shareholders of the Company have been contributing capital to the Company to meet its ordinary and normalsupport operating expenses. activities.

Management believes that actions presently being takenit has developed a liquidity plan, summarized below, that, if executed successfully, should provide sufficient liquidity to revisemeet the Company’s obligations as they become due for a reasonable period of time, and allow the development of its core business. The plan includes:

● Gaining positive cash-inflow from operating activities through continuous cost reductions and the sales of higher margin products.

● Raising cash through loans from related parties and potential equity offerings.

While the Company’s management believes that the measures in its liquidity plan including those described above will be adequate to satisfy its liquidity requirements for the twelve months after the date that these financial statements are issued, there is no assurance that the liquidity plan will be successfully implemented. Failure to successfully implement the liquidity plan may have a material adverse effect on its business, results of operations and financial requirements provide it with the opportunityposition, and may adversely affect its ability to continue as a “going concern”.

going concern. These consolidated financial statements do not reflectinclude any adjustments related to the recoverability and classification of recorded assets or the amounts and classification of liabilities or any other adjustments that wouldmight be necessary ifshould the Company werebe unable to continue as a “going concern”. While management believesgoing concern.

The Invasion of Ukraine

The invasion of Ukraine by the actions already taken or planned, will mitigateRussian Federation had an immediate impact on the conditionsglobal economy resulting in higher prices for oil and events which raise doubt about the validityother commodities. The United States, United Kingdom, European Union and other countries responded to Russia’s invasion of the “going concern” assumption used in preparingUkraine by imposing various economic sanctions and bans. Russia has responded with its own retaliatory measures. These measures have disrupted financial and economic markets. The global impact of these financial statements,measures is continually evolving and cannot be predicted with certainty and there can beis no assurance these actionsthat Russia’s invasion of Ukraine and responses thereto will be successful. Ifnot further disrupt the Company were unable to continue as a “going concern,” then substantial adjustments would be necessary to the carrying values of assets, the reported amounts of its liabilities, the reported revenuesglobal economy and expenses, and the balance sheet classifications used.financial markets.

BasisWhile the invasion of PresentationUkraine and responses thereto have not interrupted the Company’s operations, these or future developments resulting from the invasion of Ukraine could make it difficult to access debt and equity capital on attractive terms, if at all, and impact the Company’s ability to fund business activities, including proposed acquisitions.

The financial statements were prepared in conformity with accounting principles generally accepted in the United StatesUse of America (“US GAAP”) and pursuant to the rules and regulations of the SEC for annual financial statements.Estimates

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

Use of Estimates

The preparation ofIn preparing consolidated financial statements in conformity with US GAAP, required management to makemakes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosuredisclosures of contingent assets and liabilities at the datedates of the consolidated financial statements, andas well as the reported amounts of revenues and expenses during the reporting period.

Significant estimates required by management, include the recoverability of long-lived assets, allowance for doubtful accounts, and the reserve for obsolete and slow-moving inventories. Actual results could differ from those estimates.

Reclassification

Development Stage CompanyCertain prior period amounts have been reclassified to conform to the current period presentation and had no effect on previously reported consolidated net income (loss) or accumulated deficit.

The Company is a development stage company as defined by section 915-10-20 of the FASB Accounting Standards Codification (“ASC”). Although the Company has recognized nominal amounts of revenue, it is still devoting substantially all of its efforts on establishing the business. All losses accumulated since its inception on March 1, 2004 were considered part of the Company’s development stage activities.Cash and Cash Equivalents

In June 2014,For financial statement purposes, the FASB issued Accounting Standards Update (“ASU”) No. 2014-10, Development Stage Entities (Topic 915): EliminationCompany considers all highly liquid investments with an original maturity of Certain Financial Reporting Requirements, Including an Amendmentthree months or less to Variable Interest Entities Guidance in Topic 810, Consolidation.be cash and cash equivalents.

Restricted Cash

The amendmentsrestricted cash was cash maintained in this ASU removetemporarily frozen bank accounts held by Aixintang Pharmacy and its branches by the definitioncourt for a judgement against Aixintang Pharmacy which Aixintang Pharmacy is in the process of appealing (see Note 16 – litigation).

Accounts Receivable

The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. As of June 30, 2023 and December 31, 2022, the bad debt allowance was $200,044 and $272,550 respectively.

