Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 15, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | China Foods Holdings Ltd. | |
Entity Central Index Key | 0001310630 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 20,252,309 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 730,390 | $ 1,006,394 |
Trade receivables | 164,682 | |
Prepayments and other receivables | 113,523 | 121,501 |
Inventories | 167,150 | 206,272 |
Right-of-use assets | 314,800 | |
Total Current Assets | 1,490,545 | 1,334,167 |
Non-Current Assets | ||
Plant and equipment | 171,709 | 193,621 |
Intangible assets | 4,208 | 4,353 |
Total Non-Current Assets | 175,917 | 197,974 |
TOTAL ASSETS | 1,666,462 | 1,532,141 |
Current Liabilities | ||
Accounts payable | 7,827 | |
Accrued liabilities and other payables | 43,798 | 2,316 |
Customer deposits | 360,733 | 409,924 |
Lease liabilities | 55,412 | |
Amount due to a director | 106,913 | 68,953 |
Amount due to a related company | 199,964 | 199,964 |
Tax payable | 6,513 | 8,319 |
Total Current Liabilities | 773,333 | 697,303 |
Non-Current Liabilities | ||
Lease liabilities | 261,502 | |
Total Non-Current Liabilities | 261,502 | |
Total Liabilities | 1,034,835 | 697,303 |
Shareholders' Equity | ||
Common stock $0.0001 par value, 100,000,000 shares authorized, 20,252,309 shares issued and outstanding | 2,025 | 2,025 |
Additional paid-in capital | 1,290,355 | 1,290,355 |
Accumulated other comprehensive income | 7,100 | 5,244 |
Accumulated deficit | (667,853) | (462,786) |
Total Shareholders' Equity | 631,627 | 834,838 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,666,462 | $ 1,532,141 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 20,252,309 | 20,252,309 |
Common stock, shares outstanding | 20,252,309 | 20,252,309 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Income Statement [Abstract] | |||
Revenue, net | $ 167,643 | $ 35,021 | |
Cost of revenue | (153,684) | (28,235) | |
Gross profit | 13,959 | 6,786 | |
Operating expenses | |||
Selling and distribution expenses | 11,649 | 3,401 | |
General and administrative expenses | 214,176 | 136,490 | |
Total operating expenses | 225,825 | 139,891 | |
Loss from Operation | (211,866) | (133,105) | |
Other Income | |||
Interest income | 510 | 557 | |
Sundry income | 6,289 | 1,651 | |
Total other income | 6,799 | 2,208 | |
Loss before income tax | (205,067) | (130,897) | |
Income tax expenses | |||
Net loss | (205,067) | (130,897) | |
Other comprehensive loss: | |||
Foreign currency adjustment gain (loss) | 1,856 | (21,035) | |
Comprehensive loss | $ (203,211) | $ (151,932) | |
Net loss per common share Basic and diluted | [1] | $ (0.01) | $ (0.01) |
Weighted average number of common share Basic and diluted | 20,252,309 | 15,000,000 | |
[1] | denotes net loss per common share of less than $0.01 per share. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Balance at Dec. 31, 2019 | $ 1,500 | $ 1,290,355 | $ 159,441 | $ (54,001) | $ 1,397,295 |
Balance, shares at Dec. 31, 2019 | 15,000,000 | ||||
Net loss for the period | (130,897) | (130,897) | |||
Foreign currency translation adjustment | (21,035) | (21,035) | |||
Balance at Mar. 31, 2020 | $ 1,500 | 1,290,355 | 28,544 | (75,036) | 1,245,363 |
Balance, shares at Mar. 31, 2020 | 15,000,000 | ||||
Balance at Dec. 31, 2020 | $ 2,025 | 1,290,355 | (462,786) | 5,244 | 834,838 |
Balance, shares at Dec. 31, 2020 | 20,252,309 | ||||
Net loss for the period | (205,067) | (205,067) | |||
Foreign currency translation adjustment | 1,856 | 1,856 | |||
Balance at Mar. 31, 2021 | $ 2,025 | $ 1,290,355 | $ (667,853) | $ 7,100 | $ 631,627 |
Balance, shares at Mar. 31, 2021 | 20,252,309 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flow from operating activities: | ||
Net loss | $ (205,067) | $ (130,897) |
Adjustments to reconcile net loss to net cash (used in) generated from operating activities | ||
Depreciation | 21,430 | 16,126 |
Amortization | 130 | 120 |
Non-cash lease expense | 19,238 | 20,523 |
Total adjustments to reconcile net income to net cash generated from operating activities | (164,269) | (94,128) |
Change in operating assets and liabilities: | ||
Accounts receivables | (164,682) | 337,006 |
Prepayments and other receivables | 7,978 | 57,741 |
Inventories | 39,122 | (19,265) |
Accrued liabilities and other payables | 41,482 | 28,340 |
Accounts payable | (7,827) | |
Tax payable | (1,806) | |
Customer deposits | (49,191) | (16,188) |
Lease liabilities | 225 | (21,816) |
Net cash (used in) generated from operating activities | (298,968) | 271,690 |
Cash flow from investing activities | ||
Addition of plant and equipment | (27,088) | |
Net cash used in investing activities | (27,088) | |
Cash flow from financing activities: | ||
Repayment of lease liabilities | (17,349) | |
Advances from a director | 37,960 | |
Advances from a related company | 14 | |
Net cash generated from financing activities | 20,611 | 14 |
Foreign currency translation adjustment | 2,353 | (18,090) |
Net change in cash and cash equivalents | (276,004) | 226,526 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 1,006,394 | 634,492 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 730,390 | 861,018 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for interest | ||
Cash paid for income taxes |
Organization and Business Backg
Organization and Business Background | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Background | NOTE 1 – ORGANIZATION AND BUSINESS BACKGROUND China Foods Holdings Ltd. (the “Company”) was incorporated in Delaware on January 10, 2019. On July 9, 2020, the Company consummated the Share Exchange Agreement (“the “Share Exchange Agreement”) with Elite Creation Group Limited, a private limited company organized under the laws of British Virgin Islands (“ECGL”). As a result of the acquisition of ECGL, the Company entered into the healthcare product distributing and marketing industry, pursuing a new strategy of developing and distributing health related products, including supplements, across the globe with a focus on mainland China, Europe and Australia. Effective July 9, 2020, we consummated the acquisition of ECGL, and its wholly owned subsidiary Guangzhou Xiao Xiang Health Industry Company Limited, a limited liability company organized under the laws of China