UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 10-Q

 


 

 

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2023

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                 to              

 

Commission File No. 000-27873

 

America Great Health

(Exact name of registrant as specified in its charter)

 

Wyoming

98-0178621

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

   

1609 W Valley Blvd Unit 338A

 

Alhambra, CA

91803

(Address of principal executive offices)

(Zip Code)

 

(888) 988-1333

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

N/A

N/A

N/A

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐

Accelerated filer ☐

   

Non-accelerated filer

Smaller reporting company

   
 

Emerging growth company

 

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

 

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

 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. The number of shares outstanding of the registrant’s common stock as of September 30, 2023 was 21,107,018,148.

 

 

 

 

AMERICA GREAT HEALTH AND SUBSIDIARIES

TABLE OF CONTENTS

 

PART I  FINANCIAL INFORMATION

3

   

ITEM 1

Condensed Consolidated Financial Statements (Unaudited)

3

     

ITEM 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

     

ITEM 3

Quantitative and Qualitative Disclosures About Market Risk

24

     

ITEM 4

Controls and Procedures

25

     

PART II  OTHER INFORMATION

26

   

ITEM 1

Legal Proceedings

26

     

ITEM 1A

Risk Factors

26

     

ITEM 2

Unregistered Sales of Equity Securities and Use of Proceeds

26
     

ITEM 3

Defaults Upon Senior Securities

26

     

ITEM 4

Mine Safety Disclosures

26

     

ITEM 5

Other Information

26

     

ITEM 6

Exhibits

26

 

 

 

 

PART I FINANCIAL INFORMATION

 

This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on management’s beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider” or similar expressions are used.

 

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions. Our future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.

 

Item 1. Financial Statements

 

America Great Health and Subsidiaries

Condensed Consolidated Balance Sheets

 

   

September 30,

2023

   

June 30,

2023

 

ASSETS

 

(Unaudited)

   

(Audited)

 
                 

CURRENT ASSETS

               

Cash

  $ 54,626     $ 54,150  

Account receivable, net

    -       -  

Inventory

    108,174       108,351  

Advance to supplier

    16,965       16,964  

TOTAL CURRENT ASSETS

    179,765       179,465  
                 

Right-of-use asset

    23,104       41,918  

Due from the related parties

    8,218       8,218  

Deposit

    11,836       11,836  

Property and equipment, net

    53,995       57,692  
                 

TOTAL ASSETS

  $ 276,918     $ 299,129  
                 
                 

LIABILITIES AND SHAREHOLDERS' DEFICIT

               

CURRENT LIABILITIES

               

Accounts payable

  $ 1,448,030     $ 1,450,574  

Income tax payable

    3,410       3,970  

Short term loan

    690,551       705,216  

Other payable

    275,948       241,784  

Due to related party

    484,248       425,142  

Deferred income

    224,570       223,331  

Lease liability - current

    23,104       41,918  

TOTAL CURRENT LIABILITIES

    3,149,861       3,091,935  
                 

Lease liability - non current

    -       -  

Accrued liability

    683,957       609,892  

Long term loan

    1,123,138       1,123,138  
                 

TOTAL LIABILITIES

    4,956,956       4,824,965  
                 

Commitments and Contingencies

    -       -  
                 

SHAREHOLDERS' DEFICIT

               

Redeemable, convertible preferred stock, 10,000,000 shares authorized;

Series A voting preferred stock, zero shares issued and outstanding

    -       -  

Common stock, no par value, unlimited shares authorized;

21,107,018,148 and 21,090,218,148 shares issued and outstanding

    -       -  

Additional paid-in capital

    4,732,477       4,732,477  

Accumulated other comprehensive income

    2,278       (500

)

Accumulated deficit

    (9,339,487 )     (9,183,110 )
                 

TOTAL AMERICA GREAT HEALTH SHAREHOLDERS' DEFICIT

    (4,604,732 )     (4,451,133 )

Non-controlling interest

    (75,306 )     (74,703 )
                 

TOTAL SHAREHOLDERS' DEFICIT

    (4,680,038 )     (4,525,836 )
                 

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT

  $ 276,918     $ 299,129  

 

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

 

 

America Great Health and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income

 

   

Three Months Ended September 30,

 
   

2023

   

2022

 
   

(Unaudited)

 
                 

Sales

  $ 13,808     $ 51,938  
                 

Cost of goods sold

    177       27,500  
                 

Gross profit

    13,631       24,438  
                 

Selling, general and administrative expenses

               

Selling expense

    64       4,736  

General and administrative expense

    88,505       147,923  
      88,569       152,659  
                 

Loss from operations

    (74,938 )     (128,221 )
                 

Other income (expenses)

               

Interest expense

    (82,049 )     (64,539 )

Other income

    7       6  
      (82,042 )     (64,533 )
                 

Loss before income taxes

    (156,980 )     (192,754 )
                 

Income tax provision

    -       -  
                 

NET LOSS

  $ (156,980 )   $ (192,754 )
                 

Less: net loss attributable to non-controlling interest

    (603 )     (10,418

)

                 

NET LOSS ATTRIBUTABLE TO AMERICA GREAT HEALTH

  $ (156,377 )   $ (182,336 )
                 
                 

Foreign currency transaction

    2,278       76  

COMPREHENSIVE LOSS ATTRIBUTABLE TO AMERICA GREAT HEALTH

  $ (154,099 )   $ (182,260 )
                 

BASIC AND DILUTED LOSS PER SHARE

  $ (0.00 )   $ (0.00 )
                 

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING

BASIC AND DILUTED

    21,093,818,148       21,090,218,148  

 

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

 

 

America Great Health and Subsidiaries

Condensed Consolidated Statement of Shareholders' Deficit

For the three months ended September 30, 2023 and 2022

(Unaudited)

 

                                   

Additional

           

Non-

   

Other

   

Total

 
   

Preferred Stock

   

Common Stock

   

Paid-in

   

Accumulated

    controlling     Comprehensive     Shareholders  
    Shares     Amount    

Shares

    Amount    

Capital

   

Deficit

   

Interest

   

Income

   

Deficit

 
                                                                         
                                                                         

Balance, June 30, 2022

    -     $ -       21,090,218,148     $ -     $ 4,619,991     $ (8,421,849 )   $ (58,783     $ 160     $ (3,860,481 )
                                                                         

Imputed interest

    -       -       -       -       5,206       -       -       -       5,206  

OID

    -       -       -       -       15,200               -       -       15,200  

Gain/loss on exchange rate

                                                            76       76  

Net loss

                                            (182,336 )     (10,418 )     -       (192,754 )
                                                                         

Balance, September 30, 2022 (Unaudited)

    -     $ -       21,090,218,148     $ -     $ 4,640,397     $ (8,604,185 )     (69,201 )   $ 236     $ (4,032,753 )
                                                                         

Balance, June 30, 2023

    -     $ -       21,107,018,148     $ -     $ 4,732,477     $ (9,183,110 )     (74,703 )   $ (500 )   $ (4,525,836 )
                                                                         

Gain/loss on exchange rate

    -       -       -       -       -       -       -       2,778       2,778  

Net loss

    -       -       -       -       -       (156,377 )     (603 )     -       (156,980 )
                                                                         

Balance, September 30, 2023 (Unaudited)

    -     $ -       21,107,018,148     $ -     $ 4,732,477     $ (9,339,487 )     (75,306 )   $ 2,278     $ (4,680,038 )

 

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

 

 

America Great Health and Subsidiaries

Condensed Consolidated Statements of Cash Flows

 

   

Three Months Ended September 30,

 
   

2023

   

2022

 

 

 

(Unaudited)

 
Cash Flows from Operating Activities      

Net loss

  $ (156,980 )   $ (192,754 )

