Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2017 | |
Document And Entity Information | |
Entity Registrant Name | MERCARI COMMUNICATIONS GROUP LTD |
Entity Central Index Key | 835,662 |
Document Type | 8-K |
Document Period End Date | Sep. 30, 2017 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Smaller Reporting Company |
Document Fiscal Year Focus | 2,017 |
Balance Sheets
Balance Sheets - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
STOCKHOLDERS' EQUITY (DEFICIT) | |||
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | $ (2,015,365) | $ (25,132) | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | |||
CURRENT ASSETS | |||
Cash & equivalents | $ 20,881 | 29,668 | 44,419 |
Accounts receivable, net | 83,802 | 175,259 | 55,934 |
Other receivables and prepaid expenses | 6,378 | 3,782 | 962 |
Advances to suppliers | 26,850 | 105,455 | 273,173 |
Deferred commissions | 399,533 | 335,110 | 223,861 |
Deferred travel cost | 274,100 | 176,187 | 159,532 |
Inventory | 76,636 | 46,570 | 201,159 |
Total current assets | 888,180 | 872,031 | 959,039 |
NONCURRENT ASSETS | |||
Property and equipment, net | 2,786,335 | 2,816,934 | 2,946,523 |
Total non-current assets | 2,786,335 | 2,816,934 | 2,946,523 |
TOTAL ASSETS | 3,674,515 | 3,688,965 | 3,905,562 |
CURRENT LIABILITIES | |||
Accounts payable | 138,655 | 35,191 | 12,239 |
Unearned revenue | 2,560,895 | 2,066,550 | 2,256,539 |
Taxes payable | 1,252,744 | 1,193,050 | 603,531 |
Accrued liabilities and other payables | 572,364 | 314,475 | 238,683 |
Advance from shareholder | 2,203,759 | 2,095,064 | 819,702 |
TOTAL LIABILITIES | 6,728,417 | 5,704,330 | 3,930,694 |
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Paid in capital | 16,402 | 16,402 | 16,402 |
Statutory reserve | 11,721 | 11,721 | 11,721 |
Retained earnings (accumulated deficit) | (3,056,419) | (2,131,504) | (51,292) |
Accumulated other comprehensive income (loss) | (25,606) | 88,016 | (1,963) |
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | (3,053,902) | (2,015,365) | (25,132) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 3,674,515 | $ 3,688,965 | $ 3,905,562 |
Statements of Operations and Co
Statements of Operations and Comprehensive Loss - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Non-operating income (expenses) | ||||
Net loss | $ (2,080,212) | $ (192,520) | ||
Other comprehensive items | ||||
Foreign currency translation gain (loss) | (89,979) | 1,904 | ||
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||||
Net sales | $ 650,348 | $ 2,279,383 | 3,082,725 | 1,611,409 |
Cost of sales | 246,765 | 1,001,488 | 1,352,742 | 718,848 |
Gross profit | 403,583 | 1,277,895 | 1,729,983 | 892,561 |
Operating expenses | ||||
Selling expenses | 576,984 | 778,480 | 1,152,555 | 850,264 |
General and administrative expenses | 728,214 | 720,809 | 2,640,324 | 214,262 |
Provision for bad debts expense | 16,963 | 12,191 | 7,018 | 2,800 |
Total operating expenses | 1,322,161 | 1,511,480 | 3,799,897 | 1,067,326 |
Loss from operations | (918,578) | (233,585) | (2,069,914) | (174,765) |
Non-operating income (expenses) | ||||
Financial expense | (527) | (462) | (669) | (803) |
Other income | 35,661 | 38,966 | 51,445 | 18,288 |
Other expense | (41,471) | (47,502) | (61,074) | (35,240) |
Total non-operating expenses, net | (6,337) | (8,998) | (10,298) | (17,755) |
Loss before income tax | (924,915) | (242,583) | (2,080,212) | (192,520) |
Income tax expense | ||||
Net loss | (924,915) | (242,583) | (2,080,212) | (192,520) |
Other comprehensive items | ||||
Foreign currency translation gain (loss) | (113,622) | 4,352 | 89,979 | (1,904) |
Comprehensive loss | $ (1,038,537) | $ (238,231) | $ (1,990,233) | $ (194,424) |
Statement of Stockholders' Equi
Statement of Stockholders' Equity (Deficit) - USD ($) | Paid-In Capital [Member]CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | Statutory Reserves [Member]CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | Accumulated Other Comprehensive Income (Loss) [Member]CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | Retained Earnings (Accumulated Deficit) [Member]CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | Total |
Balance at Dec. 31, 2014 | $ 16,402 | $ 11,721 | $ (59) | $ 141,228 | $ 169,292 | |
Foreign currency translation loss/gain | (1,904) | $ 1,904 | (1,904) | |||
Net loss for year | (192,520) | (192,520) | (192,520) | |||
Balance at Dec. 31, 2015 | 16,402 | 11,721 | (1,963) | (51,292) | (25,132) | (25,132) |
Foreign currency translation loss/gain | 89,979 | (89,979) | 89,979 | |||
Net loss for year | (2,080,212) | (2,080,212) | (2,080,212) | |||
Balance at Dec. 31, 2016 | $ 16,402 | $ 11,721 | $ 88,016 | $ (2,131,504) | (2,015,365) | $ (2,015,365) |
Foreign currency translation loss/gain | 113,622 | |||||
Net loss for year | (924,915) | |||||
Balance at Sep. 30, 2017 | $ (3,053,902) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net loss | $ (2,080,212) | $ (192,520) | ||
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net loss | $ (924,915) | $ (242,583) | (2,080,212) | (192,520) |
Depreciation | 161,949 | 157,624 | 211,114 | 70,371 |
Provision for bad debts | 16,963 | 12,191 | 7,018 | 2,800 |
Increase (decrease) in assets | ||||
Accounts receivable | 80,058 | (210,880) | (135,369) | (55,993) |
Other receivables and prepaid expenses | (2,367) | (1,152) | (3,010) | (235) |
Advances to suppliers | 81,394 | 161,775 | 156,923 | (46,059) |
Deferred commissions | (48,100) | (177,417) | (131,129) | (233,393) |
Deferred travel cost | (87,810) | (101,676) | (28,044) | (166,324) |
Inventory | (27,297) | 71,453 | 148,020 | (141,351) |
Increase (decrease) in liabilities: | ||||
Accounts payable | 99,453 | 78,429 | 24,789 | |
Unearned revenue | 391,384 | 210,397 | (47,785) | 867,825 |
Taxes payable | 5,612 | 496,048 | 655,962 | 394,973 |
Accrued liabilities and other payables | 237,884 | 55,413 | 249,826 | 210,946 |
Net cash provided by (used in) operating activities | (15,792) | 509,622 | (971,897) | 711,040 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Purchase of property and equipment | (7,727) | (273,640) | (272,468) | (3,074,208) |
Net cash used in investing activities | (7,727) | (273,640) | (272,468) | (3,074,208) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Advance from (repayment to) shareholder | 13,631 | (261,683) | 1,231,926 | 2,409,086 |
Net cash provided by (used in) financing activities | 13,631 | (261,683) | 1,231,926 | 2,409,086 |
EFFECT OF EXCHANGE RATE CHANGE ON CASH & EQUIVALENTS | 1,101 | (838) | (2,312) | (1,897) |
NET INCREASE (DECREASE) IN CASH & EQUIVALENTS | (8,787) | (26,539) | (14,751) | 44,021 |
CASH & EQUIVALENTS, BEGINNING OF PERIOD | 29,668 | 44,419 | 44,419 | 398 |
CASH & EQUIVALENTS, END OF PERIOD | 20,881 | 17,881 | 29,668 | 44,419 |
Supplemental Cash flow data: | ||||
Income tax paid | 3,322 | |||
Interest paid |
Organization and Description of
Organization and Description of Business | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Organization and Description of Business | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Chengdu Aixin Zhonghong Biological Technology Co., Ltd. (“the Company” or “Aixin”) was incorporated in 2013 in Chengdu, China. The Company mainly | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Chengdu Aixin Zhonghong Biological Technology Co., Ltd. (“the Company” or “Aixin”) was incorporated in 2013 in Chengdu, China. The Company mainly |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements are prepared in conformity with U.S. Generally Accepted Accounting Principles (“US GAAP”). The functional currency of Aixin is Chinese Renminbi (“RMB’’). The accompanying financial statements are translated from RMB and presented in U.S. dollars (“USD”). Going Concern The Company incurred net losses of $0.92 million and $0.24 million for the nine months ended September 30, 2017 and 2016 respectively. The Company also had a stockholders’ deficit of $3.05 million as of September 30, 2017. These conditions raise a substantial doubt about the Company’s ability to continue as a going concern. The Company plans to increase its income by strengthening its sales force, providing attractive sales incentive program, and increasing marketing and promotion activities. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Use of Estimates In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as 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. Cash and Equivalents For financial statement purposes, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. 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. During the nine months ended September 30, 2017 and 2016, bad debt expense was $16,963 and $12,191, respectively. As of September 30, 2017 and December 31, 2016, the bad debt allowance was $27,279 and $9,475, respectively. Inventory Inventory mainly consists of health supplement products. Inventory is valued at the lower of average cost or market, cost being determined on a moving weighted average method. Management compares the cost of inventories with the net realizable value and an allowance is made to write down their inventories to market value, if lower. The Company did not record any write-downs of inventory at September 30, 2017 and December 31,2016. 