on March 8, 2017. Alpha Wellness (HK) Limited, a limited liability company organized under the laws of Hong Kong on April 24, 2019, is a holding company. We are a health and wellness company that develops, markets, promotes and distributes a variety of customized health and wellness care products and services, including supplements, healthy snacks, meal replacements, skincare products, and nutritional consultation services to consumers in China. We work with certain licensed healthcare food factories to develop and manufacture products and services that are distributed conventionally through sales agents and also through a network of e-commerce and social media platforms. In addition to products, we are committed to providing customized science based wellness consultation and service programs to customers. Our diverse products and services target health conscious customers and differentiate based upon age and gender and seek to manage different conditions. We reach out to customers fitting certain health and lifestyle profiles through our offline and online consultation services, and track eating habits and health indicators to provide customized products such as supplements. We believe this will facilitate the ability of customers to monitor, understand and adjust their health practices and lifestyle anytime and anywhere for increased customer engagement and retention. We conduct our business through our wholly owned subsidiary Guangzhou Xiao Xiang Health Industry Company Limited, a limited liability company organized under the laws of China on March 8, 2017 and Alpha Wellness (HK) Limited, a limited liability company organized under the laws of Hong Kong on April 24, 2019. Elite Creation Group, a limited liability company formed under the laws of the British Virgin Islands formed on September 5, 2018, is holding companies without operations. Our Products and Services Our health products are designed to help enhance immunity and improve general wellbeing. We provide the following categories of healthcare products and customized healthcare consultation services in China: (i) Nutrition Catering (ii) Special Health Food (iii) Health Supplement and (iv) Skincare. The products target all age groups with different needs. Product category Representative Products Description Nutrition Catering Series Jasmine Beauty Meal replacement and healthy snacks Special Health Food Series Power Centinent Products that support a healthy active lifestyle and enhance Immunity Health Supplement Series Fuli Fruit Juice Functional fruit beverages and dietary and nutritional supplements containing resveratrol, anthocyanin, superoxide enzyme Skincare Series Tightness Facial skin care and recovery Our products are taken as healthcare supplements in accordance with the principles of traditional Chinese medicine including the principle complementary medicine and ideal ratios and combinations of ingredients. Markets and Regions The Great Health Industry refers to production, operation, service and information dissemination, maintenance, restoration, and promotions linked to health. It covers medical products, health supplements, nutritional foods, medical devices, health appliances, fitness, health management, health consulting and many other production and service areas closely related to human health. The Great Health Industry is an emerging industry with huge market potential, especially in China. According to the “ ” 前瞻產業研究院 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and consolidation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial reporting, and in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the unaudited consolidated financial statements contained in this report reflect all adjustments that are normal and recurring in nature and considered necessary for a fair presentation of the financial position and the results of operations for the interim periods presented. The year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. The results of operations for the interim period are not necessarily indicative of the results expected for the full year. These unaudited consolidated financial statements, footnote disclosures and other information should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The unaudited condensed consolidated financial statements are presented in US Dollars and include the accounts of the Company and its subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation. The results of subsidiaries acquired or disposed of during the years are included in the consolidated statements of operations from the effective date of acquisition or up to the effective date of disposal. The following table depicts the description of the Company’s subsidiaries: Name Place of incorporation and kind of legal entity Principal activities Particulars of registered/paid up share capital Effective interest held Elite Creation Group Limited BVI, a limited liability company Investment holding 50,000 issued shares of US$1each 100 % Alpha Wellness (HK) Limited Hong Kong, a limited liability company Investment holding 300,000 issued shares of HK$1 each 100 % Guangzhou Xiao Xiang Health Industry Company Limited The PRC, a limited liability company Sales of healthcare products RMB 8,300,000 100 % The Company and its subsidiaries are hereinafter referred to as (the “Company”). Cash and cash equivalents Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. Accounts receivable Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from completion of service. Credit is extended based on evaluation of a customer’s financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectibility. At the end of fiscal year, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of March 31, 2021 and December 31, 2020, there was no allowance for doubtful accounts. Inventories Inventories are stated at the lower of cost or market value (net realizable value), cost being determined on a first-in-first-out method. Costs include material and manufacturing overhead costs. The Company provides inventory allowances based on excess and obsolete inventories determined principally by customer demand. As of March 31, 2021 and December 31, 2020, the Company did not record an allowance for obsolete inventories, nor have there been any write-offs. Plant