The following table summarizes the activity related to the Company’s Accounts Receivable allowance for doubtful accounts for the six months ended June 30, 2023 and 2022:

SCHEDULE OF ACCOUNTS RECEIVABLE ALLOWANCE FOR DOUBTFUL ACCOUNTS

Inventories

Inventories mainly consists of health supplements, drugs, pharmaceutical and nutritional products, food and beverage, hotel supplies and consumables. Inventories are valued at the lower of average cost or market, cost being determined on a development stage entitymoving weighted average method at the end of the month. Management compares the cost of inventories with the net realizable value and an allowance is made for writing down inventories to market value, if lower. The Company recorded provision for inventory reserve of $12,026 and $0 for the six months ended June 30, 2023 and 2022, respectively.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation, and impairment losses, if any. Major repairs and betterments that significantly extend original useful lives or improve productivity are capitalized and depreciated over the period benefited. Maintenance and repairs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the Master Glossaryrespective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets with 5% salvage value and estimated lives as follows:

SCHEDULE OF PROPERTY AND EQUIPMENT ESTIMATED LIVES

Impairment of Long-Lived Assets

Long-lived assets, which include property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, but at least annually.

Recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by it. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the Accounting Standards Codification, thereby removingasset exceeds its fair value. Fair value is generally determined using the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income,asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of June 30, 2023 and shareholder equity, (2) label the financial statements as thoseDecember 31, 2022, there were no significant impairments of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.its long-lived assets.

For public business entities, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. The Company adopted ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the Company to remove the inception to date information and all references to the development stage.Goodwill

Income Taxes

The Company accountsevaluates goodwill for income taxes under Section 740-10-30 ofimpairment annually or more frequently when an event occurs or circumstances change that indicate the FASB ASC, which requires recognition of deferred tax assets and liabilitiescarrying value may not be recoverable. In testing goodwill for impairment, the expected future tax consequences of events that have been included in the financial statements or tax returns.

Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expectedCompany may elect to reverse. Deferred tax assets are reduced byutilize a valuation allowancequalitative assessment to the extent management concludesevaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment indicates that goodwill impairment is more likely than not, the Company performs a two-step impairment test. The Company tests goodwill for impairment under the two-step impairment test by first comparing the book value of net assets willto the fair value of the reporting units. If the fair value is determined to be less than the book value or qualitative factors indicate that it is more likely than not be realized. Deferredthat goodwill is impaired, a second step is performed to compute the amount of impairment as the difference between the estimated fair value of goodwill and the carrying value. The Company estimates the fair value of the reporting units using discounted cash flows. Forecasts of future cash flows are based on our best estimate of future net sales and operating expenses, based primarily on expected category expansion, pricing, market segment share, and general economic conditions.

The Company completed the required testing of goodwill for impairment as of December 31, 2022, and determined that goodwill was impaired because of the current financial condition of the Company and the Company’s inability to generate future operating income without substantial sales volume increases, which are highly uncertain. Furthermore, the uncertainty of the future cash flows indicates that the recoverability of goodwill is not reasonably assured.

The goodwill write-down was reflected as an impairment loss, $3,823,770, in non-operating expenses in the statement of operations and comprehensive income (loss) during the year ended December 31, 2022.

Income Taxes

Income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities are measured usingand their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, expectedapplicable to apply to taxable income in the yearsperiods in which those temporarythe differences are expected to be recovered or settled. The effect onaffect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.

The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.

Management makes judgments as to the interpretation of the tax laws that mightamount expected to be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.realized.

Uncertain Tax Positions

The Company follows paragraph 740-10-25Accounting Standards Codification (“ASC”) Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of the FASB ASC. Paragraph 740-10-25-13 addresses the determination of whethera tax benefits claimedposition taken or expected to be claimed ontaken in a tax return shouldreturn. ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures.

Under ASC Topic 740, when tax returns are filed, it is likely that some positions taken would be recordedsustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the consolidated financial statements. Under paragraph 740-10-25-13,statements in the Company may recognize the tax benefit from an uncertain tax position only ifperiod during which, based on all available evidence, management believes it is more likely than not that the tax position will be sustained onupon examination, byincluding the taxing authorities, based onresolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the technical merits of the position. The tax benefits recognized in the financial statements from such a position should bemore-likely-than-not recognition threshold are measured based onas the largest amount of tax benefit that has a greateris more than 50% likelihoodlikely of being realized upon ultimate settlement.settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits areis classified as interest expense and penalties are classified in selling, general and administrative expenses in the statementsstatement of income.

TheAt June 30, 2023 and December 31, 2022, the Company did not take any uncertain positions that would necessitate recording a tax positionsrelated liability.