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 respective accounts, and any gain or loss is included in operations. Building 20 years Office furniture 5 years Electronic Equipment 3 years Vehicles 5 years 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 of 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 asset exceeds its fair value (“FV”). FV is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of September 30, 2017 and December 31, 2016, there was no significant impairments of its long-lived assets. 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 and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company follows ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. 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 the provisions of ASC Topic 740, when tax returns are filed, it is likely that some positions taken would be sustained 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 financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon 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 is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statement of income. At September 30, 2017 and December 31, 2016, the Company did not take any uncertain positions that would necessitate recording a tax related liability. Revenue Recognition The Company’s revenue recognition policies comply with FASB ASC Topic 605, “Revenue Recognition”. Sales are recognized when a formal arrangement exists; the price is fixed or determinable; title has passed to the buyer, which generally is at the time of delivery of the products or services; no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are recorded as unearned revenue. 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 17% of the gross sales price. 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. The Company’s sales policy allows for the return of unopened products for cash after deducting certain service and transaction fees. As alternatives for product returns, the customers can ask for an exchange of the products with same value. The amount for return of products was immaterial for the nine months ended September 30, 2017 and 2016. Cost of Sales Cost of sales (“COS”) consists primarily of cost of purchasing inventory. Write-down of inventory to lower of cost or market is also recorded in COS. 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 have not experienced any losses in such accounts and believe they are not exposed to any risks on their cash in these bank accounts. Statement of Cash Flows In accordance with ASC Topic 230, “Statement of Cash Flows,” Fair Value (“FV”) of Financial Instruments Certain of the Company’s financial instruments, including cash and equivalents, accrued liabilities and accounts payable, carrying amounts approximate their FV due to their short maturities. FASB ASC Topic 825, “Financial Instruments,” requires disclosure of the FV of financial instruments held by the Company. The carrying amounts reported in the balance sheets for current liabilities each qualify as financial instruments and are a reasonable estimate of their FV 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 FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The three levels are defined as follow: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to the FV measurement. As of September 30, 2017 and December 31, 2016, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at FV. Foreign Currency Translation and Comprehensive Income (Loss) The functional currency of the Company is 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. Translation 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 income (loss) is comprised of net income (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 loss for the nine months ended September 30, 2017 and 2016 consisted of net loss and foreign currency translation adjustments. Basic and Diluted Earnings per Share The Company is a limited Company (“LC”) formed under the laws of the PRC. Like limited liability company in the US, limited company in the PRC do not issue shares to the owners. The owners however, are called shareholders. Ownership interest is determined in proportion to capital contributed. Accordingly, earnings per share data is not presented. Segment Reporting ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s chief operating decision maker organizes segments within the Company for making operating decisions assessing performance and allocating resources. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Management determined that the Company’s operations constitute a single reportable segment in accordance with ASC 280. The Company operates exclusively in one business and industry segment: sale of health supplement products. New Accounting Pronouncements In May 2014, the FASB issued No. 2014-09, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements in Accounting Standards Codification 605 - Revenue Recognition and most industry-specific guidance throughout the Codification. The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB approved a one-year deferral of the effective date of the new revenue recognition standard. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 31, 2016, including interim reporting periods within that reporting period. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue versus Net). In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing. In May 2016, the FASB issued ASU 2016-11, Revenue from Contracts with Customers (Topic 606) and Derivatives and Hedging (Topic 815) - Rescission of SEC Guidance Because of ASU 2014-09 and 2014-16, and ASU 2016-12, Revenue from Contracts with Customers (Topic 606) - Narrow Scope Improvements and Practical Expedients. These ASUs clarify the implementation guidance on a few narrow areas and adds some practical expedients to the guidance Topic 606. The Company is evaluating the effect that these ASUs will have on its financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, 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 credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the standard will have on its financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, Classification 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. This ASU is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. The Company is currently assessing the potential impact of ASU 2016-15 on its financial statements and related disclosures. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The guidance requires that a statement of cash flows explain the change during the period 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 standard is effective for fiscal years beginning after December 15, 2017, and interim period 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 this 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 standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The standard should be applied prospectively on or after the effective date. The Company will evaluate the impact of adopting this standard prospectively upon any transactions of acquisitions or disposals of assets or businesses. In January 2017, the FASB issued ASU 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 fair value, not to exceed the carrying amount of goodwill. The guidance should be adopted on a prospective basis for the annual or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of adopting this standard on its CFS. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future CFS. | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements are prepared in conformity with U.S. Generally Accepted Accounting Principles (“US GAAP”). The functional currency of Aixin is Chinese Renminbi (“RMB’’). The accompanying financial statements are translated from RMB and presented in U.S. dollars (“USD”). Going Concern The Company incurred net losses of $2.08 million and $0.19 million for 2016 and 2015 respectively. The Company also had a stockholders’ deficit of $2.02 million as of December 31, 2016. These conditions raise a substantial doubt about the Company’s ability to continue as a going concern. The Company plans to increase its income by strengthening its sales force, providing attractive sales incentive program, and increasing marketing and promotion activities. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Use of Estimates In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as 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. Cash and Equivalents For financial statement purposes, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. 