and equipment Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values: Expected useful lives Residual value Furniture, fixture and equipment 3 years 5 % Motor vehicle 3.33 to 4 years 5 % Expenditures for repairs and maintenance are expensed as incurred. When assets have been retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations. Depreciation expense for the three months ended March 31, 2021 and 2020 were $21,430 and $16,126, respectively. Intangible assets Intangible assets represented trademarks of their products and are stated at cost less accumulated amortization and any recognized impairment loss. Amortization is provided over the term of their registrations on a straight-line basis, which is 10 years and will expire in 2028. Amortization expense for the three months ended March 31, 2021 and 2020 were $130 and $120, respectively. Impairment of long-lived assets In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as plant and equipment, as well as intangible assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. There has been no impairment charge for the periods presented. Revenue recognition The Company adopted Accounting Standards Codification (“ASC ”) 606 – Revenue from Contracts with Customers ● identify the contract with a customer; ● identify the performance obligations in the contract; ● determine the transaction price; ● allocate the transaction price to performance obligations in the contract; and ● recognize revenue as the performance obligation is satisfied. The Company recognizes revenue from the sale of their healthcare products upon delivery to the customers, whereas the title and risk of loss are fully transferred to the customers. The Company records its revenues, net of value added taxes (“VAT”). The Company is subject to VAT which is levied on the majority of the products at the rate of 17% on the invoiced value of sales. The Company experienced no product returns and recorded no reserve for sales returns for the three months ended March 31, 2021 and 2020. Income taxes The Company adopted the ASC 740 Income tax provisions of paragraph 740-10-25-13, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the condensed consolidated financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the condensed consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13. 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. Uncertain tax positions The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC 740 provisions of Section 740-10-25 for the three months ended March 31, 2021 and 2020. Foreign currencies translation Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the condensed consolidated statement of operations. The reporting currency of the Company is United States Dollar (“US$”) and the accompanying financial statements have been expressed in US$. In addition, the Company is operating in Hong Kong SAR and the People’s Republic of China and maintain its books and record in its local currency, Hong Kong Dollars (“HK$”) and Renminbi (“RMB”), which is a functional currency as being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement Translation of amounts from HK$ and RMB into US$ has been made at the following exchange rates for the three months ended March 31, 2021 and 2020: 2021 2020 Period-end HK$:US$ exchange rate 0.12863 0.12899 Period average HK$:US$ exchange rate 0.12891 0.12869 Period-end RMB:US$ exchange rate 0.15248 0.14109 Period average RMB:US$ exchange rate 0.15431 0.14327 Comprehensive income ASC Topic 220, “ Comprehensive Income Leases The Company adopted Topic 842, Leases At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use (“ROU”) assets, lease liabilities and long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as prepaid or accrued lease payments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Subsequently, the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components. Lease expense is recognized on a straight-line basis over the lease terms. Lease expense includes amortization of the ROU assets and accretion of the lease liabilities. Amortization of ROU assets is calculated as the periodic lease cost less accretion of the lease liability. The amortized period for ROU assets is limited to the expected lease term. The Company has elected a practical expedient to combine the lease and non-lease components into a single lease component. The Company also elected the short-term lease measurement and recognition exemption and does not establish ROU assets or lease liabilities for operating leases with terms of 12 months or less. Related parties The Company follows the ASC 850-10, Related Party Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value 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 Income-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 consolidated or combined 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) amount 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 the ASC 450-20, Commitments If the assessment of a contingency indicates that it is probable that a material loss has been 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 potentially 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. Fair value of financial instruments The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, approximate their fair values because of the short maturity of these instruments. Recent accounting pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes |
Prepayments and Other Receivabl
Prepayments and Other Receivable | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Prepayments and Other Receivables | NOTE 3 - PREPAYMENTS AND OTHER RECEIVABLES Prepayments and other receivables consisted of the following: March 31, 2021 December 31, 2020 (Audited) Prepayments $ 2,343 $ 7,712 Other deposits 67 119 Supplier deposits 111,113 113,670 $ $113,523 $ 121,501 Other receivables represented deposit payments made to suppliers for routine procurement, which are interest-free, unsecured and recoverable when the Company received the goods from the suppliers. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 4 - INVENTORIES Inventories consisted of the following: March 31, 2021 December 31, 2020 (Audited) Packing materials $ 12,121 $ 21,527 Finished goods 155,029 184,745 $ 167,150 $ 206,272 For the three months ended March 31, 2021 and 2020, no allowance for obsolete inventories was recorded by the Company. |