Loss from discontinued operations

    -       -  

Adjustments to reconcile net loss to net cash used in operating activities:

               

Depreciation

    3,697       1,476  

Original issue discount on debt

    -       15,200  

Imputed interest

    -       5,206  

Changes in operating Assets and Liabilities:

               

Accounts receivable

    -       273  

Prepaid investment

    -       -  

Other receivable

    -       -  

Other long term asset

    -       (20,210 )

Inventory

    177       (5,447 )

Accounts payable

    (2,544 )     (3,280 )

Customer advances

    1,240       13,000  

Other liabilities

    -       27,137  

Other payable

    33,602       16,143  

Income tax payable

    -       12  
                 

Net cash used in operating activities

    (120,808 )     (143,244 )
                 

Cash Flows from Investing Activities

               

Purchase of property and equipment

    -       -  

Net cash provided by investing activities

    -       -  
                 

Cash Flows from Financing Activities

               

Repayment of short term loan

    (14,664 )     (30,595 )

       Proceeds of long term loan

    74,064       152,924  

Advances from related party

    77,470       104,706  

Repayment to related party

    (18,364 )     (71,938 )

Net cash provided by financing activities

    118,506       155,097  
                 

Effect of exchange rate change on cash

    2,778       76  
                 

Net increase in cash

    476       11,929  
                 

Cash beginning of period

    54,150       62,643  

Cash end of period

  $ 54,626     $ 74,572  
                 

Interest paid

  $ -     $ -  

Taxes paid

  $ 800     $ 800  
                 

Non-cash transactions

               

Shares issued for equity investment

  $ -     $ -  

 

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

 

 

AMERICA GREAT HEALTH AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 1 NATURE OF BUSINESS

 

History and Organization

 

America Great Health, formerly Crown Marketing, is a Wyoming corporation (the "Company"). A change of control of the Company was completed on January 19, 2017 from Jay Hooper, the former officer and director of the Company and its former majority shareholder. Control was obtained by the sale of 16,155,746,000 shares of Company common stock from Mr. Hooper to an investor group led by Mike Q. Wang. In connection with the change of control, the Company sold to its former majority shareholder a subsidiary for $100 and another subsidiary in exchange for the cancellation of all payables and accrued expenses. After December 31, 2016, the Company’s operations are determined and structured by the new investor group. As such, the Company accounted for all of its assets, liabilities and results of operations up to January 1, 2017 as discontinued operations.

 

On March 1, 2017, the Company filed with the Secretary of State of the State of Wyoming an Articles of Amendment to change the corporate name from Crown Marketing to America Great Health.

 

On March 9, 2017, the Company formed a wholly owned subsidiary, America Great Health, under the laws of the State of California.

 

On June 24, 2019, the Company registered a wholly owned subsidiary in China, US-China Mega Beauty Health Industry Development Co., LTD. The subsidiary is mainly engaged in merger and acquisition, investment and financing, and marketing of medical equipment and health products in China.

 

On June 30, 2020, the Company and Purecell Group (“Purecell”), a leading anti-aging medical institution in Australia, entered into a Cooperation Agreement, in which the Company agreed to acquire 51% of the equity of Purecell, as consideration, the Company shall issue 510,000,000 common shares to Purecell’s nominated trustee. Upon completion of the acquisition transaction, Purecell shall remain autonomy in its day-to-day operation, including recruiting and retaining management team members. On February 10, 2021, the Company completed its financial and legal due diligence. This transaction was completed in May 2021.

 

On December 7, 2020, the Company’s wholly-owned Californian subsidiary, America Great Health, entered into a Cooperation Agreement with Brilliant Healthcare Limited (“Brilliant”) pursuant to which the parties will establish a joint venture in China (the “JV Company”) for the purpose of promoting and developing stem cell related product’s R&D, production, sales, raw material procurement, mergers and acquisitions, and consulting services. After the formation of the JV company is completed, the Company shall invest US$4.2 million in the JV Company within the next 24 months for a 60% equity ownership in the JV Company. Brilliant shall transfer its patented technology to the JV Company as its capital contribution, to account for a 40% equity interest in the JV Company. As a condition for AAGH to obtain 60% equity in the JV company and a as the founder of Brilliant, Dr. Aihua Guo agrees to transfer its patent to the JV company as its share of contribution, and AAGH also agrees to pay Dr. Aihua Guo additional compensation, which includes: (i) AAGH transfers 300 million original shares of AAGH to Dr. Aihua Guo at no cost, valuing at $15 million; (ii) AAGH pays Dr. Aihua Guo a one-time cash compensation of $3 million with the following payment schedule: AAGH agrees to pay $500,000 to Dr. Aihua Guo six months from the date of signing of this Agreement, $1.5 million to Dr. Aihua Guo 12 months from the date of signing of this Agreement, and $1 million to Dr. Aihua Guo 24 months from the date of signing of this Agreement. In June 2021, the JV Company was established in Hainan, China as “Sijinsai (Hainan) Biological Tech Ltd.” On July 9, 2021, the Company paid its first investment of $50,000.

 

On May 18, 2021, the Company and David Tsai (“Dr. Tsai”), a pioneer in anti-cancer peptide research and invention in the United States, entered into a Cooperation Agreement, in which Dr. Tsai shall provide to the Company theories, technologies, methods, sources of raw materials, processing and production techniques, quality standards, quality control methods and other information and details related to his anti-cancer protein peptides, oral insulin and activation technology. Dr. Tsai shall also be responsible for the whole process of technology and product production, application and implementation, as well as professional technical support, consultation and cooperation in the process of product verification, publicity, promotion and sales. Currently, several patents are in the application process, and several products are in the process of getting ready for production.

 

On September 3, 2021, the Company entered into an Assets Acquisition Agreement with Wang’s Property Investment & Management LLC to purchase 53 units in 19 real estate properties appraised at $7,626,286.37 for a purchase price of $7,000,000. The purchase price shall be paid as follows:

 

 

 

(i)

$1,000,000 on execution of the Agreement, (ii) $2,000,000 within 60 days thereof and (iii) the remainder by April 10, 2022. The Agreement is subject to customary closing conditions, including, satisfactory due diligence. On September 9, 2021, the Company entered into a Supplemental Assets Acquisition Agreement with Wang’s Property Investment & Management LLC to amend and clarify that (i) it was purchasing 19 real estate properties which includes 53 units appraised at $7,626,286.37 for a purchase price of $7,000,000 and (ii) that it will waive and not conduct due diligence in order for the transaction to proceed. The acquisition has not been consummated.

 

On November 4, 2021, the Company set up a 100% owned subsidiary Nutrature Health LLC.

 

On November 11, 2021, America Great Health (the “Company”) entered into an Advisory Committee Member Consulting Agreement with Dr. Kevin Buckman MD (“Consultant”). Pursuant to the Agreement, Consultant is to provide advisory services, as a member to the Advisory Committee to the Board of Directors of the Company, including without limitation, assisting GOF Biotechnologies Inc. in its new drug approval process for oral insulin and Amylase X. Consultant shall be compensated with a warrant to purchase 500,000 shares of the Company at $0.01 per share within 24 months and a warrant at each of the following stages: IND application, Phase I clinical trials, Phase II clinical trials, Phase III clinical trials and the sale of GOF Biotechnologies Inc. the license of oral insulin and Amylase X at Phase I or Phase II clinical trials stages. This Agreement shall be for an initial one-year term and shall renew automatically for successive one-year terms up to a maximum of three (3) years unless terminated by either party pursuant to the Agreement. The 500,000 shares were issued free in April 20, 2022.

