UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

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

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

For the fiscal year ended February 28, 20192022

OR

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

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

Commission file number 333-173456

Nevada

(State of other jurisdiction of incorporation or organization)

10F., Yunfeng Building, No. 478 Wuzhong Rd, Shanghai, China 201103

(Address of principal executive offices, including zip code)

+86 21 64748888

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ ☐ No x☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ ☐ No x☒

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

Indicate by check mark whether registrant has submitted electronically and 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

☐ 

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

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

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

There was no active public trading market for the common stock. Based on recorded trades as of August 31, 2017,2021, the aggregate market value of 12,043,993 common stock held by non-affiliates was $234,858.$531,140.

As of May 17, 2019,9, 2022, there are 18,694,04119,985,708 shares of common stock issued and outstanding.

TABLE OF CONTENTS

JUBILANT FLAME INTERNATIONAL, LTD.

FORWARD LOOKING STATEMENTS

This Annual Report contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management’s plans and objectives for our future operations. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks include, by way of example and not in limitation:

This list is not an exhaustive list of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully, and readers should not place undue reliance on our forward-looking statements. Forward looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in United States dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. All references to “common stock” refer to the common shares in our capital stock.

As used in this annual report, the terms “we”, “us”, “our”, the “Company”, the ‘‘Registrant”, and “Jubilant Flame” mean Jubilant Flame International, LTD. unless otherwise indicated.

 

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Description of Business

Jubilant Flame International, LTD was organized in the state of Nevada on September 29, 2009 under the name Liberty Vision, Inc. The Company provided web development and marketing services for clients through a wholly owned subsidiary until December 5, 2012, when the Company disposed of its subsidiary to a shareholder for a nominal sum. On December 16, 2012, the Company changed its name to Jiu Feng Investment Hong Kong, LTD. On August 18, 2015, the Company changed its name to Jubilant Flame International, Ltd.

Previously, the Company was engaged in the business of developing and marketing medical products, including Bone-Induction Artificial Bone and Vacuum Sealing Drainage under a license from BioMark. Starting the fourth quarter of fiscal year ended February 28, 2018, the Company has started a new line of business to promote and sell a new cosmetics product “Acropass” series in United States.

The Company purchases the Acropass inventory from Rubyfield Holdings Limited, a Chinese company owned by the CEO of the Company (“Rubyfield”). Under a Resale Agreement between the Company and Rubyfield, the Company agrees to purchase Acropass products from Rubyfield. In addition to selling the Acropass products to the Company, Rubyfield agrees to provide training to Company personnel regarding the Acropass products and provide promotional material to the Company. The Resale Agreement expires on December 31, 2019 and the Company has the right to renew the agreement upon its expiration.

The Company also has a Master Service Agreement (the “MSA”) with a third party (“Manager”). Pursuant to MSA, the Manager agrees to provide branding services, social media management services, ad campaign services, and manage and operate the Company’s online shopping platform in the United States and the Company’s Amazon account with respect to the sales of the Acropass products the Company has purchased from Rubyfield.

In the beginning of 2020, the Company ceased the marketing and selling of cosmetic products in the United States.

From the third quarter of year ended February 29, 2020, the company started to provide technical support services for development of new nutrition material and product to customers. The technical support focuses on a nutrition food series which is selling in the USA market. Currently, the nutrition food series include SEA-BUCKTHORN and Organic Sprouting Powder. The company’s technology background directors provide excellent technical service to manufacturers in the USA.

Principal Products and MarketService

Currently,By the third quarter of year ended February 29, 2020, the Company purchaseshad purchased two type of Acropass products for resale in the United States from Rubyfield – Acropass Trouble Care for acne treatment and Acropass Ageless Lifter for wrinkle treatment (collectively, “Acropass Products”). The Acropass Products are made of hydrocolloid patches with dissolving microstructures. The microstructures contain hyaluronic acid and epidermal growth factor. Hyaluronic Acid is a natural moisturizing agent that delivers nutrients to skin cells and blocks water evaporation from the skin, enabling the skin to maintain adequate amounts of water. EGF protects the skin’s innate natural growth and robustness by preventing the appearance of skin aging and sagging. Both ingredients work together to improve the appearance of skin elasticity and reduces the appearance of wrinkles and acne.

The customer applies Acropass Products by putting the patch on the targeted area and press down the patch to skin. The dissolving microstructures that are tiny processes about ¼ the thickness of human hair and can penetrate in-between skin membranes and pass through the horny layer (stratum corneum). The microstructures dissolve in the skin and deliver the ingredient to the skin. Upon application, the microstructures are completely dissolved and absorbed into the skin, and produce anti-aging and acne soothing effects.