Revenue Recognition

Revenue from sale of goods under Topic 606 is recognized in a manner that reasonably reflects the delivery of the Company’s products and hadservices to customers in return for expected consideration and includes the following elements:

The Company’s revenue recognition policies for its various operating segments are as follows:

Products

The Company’s revenue from sales of products is recognized when goods are delivered to the customer and no unrecognized tax liabilitiesother obligation exists. The Company does not provide unconditional return or benefits in accordanceother concessions to the customer. The Company’s sales policy allows for the return of unopened products for cash after deducting certain service and transaction fees. As an alternative to the product return option, the customers have the option of asking for an exchange for products with the provisionssame value.

Sales revenue of Section 740-10-25AiXin Zhonghong represents the invoiced value of goods, net of value-added taxes (“VAT”). All of the Company’s products sold in China are subject to the PRC VAT of 13% since April 1, 2019. This VAT may be offset by VAT paid by the Company on raw materials and other materials purchased in China. The Company records VAT payable and VAT receivable net of payments in the financial statements. The VAT tax return is filed offsetting the payables against the receivables. Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government.

Hotel

Hotel revenues are primarily derived from the rental of rooms, food and beverage sales and other ancillary goods and services, including but not limited to souvenir, parking and conference reservation. Each of these products and services represents a distinct performance obligation and, in exchange for these services, the Company receives fixed amounts based on published rates or negotiated contracts. Payment is due in full at November 30, 2017the time when the services are rendered or May 31, 2017. the goods are provided. Room rental revenue is recognized on a daily basis when rooms are occupied. Food and beverage revenue and other goods and services revenue are recognized when they have been delivered or rendered to the guests as the respective performance obligations are satisfied. All of the hotel’s goods sold in China are subject to the PRC VAT of 6%. This VAT may be offset by VAT paid by the Company on raw materials and other materials purchased in China.

Pharmacies

The tax years 2014-2016 remain openCompany’s retail drugstores (Aixintang Pharmacies) recognize revenue at the time the customer takes possession of the merchandise. For pharmacy sales, each prescription claim is its own arrangement with the customer and is a performance obligation. Aixintang Pharmacies generally receives payments from customers as it satisfies its performance obligations. The Company records a receivable when it has an unconditional right to examinationreceive payment and only the passage of time is required before payment is due. Sales revenue represents the invoiced value of goods, net of VAT. All of Aixintang Pharmacies’ products sold in China are eligible for federal income tax purposesthe PRC VAT of 0% as it qualifies as a small business.

Manufacture and Sale

The Company’s new subsidiary Runcangsheng recognizes revenue at the time products are shipped as this satisfies its performance obligation. The Company records a receivable for its sales when it has an unconditional right to receive payment and only the passage of time is required before payment is due. Sales revenue represents the invoiced value of goods, net of value-added taxes (“VAT”). All of the Company’s products sold in China are subject to the PRC VAT of 13% unless it is a qualified small business subject to exemption.

Unearned Revenue

The Company’s unearned revenue primarily consists of advances received from customers for the purchase of products prior to the delivery of goods, and for the rental of hotel rooms prior to the delivery of service. The delivery of products and room rental services is (normally within one year) based upon contract terms and customer demand.

Concentration of Credit Risk

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

The Company has cash on hand and demand deposits in accounts maintained with state-owned banks within the PRC. Cash in state-owned banks is covered by insurance up to RMB 500,000 ($72,500) per bank. The Company has not experienced any losses in such accounts and believes they are not exposed to any risks on its cash in these bank accounts.

During the three and six months ended June 30, 2023 and 2022, the Company had no customer that accounted for over 10% of its total revenue.

During the three months ended June 30, 2023, the Company had one supplier that accounted for 15% of its total purchases.

During the six months ended June 30, 2023, the Company had two suppliers that accounted for 15% and 13%, respectively, of its total purchases.

During the three months ended June 30, 2022, the Company had one supplier that accounted for 23% of its total purchases.

During the six months ended June 30, 2022, the Company had one supplier that accounted for 12% of its total purchases.

Leases

The Company determines if an arrangement is a lease at inception under FASB ASC Topic 842, Right of Use Assets (“ROU”) and lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of its leases do not provide an implicit rate, it uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The ROU assets include adjustments for prepayments and accrued lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise such options.

ROU assets are reviewed for impairment when indicators of impairment are present. ROU assets from operating and finance leases are subject to the impairment guidance in ASC 360, Property, Plant, and Equipment, as ROU assets are long-lived nonfinancial assets.