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. During the years ended December 31, 2016 and 2015, bad debt expense was $7,018 and $2,800, respectively. As of December 31, 2016 and 2015, the bad debt allowance for accounts receivable was $9,475 and $2,944, respectively. Inventory Inventory mainly consists of health supplement products. Inventory is valued at the lower of average cost or market, cost being determined on a moving weighted average method. Management compares the cost of inventories with the net realizable value and an allowance is made for writing down their inventories to market value, if lower. The Company did not record any write-downs of inventory at December 31, 2016 and 2015. 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 respective accounts, and any gain or loss is included in operations. Building 20 years Office furniture 5 years Electronic Equipment 3 years Vehicles 5 years 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 of 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 asset exceeds its fair value (“FV”). FV is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of December 31, 2016 and 2015, there was no significant impairments of its long-lived assets. 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 and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company follows ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. 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 the provisions of ASC Topic 740, when tax returns are filed, it is likely that some positions taken would be sustained 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 financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon 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 is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statement of income. At December 31, 2016 and 2015, the Company did not take any uncertain positions that would necessitate recording a tax related liability. Revenue Recognition The Company’s revenue recognition policies comply with FASB ASC Topic 605, “Revenue Recognition”. Sales are recognized when a formal arrangement exists; the price is fixed or determinable; title has passed to the buyer, which generally is at the time of delivery of the products or services; no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are recorded as unearned revenue. 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 17% of the gross sales price. 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. The Company’s sales policy allows for the return of unopened products for cash after deducting certain service and transaction fees. As alternatives for the product return option, the customers have options of asking an exchange of the products with same value. The amount for return of products was immaterial for the years ended December 31, 2016 and 2015. Cost of Sales Cost of sales (“COS”) consists primarily of cost of purchasing inventory. Write-down of inventory to lower of cost or market is also recorded in COS. 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 have not experienced any losses in such accounts and believe they are not exposed to any risks on their cash in these bank accounts. Statement of Cash Flows In accordance with ASC Topic 230, “Statement of Cash Flows,” Fair Value (“FV”) of Financial Instruments Certain of the Company’s financial instruments, including cash and equivalents, accrued liabilities and accounts payable, carrying amounts approximate their FV due to their short maturities. FASB ASC Topic 825, “Financial Instruments,” requires disclosure of the FV of financial instruments held by the Company. The carrying amounts reported in the balance sheets for current liabilities each qualify as financial instruments and are a reasonable estimate of their FV 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 FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The three levels are defined as follow: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to the FV measurement. As of December 31, 2016 and 2015, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at FV. Foreign Currency Translation and Comprehensive Income (Loss) The functional currency of the Company is 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. Translation 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 income (loss) is comprised of net income (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 loss for 2016 and 2015 consisted of net loss and foreign currency translation adjustments. Basic and Diluted Earnings per Share The Company is a limited Company (“LC”) formed under the laws of the PRC. Like limited liability company in the US, limited company in the PRC do not issue shares to the owners. The owners however, are called shareholders. Ownership interest is determined in proportion to capital contributed. Accordingly, earnings per share data is not presented. Segment Reporting ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s chief operating decision maker organizes segments within the Company for making operating decisions assessing performance and allocating resources. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Management determined that the Company’s operations constitute a single reportable segment in accordance with ASC 280. The Company operates exclusively in one business and industry segment: sale of health supplement products. New Accounting Pronouncements In May 2014, the FASB issued No. 2014-09, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements in Accounting Standards Codification 605 - Revenue Recognition and most industry-specific guidance throughout the Codification. The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB approved a one-year deferral of the effective date of the new revenue recognition standard. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 31, 2016, including interim reporting periods within that reporting period. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue versus Net). In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing. In May 2016, the FASB issued ASU 2016-11, Revenue from Contracts with Customers (Topic 606) and Derivatives and Hedging (Topic 815) - Rescission of SEC Guidance Because of ASU 2014-09 and 2014-16, and ASU 2016-12, Revenue from Contracts with Customers (Topic 606) - Narrow Scope Improvements and Practical Expedients. These ASUs clarify the implementation guidance on a few narrow areas and adds some practical expedients to the guidance Topic 606. The Company is evaluating the effect that these ASUs will have on its financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, 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 credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the standard will have on its financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, Classification 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. This ASU is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. The Company is currently assessing the potential impact of ASU 2016-15 on its financial statements and related disclosures. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The guidance requires that a statement of cash flows explain the change during the period 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 standard is effective for fiscal years beginning after December 15, 2017, and interim period 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 this ASU will have a significant impact on its financial statements. |
Deferred Commission
Deferred Commission | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Deferred Commission | 3. DEFERRED COMMISSION The Company pays commissions to its salesmen based on cash collected from the sales. The Company calculated and paid commission based on certain proportion of monthly cash receipts from sales; however, the customers sometimes delays taking delivery of the products after payment is made to the Company, which is recorded as unearned revenue. Accordingly, the Company only recognizes current commission cost as the related revenue is recognized. Commission expenses are recorded as selling expenses. As of September 30, 2017 and December 31, 2016, the Company had deferred commissions of $399,533 and $335,110 respectively. | 3. DEFERRED COMMISSION The Company paid commissions to its salesmen based on cash collected from the sales. The Company calculated and paid commission based on certain proportion of monthly cash receipts from sales; however, the customers sometimes delays taking delivery of the products after payment is made to the Company, which is recorded as unearned revenue. Accordingly, the Company only recognizes current commission cost as the related revenue is recognized. Commission expenses are recorded as selling expenses. As of December 31, 2016 and 2015, the Company had deferred commission of $335,110 and $223,861 respectively. |
Deferred Travel Cost