 

On November 15, 2021, the Company set up a 100% owned subsidiary GOF Biotechnologies Inc. GOF is 75% majority owned (60,000,000 shares of common stock) by the Company and the remaining 25% of its issued and outstanding shares (20,000,000 shares of common stock) are held by Men Hwei, Tsai. On December 31, 2021, the Company entered into a Supplementary Agreement with Zhigong Lin to amend his prior employment agreement with the Company dated August 31, 2021. The Supplement Agreements provides, inter alia, that Zhigong Lin will be appointed Chief Executive Officer of GOF. The employment agreement and supplement agreement were both terminated by the end of July without the issuance of any GOF shares.

 

On February 4, 2021, the Company set up a 100% owned subsidiary, International Institute of Great Healthcare, Inc. (“IIGH”) under the laws of the State of California. IIGH will bring together doctors and professional-level experts from different countries and regions in the world to the research fields involving bio medicine, clinic medicine, health management, information technology, data analysis, software development, artificial intelligence, industrial planning, financial investment, etc.

 

On November 25,2022, the Company signed a supplementary agreement with Men Hwei, Tsai who is an unrelated party. The Company A agrees that if the patent is sold or transferred, Men Hwei, Tsai or Men Hwei, Tsai's successor may receive a 25% gain on the transfer or sale of the interest. The Company agrees to give Men Hwei, Tsai an additional 20 million AAGH shares. The Company allows Men Hwei, Tsai to use three years (from November 26, 2022 to November 25, 2025) find investors each with more than US$10 million investment. In case that no investor is found within three years, Men Hwei, Tsai agrees to return the patent to the Company, and both parties will continue to cooperate in accordance with the original contract on May 18, 2021. If Men Hwei, Tsai finds an investor with an investment of at least US$10 million within three years, and the process for Men Hwei, Tsai and its investors to apply for a new drug may last for several years, then Men Hwei, Tsai agrees that the Company will use the patented technology to develop dietary supplement that are helpful to Alzheimer’s disease. The Company will be responsible for marketing the dietary supplement. Men Hwei, Tsai is entitled to commission equaling to 8% of sales price.

 

On November 26, 2022, the Company signed a supplementary agreement with Men Hwei, Tsai who is an unrelated party and transferred pending anti-dementia patent to Men Hwei, Tsai for $34,978.48.

 

Going Concern

 

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying condensed consolidated financial statements, the Company has incurred recurring net losses. For the three months ended September 30, 2023, the Company recorded a net loss of $156,980, used cash to fund operating activities of $120,808, and at September 30, 2023, had a shareholders’ deficit of $4,680,038. These factors create substantial doubt about the Company’s ability to continue as a going concern within the next twelve months from the date these financial statements are available to be issued. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

 

During the year ended June 30, 2017, the Company’s former majority shareholder sold his shares to an investor group. The new owners’ plans to continue as a going concern revolve around its ability to achieve profitable operations, as well as raise necessary capital to pay ongoing general and administrative expenses of the Company. The ability of the Company to continue as a going concern is dependent on securing additional sources of capital and the success of the Company’s plan. There is no assurance that the Company will be successful in raising the additional capital or in achieving profitable operations.

 

Our cash needs for the three months ended September 30, 2023 were primarily met by loans and advances from the current majority shareholder. As of September 30, 2023, we had a cash balance of $54,626. We intend to finance operating costs over the next twelve months with existing cash on hand and advance from current majority shareholder.

 

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying CFS were prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”).

 

The accompanying unaudited condensed consolidated financial statements of America Great Health, formerly Crown Marketing and Subsidiaries (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the three months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending June 30, 2024.

 

Basis of Consolidation

 

The Condensed Consolidated Financial Statements includes the accounts of the Company and its current wholly owned subsidiaries, America Great Health in California (100%), GOF Biotechnologies in California (75%), International Institute of Great Health in California (100%), Nutrature Health LLC in California (100%), Sijinsai in China (60%), and US-China Mega Beauty Health Industry Development Co., LTD, (100%). Intercompany transactions and accounts were eliminated in consolidation.

 

The following table depicts the identity of the Company’s subsidiaries:

 

       

Attributable

 
   

Place of

 

Equity

 

Name of Subsidiary

 

Incorporation

 

Interest %

 

America Great Health in California

 

USA

 

100

 

GOF Biotechnologies in California

 

USA

 

75

 

International Institute of Great Health in California

 

USA

 

100

 

Nutrature Health LLC in California

 

USA

 

100

 

Sijinsai in China

 

CHINA

 

60

 

US-China Mega Beauty Health Industry Development Co., LTD

 

CHINA

 

100

 

 

Estimates

 

The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates include accounting for potential liabilities and the assumptions made in valuing stock instruments issued for services, debt and equity investment. Actual results could differ from those estimates.

 

Foreign Currency Translation

 

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.

 

 

In accordance with ASC 830, “Translation of Financial Statements” the subsidiary’s assets and liabilities booked and recorded at the non-US local functional currency are generally translated into USD for consolidation purposes, using the exchange rate on the balance sheet date, and revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of foreign subsidiary’s financial statements are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

 

The Company’s reporting currency is the United States Dollar (“USD”). The Company’s wholly owned subsidiary of US-China Mega Beauty Health Industry Development Co., LTD. maintains its books and records in its local currency. The Chinese Yuan (“RMB”), which is the functional currency as being the primary currency of the economic environment in which the subsidiary operates.

 

Below is a table with foreign exchange rates used for translation:

 

       
 

September 30,

 
 

2023

 
Average Quarterly (average rate)      

Chinese Renminbi (RMB)

RMB

7.2414

 

United States dollar ($)

$       

1.00

 

 

 

September 30,

 

 

2023

 
Quarter Ended (Closing rate)      

Chinese Renminbi (RMB)

RMB

7.2948

 

United States dollar ($)

$       

1.00

 

 

Cash

 

The Company considers all highly liquid debt instruments purchased with maturity periods of six months or less to be cash equivalents. The carrying amounts reported in the accompanying balance sheet for cash and cash equivalents approximate their fair value. The Company’s bank account in the United States is protected by FDIC insurance.

 

The Company’s bank account in the United States is protected by FDIC insurance. As of September 30, 2023 and June 30, 2023, the Company’s bank account in the United States had $3,884 and $4,087, respectively, within FDIC insurance of $250,000.

 

Revenues

 

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

 

 

executed contract(s) with customers that the Company believes is legally enforceable;

 

 

identification of performance obligation in the respective contract;

 

 

determination of the transaction price for each performance obligation in the respective contract;

 

 

allocation of the transaction price to each performance obligation; and

 

 

recognition of revenue only when the Company satisfies each performance obligation.

 

 

The Company sells health related products through wholesale and retailers. Substantially all of the Company’s revenue is derived from product sales. The Company considers purchase orders to be a contract with a customer. Contracts with customers are considered to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than one year, and virtually all of the Company’s contracts are short-term. The Company recognizes revenue for the transfer of promised goods to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. The Company typically satisfies its performance obligations in contracts with customers upon shipment of the goods. The Company does not have any contract assets since the Company has an unconditional right to consideration when the Company has satisfied its performance obligation and payment from customers is not contingent on a future event. Generally, payment is due from customers within 40 to 60 days of the invoice date, and the contracts do not have significant financing components nor variable consideration. Returns and allowances are not a significant aspect of the revenue recognition process as historically they have been immaterial. All of the Company’s contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as a price per unit. All estimates are based on the Company’s historical experience; complete satisfaction of the performance obligation, and the Company’s best judgment at the time the estimate is made. Historically, sales returns have not significantly impacted the Company’s revenue.