ROU assets are tested for impairment individually or as part of an asset group if the cash flows related to the ROU asset are not independent from the cash flows of other major taxing jurisdictionsassets and liabilities. An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. The Company recognized no impairment of ROU assets as of June 30, 2023 and December 31, 2022. Operating leases are included in operating lease ROU and operating lease liabilities (current and non-current), on the consolidated balance sheets.

Statement of Cash Flows

In accordance with ASC Topic 230, “Statement of Cash Flows,” cash flows from the Company’s operations are calculated based on the local currencies using the average translation rates. As a result, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets.

Fair Value of Financial Instruments

The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accrued liabilities and accounts payable, approximate their fair value due to their short maturities. FASB ASC Topic 825, “Financial Instruments,” requires disclosure of the fair value of financial instruments held by the Company. The carrying amounts reported in the consolidated balance sheets for current liabilities each qualify as financial instruments and are a reasonable estimate of their fair value because of the short period of time between the origination of such instruments and their expected realization and the current market rate of interest.

Fair Value Measurements and Disclosures

ASC Topic 820, “Fair Value Measurements and Disclosures,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels are defined as follow:

As of June 30, 2023 and December 31, 2022, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at fair value.

Foreign Currency Translation and Comprehensive Income (Loss)

The functional currency of the Company is subject.RMB. For financial reporting purposes, RMB is translated into USD as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet dates. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period.

Loss per ShareTranslation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated other comprehensive income”. Gains and losses resulting from foreign currency transactions are included in income. There was no significant fluctuation in the exchange rate for the conversion of RMB to USD after the balance sheet date.

The Company uses FASB ASC Topic 220, “Comprehensive Income”. Comprehensive loss is comprised of net loss and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. Comprehensive income (loss) for the three and six months ended June 30, 2023 and 2022 consisted of net income (loss) and foreign currency translation adjustments.

Earnings per Share

Basic lossincome (loss) per share wasis computed by dividingon the loss for each period applicable to the common shareholders bybasis of the weighted average number of common shares outstanding during the period. There

Dilution is computed by applying the treasury stock method for options and warrants. Under this method, options and warrants are no outstandingassumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock equivalents forat the six and three months ended November 30, 2017 or 2016 and they are thus not considered.average market price during the period.

ConcentrationAs of Credit RiskJune 30, 2023 and December 31, 2022, the Company did not have any potentially dilutive instruments.

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements.Stock-Based Compensation

Fair Value of Financial Instruments

The carrying value of cashCompany periodically grants stock options, warrants and accrued expenses, if applicable, approximate their fair valuesawards to employees and non-employees in non-capital raising transactions as compensation for services rendered. The Company accounts for stock option, stock warrant and stock award grants to employees based on the short-term maturityauthoritative guidance provided by the FASB where the value of these instruments.the award is measured on the date of grant and recognized over the vesting period. The carrying amountsCompany accounts for stock option, stock warrant and stock award grants to non-employees in accordance with the authoritative guidance of debt were also estimatedthe FASB where the value of the stock compensation is determined based upon the measurement date at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to approximate fair value.earn the equity instruments is complete. Stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the employees and non-employees, option, warrant and award grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date.

Segment Reporting

ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The Company utilizes the methods of fair value (“FV”) measurement as described in ASC 820 to value its financial assets and liabilities. As defined in ASC 820, FVmanagement approach model is based on the price that would be received to sell an asset or paid to transferway a liability in an orderly transaction between market participants atcompany’s chief operating decision maker organizes segments within the measurement date. In order to increase consistencyCompany for making operating decisions assessing performance and comparability in FV measurements, ASC 820 establishes a FV hierarchy that prioritizes observable and unobservable inputs used to measure FV into three broad levels, which are described below:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The FV hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices thatallocating resources. Reportable segments are based on inputs not quoted on active markets, but corroborated by market data.products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company.

Level 3: Unobservable inputsThe Company manages its business as four operating segments, products, pharmacies, hotel, and manufacture and sales, all of which are used when little or no market data is available. The FV hierarchy giveslocated in the lowest priority to Level 3 inputs.PRC. All of its revenues are derived in the PRC. All long-lived assets are located in PRC.

Related PartiesThe following table shows the Company’s operations by business segment for the three months ended June 30, 2023 and 2022.

SCHEDULE OF SEGMENTS INFORMATION

The following table shows the Company’s operations by business segment for the six months ended June 30, 2023 and 2022.