Deferred Travel Cost | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Deferred Travel Cost | 4. DEFERRED TRAVEL COST As part of the Company’s sales incentive program, the Company occasionally provided free travel to its customers whose prepayment to purchase the Company’s products reached to certain amount. There are different travel incentive offering to its customers based on amount received from each customer. The Company recorded the to-be-provided free travel cost when cash is collected from customers as deferred travel cost with corresponding account of accrued travel cost, and recorded as net of sales once the prepayment from customers was recognized as revenue. As of September 30, 2017 and December 31, 2016, the Company had deferred travel cost of $274,100 and $176,187, respectively. | 4. DEFERRED TRAVEL COST As part of the Company’s sales incentive program, the Company occasionally provided free travel to its customers whose prepayment to purchase the Company’s products reached to certain amount. There are different travel incentive offering to its customers based on amount received from each customer. The Company recorded the to-be-provided free travel cost when cash is collected from customers as deferred travel cost with corresponding account of accrued travel cost, and recorded as net of sales once the prepayment from customers was recognized as revenue. As of December 31, 2016 and 2015, the Company had deferred travel cost of $176,187 and $159,532 respectively. |
Inventory
Inventory | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Inventory | 5. INVENTORY Inventory consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Finished goods – health supplements $ 76,636 $ 46,570 Less: Inventory impairment allowance - - Total $ 76,636 $ 46,570 | 5. INVENTORY Inventory consisted of the following at December 31, 2016 and 2015: 2016 2015 Finished goods – health supplements $ 46,570 $ 201,159 Less: Inventory impairment allowance - - Total $ 46,570 $ 201,159 |
Property And Equipment, Net
Property And Equipment, Net | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Property and Equipment, Net | 6. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Office furniture $ 237,853 $ 226,385 Building 2,760,639 2,641,211 Vehicle 221,209 211,639 Electronic equipment 13,766 6,776 Total 3,233,467 3,086,012 Less: Accumulated depreciation (447,132 ) (269,078 ) Net $ 2,786,335 $ 2,816,934 Depreciation for the nine months ended September 30, 2017 and 2016 was $161,949 and $157,624, respectively. | 6. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following at December 31, 2016 and 2015: 2016 2015 Office furniture $ 226,385 $ 37,238 Building 2,641,211 2,821,560 Vehicle 211,639 150,940 Electronic equipment 6,776 8,287 Total 3,086,012 3,018,026 Less: Accumulated depreciation (269,078 ) (71,503 ) Net $ 2,816,934 $ 2,946,523 |
Taxes Payables
Taxes Payables | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Taxes Payables | 7. TAXES PAYABLE Taxes payable consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Income $ 36,890 $ 35,295 Value-added 1,129,223 1,075,161 City construction 49,445 47,137 Education 35,329 33,680 Other 1,857 1,777 Taxes payable $ 1,252,744 $ 1,193,050 | 7. TAXES PAYABLES Taxes payable consisted of the following at December 31, 2016 and 2015: 2016 2015 Income $ 35,295 $ 90,021 Value-added 1,075,161 465,193 City construction 47,137 27,271 Education 33,680 19,479 Other 1,777 1,567 Taxes payable $ 1,193,050 $ 603,531 |
Accrued Liabilities And Other P
Accrued Liabilities And Other Payables | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Accrued Liabilities And Other Payables | 8. ACCRUED LIABILITIES AND OTHER PAYABLES Accrued liabilities and other payables consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Accrued liability – travel cost (see Note 4) $ 86,049 $ 114,726 Salary payable 58,031 53,714 Other payables 428,284 146,035 Total $ 572,364 $ 314,475 Other payable mainly consisted of payables for employees’ social insurance and disabled employment security fund of $242,385 and commission payable of $174,121 at September 30, 2017; and payables of employees’ social insurance and disables employment security fund of $128,927 at December 31, 2016, respectively. | 8. ACCRUED LIABILITIES AND OTHER PAYABLES Accrued liabilities and other payables consisted of the following at December 31, 2016 and 2015: 2016 2015 Accrued liability – travel cost (see Note 4) $ 114,726 $ 108,795 Salary payable 53,714 34,300 Other payables 146,035 95,588 Total $ 314,475 $ 238,683 Other payable mainly consisted of payables for employees’ social insurance and disabled employment security fund of $128,927 and $67,253 at December 31, 2016 and 2015, respectively. |
Related Party Transactions
Related Party Transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Related Party Transactions | 9. RELATED PARTY TRANSACTIONS Advance from a Shareholder At September 30, 2017 and December 31, 2016, the Company had advance from a major shareholder of $2,203,759 and $2,095,064, respectively. The advance was payable on demand, and bore no interest. Office lease from a Major Shareholder In May 2014, the Company entered a lease with its major shareholder for office use; the lease term is three years until May 2017 with option to renew. The monthly rent was RMB 5,000 ($721), the Company was required to prepay each year’s annual rent at 15th of May of each year. The Company renewed lease in May 2017 for another three years until May 28, 2020 with month rents of RMB 5,000 ($721), payable quarterly. The future annual minimum lease payment at September 30, 2017 is $8,652 for each of the year ending September 30, 2018, and 2019, and $3,605 for the year ending September 30, 2020. The renal expense for this lease was $6,490 for the nine months ending September 30, 2017 and 2016, respectively. | 9. RELATED PARTY TRANSACTIONS Advance from a Shareholder At December 31, 2016 and 2015, the Company had advance from a major shareholder of $2,095,064 and $819,702, respectively. The advance was payable on demand, and bore no interest. Office lease from a Major Shareholder In May 2014, the Company entered a lease with its major shareholder for office use; the lease term is three years until May 2017 with option to renew. The monthly rent was RMB 5,000 ($721), the Company was required to prepay each year’s annual rent at 15th of May of each year. The rental expense for the year ended December 31, 2016 and 2015 was $9,033 each. The Company renewed lease in May 2017 for another three years until May 28, 2020 with month rents of RMB 5,000 ($721), payable quarterly. |
Income Taxes
Income Taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Income Taxes | 10. INCOME TAXES The Company is governed by the Income Tax Laws of the PRC and various local tax laws. Effective January 1, 2008, China adopted a uniform tax rate of 25% for all enterprises (including foreign-invested enterprises). The following table reconciles the PRC statutory rates to the Company’s effective tax rate for nine months ended September 30, 2017 and 2016: 2017 2016 PRC statutory rates (benefit) (25.0 )% (25.0 )% Valuation allowance on NOL 25.0 % 25.0 % Tax (benefit) per financial statements - % - % | 10. INCOME TAXES The Company is governed by the Income Tax Laws of the PRC and various local tax laws. Effective January 1, 2008, China adopted a uniform tax rate of 25% for all enterprises (including foreign-invested enterprises). The following table reconciles the PRC statutory rates to the Company’s effective tax rate for 2016 and 2015: 2016 2015 PRC statutory rates (benefit) (25.0 )% (25.0 )% Valuation allowance on NOL 25.0 % 25.0 % Tax (benefit) per financial statements - % - % |
Statutory Reserves
Statutory Reserves | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Statutory Reserves | 11. STATUTORY RESERVES Pursuant to the PRC corporate law effective January 1, 2006, the Company is now only required to maintain one statutory reserve by appropriating from its after-tax profit before declaration or payment of dividends. The statutory reserve represents restricted retained earnings. Surplus reserve fund The Company is now required to transfer 10% of its net income, as determined under PRC accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the Company’s registered capital. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital. Common welfare fund Common welfare fund is a voluntary fund that the Company can elect to transfer 5% to 10% of its net income, as determined under PRC accounting rules and regulations, to this fund. The Company did not make any contribution to this fund during the nine month ended September 30, 2017 or 2016. This fund can only be utilized on capital items for the collective benefit of the Company’s employees, such as construction of dormitories, cafeteria facilities, and other staff welfare facilities. This fund is non-distributable other than upon liquidation. | 11. STATUTORY RESERVES Pursuant to the PRC corporate law effective January 1, 2006, the Company is now only required to maintain one statutory reserve by appropriating from its after-tax profit before declaration or payment of dividends. The statutory reserve represents restricted retained earnings. Surplus reserve fund The Company is now required to transfer 10% of its net income, as determined under PRC accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the Company’s registered capital. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital. Common welfare fund Common welfare fund is a voluntary fund that the Company can elect to transfer 5% to 10% of its net income, as determined under PRC accounting rules and regulations, to this fund. The Company did not make any contribution to this fund during 2016 or 2015. This fund can only be utilized on capital items for the collective benefit of the Company’s employees, such as construction of dormitories, cafeteria facilities, and other staff welfare facilities. This fund is non-distributable other than upon liquidation. |