Lease
Lease | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Lease | NOTE 5 - LEASE The Company leased office and warehouse facilities under various non-cancelable operating leases expiring at the term of 5 years, through March 31, 2026. Right of use assets and lease liability – right of use are as follows: March 31, 2021 December 31, 2020 (Audited) Right-of-use assets $ 314,800 $ - The lease liability – right of use is as follows: March 31, 2021 December 31, 2020 (Audited) Current portion 55,412 - Non-current portion 261,502 - Total $ 316,914 $ - For the three months ended March 31, 2021 and 2020, the Company charges its lease expense $19,238 and $20,523, respectively. |
Plant and Equipment
Plant and Equipment | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Plant and Equipment | NOTE 6 - PLANT AND EQUIPMENT March 31, 2021 December 31, 2020 (Audited) Motor vehicle $ 311,343 $ 311,343 Furniture, fixture and equipment $ 15,465 $ 15,465 Foreign translation adjustment $ 9,246 $ 10,471 $ 336,054 $ 337,279 Less: accumulated depreciation (158,976 ) (137,546 ) Foreign translation adjustment $ (5,369 ) $ (6,112 ) Plant and equipment, net $ 171,709 $ 193,621 Depreciation expense for the three months period ended March 31, 2021 and 2020 were $21,430 and $16,126, respectively. |
Amounts Due to a Director and a
Amounts Due to a Director and a Related Company | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Amounts Due to a Director and a Related Company | NOTE - 7 AMOUNTS DUE TO A DIRECTOR AND A RELATED COMPANY As of March 31, 2021 and December 31, 2020, the amounts represented temporary advances to the Company by its director and its related company which were unsecured, interest-free and have no fixed terms of repayments. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | NOTE 8 – SHAREHOLDERS’ EQUITY Common Stock The Company is authorized, subject to limitations prescribed by Delaware law, to issue up to 100,000,000 shares of common stock with a nominal par value of $0.0001. Dividend Rights Subject to preferences that may apply to shares of preferred stock outstanding at the time, the holders of outstanding shares of our common stock are entitled to receive dividends out of funds legally available if our board of directors, in its discretion, determines to issue dividends and only then at the times and in the amounts that our board of directors may determine. Voting Rights Each holder of common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Under our Certificate of Incorporation, stockholders do not have the right to cumulate votes for the election of directors. No Preemptive or Similar Rights Our common stock is not entitled to preemptive rights and is not subject to conversion, redemption or sinking fund provisions. Right to Receive Liquidation Distributions Upon our dissolution, liquidation or winding-up, the assets legally available for distribution to our stockholders are distributable ratably among the holders of our common stock, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights and payment of liquidation preferences, if any, on any outstanding shares of preferred stock. On July 9, 2020, the Company consummated the Share Exchange Agreement (“the “Share Exchange Agreement”) with Elite Creation Group Limited, a private limited company organized under the laws of British Virgin Islands (“ECGL”), and the shareholders of ECGL. Pursuant to the Share Exchange Agreement, we purchased Fifty Thousand (50,000) shares of ECGL (the “ECGL Shares”), representing all of the issued and outstanding shares of common stock of ECGL. As consideration, the Company agreed to issue to the shareholders of ECGL Fifteen Million (15,000,000) shares of its common stock, at a value of US $0.32 per share, for an aggregate value of $4,800,000. As of March 31, 2021 and December 31, 2020, a total of 20,252,309 outstanding shares of common stock were issued. Preferred Stock The Company is not currently authorized to issue shares of preferred stock. The Certificate of Incorporation however, allows the board of directors to authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of the common stock in the event that shares of preferred stock are authorized in the future. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in control of our company and may adversely affect the market price of our common stock and the voting and other rights of the holders of common stock. The Company has no current plans to issue any shares of preferred stock. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 9 - INCOME TAXES The Company is subject to taxes in the governing jurisdictions in which it operates. The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate, as follows: United States of America CFOO is registered in the State of Delaware and is subject to US federal corporate income tax. The U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in its income tax provision. The Company has not accrued or paid interest or penalties which were not material to its results of operations for the periods presented. BVI Under the current BVI law, the Company is not subject to tax on income. The PRC The Company’s subsidiary operating in the PRC is subject to the Corporate Income Tax Law of the People’s Republic of China at a unified income tax rate of 25%. The reconciliation of income tax rate to the effective income tax rate for the three months ended March 31, 2021 and 2020 is as follows: Three months ended March 31, 2021 2020 Loss before income taxes $ (170,229 ) $ (121,337 ) Statutory income tax rate 25 % 25 % Income tax expense at statutory rate (42,557 ) (30,334 ) Net operating loss 42,557 30,334 Income tax expense $ - $ - Hong Kong The Company’s subsidiary operating in Hong Kong is subject to the Hong Kong Profits Tax at the two-tiered profits tax rates from 8.25% to 16.5% on the estimated assessable profits arising in Hong Kong during the current year, after deducting a tax concession for the tax year. The reconciliation of income tax rate to the effective income tax rate for the three months ended March 31, 2021 and 2020 is as follows: Three months ended March 31, 2021 2020 Loss before income taxes $ (31,621 ) $ (9,560 ) Statutory income tax rate 8.25 % 8.25 % Income tax expense at statutory rate (2,608 ) (788 ) Net operating loss 2,608 788 Income tax expense $ - $ - The following table sets forth the significant components of the deferred tax assets of the Company as of March 31, 2021 and December 31, 2020: March 31, 2021 December 31, 2020 (Audited) Deferred tax assets: Net operating loss carryforwards - United States $ 31,905 31,454 - Hong Kong 2,608 - - PRC 163,060 120,503 197,573 151,957 Less: valuation allowance (197,573 ) (151,957 ) Deferred tax assets, net $ - $ - |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 10 - RELATED PARTY TRANSACTIONS From time to time, the Company’s director advanced funds to the Company for working capital purpose. Those advances are unsecured, non-interest bearing and have no fixed terms of repayment. The Company has been provided free office space by its stockholder. The management determined that such cost is nominal and did not recognize the rent expense in its condensed consolidated financial statements. Apart from the transactions and balances detailed elsewhere in these accompanying consolidated financial statements, the Company has no other significant or material related party transactions during the periods presented. |
Concentrations of Risk
Concentrations of Risk | 3 Months Ended |
Mar. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
Concentrations of Risk | NOTE 11 - CONCENTRATIONS OF RISK The Company is exposed to the following concentrations of risk: (a) Major customers For the three months ended March 31, 2020, a single customer represented more than 10% of the Company’s revenues. This customer accounted for 99% of the Company’s revenues amounting to $34,930 with $193,190 of accounts receivable. For the three months ended March 31, 2021, a single customer represented more than 10% of the Company’s revenues. This customer accounted for 100% of the Company’s revenues amounting to $167,643 with $164,682 of accounts receivable. All of the Company’s customers are located in the People’s Republic of China. (b) Major vendors For the three months ended March 31, 2021, a single vendor represented more than 10% of the Company’s purchases. This vendor accounted for 100% of the Company’s purchases amounting to $123,742 with $0 of accounts payable. For the three months ended March 31, 2020, a single vendor represented more than 10% of the Company’s purchases. This vendor accounted for 100% of the Company’s purchases amounting to $48,695 with $0 of accounts payable. All of the Company’s vendors are located in the People’s Republic of China. (c) Credit risk Financial instruments that are potentially subject to credit risk consist principally of trade receivables. The Company believes the concentration of credit risk in its trade receivables is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. (d) Economic and political risk The Company’s major operations are conducted in the People’s Republic of China. Accordingly, the political, economic, and legal environments in PRC, as well as the general state of PRC’s economy may influence the Company’s business, financial condition, and results of operations. (e) Exchange rate risk The Company cannot guarantee that the current exchange rate will remain steady; therefore there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of HKD and RMB converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 12 COMMITMENTS AND CONTINGENCIES As of March 31, 2021, the Company has no material commitments or contingencies. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Event | NOTE 13 SUBSEQUENT EVENT In accordance with ASC Topic 855, “ Subsequent Events |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of presentation and consolidation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial reporting, and in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the unaudited consolidated financial statements contained in this report reflect all adjustments that are normal and recurring in nature and considered necessary for a fair presentation of the financial position and the results of operations for the interim periods presented. The year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. The results of operations for the interim period are not necessarily indicative of the results expected for the full year. These unaudited consolidated financial statements, footnote disclosures and other information should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The unaudited condensed consolidated financial statements are presented in US Dollars and include the accounts of the Company and its subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation. The results of subsidiaries acquired or disposed of during the years are included in the consolidated statements of operations from the effective date of acquisition or up to the effective date of disposal. The following table depicts the description of the Company’s subsidiaries: Name Place of incorporation and kind of legal entity Principal activities Particulars of registered/paid up share capital Effective interest held Elite Creation Group Limited BVI, a limited liability company Investment holding 50,000 issued shares of US$1each 100 % Alpha Wellness (HK) Limited Hong Kong, a limited liability company Investment holding 300,000 issued shares of HK$1 each 100 % Guangzhou Xiao Xiang Health Industry Company Limited The PRC, a limited liability company Sales of healthcare products RMB 8,300,000 100 % The Company and its subsidiaries are hereinafter referred to as (the “Company”). |
Cash and Cash Equivalents | Cash and cash equivalents Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. |
Accounts Receivable | Accounts receivable Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from completion of service. Credit is extended based on evaluation of a customer’s financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectibility. At the end of fiscal year, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of March 31, 2021 and December 31, 2020, there was no allowance for doubtful accounts. |