The Company follows subtopic 850-10

As the acquisition of Runcangsheng was consummated as of September 30, 2022 (see Note 17), the revenues and operating results of the FASB ASC for the identification of related partiesmanufacture and disclosure of related party transactions. Pursuant to Section 850-10-20 related parties include: a. affiliates of the Company; b. entities for which investmentssale segment were included in their equity securities would be required, absent the election of the FV option under the FV Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of financial statements is not required in those statements.

The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

Commitments and Contingencies

The Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss toof the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.beginning on October 1, 2022.

In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

New Accounting Pronouncements

If the assessment of a contingency indicates it is probable a material loss was incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

New Accounting Pronouncements

In AugustJune 2016, the FASB issued ASU No. 2016-15, Classification2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of Certain Cash Receipts and Cash Payments. ASU 2016-15 clarifies the presentation and classification of certain cash receipts and cash payments in the statement of cash flows.credit losses on financial assets measured at amortized cost. This ASUguidance is effective for public businessfiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017.2018. The Company does not anticipateis currently evaluating the impact that the adoption of this ASUstandard will have a significant impact on its consolidated financial statements.

In November 2016,January 2017, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash.2017-04, Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its FV, not to exceed the carrying amount of goodwill. The guidance should be adopted on a prospective basis. As a smaller reporting company, the standard will be effective for the Company for interim and annual reporting periods beginning after December 15, 2022, with early adoption permitted. The adoption of ASU 2017-04 is not expected to have any impact on the Company’s consolidated financial statements presentation or disclosures.

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that a statementrequires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of cash flows explain the change during the periodcalculating diluted EPS when an instrument may be settled in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The standardshares. For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2017, and2021 including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The standard should be applied using a retrospective transition method to each period presented. The Company does not anticipate the adoption of thisbut no earlier than fiscal years beginning after December 15, 2020. For all other entities, ASU will have a significant impact on its financial statements.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The standard2020-06 is effective for fiscal years beginning after December 15, 2017,2023, including interim periods within those fiscal years. Early adoption is permitted. The standardEntities should be applied prospectively on or afteradopt the effective date. The Company will adopt this ASU for itsguidance as of the beginning of the fiscal year beginning January 1, 2018.of adoption and cannot adopt the guidance in an interim reporting period. The adoption of ASU 2020-06 is not expected to have any impact on the Company’s consolidated financial statements presentation or disclosures.

The Company has reviewed allCompany’s management does not believe that any other recently issued, but not yet effective, accounting pronouncements and have determined that these new accounting pronouncements are either not applicable orauthoritative guidance, if currently adopted, would not have a material impact on the results of operationsCompany’s financial statement presentation or changes in the financial position.disclosures.

NOTE 2 - RELATED PARTY TRANSACTIONS

As of November 30, 2017, the Company had due to related parties of $248,265, of which, 1) $164,877 was due to China Concentric as a result of an assignment of rights to advances previously made by Algodon, the Company’s former parent. The assignment of rights was made concurrent with the sale by Algodon of its shares in the Company to China Concentric on January 20, 2017. This advance carries no interest. 2) $1,800 advanced to the Company for paying certain company’s expenses by Mr. Zhu, a shareholder of the Company. 3) $81,588 advanced to the Company for paying G&A expenses by an officer of the Company.

As of May 31, 2017, the Company had 1) advances due China Concentric of $164,877. This total advance, which was assigned to China Concentric by Algodon, carries no interest. 2) $1,800 advanced to the Company for paying certain Company expenses by Mr. Zhu, a shareholder of the Company.

NOTE 3 - INCOME TAXES

As of November 30, 2017, the Company had a net operating loss (“NOL”) carry-forward for income tax reporting purposes of approximately $451,915 that may be offset against future taxable income through 2036. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. No tax benefit has been reported in the financial statements, because the Company believes there is a 50% or greater chance that the realization of the Company’s net deferred tax assets resulting from NOL carry-forwards will expire unused. Accordingly, the potential tax benefits of the loss carry-forwards are offset by a valuation allowance of the same amount.

Components of deferred tax assets are as follows:

3. OTHER RECEIVABLES AND PREPAID EXPENSES

Other receivables and prepaid expenses consisted of the following at June 30, 2023 and December 31, 2022:

SCHEDULE OF OTHER RECEIVABLES AND PREPAID EXPENSES

4. ADVANCES TO SUPPLIERS

The provisionCompany had advances to suppliers of $156,745 and $168,523 as of June 30, 2023 and December 31, 2022, respectively. Advances to suppliers primarily include prepayments for income taxes differs fromproducts expected to be delivered subsequent to balance sheet dates.