Operating Risks
Operating Risks | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Operating Risks | 12. OPERATING RISKS The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with company in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. The Company’s sales, purchases and expenses are denominated in RMB and all of the Company’s assets and liabilities are also denominated in RMB. The RMB is not freely convertible into foreign currencies under the current law. In China, foreign exchange transactions are required by law to be transacted only by authorized financial institutions. Remittances in currencies other than RMB may require certain supporting documentation to effect the remittance. | 12. OPERATING RISKS The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with company in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. The Company’s sales, purchases and expenses are denominated in RMB and all of the Company’s assets and liabilities are also denominated in RMB. The RMB is not freely convertible into foreign currencies under the current law. In China, foreign exchange transactions are required by law to be transacted only by authorized financial institutions. Remittances in currencies other than RMB may require certain supporting documentation to effect the remittance. |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Subsequent Events | 13. SUBSEQUENT EVENTS On May 26, 2017, HK AiXin International Group Co., Limited, a Hong Kong limited company (“AiXin HK”) established on February 25, 2016 to serve as an intermediate holding company, entered an acquisition agreement with the Company and its shareholders to acquire 100% ownership of the Company for RMB 100,000,000 ($14.56 million). On May 27, 2017, the local government of the PRC issued a certificate of approval regarding the foreign ownership of AiXin Zhonghong by AiXin HK. AiXin (BVI) International Group Co., Ltd. (“Aixin BVI”) was incorporated in British Virgin Islands on September 21, 2017 to serve as a holding company. On November 17, 2017, AiXin BVI and AiXin HK entered a share exchange agreement, wherein AiXin BVI acquired 100% ownership of AiXin HK in exchange for the issuance of 10 shares of the commons stock of Aixin BVI. On December 12, 2017, AiXin BVI and its shareholders entered into and closed a share exchange agreement, with Mercari Communications Group, Ltd (“Mercari”), pursuant to which Mercari acquired 100% of the issued and outstanding capital stock of Aixin BVI in exchange for a total of 227,352,604 shares of Mercari’s common stock. In addition, the Company desired to issue 45,224,085 shares of Mercari’s common stock to three individuals for services rendered to the Company. After giving effect to the Share Exchange and new shares issued to three individuals, Mercari had outstanding 317,988,089 shares of common stock, representing all of Mercari’s authorized shares of common stock. As a result of the Share Exchange described above, AiXin BVI became the wholly-owned subsidiary of Mercari, and AiXin BVI owns all of the outstanding shares of AiXin HK, which in turn owns all of the outstanding shares of AiXin Zhonghong. Neither AiXin BVI nor AiXin HK had operations prior to December 12, 2017. For accounting purposes, the acquisition of AiXin BVI by Mercari was accounted for as a reverse acquisition and has been treated as a recapitalization of Mercari, 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 financial statements of AiXin Zhonghong are now the historical financial statements of the registrant, Mercari. The assets and liabilities of AiXin Zhonghong have been brought forward at their book value and no goodwill has been recognized. | 13. SUBSEQUENT EVENTS On May 26, 2017, HK AiXin International Group Co., Limited, a Hong Kong limited company (“AiXin HK”) established on February 25, 2016 to serve as an intermediate holding company, entered an acquisition agreement with the Company and its shareholders to acquire 100% ownership of the Company for RMB 100,000,000 ($14.56 million). On May 27, 2017, the local government of the PRC issued a certificate of approval regarding the foreign ownership of AiXin Zhonghong by AiXin HK. AiXin (BVI) International Group Co., Ltd. (“Aixin BVI”) was incorporated in British Virgin Islands on September 21, 2017 to serve as a holding company. On November 17, 2017, AiXin BVI and AiXin HK entered a share exchange agreement, wherein AiXin BVI acquired 100% ownership of AiXin HK in exchange for the issuance of 10 shares of the commons stock of Aixin BVI. On December 12, 2017, AiXin BVI and its shareholders entered into and closed a share exchange agreement, with Mercari Communications Group, Ltd (“Mercari”), pursuant to which Mercari acquired 100% of the issued and outstanding capital stock of Aixin BVI in exchange for a total of 227,352,604 shares of Mercari’s common stock. In addition, the Company desired to issue 45,224,085 shares of Mercari’s common stock to three individuals for services rendered to the Company. After giving effect to the Share Exchange and new shares issued to three individuals, Mercari had outstanding 317,988,089 shares of common stock, representing all of Mercari’s authorized shares of common stock. As a result of the Share Exchange described above, AiXin BVI became the wholly-owned subsidiary of Mercari, and AiXin BVI owns all of the outstanding shares of AiXin HK, which in turn owns all of the outstanding shares of AiXin Zhonghong. Neither AiXin BVI nor AiXin HK had operations prior to December 12, 2017. For accounting purposes, the acquisition of AiXin BVI by Mercari was accounted for as a reverse acquisition and has been treated as a recapitalization of Mercari, 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 financial statements of AiXin Zhonghong are now the historical financial statements of the registrant, Mercari. The assets and liabilities of AiXin Zhonghong have been brought forward at their book value and no goodwill has been recognized. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) - CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2016 | |
Basis of Presentation | Basis of Presentation The accompanying financial statements are prepared in conformity with U.S. Generally Accepted Accounting Principles (“US GAAP”). The functional currency of Aixin is Chinese Renminbi (“RMB’’). The accompanying financial statements are translated from RMB and presented in U.S. dollars (“USD”). | Basis of Presentation The accompanying financial statements are prepared in conformity with U.S. Generally Accepted Accounting Principles (“US GAAP”). The functional currency of Aixin is Chinese Renminbi (“RMB’’). The accompanying financial statements are translated from RMB and presented in U.S. dollars (“USD”). |
Going Concern | Going Concern The Company incurred net losses of $0.92 million and $0.24 million for the nine months ended September 30, 2017 and 2016 respectively. The Company also had a stockholders’ deficit of $3.05 million as of September 30, 2017. These conditions raise a substantial doubt about the Company’s ability to continue as a going concern. The Company plans to increase its income by strengthening its sales force, providing attractive sales incentive program, and increasing marketing and promotion activities. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. | Going Concern The Company incurred net losses of $2.08 million and $0.19 million for 2016 and 2015 respectively. The Company also had a stockholders’ deficit of $2.02 million as of December 31, 2016. These conditions raise a substantial doubt about the Company’s ability to continue as a going concern. The Company plans to increase its income by strengthening its sales force, providing attractive sales incentive program, and increasing marketing and promotion activities. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Use of Estimates | Use of Estimates In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as 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. | Use of Estimates In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as 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. |