Acropass Ageless Lifters can be applied to any areas on the face and the Company offers special patches to be used under the eyes, on the laugh lines or as spot treatments. Acropass Trouble Care patches are small round patches to be used on the acne.

The Company does not manufacture the Acropass Products and purchases the Acropass Products directly from Rubyfield for resale.

The Company’s current target customers are individuals who have acne or aging concernsIn the beginning of 2020, the Company ceased the marketing and selling of cosmetic products in the United States.

 

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From the third quarter of year ended February 29, 2020, the company started to provide technical support services in connection with nutritionally oriented food that include Sea-Buckthourn and Organic Spouting Powder. The company’s technology background directors make our service match customers needs well.

Marketing and Distribution Methods

We do not have any brick-and-mortar stores and sells the Acropass Products directly to our customers on our own website or via Amazon. We hirehired the Manager to manage the sales and distribution of our products, but we dodid not engage any distributors to distribute our products. Based on our sales and inventories, we orderordered additional inventory from Rubyfield under the Resale Agreement. Rubyfield will then shipshipped the inventory from China to the Manager in the United States and the Manager will fulfillfulfills our customers’ orders on the website and via Amazon.

Because we arewere essentially an online business, we directly targettargeted our customers by promoting our products on our website or via social media, internet advertisement and media reviews. On our products shopping website, http://www.acropass-shop.com/, we havehad detailed product descriptions, promotional videos and photos to educate our customers about our products and address potential concerns and questions from our customers. In the future, we are also planning to start a blog on our website to raise awareness of skincare and promote our products.

In addition to our website, we also utilizeutilized social medical platforms to market our products. Currently, we havehad established a Facebook account that allows us to promote our skin care products and interact with our existing and potential customers. Our customers can follow our posts, watch product videos, write reviews on our products and interact with other customers who are also interested in Acropass Products. We also havehad presence on Instagram and Twitter and regularly launch social media campaign on different platforms. Previouslyplatforms until we have conducted raffle giveawaysceased the marketing and have given out limited time promotional code to allow our followers to try ourselling of cosmetic products at a discounted price.in the United States. In the future, we plan to work with social media influencersbeginning of 2020, the Company ceased the marketing and digital media to review and market ourselling of cosmetic products viain the influencer’s social media account.United States.

We are planningAs we just started our technical support service for development of nutrition food to launch internet advertisement campaignmanufacturers, our service expanding reply on Facebook and Google. We closely monitor our performance analysis and metrics report on weekly basis to optimize the most effective ads and channels to market our products on the internet.referral currently.

Competition

The skin care businessproduct in the United States is very competitive. Brand recognition, quality of products, packaging, ingredients, celebrity effects and price are some of the many factors that impact consumers’ choices among competing products and brands. Marketing, promotion, merchandising, branding, and positive customer and media review have a significant impact on consumers’ buying decisions. We compete against a number of companies, most of which have substantially greater resources than we do.

Our principal competitors consist of well-known, multinational manufacturers and marketers, of skin care products, most of which design, manufacture, market and sell their products under multiple brand names. We also facefaced competition from smaller independent brands, skincareskin care specialty websites, as well as some retailers, medical officesretailers. In the beginning of 2020, the Company ceased the marketing and spas that have developed their own skin care products. As Asian beautyselling of cosmetic products become popular in the United States, we also face competition from other imported Asian beauty products sold at local specialty stores or online.States.

The company’s technical support service to nutrition food industry is unique. SEA-BUCKTHORN is highly beneficial to the heart disease, diabetes, and boost the immune system treatment. Organic Sprouting Powder contains high level of plant protein. We believe the Acropass Product is unique in the anti-aging and acne treatment market. Our products deliver effective treatment without any risk of serious skin damage. Our products are designed as a patch that is quick and easy to use and our customers can use the product at home without any supervision from the professionals. Acropass Products penetrates deeper into the skin compare to other hyaluronic acid serums on the market, many of which were exclusively designed for under-eye use – while Ageless Lifter can be applied at anytime, and anywhere on the face where anti-aging effects are desired. Users have shared that they experienced satisfying anti-aging effects after eight uses, with results lasting up to a month after terminating the treatment. Our users also include younger population because our product helps younger users maintain smoother and youthful skin and diminish the appearance of acne. Unlike injections, it’s a relatively painless anti-aging solution, and a non-invasive alternative to micro-needling, delivering the benefits of improved skin elasticity and miniaturization in a non-invasive way. We believe that by word-of-mouth, internet and social media platform marketing, we will gain recognition among our targeted customers.