 

Product Revenue

 

A majority of the Company’s sales are for products sold at a point in time and shipped to customers, for which control is transferred to the customer as goods are delivered to the third-party carrier for shipment. The Company receives payment for the sale of products at the time customers place orders and payment is required prior to shipment. The Company does not recognize assets associated with costs to obtain or fulfill a contract with a customer.

 

Shipping and handling activities are performed upon delivery to the third-party carrier for shipment. The Company accounts for these activities as fulfillment costs. Therefore, the Company recognizes the costs of these activities when revenue for the goods is recognized. Shipping and handling costs are included in cost of sales for all periods presented.

 

Inventories

 

Inventories are stated at the lower of cost (first-in, first-out) or net realizable value. Adjustments to reduce the cost of inventory to its net realizable value are made, if required, for estimated excess, obsolescence, or impaired balances. For the three months ended September 30, 2023 and 2022, the Company has not made provision for inventory in regards to slow moving or obsolete items. As of September 30, 2023 and June 30, 2023, inventories amounted to $108,174 and $108,351, respectively.

 

Equity Method Investments

 

We apply the equity method of accounting to investments when we have significant influence, but not controlling interest in the investee. Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. The Company’s proportionate share of the net income (loss) resulting from these investments is reported under the line item captioned “equity investment” in our Consolidated Statements of Operations. The carrying value of our equity method investments is reported in equity investment in the Consolidated Balance Sheets. The Company’s equity method investments are reported at cost and adjusted each period for the Company’s share of the investee’s income or loss and dividend paid, if any. The Company’s share of the investee’s income or loss is recorded on a one quarter lag for all equity method investments. The Company classifies distributions received from equity method investments using the cumulative earnings approach on the Consolidated Statements of Cash Flows. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. The Company recorded no other-than-temporary impairment charges related to its equity method investments during the three months ended September 30, 2023 and 2022.

 

Fair Value Measurements

 

Fair value measurements are determined using authoritative guidance issued by the FASB, with the exception of the application of the guidance to non-recurring, non-financial assets and liabilities as permitted. Fair value is defined in the authoritative guidance as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

 

Level 1—Quoted prices in active markets for identical assets or liabilities.

 

Level 2—Inputs, other than the quoted prices in active markets, are observable either directly or indirectly.

 

 

Level 3—Unobservable inputs based on the Company’s assumptions.

 

The Company is required to use observable market data if available without undue cost and effort.

 

The Company’s financial instruments include cash and accounts payable. Management has estimated that the carrying amounts approximate their fair value due to the short-term nature.

 

Loss per Share

 

Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the three months ended September 30, 2023 and 2022, as there are no potential shares outstanding that would have a diluted effect.

 

Income Taxes

 

Income tax expense is based on pretax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. The Company did not record a valuation allowance against its deferred tax assets as of September 30, 2023, and June 30, 2023.

 

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes.

 

Recent Accounting Pronouncements

 

In July 2017, the FASB issued Accounting Standards Update 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II)”, which is the replacement of the Indefinite Deferral for Mandatory Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatory Redeemable Non-controlling Interests with a Scope Exception. The amendments in Part I of this Update that relate to the recognition, measurement, and earnings per share of certain freestanding equity-classified financial instruments that include down round features affect entities that present earnings per share in accordance with the guidance in Topic 260, Earnings Per Share. The amendments in Part II of this Update do not have an accounting effect. The amendments in Part I of the update are effective for fiscal year, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is assessing the impact to its accounting practices and financial reporting procedures as a result of the issuance of this standard.

 

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in accounting standards. The amendments in the ASU are effective for fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The Company is currently evaluating the effect, if any, that the ASU will have on its consolidated financial statements.

 

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or is not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

 

NOTE 3 DEPOSITS

 

As of September 30, 2023 and June 30, 2023, deposits amounted to $11,836.

 

 

NOTE 4 INVENTORY

 

As of September 30, 2023 and June 30, 2023, inventory consisted of the following:

 

   

September 30,

   

June 30,

 
   

2023

   

2023

 

Raw materials

  $ 65,900     $ 65,900  

Finished goods

    42,274       42,451  

Total Inventory

  $ 108,174     $ 108,351  

 

NOTE 5 RELATED PARTY TRANSACTIONS

 

During the three months ended September 30, 2023, the Company's current majority shareholder advanced $77,470 to the Company as working capital and the Company repaid $18,364 to the shareholder. As of September 30, 2023 and June 30, 2023, the Company owed its current majority shareholder $484,248 and $425,142, respectively. The advances are non-interest bearing and are due on demand. Imputed interest amounted to $0 and $5,206 for the three months ended September 30, 2023 and 2022 and was recorded as paid in capital, respectively.

 

NOTE 6 SHORT TERM LOAN

 

As of September 30, 2023 and June 30, 2023, short term loan amounted to $690,551 and $705,216 from unrelated third parties, respectively.

 

NOTE 7 LONG TERM LOAN

 

As of September 30, 2023 and June 30, 2023, long term loan both amounted to $1,123,138. The loan has an annual interest rate of 20%, except that the received long term loan on September 9, 2022 has an annual interest rate of 16%. The principal and interest are due in five years. Interest expense incurred for the three months ended September 30, 2023 and 2022 amounted to $56,618 and $52,924, respectively.

 

As of September 30, 2023, long term loan consisted of the following:

 

   

Principal

   

Interest

   

Balance

 
                         

Received long term loan on April 27, 2021

  $ 200,000     $ 97,096     $ 297,096  

Received long term loan on June 3, 2021

    290,000       134,910       424,910  

Received long term loan on June 4, 2021

    50,000       23,260       73,260  

Received long term loan on June 23, 2021

    30,000       13,627       43,627  

Received long term loan on July 12, 2021

    10,000       4,438       14,438  

Received long term loan on September 1, 2021

    60,000       24,953       84,953  

Received long term loan on September 22, 2021

    50,000       20,219       70,219  

Received long term loan on September 27, 2021

    50,000       20,082       70,082  

Received long term loan on September 30, 2021

    10,000       4,000       14,000  

Received long term loan on October 29, 2021

    12,138       4,662       16,800  

Received long term loan on November 9, 2021

    50,000       18,904       68,904  

Received long term loan on November 16, 2021

    140,000       52,395       192,395  

Received long term loan on November 18, 2021

    50,000       18,658       68,658  

Received long term loan on November 29, 2021

    20,000       7,342       27,342  

Received long term loan on November 30, 2021

    10,000       3,666       13,666  

Received long term loan on October 13, 2022

    21,000       4,050       25,050  

Received long term loan on March 10, 2023

    10,000       1,118       11,118  

Received long term loan on March 14, 2023

    10,000       1,096       11,096  

Received long term loan on March 16, 2023

    10,000       1,085       11,085  

Received long term loan on April 17, 2023

    30,000       2,729       32,729  

Received long term loan on May 9, 2023

    10,000       789       10,789  

Total

  $ 1,123,138     $ 459,079     $ 1,582,217  

 

 

On May 5, 2021, the Company issued 10,000,000 shares to an unrelated party as collateral for a loan of $200,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on April 27, 2021.

 

On May 31, 2021, the Company agreed 500,000 shares to an unrelated party as collateral for loans of $50,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed $20,000 on June 3, 2021 and $30,000 on June 23, 2021 and issued 200,000 shares on June 18, 2021 and 240,000 shares on October 28, 2021 with 60,000 shares unissued.

 

On June 18, 2021, the Company issued an aggregate of 2,850,000 shares to 5 unrelated parties as collateral for loans of $270,000. One party with a loan of $100,000 was also awarded 100,000 bonus shares beside the 1,000,000 shares. The loans have an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on June 3, 2021.

 

On June 18, 2021, the Company issued 500,000 shares to an unrelated party as collateral for a loan of $50,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on June 4, 2021.