Cash and Equivalents | Cash and Equivalents For financial statement purposes, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. | Cash and Equivalents For financial statement purposes, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Accounts Receivable | 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. During the nine months ended September 30, 2017 and 2016, bad debt expense was $16,963 and $12,191, respectively. As of September 30, 2017 and December 31, 2016, the bad debt allowance was $27,279 and $9,475, respectively. | 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. During the years ended December 31, 2016 and 2015, bad debt expense was $7,018 and $2,800, respectively. As of December 31, 2016 and 2015, the bad debt allowance for accounts receivable was $9,475 and $2,944, respectively. |
Inventory | Inventory Inventory mainly consists of health supplement products. Inventory is valued at the lower of average cost or market, cost being determined on a moving weighted average method. Management compares the cost of inventories with the net realizable value and an allowance is made to write down their inventories to market value, if lower. The Company did not record any write-downs of inventory at September 30, 2017 and December 31,2016. | Inventory Inventory mainly consists of health supplement products. Inventory is valued at the lower of average cost or market, cost being determined on a moving weighted average method. Management compares the cost of inventories with the net realizable value and an allowance is made for writing down their inventories to market value, if lower. The Company did not record any write-downs of inventory at December 31, 2016 and 2015. |
Property and Equipment | 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 respective accounts, and any gain or loss is included in operations. Building 20 years Office furniture 5 years Electronic Equipment 3 years Vehicles 5 years | 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 respective accounts, and any gain or loss is included in operations. Building 20 years Office furniture 5 years Electronic Equipment 3 years Vehicles 5 years |
Impairment of Long-lived Assets | 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 of 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 asset exceeds its fair value (“FV”). FV is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of September 30, 2017 and December 31, 2016, there was no significant impairments of its long-lived assets. | 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 of 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 asset exceeds its fair value (“FV”). FV is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of December 31, 2016 and 2015, there was no significant impairments of its long-lived assets. |
Income Taxes | 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 and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company follows ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. 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 the provisions of ASC Topic 740, when tax returns are filed, it is likely that some positions taken would be sustained 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 financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon 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 is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statement of income. At September 30, 2017 and December 31, 2016, the Company did not take any uncertain positions that would necessitate recording a tax related liability. | 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 and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company follows ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. 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 the provisions of ASC Topic 740, when tax returns are filed, it is likely that some positions taken would be sustained 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 financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon 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 is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statement of income. At December 31, 2016 and 2015, the Company did not take any uncertain positions that would necessitate recording a tax related liability. |
Revenue Recognition | Revenue Recognition The Company’s revenue recognition policies comply with FASB ASC Topic 605, “Revenue Recognition”. Sales are recognized when a formal arrangement exists; the price is fixed or determinable; title has passed to the buyer, which generally is at the time of delivery of the products or services; no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are recorded as unearned revenue. 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 17% of the gross sales price. 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. The Company’s sales policy allows for the return of unopened products for cash after deducting certain service and transaction fees. As alternatives for product returns, the customers can ask for an exchange of the products with same value. The amount for return of products was immaterial for the nine months ended September 30, 2017 and 2016. | Revenue Recognition The Company’s revenue recognition policies comply with FASB ASC Topic 605, “Revenue Recognition”. Sales are recognized when a formal arrangement exists; the price is fixed or determinable; title has passed to the buyer, which generally is at the time of delivery of the products or services; no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are recorded as unearned revenue. 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 17% of the gross sales price. 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. The Company’s sales policy allows for the return of unopened products for cash after deducting certain service and transaction fees. As alternatives for the product return option, the customers have options of asking an exchange of the products with same value. The amount for return of products was immaterial for the years ended December 31, 2016 and 2015. |
Cost of Sales | Cost of Sales Cost of sales (“COS”) consists primarily of cost of purchasing inventory. Write-down of inventory to lower of cost or market is also recorded in COS. | Cost of Sales Cost of sales (“COS”) consists primarily of cost of purchasing inventory. Write-down of inventory to lower of cost or market is also recorded in COS. |
Concentration of Credit Risk | 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 have not experienced any losses in such accounts and believe they are not exposed to any risks on their cash in these bank accounts. | 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 have not experienced any losses in such accounts and believe they are not exposed to any risks on their cash in these bank accounts. |
Statement of Cash Flows | Statement of Cash Flows In accordance with ASC Topic 230, “Statement of Cash Flows,” | Statement of Cash Flows In accordance with ASC Topic 230, “Statement of Cash Flows,” |
Fair Value ("FV") of Financial Instruments | Fair Value (“FV”) of Financial Instruments Certain of the Company’s financial instruments, including cash and equivalents, accrued liabilities and accounts payable, carrying amounts approximate their FV due to their short maturities. FASB ASC Topic 825, “Financial Instruments,” requires disclosure of the FV of financial instruments held by the Company. The carrying amounts reported in the balance sheets for current liabilities each qualify as financial instruments and are a reasonable estimate of their FV 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 (“FV”) of Financial Instruments Certain of the Company’s financial instruments, including cash and equivalents, accrued liabilities and accounts payable, carrying amounts approximate their FV due to their short maturities. FASB ASC Topic 825, “Financial Instruments,” requires disclosure of the FV of financial instruments held by the Company. The carrying amounts reported in the balance sheets for current liabilities each qualify as financial instruments and are a reasonable estimate of their FV 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 | Fair Value Measurements and Disclosures ASC Topic 820, “Fair Value Measurements and Disclosures,” defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The three levels are defined as follow: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to the FV measurement. As of September 30, 2017 and December 31, 2016, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at FV. | Fair Value Measurements and Disclosures ASC Topic 820, “Fair Value Measurements and Disclosures,” defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The three levels are defined as follow: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to the FV measurement. As of December 31, 2016 and 2015, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at FV. |