Inventories | Inventories Inventories are stated at the lower of cost or market value (net realizable value), cost being determined on a first-in-first-out method. Costs include material and manufacturing overhead costs. The Company provides inventory allowances based on excess and obsolete inventories determined principally by customer demand. As of March 31, 2021 and December 31, 2020, the Company did not record an allowance for obsolete inventories, nor have there been any write-offs. |
Plant and Equipment | Plant and equipment Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values: Expected useful lives Residual value Furniture, fixture and equipment 3 years 5 % Motor vehicle 3.33 to 4 years 5 % Expenditures for repairs and maintenance are expensed as incurred. When assets have been retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations. Depreciation expense for the three months ended March 31, 2021 and 2020 were $21,430 and $16,126, respectively. |
Intangible Assets | Intangible assets Intangible assets represented trademarks of their products and are stated at cost less accumulated amortization and any recognized impairment loss. Amortization is provided over the term of their registrations on a straight-line basis, which is 10 years and will expire in 2028. Amortization expense for the three months ended March 31, 2021 and 2020 were $130 and $120, respectively. |
Impairment of Long-lived Assets | Impairment of long-lived assets In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as plant and equipment, as well as intangible assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. There has been no impairment charge for the periods presented. |
Revenue Recognition | Revenue recognition The Company adopted Accounting Standards Codification (“ASC ”) 606 – Revenue from Contracts with Customers ● identify the contract with a customer; ● identify the performance obligations in the contract; ● determine the transaction price; ● allocate the transaction price to performance obligations in the contract; and ● recognize revenue as the performance obligation is satisfied. The Company recognizes revenue from the sale of their healthcare products upon delivery to the customers, whereas the title and risk of loss are fully transferred to the customers. The Company records its revenues, net of value added taxes (“VAT”). The Company is subject to VAT which is levied on the majority of the products at the rate of 17% on the invoiced value of sales. The Company experienced no product returns and recorded no reserve for sales returns for the three months ended March 31, 2021 and 2020. |
Income Taxes | Income taxes The Company adopted the ASC 740 Income tax provisions of paragraph 740-10-25-13, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the condensed consolidated financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the condensed consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13. 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. |
Uncertain Tax Positions | Uncertain tax positions The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC 740 provisions of Section 740-10-25 for the three months ended March 31, 2021 and 2020. |
Foreign Currencies Translation | Foreign currencies translation Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the condensed consolidated statement of operations. The reporting currency of the Company is United States Dollar (“US$”) and the accompanying financial statements have been expressed in US$. In addition, the Company is operating in Hong Kong SAR and the People’s Republic of China and maintain its books and record in its local currency, Hong Kong Dollars (“HK$”) and Renminbi (“RMB”), which is a functional currency as being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement Translation of amounts from HK$ and RMB into US$ has been made at the following exchange rates for the three months ended March 31, 2021 and 2020: 2021 2020 Period-end HK$:US$ exchange rate 0.12863 0.12899 Period average HK$:US$ exchange rate 0.12891 0.12869 Period-end RMB:US$ exchange rate 0.15248 0.14109 Period average RMB:US$ exchange rate 0.15431 0.14327 |
Comprehensive Income | Comprehensive income ASC Topic 220, “ Comprehensive Income |
Leases | Leases The Company adopted Topic 842, Leases At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use (“ROU”) assets, lease liabilities and long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as prepaid or accrued lease payments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Subsequently, the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components. Lease expense is recognized on a straight-line basis over the lease terms. Lease expense includes amortization of the ROU assets and accretion of the lease liabilities. Amortization of ROU assets is calculated as the periodic lease cost less accretion of the lease liability. The amortized period for ROU assets is limited to the expected lease term. The Company has elected a practical expedient to combine the lease and non-lease components into a single lease component. The Company also elected the short-term lease measurement and recognition exemption and does not establish ROU assets or lease liabilities for operating leases with terms of 12 months or less. |
Related Parties | Related parties The Company follows the ASC 850-10, Related Party Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value 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 Income-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 consolidated or combined 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) amount 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 | Commitments and contingencies The Company follows the ASC 450-20, Commitments If the assessment of a contingency indicates that it is probable that a material loss has been 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 potentially 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. |
Fair Value of Financial Instruments | Fair value of financial instruments The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, approximate their fair values because of the short maturity of these instruments. |