 

On October 28, 2021, the Company issued 80,000 shares to an unrelated party as collateral for loans of $10,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on July 12, 2021.

 

On October 28, 2021, the Company issued 1,540,000 shares to an unrelated party as collateral for loans of $60,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on September 1, 2021.

 

On October 28, 2021, the Company issued 500,000 shares to an unrelated party as collateral for loans of $50,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on September 22, 2021.

 

On November 22, 2021, the Company issued 500,000 shares to an unrelated party as collateral for loans of $50,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed in September 27, 2021.

 

 

On November 22, 2021, the Company issued 100,000 shares to an unrelated party as collateral for loans of $10,000. The loan has an annual interest rate of 20%. The principal and interest are due in one year. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on September 30, 2021.

 

On November 22, 2021, the Company issued 161,840 shares to an unrelated party as collateral for loans of $12,138. The loan has an annual interest rate of 20%. The principal and interest are due in one year. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on October 29, 2021.

 

On November 22, 2021, the Company issued 400,000 shares to an unrelated party as collateral for loans of $40,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on November 16, 2021.

 

On November 22, 2021, the Company issued 500,000 shares to an unrelated party as collateral for loans of $50,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on November 9, 2021.

 

On November 29, 2021, the Company issued 1,000,000 shares to an unrelated party as collateral for a loan of $100,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on November 16, 2021.

 

On February 2, 2022, the Company issued 500,000 shares to an unrelated party as collateral for loans of $50,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on November 19, 2021.

 

On February 2, 2022, the Company issued 200,000 shares to an unrelated party as collateral for loan of $20,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on November 29, 2021.

 

On February 2, 2022, the Company issued 100,000 shares to an unrelated party as collateral for loan of $10,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on November 30, 2021.

 

On September 9, 2022, the Company signed a loan agreement of $100,000 with a five-year term from an unrelated party for a freeze-dryer. The loan has an annual interest rate of 16% with the payments of $3,000 at the end of every month starting the fourth month after the Company received the proceed and the final payment of $12,000 on September 9, 2027. The Company received the proceed on September 9, 2022. This loan was returned and $4,953 of accrued interest was paid on January 13, 2023.

 

On October 13, 2022, the Company signed a loan agreement of $21,000 with Lian Chen who is an unrelated party. The loan has an annual interest rate of 20%. Total principal and interest of $42,000 are due in five years. The unrelated party would receive 2,625,000 shares from a shareholder designated by the Company. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received $21,000 loan on October 13, 2022. On October 21, 2022, the Company's current majority shareholder Mike Q. Wang transferred 2,625,000 shares to Lian Chen. If after five years, Lian Chen chooses to use stocks to offset the loan, then the Company will issue 2,625,000 shares of common stock to Mike Wang.

 

 

On January 13, 2023, the Company signed a loan agreement of $150,000 with a one-year term from an unrelated party. The loan has an annual interest rate of 20%. Total principal and interest of $30,000 are due in one year.

 

On January 24, 2023, the Company signed a loan agreement of $300,000 with a one-year term from an unrelated party. The loan has an annual interest rate of 20%. A total principal and interest of $60,000 are due in one year.

 

On March 10, 2023, the Company signed a loan agreement of $10,000 with a three-year term from an unrelated party. The loan has an annual interest rate of 20%. Total principal and interest of $6,000 are due in three years. The unrelated party would receive 1,000,000 shares from a shareholder designated by the Company. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can normally be traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of the loan will be forgiven. As of the issue of this Form 10Q, the 1,000,000 shares have not been issued.

 

On March 14, 2023, the Company signed a loan agreement of $10,000 with a three-year term from an unrelated party. The loan has an annual interest rate of 20%. Total principal and interest of $6,000 are due in three years. The unrelated party would receive 1,000,000 shares from a shareholder designated by the Company. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can normally be traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of the loan will be forgiven. The 1,000,000 shares were issued on April 18, 2023.

 

On March 16, 2023, the Company signed a loan agreement of $10,000 with a three-year term from an unrelated party. The loan has an annual interest rate of 20%. Total principal and interest of $6,000 are due in three years. The unrelated party would receive 1,000,000 shares from a shareholder designated by the Company. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can normally be traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of the loan will be forgiven. The 1,000,000 shares were issued on April 18, 2023.

 

On April 17, 2023, the Company signed a loan agreement of $30,000 with a three-year term from an unrelated party. The loan has an annual interest rate of 20%. A total principal and interest of $18,000 are due in three years. The unrelated party would receive 6,000,000 shares from a shareholder designated by the Company. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can normally be traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of the loan will be forgiven. As of the issue of this Form 10Q, 6,000,000 shares have not been issued.

 

On May 9, 2023, the Company signed a loan agreement of $10,000 with a three-year term from an unrelated party. The loan has an annual interest rate of 20%. A total principal and interest of $6,000 are due in three years. The unrelated party would receive 1,000,000 shares from a shareholder designated by the Company. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can normally be traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of the loan will be forgiven. As of the issue of this Form 10Q, the 1,000,000 shares have not been issued.

 

NOTE 8 CONVERTIBLE, REDEEMABLE PREFERRED STOCK

 

During the year ended June 30, 2016, the Company’s Board of Directors authorized the creation of a series of preferred stock consisting of 1,000,000 shares designated as Series A Preferred Stock (the “Series A”). The Series A is entitled to a dividend of 4%, when and as declared, and is entitled to a liquidation preference of $1 per share plus unpaid dividends. The Series A is redeemable at the option of the Company at any time, in whole or in part, at a price of $1.00 per share, plus 4% per annum thereupon from the date of issuance (the “Stated Value”). In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the Series A shall be entitled to a preferential amount equal to the Stated Value, prior to the holders of common stock receiving any distribution. Each share of Series A is automatically converted on the Conversion Date into a number of shares of common stock of the Company at the initial conversion rate (the “Conversion Rate”), which shall be the Stated Value as of the date of conversion divided by the Market Price. The Market Price for purposes of this Section 5 shall be equal to the average closing sales price of the Common Stock over the 5 previous trading days.

 

 

The Series A is also subject to adjustments to the Conversion Rate. If the common stock issuable on conversion of the Series A is changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above), the holders of the Series A shall, upon its conversion, be entitled to receive, in lieu of the common stock which the holders would have become entitled to receive but for such change, a number of shares of such other class or classes of stock that would have been subject to receipt by the holders if they had exercised their rights of conversion of the Series A immediately before that change.

 

In August 2016, the Company filed an amendment to its Articles of Incorporation to increase the number of authorized shares of Series A Preferred Stock from 1,000,000 to 10,000,000.

 

There were no preferred shares outstanding as of September 30, 2023 and June 30, 2023.

 

NOTE 9 SHAREHOLDERS DEFICIT

 

At September 30, 2023 and June 30, 2023, the Company had 21,107,018,148 and 21,090,218,148 shares issued and outstanding, respectively.

 

1) Shares issued for equity investment

 

On April 6, 2021, the Company issued 70,000,000 shares to a director of Imediplus as collateral in exchange for getting trust of 2,500,000 shares that is 5% of Imediplus. The transaction has not been completed by the reporting date.

 

Equity Investment in Purecell Group:

 

On June 30, 2020, the Company and Purecell Group (“Purecell”), a leading anti-aging medical institution in Australia, entered into a Cooperation Agreement, in which the Company agreed to acquire 51% of the equity of Purecell, as consideration, the Company shall issue 510,000,000 common shares to Purecell’s nominated trustee. Because the company does not have significant control over Purecell, so this is an equity investment. Upon completion of the acquisition transaction, Purecell shall remain autonomy in its day to day operation, including recruiting and retaining management team members. On February 10, 2021, the Company completed its financial and legal due diligence. On April 6, 2021, the Company issued 510,000,000 shares to two shareholders of Purecell Group PTY Ltd ("Purecell") in exchange of 51% of ownership of Purecell. On April 6, 2021, the Company issued 50,000,000 shares of common stock to Purecell’s project introducer as compensation for services, at fair market value of $0.00001 per share.