Foreign Currency Translation and Comprehensive Income (loss) | Foreign Currency Translation and Comprehensive Income (Loss) The functional currency of the Company is 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. Translation 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 income (loss) is comprised of net income (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 loss for the nine months ended September 30, 2017 and 2016 consisted of net loss and foreign currency translation adjustments. | Foreign Currency Translation and Comprehensive Income (Loss) The functional currency of the Company is 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. Translation 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 income (loss) is comprised of net income (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 loss for 2016 and 2015 consisted of net loss and foreign currency translation adjustments. |
Basic and Diluted Earnings Per Share | Basic and Diluted Earnings per Share The Company is a limited Company (“LC”) formed under the laws of the PRC. Like limited liability company in the US, limited company in the PRC do not issue shares to the owners. The owners however, are called shareholders. Ownership interest is determined in proportion to capital contributed. Accordingly, earnings per share data is not presented. | Basic and Diluted Earnings per Share The Company is a limited Company (“LC”) formed under the laws of the PRC. Like limited liability company in the US, limited company in the PRC do not issue shares to the owners. The owners however, are called shareholders. Ownership interest is determined in proportion to capital contributed. Accordingly, earnings per share data is not presented. |
Segment Reporting | Segment Reporting ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s chief operating decision maker organizes segments within the Company for making operating decisions assessing performance and allocating resources. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Management determined that the Company’s operations constitute a single reportable segment in accordance with ASC 280. The Company operates exclusively in one business and industry segment: sale of health supplement products. | Segment Reporting ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s chief operating decision maker organizes segments within the Company for making operating decisions assessing performance and allocating resources. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Management determined that the Company’s operations constitute a single reportable segment in accordance with ASC 280. The Company operates exclusively in one business and industry segment: sale of health supplement products. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the FASB issued No. 2014-09, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements in Accounting Standards Codification 605 - Revenue Recognition and most industry-specific guidance throughout the Codification. The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB approved a one-year deferral of the effective date of the new revenue recognition standard. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 31, 2016, including interim reporting periods within that reporting period. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue versus Net). In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing. In May 2016, the FASB issued ASU 2016-11, Revenue from Contracts with Customers (Topic 606) and Derivatives and Hedging (Topic 815) - Rescission of SEC Guidance Because of ASU 2014-09 and 2014-16, and ASU 2016-12, Revenue from Contracts with Customers (Topic 606) - Narrow Scope Improvements and Practical Expedients. These ASUs clarify the implementation guidance on a few narrow areas and adds some practical expedients to the guidance Topic 606. The Company is evaluating the effect that these ASUs will have on its financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, 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 credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the standard will have on its financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, Classification 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. This ASU is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. The Company is currently assessing the potential impact of ASU 2016-15 on its financial statements and related disclosures. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The guidance requires that a statement of cash flows explain the change during the period 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 standard is effective for fiscal years beginning after December 15, 2017, and interim period 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 this 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 standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The standard should be applied prospectively on or after the effective date. The Company will evaluate the impact of adopting this standard prospectively upon any transactions of acquisitions or disposals of assets or businesses. In January 2017, the FASB issued ASU 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 fair value, not to exceed the carrying amount of goodwill. The guidance should be adopted on a prospective basis for the annual or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of adopting this standard on its CFS. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future CFS. | New Accounting Pronouncements In May 2014, the FASB issued No. 2014-09, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements in Accounting Standards Codification 605 - Revenue Recognition and most industry-specific guidance throughout the Codification. The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB approved a one-year deferral of the effective date of the new revenue recognition standard. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 31, 2016, including interim reporting periods within that reporting period. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue versus Net). In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing. In May 2016, the FASB issued ASU 2016-11, Revenue from Contracts with Customers (Topic 606) and Derivatives and Hedging (Topic 815) - Rescission of SEC Guidance Because of ASU 2014-09 and 2014-16, and ASU 2016-12, Revenue from Contracts with Customers (Topic 606) - Narrow Scope Improvements and Practical Expedients. These ASUs clarify the implementation guidance on a few narrow areas and adds some practical expedients to the guidance Topic 606. The Company is evaluating the effect that these ASUs will have on its financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, 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 credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the standard will have on its financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, Classification 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. This ASU is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. The Company is currently assessing the potential impact of ASU 2016-15 on its financial statements and related disclosures. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The guidance requires that a statement of cash flows explain the change during the period 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 standard is effective for fiscal years beginning after December 15, 2017, and interim period 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 this ASU will have a significant impact on its financial statements. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Schedule of Estimated Useful Life of Property Plant and Equipment | Building 20 years Office furniture 5 years Electronic Equipment 3 years Vehicles 5 years | Building 20 years Office furniture 5 years Electronic Equipment 3 years Vehicles 5 years |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Schedule of Inventory | Inventory consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Finished goods – health supplements $ 76,636 $ 46,570 Less: Inventory impairment allowance - - Total $ 76,636 $ 46,570 | Inventory consisted of the following at December 31, 2016 and 2015: 2016 2015 Finished goods – health supplements $ 46,570 $ 201,159 Less: Inventory impairment allowance - - Total $ 46,570 $ 201,159 |
Property And Equipment, Net (Ta