5. INVENTORIES

Inventories consisted of the amount computed usingfollowing at June 30, 2023 and December 31, 2022:

SCHEDULE OF INVENTORIES

6. PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the federal US statutory income tax ratefollowing at June 30, 2023 and December 31, 2022:

SCHEDULE OF PROPERTY AND EQUIPMENT

Depreciation expense for the three months ended June 30, 2023 and 2022 was $88,509 and $26,947, respectively.

Depreciation expense for the six months ended NovemberJune 30, 20172023 and 2016 is as follows:2022 was $192,909 and $55,925, respectively

7. INTANGIBLE ASSET, NET

Intangible asset consisted of the following at June 30, 2023 and December 31, 2022:

SCHEDULE OF INTANGIBLE ASSET

The provision for income taxes differs from the amount computed using the federal US statutory income tax rateAmortization expense for the three months ended NovemberJune 30, 20172023 and 2016 is as follows2022 was $357 and $633, respectively.

The Company evaluates its valuation allowance requirements based on projected future operations. When circumstances changeAmortization expense for the six months ended June 30, 2023 and cause a change in management’s judgment about the recoverability of deferred tax assets, the impact of the change on the valuation is reflected in current income.2022 was $518 and $1,294, respectively.

NOTE 4 – CHANGE IN CONTROL8. TAXES PAYABLE

On January 20, 2017, Algodon Wines & Luxury Development Group, Inc. (“Algodon”), the owner of at least 43,822,001 shares (the “Algodon Shares”), or 96.5%Taxes payable consisted of the outstanding common stockfollowing at June 30, 2023 and December 31, 2022:

SCHEDULE OF TAX PAYABLE

9. ACCRUED LIABILITIES AND OTHER PAYABLES

Accrued liabilities and other payables consisted of the following at June 30, 2023 and December 31, 2022:

SCHEDULE OF ACCRUED LIABILITIES AND OTHER PAYABLES

10. LOAN FROM THIRD PARTIES

As of June 30, 2023 and December 31, 2022, the Company sold the Algodon Shareshad advances from unrelated third parties of Aixin Shangyan Hotel in an aggregate amount $82,744 and $86,992, respectively. There was no written agreement, and these loans are payable on demand and bear no interest.

11. LEASE

AiXinZhonghong leases its office on a monthly basis. AiXinZhonghong also has operating leases for other sales locations under various operating lease arrangements. The leases have remaining lease terms of approximately 0.25 to China Concentric Capital Group Ltd.,4.92 years.

Aixin Shangyan Hotel leases its hotel premises under an operating lease arrangement. The lease has a British Virgin Islands company (“China Concentric”), for $260,000 pursuantremaining lease term of approximately 0.50 years.

Aixintang Pharmacies lease retail pharmacy stores under operating lease arrangements, with remaining lease terms of 1.46 to 3.17 years.

Runcangsheng leases its office under an operating lease arrangement. The lease has a Stock Purchase Agreement dated December 20, 2016, as amended. Algodon also assigned to China Concentric all its right, title and interest to amounts payable to Algodon for non-interest bearing advancesremaining lease term of approximately 2.67 years.

Balance sheet information related to the Company, which advances,Company’s leases is presented below:

SCHEDULE OF OPERATING LEASE LIABILITIES

The following provides details of the Company’s lease expenses:

SCHEDULE OF OPERATING LEASE EXPENSES

Other information related to leases is presented below:

SCHEDULE OF OTHER INFORMATION RELATED LEASES

Maturities of lease liabilities were as follows:

SCHEDULE OF MATURITIES OF LEASE LIABILITIES

12. RELATED PARTY TRANSACTIONS

SCHEDULE OF ADVANCES AND ACCOUNTS PAYABLE TO RELATED PARTY

Advances to supplier – related party

Advances to supplier – related party consisted of the following as of January 20, 2017 were $164,877.the periods indicated:

Accounts payable – related party

Accounts payable – related party consisted of the following as of the periods indicated:

Luquan Shengcaofeng Biotechnology Co., Ltd. is an entity controlled by Mr. Huiliang Jiao, a Director of the Company.

On February 2, 2017, China Concentric soldDue from related parties

Due from related parties consisted of the following as of the periods indicated:

SCHEDULE OF RELATED PARTY TRANSACTIONS