 

On May 11, 2021, Aussie Produce PTY LTD (“AP”) signed agreement with Purecell to invest $2,340,000 in exchange of 6% of total outstanding shares of Purecell and 35,000,000 shares of the Company owned by Purecell. Purecell will issue 6% shares to AP in exchange for the $2,340,000 investment. In addition, Purecell will issue 68,372 shares to AP and issue 71,163 shares to the Company. The Company will also issue additional 31,212,000 shares to Purecell. Purecell will use the proceeds to acquire VERITA PHARMA, which is a medicine factory. In order to complete the change of 35,000,000 shares of the Company held by Purecell to AP within the agreed time limit, and to meet the conditions that AP investment funds are in place, the Company and Purecell agreed through consultation that in order to gain time, the Company will issue an additional 35,000,000 shares for AP. On May 26, 2021, the Company issued 35,000,000 shares to shareholder of AP, at fair market value of $0.00001 per share.

 

On March 31, 2022, the Company issued 1,300,000 shares of common stock to an US individual at $0.075 per share.

 

2) Shares issued for stock compensation

 

None

 

3) Shares issued for short term loan as original issue discount

 

None

 

4) Shares issued for loan as collateral

 

None

 

5) Shares issued in exchange for payable balance

 

None

 

 

NOTE 10 EQUITY INVESTMENT

 

On June 30, 2020, the Company and Purecell Group (“Purecell”), a leading anti-aging medical institution in Australia, entered into a Cooperation Agreement, in which the Company agreed to acquire 51% of the equity of Purecell, as consideration, the Company shall issue 510,000,000 common shares to Purecell’s nominated trustee. Because the company does not have significant control over Purecell, so this is an equity investment. Upon completion of the acquisition transaction, Purecell shall remain autonomy in its day to day operation, including recruiting and retaining management team members. On February 10, 2021, the Company completed its financial and legal due diligence. On April 6, 2021, the Company issued 510,000,000 shares to two shareholders of Purecell Group PTY Ltd ("Purecell" ) in exchange of 51% of ownership of Purecell. On April 6, 2021, the Company issued 50,000,000 shares of common stock to Purecell’s project introducer as compensation for services, at fair market value of $0.00001 per share.

 

On May 11, 2021, Aussie Produce PTY LTD (“AP”) signed agreement with Purecell to invest $2,340,000 in exchange of 6% of total outstanding shares of Purecell and 35,000,000 shares of the Company owned by Purecell. Purecell will issue 6% shares to AP in exchange for the $2,340,000 investment. In addition, Purecell will issue 68,372 shares to AP and issue 71,163 shares to the Company. The Company will also issue additional 31,212,000 shares to Purecell. Purecell will use the proceeds to acquire VERITA PHARMA, which is a medicine factory. In order to complete the change of 35,000,000 shares of the Company held by Purecell to AP within the agreed time limit, and to meet the conditions that AP investment funds are in place, the Company and Purecell agreed through consultation that in order to gain time, the Company will issue an additional 35,000,000 shares for AP. On May 26, 2021, the Company issued 35,000,000 shares to shareholder of AP, at fair market value of $0.00001 per share.

 

The following table summarizes the income statement of Purecell.

 

   

From 07/01/2023 to

 
   

09/30/2023

 
   

(Unaudited)

 

Sales

  $ -  

Gross profit

    22,869  

Net loss

    (67,871 )

51% share

    (36,614 )

 

The following table provides the summary of equity investment in Purecell.

 

   

As of September 30, 2023

 
   

(Unaudited)

 

Total assets

  $ 3,223,885  

Net assets

    2,248,575  

51% ownership

    1,146,773  

Beginning balance of investment

    5,450  

Loss on equity investment

    (5,450 )

Ending balance of investment

    -  

 

NOTE 11 INCOME TAXES

 

As of September 30, 2023, the Company had federal and California income tax net operating loss carryforwards of approximately $6.5 million. These net operating losses will begin to expire 20 years from the date the tax returns are filed.

 

Uncertain Tax Positions

 

Interest associated with unrecognized tax benefits are classified as income tax, and penalties are classified in selling, general and administrative expenses in the statements of operations. For the three months ended September 30, 2023 and 2022, the Company had no unrecognized tax benefits and related interest and penalties expenses. Currently, the Company is not subject to examination by major tax jurisdictions.

 

 

NOTE 12 LEASE

 

The Company has entered into a operating leases agreement with GKT, Alhambra, LP. The lease term of the office space is from December 1, 2020 to November 30, 2023. The current monthly rent including monthly management fee is $4,655.64. The operating lease is listed as separate line item on the Company’s condensed consolidated financial statements and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligation to make lease payments are also listed as a separate line item on the Company’s condensed consolidated financial statements.

 

The Company has entered into an operating lease agreement with SoCal Industrial LLC, Irwindale. The lease term of the office space is from June 1, 2023 to May 31, 2024 after the prior lease expired on May 31, 2023. The current monthly rent including monthly management fee is $1,764.00. The operating lease is listed as a separate line item on the Company’s condensed consolidated financial statements and represents the Company’s right to use the underlying asset for the lease term. The Company’s obligation to make lease payments is also listed as a separate line item on the Company’s condensed consolidated financial statements.

 

Operating lease right-of-use assets and liabilities commencing after December 1, 2020 are recognized at commencement date based on the present value of lease payments over the lease term. For the three months ended September 30, 2023, the Company recognized approximately $20,277 in total lease costs.

 

Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments.

 

Information related to the Company’s operating ROU assets and related lease liabilities are as follows:

 

   

Three months ended

September 30, 2023

 
         

Cash paid for operating lease liabilities

  $ 18,896  

Weighted-average remaining lease term

    1.04  

Weighted-average discount rate

    5 %

Minimum future lease payments

  $ 23,423  

 

The following table presents the amortization of the Company’s lease liabilities under ASC 842 for each of the following years ending September 30:

 

2023

  $ 14,603  

2024

    8,820  

2025

    -  

2026

    -  

Total minimum payments

    23,423  

Less: imputed interest

    (319 )

Total lease liability

    23,104  

Less: short-term lease liability

    (23,104 )

Long-term lease liability

  $ -  

 

NOTE 13 CONCENTRATION

 

Major vendors

 

For the year ended September 30, 2023, no vendors accounted for 10% or more of the Company’s purchases and its outstanding accounts payable balances as at year-end dates.

 

 

NOTE 14 SUBSEQUENT EVENTS

 

On July 23, 2023, the Company, SHOWA International Pty Ltd. (“SHOWA”), and Jeffery Tu & Eric Hsu, entered into a Cooperation Agreement (the “Agreement”), in which three parties shall establish a strategic partnership in Japan to produce and promoting Bio-active Protein Peptide in Japan. SHOWA, as a Japanese based company, shall use its best effort in promoting the Company’s Bio-active Protein Peptide and related products in Japan, and shall be in charge of the overall marketing strategy, day-to-day business operations, products design, public relations, etc. As the Company’s exclusive strategic partner in Japan, SHOWA shall be responsible for marketing and promoting all of the Company’s Bio-active Protein Peptide and related products within the territory of Japan and other mutually agreed regions. In addition, SHOWA shall achieve the following milestones in sales during the next four-year period of time: 150,000 bottles during year one, 300,000 bottles during year two, 600,000 during year three, 1,000,000 bottles during year four.