Recent Accounting Pronouncements | Recent accounting pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Subsidiaries Information | The following table depicts the description of the Company’s subsidiaries: Name Place of incorporation and kind of legal entity Principal activities Particulars of registered/paid up share capital Effective interest held Elite Creation Group Limited BVI, a limited liability company Investment holding 50,000 issued shares of US$1each 100 % Alpha Wellness (HK) Limited Hong Kong, a limited liability company Investment holding 300,000 issued shares of HK$1 each 100 % Guangzhou Xiao Xiang Health Industry Company Limited The PRC, a limited liability company Sales of healthcare products RMB 8,300,000 100 % |
Schedule of Estimated Useful Lives | Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values: Expected useful lives Residual value Furniture, fixture and equipment 3 years 5 % Motor vehicle 3.33 to 4 years 5 % |
Schedule of Foreign Currencies Translation Exchange Rates | Translation of amounts from HK$ and RMB into US$ has been made at the following exchange rates for the three months ended March 31, 2021 and 2020: 2021 2020 Period-end HK$:US$ exchange rate 0.12863 0.12899 Period average HK$:US$ exchange rate 0.12891 0.12869 Period-end RMB:US$ exchange rate 0.15248 0.14109 Period average RMB:US$ exchange rate 0.15431 0.14327 |
Prepayments and Other Receiva_2
Prepayments and Other Receivables (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Schedule of Prepayments and Other Receivables | Prepayments and other receivables consisted of the following: March 31, 2021 December 31, 2020 (Audited) Prepayments $ 2,343 $ 7,712 Other deposits 67 119 Supplier deposits 111,113 113,670 $ $113,523 $ 121,501 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: March 31, 2021 December 31, 2020 (Audited) Packing materials $ 12,121 $ 21,527 Finished goods 155,029 184,745 $ 167,150 $ 206,272 |
Lease (Tables)
Lease (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Schedule of Right of Use Assets and Liability | Right of use assets and lease liability – right of use are as follows: March 31, 2021 December 31, 2020 (Audited) Right-of-use assets $ 314,800 $ - The lease liability – right of use is as follows: March 31, 2021 December 31, 2020 (Audited) Current portion 55,412 - Non-current portion 261,502 - Total $ 316,914 $ - |
Plant and Equipment (Tables)
Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Plant and Equipment | March 31, 2021 December 31, 2020 (Audited) Motor vehicle $ 311,343 $ 311,343 Furniture, fixture and equipment $ 15,465 $ 15,465 Foreign translation adjustment $ 9,246 $ 10,471 $ 336,054 $ 337,279 Less: accumulated depreciation (158,976 ) (137,546 ) Foreign translation adjustment $ (5,369 ) $ (6,112 ) Plant and equipment, net $ 171,709 $ 193,621 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
People Republic of China [Member] | |
Schedule of Reconciliation Tax Rate to Effective Income Tax Rate | The reconciliation of income tax rate to the effective income tax rate for the three months ended March 31, 2021 and 2020 is as follows: Three months ended March 31, 2021 2020 Loss before income taxes $ (170,229 ) $ (121,337 ) Statutory income tax rate 25 % 25 % Income tax expense at statutory rate (42,557 ) (30,334 ) Net operating loss 42,557 30,334 Income tax expense $ - $ - |
Hong Kong [Member] | |
Schedule of Reconciliation Tax Rate to Effective Income Tax Rate | The reconciliation of income tax rate to the effective income tax rate for the three months ended March 31, 2021 and 2020 is as follows: Three months ended March 31, 2021 2020 Loss before income taxes $ (31,621 ) $ (9,560 ) Statutory income tax rate 8.25 % 8.25 % Income tax expense at statutory rate (2,608 ) (788 ) Net operating loss 2,608 788 Income tax expense $ - $ - |
Schedule of Deferred Tax Assets | The following table sets forth the significant components of the deferred tax assets of the Company as of March 31, 2021 and December 31, 2020: March 31, 2021 December 31, 2020 (Audited) Deferred tax assets: Net operating loss carryforwards - United States $ 31,905 31,454 - Hong Kong 2,608 - - PRC 163,060 120,503 197,573 151,957 Less: valuation allowance (197,573 ) (151,957 ) Deferred tax assets, net $ - $ - |
Organization and Business Bac_2
Organization and Business Background (Details Narrative) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of operation markets and regions description | The scale of the Great Health Industry in 2017 was USD 947.42 billion, which increased to over USD 1,069.66 billion in 2018. The report predicted USD 1,341.66 billion volume for 2019 and forecast over USD 1,528.09 billion for 2020. In the years till 2023, the average annual compound growth rate will be approximately 12.55%, and with the Great Health Industry reaching approximately USD 2,153.08 billion in 2023. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Allowance for doubtful accounts | |||
Depreciation expense | $ 21,430 | $ 16,126 | |
Intangible assets amortization period | 10 years | ||
Amortization expense | $ 130 | 120 | |
Sales tax percentage | 17.00% | ||
Reserve for sales returns |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Subsidiaries Information (Details) - 3 months ended Mar. 31, 2021 | USD ($)shares | HKD ($)shares | CNY (¥)shares |
Elite Creation Group Limited [Member] | |||
Place of incorporation and kind of legal entity | BVI, a limited liability company | BVI, a limited liability company | BVI, a limited liability company |
Principal activities | Investment holding | Investment holding | Investment holding |
Particulars of registered/paid up share capital, shares | shares | 50,000 | 50,000 | 50,000 |
Particulars of registered/paid up share capital, value | $ | $ 1 | ||
Effective interest held | 100.00% | 100.00% | 100.00% |
Alpha Wellness (HK) Limited [Member] | |||
Place of incorporation and kind of legal entity | Hong Kong, a limited liability company | Hong Kong, a limited liability company | Hong Kong, a limited liability company |
Principal activities | Investment holding | Investment holding | Investment holding |
Particulars of registered/paid up share capital, shares | shares | 300,000 | 300,000 | 300,000 |
Effective interest held | 100.00% | 100.00% | 100.00% |
Alpha Wellness (HK) Limited [Member] | HK [Member] | |||
Particulars of registered/paid up share capital, value | $ | $ 1 | ||
Guangzhou Xiao Xiang Health Industry Company Limited [Member] | |||
Place of incorporation and kind of legal entity | The PRC, a limited liability company | The PRC, a limited liability company | The PRC, a limited liability company |