Property And Equipment, Net (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Schedule of Property and Equipment | Property and equipment consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Office furniture $ 237,853 $ 226,385 Building 2,760,639 2,641,211 Vehicle 221,209 211,639 Electronic equipment 13,766 6,776 Total 3,233,467 3,086,012 Less: Accumulated depreciation (447,132 ) (269,078 ) Net $ 2,786,335 $ 2,816,934 | Property and equipment consisted of the following at December 31, 2016 and 2015: 2016 2015 Office furniture $ 226,385 $ 37,238 Building 2,641,211 2,821,560 Vehicle 211,639 150,940 Electronic equipment 6,776 8,287 Total 3,086,012 3,018,026 Less: Accumulated depreciation (269,078 ) (71,503 ) Net $ 2,816,934 $ 2,946,523 |
Taxes Payables (Tables)
Taxes Payables (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Schedule of Taxes Payables | Taxes payable consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Income $ 36,890 $ 35,295 Value-added 1,129,223 1,075,161 City construction 49,445 47,137 Education 35,329 33,680 Other 1,857 1,777 Taxes payable $ 1,252,744 $ 1,193,050 | Taxes payable consisted of the following at December 31, 2016 and 2015: 2016 2015 Income $ 35,295 $ 90,021 Value-added 1,075,161 465,193 City construction 47,137 27,271 Education 33,680 19,479 Other 1,777 1,567 Taxes payable $ 1,193,050 $ 603,531 |
Accrued Liabilities And Other24
Accrued Liabilities And Other Payables (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Schedule of Accrued Liabilities and Other Payables | Accrued liabilities and other payables consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Accrued liability – travel cost (see Note 4) $ 86,049 $ 114,726 Salary payable 58,031 53,714 Other payables 428,284 146,035 Total $ 572,364 $ 314,475 | Accrued liabilities and other payables consisted of the following at December 31, 2016 and 2015: 2016 2015 Accrued liability – travel cost (see Note 4) $ 114,726 $ 108,795 Salary payable 53,714 34,300 Other payables 146,035 95,588 Total $ 314,475 $ 238,683 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||
Schedule of Effective Tax Rate | The following table reconciles the PRC statutory rates to the Company’s effective tax rate for nine months ended September 30, 2017 and 2016: 2017 2016 PRC statutory rates (benefit) (25.0 )% (25.0 )% Valuation allowance on NOL 25.0 % 25.0 % Tax (benefit) per financial statements - % - % | The following table reconciles the PRC statutory rates to the Company’s effective tax rate for 2016 and 2015: 2016 2015 PRC statutory rates (benefit) (25.0 )% (25.0 )% Valuation allowance on NOL 25.0 % 25.0 % Tax (benefit) per financial statements - % - % |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Details Narrative) | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2014USD ($) | |
Net losses | $ 2,080,212 | $ 192,520 | |||||
Stockholders' deficit | 2,015,365 | 25,132 | $ (169,292) | ||||
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | |||||||
Net losses | $ 924,915 | $ 242,583 | 2,080,212 | 192,520 | |||
Stockholders' deficit | 3,053,902 | 2,015,365 | 25,132 | ||||
Bad debt expense | 16,963 | $ 12,191 | 7,018 | 2,800 | |||
Allowance for doubtful accounts receivable | 27,279 | 9,475 | 2,944 | ||||
Write-downs inventory | |||||||
Property and equipment salvage value percentage | 5.00% | 5.00% | 5.00% | 5.00% | |||
Percentage of PRC VAT of gross sales price | 17.00% | ||||||
Impairment of long lived assets | |||||||
Cash, FDIC insured amount | $ 72,500 | $ 72,500 | |||||
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | RMB [Member] | |||||||
Cash, FDIC insured amount | ¥ | ¥ 500,000 | ¥ 500,000 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies - Schedule of Estimated Useful Life of Property Plant and Equipment (Details) - CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Building [Member] | ||
Property and equipment estimated lives | 20 years | 20 years |
Office Furniture [Member] | ||
Property and equipment estimated lives | 5 years | 5 years |
Electronic Equipment [Member] | ||
Property and equipment estimated lives | 3 years | 3 years |
Vehicle [Member] | ||
Property and equipment estimated lives | 5 years | 5 years |
Deferred Commission (Details Na
Deferred Commission (Details Narrative) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | |||
Deferred commission | $ 399,533 | $ 335,110 | $ 223,861 |
Deferred Travel Cost (Details N
Deferred Travel Cost (Details Narrative) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | |||
Deferred travel cost | $ 274,100 | $ 176,187 | $ 159,532 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Finished goods - health supplements | $ 76,636 | $ 46,570 | $ 201,159 |
Less: Inventory impairment allowance | |||
Total | $ 76,636 | $ 46,570 | $ 201,159 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | ||||
Depreciation | $ 161,949 | $ 157,624 | $ 211,114 | $ 70,371 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment (Details) - CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Total | $ 3,233,467 | $ 3,086,012 | $ 3,018,026 |
Less: Accumulated depreciation | (447,132) | (269,078) | (71,503) |
Net | 2,786,335 | 2,816,934 | 2,946,523 |
Office Furniture [Member] | |||
Total | 237,853 | 226,385 | 37,238 |
Building [Member] | |||
Total | 2,760,639 | 2,641,211 | 2,821,560 |
Vehicle [Member] | |||
Total | 221,209 | 211,639 | 150,940 |
Electronic Equipment [Member] | |||
Total | $ 13,766 | $ 6,776 | $ 8,287 |
Taxes Payable - Schedule of Tax
Taxes Payable - Schedule of Taxes Payable (Details) - CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Income | $ 36,890 | $ 35,295 | $ 90,021 |
Value-added | 1,129,223 | 1,075,161 | 465,193 |
City construction | 49,445 | 47,137 | 27,271 |
Education | 35,329 | 33,680 | 19,479 |
Other | 1,857 | 1,777 | 1,567 |
Taxes payable | $ 1,252,744 | $ 1,193,050 | $ 603,531 |
Accrued Liabilities and Other34
Accrued Liabilities and Other Payables (Details Narrative) - CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Employee related liabilities | $ 242,385 | $ 128,927 | $ 67,253 |
Commission payable | $ 174,121 |
Accrued Liabilities and Other35
Accrued Liabilities and Other Payables - Schedule of Accrued Liabililties and Other Payables (Details) - CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued liability - travel cost | $ 86,049 | $ 114,726 | $ 108,795 |
Salary payable | 58,031 | 53,714 | 34,300 |
Other payables | 428,284 | 146,035 | 95,588 |
Total | $ 572,364 | $ 314,475 | $ 238,683 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||
May 31, 2014USD ($) | May 31, 2014CNY (¥) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Advance from major shareholder | $ 2,203,759 | $ 2,095,064 | $ 819,702 | |||
Monthly rent | $ 721 | $ 9,033 | $ 9,033 | |||
Lease term description | Company renewed lease in May 2017 for another three years until May 28, 2020 | Company renewed lease in May 2017 for another three years until May 28, 2020 | ||||
Future annual minimum lease payment | 8,652 | |||||
Future annual minimum lease payment 2018 | 8,652 | |||||
Future annual minimum lease payment 2019 | 8,652 | |||||
Future annual minimum lease payment 2020 | 3,605 | |||||
Renal expense | $ 6,490 | $ 6,490 | ||||
RMB [Member] | ||||||
Monthly rent | ¥ | ¥ 5,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | Jan. 01, 2008 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Income tax rate | |||||
China [Member] | |||||
Income tax rate | 25.00% |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
PRC statutory rates (benefit) | (25.00%) | (25.00%) | (25.00%) | (25.00%) |
Valuation allowance on NOL | 25.00% | 25.00% | 25.00% | 25.00% |
Tax (benefit) per financial statements |
Statutory Reserves (Details Nar
Statutory Reserves (Details Narrative) - CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | Sep. 30, 2017 | Dec. 31, 2016 |
Net income percentage required | 10.00% | 10.00% |
Surplus reserve balance percentage | 50.00% | 50.00% |
Remaining reserve balance percentage | 25.00% | 25.00% |
Minimum [Member] | ||
Net income percentage variations | 5.00% | 5.00% |
Maximum [Member] | ||
Net income percentage variations | 10.00% | 10.00% |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) - Subsequent Event [Member] - CHENGDU AIXIN ZHONGHONG BIOLOGICAL TECHNOLOGY CO., LTD [Member] | Dec. 12, 2017shares | Nov. 17, 2017shares | May 26, 2017USD ($) | May 26, 2017CNY (¥) |
AiXin HK [Member] | ||||
Equity ownership percentage | 100.00% | 100.00% | ||
Payment to acquire business | $ | $ 14,560,000 | |||
AiXin HK [Member] | RMB [Member] | ||||
Payment to acquire business | ¥ | ¥ 100,000,000 | |||
Aixin BVI [Member] | Share Exchange Agreement [Member] | ||||
Equity ownership percentage | 100.00% | 100.00% | ||
Exchange for issuance shares of common stock | 227,352,604 | 10 | ||
Aixin BVI [Member] | Share Exchange Agreement [Member] | Three Individuals [Member] | ||||
Number of common stock shares issued for services | 45,224,085 | |||
Common stock shares outstanding | 317,988,089 |