 

On October 04, 2023, the Company entered into a New Drugs Application and Joint Venture Agreement (the “Agreement”), with CIMC Automatic Control System Technology (Liaoning) Co., Ltd. (“CIMC”), in which both parties agree to establish a joint venture in Beijing, China aiming to develop and promote the Bio-active Protein Peptide supplements and Peptide medicinal in China (“New Venture”). Upon execution of the Agreement, the Company shall contribute its technologies and marketing assistance, and owns 30% of total outstanding shares of the New Venture; CIMC shall contribute all required working capital and other resources and owns 70% of total outstanding shares of the New Venture. The total registered capital of the New Venture shall be $10 million RMB. CIMC shall also be responsible for all required capital in the new drugs application and approval process which is approximately 200 million RMB. Both parties further agree that the New Venture shall distribute 10% of its net profit to the Company annually for R&D and product productions.

 

 

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.

 

Forward Looking Statement Notice

 

Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Crown Marketing, (“we”, “us”, “our” or the “Company”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Quarterly Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

 

Overview of Business

 

Our mission is to invest in innovative technologies intergrated with business development in the healthcare ecosystem.

 

We are focused on protein and peptide small molecular drugs research and development, diagnostic and medical devices with AI cloud computing, cell therapy and regenerational medicine and supplements manufacturing and sales.

 

On September 3, 2021, the Company entered into an Assets Acquisition Agreement with Wang’s Property Investment & Management LLC to purchase 53 units in 19 real estate properties appraised at $7,626, 286.37 for a purchase price of $7,000,000, The purchase price shall be paid as follows: (i) $1,000,000 on execution of the Agreement, (ii) $2,000,000 within 60 days thereof and (iii) the remainder by April 10, 2022. The Agreement is subject to customary closing conditions, including, satisfactory due diligence. On September 9, 2021, the Company entered into a Supplemental Assets Acquisition Agreement with Wang’s Property Investment & Management LLC to amend and clarify that (i) it was purchasing 19 real estate properties which includes 53 units appraised at $7,626,286.37 for a purchase price of $7,000,000 and (ii) that it will waive and not conduct due diligence in order for the transaction to proceed. The acquisition has not been consummated. With the asset acquisition from Wang’s Property Investment & Management LLC, the Company will diversify its business into property investment and management. By the end of May 2022, the Company ceased the acquisition of Wang’s Property Investment & Management LLC.

 

Results of Operations

 

Results of Operations for the three months ended September 30, 2023 compared to the three months ended September 30, 2022.

 

Sales amounted to $13,808 and $51,938 for the three months ended September 30, 2023 and 2022, respectively.

 

Cost of goods sold amounted to $177 and $27,500 for the three months ended September 30, 2023 and 2022, respectively.

 

Gross profit amounted to $13,631 and $24,428 for the three months ended September 30, 2023 and 2022, respectively.

 

Operating expenses incurred for the three months ended September 30, 2023 and 2022 was $88,569 and $152,659, respectively. The decrease was mainly due to decreased payroll expenses, rent expenses, advertising, and professional expenses.

 

Our net loss for the three months ended September 30, 2023 and 2022 was $156,980 and $192,754, respectively. The decrease in net loss was mainly due to decrease in payroll expenses and professional expenses.

 

 

Liquidity and Capital Resources

 

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.

 

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, the Company has incurred recurring net losses. For the three months ended September 30, 2023, the Company recorded a net loss of $156,980, used cash to fund operating activities of $120,808 and at September 30, 2023, had a shareholders’ deficit of $4,680,038. For the three months ended September 30, 2022 the Company recorded a net loss of $192,754, used cash to fund operating activities of $143,244 and at June 30, 2023, had a shareholders’ deficit of $4,525,836. These factors create substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

The Company is raising the additional capital to achieve profitable operations.

 

Our cash needs for the three months ended September 30, 2023 were primarily met by loans and advances from current majority shareholder. As of September 30, 2023, we had a cash balance of $54,626. Our new majority shareholders will need to provide all of our working capitals going forward.

 

Primarily as a result of our recurring losses and our lack of liquidity, we received a report from our independent registered public accounting firm for our financial statements for the three months ended September 30, 2023 that includes an explanatory paragraph describing the uncertainty as to our ability to continue as a going concern.

 

Liquidity and Capital Resources for the three months ended September 30, 2023 compared to the three months ended September 30, 2022

 

   

For the Three Months Ended September 30

 
   

2023

   

2022

 

Summary of Cash Flows:

 

(Unaudited)

   

(Unaudited)

 
                 

Net cash used in operating activities

  $ (120,808 )   $ (143,244 )

Net cash used in investing activities

    -       -  

Net cash provided by financing activities

    118,506       155,097  

Effect of exchange rate change on cash

    2,778       76  

Net increase (decrease) in cash

    476       11,929  

Cash beginning of period

    54,150       62,643  

Cash end of period

  $ 54,626     $ 74,572  

 

Operating Activities

 

Net cash used in operating activities was $120,808 for the three months ended September 30, 2023, a decrease of $22,436 compared to cash used in operating activities of $143,244 for the three months ended September 30, 2022. The decrease in net cash used in operating activities was mainly due to a decrease in net loss and deposit, offset by an increase in other payable and customer advances for the three months ended September 30, 2023 compared to the same period in 2022.

 

Investing Activities

 

None.

 

 

Financing Activities

 

Net cash provided by financing activities was $476 for the three months ended September 30, 2023, compared to $155,097 net cash provided by financing activities for the three months ended September 30, 2022. The decrease in net cash provided by financing activities for the three months ended September 30, 2022 was primarily attributable to a decrease in amount short term loan and long term loan.

 

Financial Position

 

As of September 30, 2023, we had $54,626 in cash, negative working capital of $3,337,845 and an accumulated deficit of $4,680,038. As of June 30, 2023, we had $54,150 in cash, negative working capital of $2,912,470 and an accumulated deficit of $4,525,836.

 

Critical Accounting Policies and Estimates

 

Estimates

 

The preparation of these consolidated financial statements (“CFS”) in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of net sales and expenses during the reported periods. Actual results may differ from those estimates and such differences may be material to the financial statements. The more significant estimates and assumptions by management include among others, the fair value of shares of common stock issued for services. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.

 

Revenues

 

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

 

 

executed contract(s) with customers that the Company believes is legally enforceable;

 

 

identification of performance obligation in the respective contract;

 

 

determination of the transaction price for each performance obligation in the respective contract;

 

 

allocation of the transaction price to each performance obligation; and

 

 

recognition of revenue only when the Company satisfies each performance obligation.

 

Inventories

 

Inventories are stated at the lower of cost (first-in, first-out) or net realizable value. Adjustments to reduce the cost of inventory to its net realizable value are made, if required, for estimated excess, obsolescence, or impaired balances. For the three months ended September 30, 2023 and 2022, the Company has not made provision for inventory in regards to slow moving or obsolete items. As of September 30, 2023 and June 30, 2022, inventories amounted to $108,174 and $108,351, respectively.

 

Fair Value Measurements

 

Fair value measurements are determined using authoritative guidance issued by the FASB, with the exception of the application of the guidance to non-recurring, non-financial assets and liabilities as permitted. Fair value is defined in the authoritative guidance as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

 

Level 1—Quoted prices in active markets for identical assets or liabilities.

 

 

Level 2—Inputs, other than the quoted prices in active markets, are observable either directly or indirectly.

 

Level 3—Unobservable inputs based on the Company’s assumptions.

 

The Company is required to use observable market data if available without undue cost and effort.

 

The Company’s financial instruments include cash and accounts payable. Management has estimated that the carrying amounts approximate their fair value due to the short-term nature.