Principal activities | Sales of healthcare products | Sales of healthcare products | Sales of healthcare products |
Effective interest held | 100.00% | 100.00% | 100.00% |
Guangzhou Xiao Xiang Health Industry Company Limited [Member] | HK [Member] | |||
Particulars of registered/paid up share capital, value | ¥ | ¥ 8,300,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Furniture, Fixture and Equipment [Member] | |
Estimated useful lives | 3 years |
Residual value | 5.00% |
Motor Vehicle [Member] | |
Residual value | 5.00% |
Motor Vehicle [Member] | Minimum [Member] | |
Estimated useful lives | 3 years 3 months 29 days |
Motor Vehicle [Member] | Maximum [Member] | |
Estimated useful lives | 4 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Foreign Currencies Translation Exchange Rates (Details) | Mar. 31, 2021 | Mar. 31, 2020 |
Period-end HK$:US$ exchange rate [Member] | ||
Foreign currency translation exchange rates | 0.12863 | 0.12899 |
Period average HK$:US$ Exchange Rate [Member] | ||
Foreign currency translation exchange rates | 0.12891 | 0.12869 |
Period-end RMB:US$ Exchange Rate [Member] | ||
Foreign currency translation exchange rates | 0.15248 | 0.14109 |
Period average RMB:US$ Exchange Rate [Member] | ||
Foreign currency translation exchange rates | 0.15431 | 0.14327 |
Prepayments and Other Receiva_3
Prepayments and Other Receivables - Schedule of Prepayments and Other Receivables (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Receivables [Abstract] | ||
Prepayments | $ 2,343 | $ 7,712 |
Other deposits | 67 | 119 |
Supplier deposits | 111,113 | 113,670 |
Prepayments and other receivable | $ 113,523 | $ 121,501 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Allowance for obsolete inventories |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Packing materials | $ 12,121 | $ 21,527 |
Finished goods | 155,029 | 184,745 |
Inventories | $ 167,150 | $ 206,272 |
Lease (Details Narrative)
Lease (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Operating lease, description | The Company leased office and warehouse facilities under various non-cancelable operating leases expiring at the term of 5 years, through March 31, 2026. | |
Operating lease term | 5 years | |
Lease expenses | $ 19,238 | $ 20,523 |
Lease - Schedule of Right of Us
Lease - Schedule of Right of Use Assets and Liability (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Right-of-use assets | $ 314,800 | |
Current portion | 55,412 | |
Non-current portion | 261,502 | |
Total | $ 316,914 |
Plant and Equipment (Details Na
Plant and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 21,430 | $ 16,126 |
Plant and Equipment - Schedule
Plant and Equipment - Schedule of Plant and Equipment (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Foreign translation difference, gross | $ 9,246 | $ 10,471 |
Plant and equipment. gross | 336,054 | 337,279 |
Less: accumulated depreciation | (158,976) | (137,546) |
Foreign translation difference, net | (5,369) | (6,112) |
Plant and equipment, net | 171,709 | 193,621 |
Motor Vehicle [Member] | ||
Plant and equipment. gross | 311,343 | 311,343 |
Furniture, Fixture and Equipment [Member] | ||
Plant and equipment. gross | $ 15,465 | $ 15,465 |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) - USD ($) | Jul. 09, 2020 | Mar. 31, 2021 | Dec. 31, 2020 |
Common stock, shares authorized | 100,000,000 | 100,000,000 | |
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Common stock voting rights | Each holder of common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. | ||
Common stock, shares issued | 20,252,309 | 20,252,309 | |
Share Exchange Agreement [Member] | Elite Creation Group Limited [Member] | Common Stock [Member] | |||
Number of shares acquired in an agreement | 50,000 | ||
Shares issued as a consideration on acquisition | 15,000,000 | ||
Share price per share | $ 0.32 | ||
Aggregate value of shares issued as a consideration on acquisition | $ 4,800,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 3 Months Ended |
Mar. 31, 2021 | |
People Republic of China [Member] | |
Income tax description | The Company's subsidiary operating in the PRC is subject to the Corporate Income Tax Law of the People's Republic of China at a unified income tax rate of 25%. |
Hong Kong [Member] | |
Income tax description | The Company's subsidiary operating in Hong Kong is subject to the Hong Kong Profits Tax at the two-tiered profits tax rates from 8.25% to 16.5% on the estimated assessable profits arising in Hong Kong during the current year, after deducting a tax concession for the tax year. |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation Tax Rate to Effective Income Tax Rate (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Loss before income taxes | $ (205,067) | $ (130,897) |
Income tax expense | ||
People Republic of China [Member] | ||
Loss before income taxes | $ (170,229) | $ (121,337) |
Statutory income tax rate | 25.00% | 25.00% |
Income tax expense at statutory rate | $ (42,557) | $ (30,334) |
Net operating loss | 42,557 | 30,334 |
Income tax expense | ||
Hong Kong [Member] | ||
Loss before income taxes | $ (31,621) | $ (9,560) |
Statutory income tax rate | 8.25% | 8.25% |
Income tax expense at statutory rate | $ (2,608) | $ (788) |
Net operating loss | 2,608 | 788 |
Income tax expense |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Net operating loss carryforwards | $ 197,573 | $ 151,957 |
Less: valuation allowance | (197,573) | (151,957) |
Deferred tax assets, net | ||
United States [Member] | ||
Net operating loss carryforwards | 31,905 | 31,454 |
Hong Kong [Member] | ||
Net operating loss carryforwards | 2,608 | |
People Republic of China [Member] | ||
Net operating loss carryforwards | $ 163,030 | $ 120,503 |
Concentrations of Risk (Details
Concentrations of Risk (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue | $ 167,643 | $ 35,021 |
Revenue [Member] | Single Customer [Member] | ||
Concentration risk, percentage | 100.00% | 99.00% |
Revenue | $ 167,643 | $ 34,930 |
Accounts receivable | $ 164,682 | $ 193,190 |
Purchase [Member] | Single Vendor [Member] | ||
Concentration risk, percentage | 100.00% | 100.00% |
Purchases | $ 48,695 | |
Accounts payables | $ 0 | $ 0 |