 

Loss per Share

 

Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the three months ended September 30, 2023 and 2022, as there are no potential shares outstanding that would have a dilutive effect.

 

Income Taxes

 

Income tax expense is based on pretax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. The Company recorded a valuation allowance against its deferred tax assets as of September 30, 2023 and June 30, 20232.

 

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes.

 

Recent Accounting Pronouncements

 

See Footnote 2 of the financial statements for a discussion of recently issued accounting standards.

 

Contractual Obligations and Off-Balance Sheet Arrangements

 

We do not have any contractual obligations or off-balance sheet arrangements.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

 

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of September 30, 2023. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that our disclosure and controls are not designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) a lack of accounting staff and resources with appropriate knowledge of generally accepted accounting principles in the United States (“U.S. GAAP”) and SEC reporting and compliance requirements; (3) a lack of independent directors and (4) a lack of an effective review process by the accounting manager and management.

 

Management believes that the material weaknesses set forth in above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors’ results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

 

Changes in Internal Controls

 

There have been no changes in our internal controls over financial reporting during the period ended September 30, 2023 that have materially affected or are reasonably likely to materially affect our internal controls.

 

 

PART II OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

We are not a party to or otherwise involved in any legal proceedings.

 

In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, other than as set forth herein, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.

 

Item 1A. Risk Factors.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

Not applicable.

 

Item 3. Defaults Upon Senior Securities.

 

There have been no events which are required to be reported under this Item.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits and Financial Statement Schedules

 

31.1

Certification of CEO and CFO. Filed herewith.

32.1

Certification pursuant to 18 U.S.C. Section 1350 of CEO and CFO. Filed herewith.

101.INS*

Inline XBRL Instance Document

101.SCH*

Inline XBRL Taxonomy Extension Schema Document

101.CAL*

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*

Inline XBRL Taxonomy Extension Definition Linkbase Definition

101.PRE*

Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.LAB*

Inline XBRL Taxonomy Extension Label Linkbase Document

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

   

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

AMERICA GREAT HEALTH

   

Dated: November 17, 2023

By: /s/ Quinn Chen

   

Quinn Chen

   

Chief Financial Officer

   

 

 

 

 

 

27
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EXHIBIT 31.1

 

CERTIFICATION

 

I, Quinn Chen, certify that:

 

1.    I have reviewed this quarterly report on Form 10-Q of America Great Health;

 

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.    The registrant’s other certifying officer(s) and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

 

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles

 

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)    All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Dated: November 17, 2023

By: /s/ Quinn Chen

 

Quinn Chen

 

Chief Financial Officer

 

 

 

EXHIBIT 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of America Great Health (the “Company”) on Form 10-Q for the year ending September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mike Q. Wang, President and Secretary of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

 

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and

 

 

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

 

Dated: November 17, 2023

By: /s/ Mike Q. Wang

 

Mike Q. Wang

 

President, Secretary

 

 

 
v3.23.3
Document And Entity Information
3 Months Ended
Sep. 30, 2023
shares
Document Information Line Items  
Entity Registrant Name America Great Health
Document Type 10-Q
Current Fiscal Year End Date --06-30
Entity Common Stock, Shares Outstanding 21,107,018,148
Amendment Flag false
Entity Central Index Key 0001098009
Entity Current Reporting Status No
Entity Filer Category Non-accelerated Filer
Document Period End Date Sep. 30, 2023
Document Fiscal Year Focus 2024
Document Fiscal Period Focus Q1
Entity Small Business true
Entity Emerging Growth Company false
Entity Shell Company false
Document Quarterly Report true
Document Transition Report false
Entity File Number 000-27873
Entity Incorporation, State or Country Code WY
Entity Tax Identification Number 98-0178621
Entity Address, Address Line One 1609 W Valley Blvd Unit 338A
Entity Address, City or Town Alhambra
Entity Address, State or Province CA
Entity Address, Postal Zip Code 91803
City Area Code (888)
Local Phone Number 988-1333
Title of 12(b) Security N/A
No Trading Symbol Flag true
Security Exchange Name NONE
Entity Interactive Data Current No
v3.23.3
Consolidated Balance Sheets - USD ($)
Sep. 30, 2023
Jun. 30, 2023
CURRENT ASSETS    
Cash $ 54,626 $ 54,150
Account receivable, net 0 0
Inventory 108,174 108,351
Advance to supplier 16,965 16,964
TOTAL CURRENT ASSETS 179,765 179,465
Right-of-use asset 23,104 41,918
Due from the related parties 8,218 8,218
Deposit 11,836 11,836
Property and equipment, net 53,995 57,692
TOTAL ASSETS 276,918 299,129
CURRENT LIABILITIES    
Accounts payable 1,448,030 1,450,574
Income tax payable 3,410 3,970
Short term loan 690,551 705,216
Other payable 275,948 241,784
Due to related party 484,248 425,142
Deferred income 224,570 223,331
Lease liability - current 23,104 41,918
TOTAL CURRENT LIABILITIES 3,149,861 3,091,935
Lease liability - non current 0 0
Accrued liability 683,957 609,892
Long term loan 1,123,138 1,123,138
TOTAL LIABILITIES 4,956,956 4,824,965
Commitments and Contingencies 0 0
SHAREHOLDERS' DEFICIT    
Redeemable, convertible preferred stock, 10,000,000 shares authorized; Series A voting preferred stock, zero shares issued and outstanding 0 0
Common stock, no par value, unlimited shares authorized; 21,107,018,148 and 21,090,218,148 shares issued and outstanding 0 0
Additional paid-in capital 4,732,477 4,732,477
Accumulated other comprehensive income 2,278 (500)
Accumulated deficit (9,339,487) (9,183,110)
TOTAL AMERICA GREAT HEALTH SHAREHOLDERS' DEFICIT (4,604,732) (4,451,133)
Non-controlling interest (75,306) (74,703)
TOTAL SHAREHOLDERS' DEFICIT (4,680,038) (4,525,836)
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 276,918 $ 299,129
v3.23.3
Consolidated Balance Sheets (Parentheticals) - shares
Sep. 30, 2023
Jun. 30, 2023
Statement of Financial Position [Abstract]    
Series A voting preferred stock, shares issued 0 0
Series A voting preferred stock, shares outstanding 0 0
Redeemable, convertible preferred stock, shares authorized 10,000,000 10,000,000
Common stock, shares issued 21,107,018,148 21,090,218,148
Common stock, shares outstanding 21,107,018,148 21,090,218,148
v3.23.3
Consolidated Statements of Operations and Comprehensive Income - USD ($)
3 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Income Statement [Abstract]    
Sales $ 13,808 $ 51,938
Cost of goods sold 177 27,500
Gross profit 13,631 24,438
Selling, general and administrative expenses    
Selling expense 64 4,736
General and administrative expense 88,505 147,923
88,569 152,659
Loss from operations (74,938) (128,221)
Other income (expenses)    
Interest expense (82,049) (64,539)
Other income 7 6
(82,042) (64,533)
Loss before income taxes (156,980) (192,754)
Income tax provision 0 0
NET LOSS (156,980) (192,754)
Less: net loss attributable to non-controlling interest (603) (10,418)
NET LOSS ATTRIBUTABLE TO AMERICA GREAT HEALTH (156,377) (182,336)
Foreign currency transaction 2,278 76
COMPREHENSIVE LOSS ATTRIBUTABLE TO AMERICA GREAT HEALTH $ (154,099) $ (182,260)
BASIC AND DILUTED LOSS PER SHARE (in Dollars per share) $ 0 $ 0
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING BASIC AND DILUTED (in Shares) 21,093,818,148 21,090,218,148