Principal Supplier

Rubyfield is the principal and sole supplier of the Company’s Acropass Products. The Company entered into a Resale Agreement with Rubyfield, pursuant to which the Company agrees to purchase Acropass Products from Rubyfield. The Resale Agreement expires on December 31, 2019 and the Company has the right todidn’t renew the agreement upon the expiration. The Resale Agreement cannot be terminated prior to the expiration date unless the termination is upon the consent by both parties in a force majeure event.

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Intellectual Property

Through a Resale Agreement with Rubyfield, the Company has the rights to distribute Acropass Products in the United States. The Company does not own any intellectual property nor did the Company enter into any license arrangement with Raphas or Rubyfield with respect to Acropass Products or their intellectual property.

In addition to the promotional material provided by Rubyfield under the Resale Agreement, the Company has created promotional material related to Acropass Products, including videos, photographs and marketing material. The Company owns the intellectual property rights to such promotional material.

From the third quarter of year ended February 28,2020, the company started new business line to provide technical support services of development of new healthy material and product to customers. The company believes its technology background directors may develop new intellectual property in this new service business area. The company has not generated revenue from this new business line.

Government Regulation

We do not need governmental approval to market and distribute our products in the United States but our products are regulated by the Federal Food, Drug, and Cosmetic Act (FD&C Act) and the Fair Packaging and Labeling Act (FPLA) because they are considered cosmetics. FDA regulates cosmetics under the authority of these laws. Our products registered in the FDA volunteer registration program.

The FD&C Act defines cosmetics by their intended use, as “articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body...for cleansing, beautifying, promoting attractiveness, or altering the appearance” (FD&C Act, sec. 201(i)). The FD&C Act prohibits the marketing of adulterated or misbranded cosmetics in interstate commerce. “Adulteration” refers to violations involving product composition--whether they result from ingredients, contaminants, processing, packaging, or shipping and handling. “Misbranding” refers to violations involving improperly labeled or deceptively packaged products. Under the FD&C Act, a product also may be misbranded due to failure to provide material facts. This means, for example, any directions for safe use and warning statements needed to ensure a product’s safe use.

In addition, under the authority of the FPLA, FDA requires a list of ingredients for cosmetics marketed on a retail basis to consumers (Title 21, Code of Federal Regulations).Regulations. Cosmetics that fail to comply with the FPLA are considered misbranded under the FD&C Act. This requirement does not apply to cosmetics distributed solely for professional use, institutional use (such as in schools or the workplace), or as free samples.

FDA can take action against cosmetics on the market that are in violation of these laws, as well as companies and individuals who market such products.

FDA’s legal authority over cosmetics is different from their authority over other medical products they regulate. Under the law, cosmetic products and ingredients do not need FDA premarket approval, with the exception of color additives. However, FDA can pursue enforcement action against products on the market that are not in compliance with the law, or against firms or individuals who violate the law.

We followhave followed best practices guidelines to comply with all regulatory requirements.

Research and Development

The Company has not conducted any research and development activities related to Acropass Products.

Employees

Our officers and directors are responsible for planning, developing and operational duties, and will continue to do so throughout the early stages of our growth. Currently, we have five employees. In the future, when our business plans require, we will add additional staff who may be full or part time employees or consultants.

 

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Reports to Securities Holders

We prepare an annual report that includes audited financial information. We will make our financial information equally available to any interested parties or investors through compliance with the disclosure rules for a small business issuer under the Securities Exchange Act of 1934. We are subject to disclosure filing requirements including filing Form 10-K annually and Form 10-Q quarterly. In addition, we will file Form 8-K current reports and proxy materials and other information from time to time as required. We do not intend to voluntarily file the above reports in the event that our obligation to file such reports is suspended under the Exchange Act. The public may read and copy any materials that we file with the Securities and Exchange Commission, (“SEC”), at the SEC’s Public Reference Room at 100 F Street NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

ITEM 1A RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2 PROPERTIES

We do not own any real property. Our business is presently operated from office provided by our CEO, Ms. Yan Li at 10F., Yunfeng Building, No. 478 Wuzhong Rd, Shanghai, China 201103, without paying any rent.

ITEM 3 LEGAL PROCEEDINGS

Currently, the Company is not involved in any pending litigation or legal proceeding.

ITEM 4 MINE SAFETY DISCLOSURES

Not applicable to our Company.

PART II

PART II

ITEM 5 MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

Our common stock is currently quoted on the OTCQB Bulletin Board under the symbol “JFIL”. Because we are quoted on the OTCQB Bulletin Board, our securities may be less liquid, receive less coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange. Although there is trading in our common stock from time to time, there is no established market for our common stock. In the past year, it has traded the price per share has been in the $0.019$0.018 to $0.065 range.$0.078 range during the year ended February 28, 2022 These prices reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transaction values.

Holders

As of February 28, 2019,2022, there were 4541 total record holders of 18,548,20819,548,208 shares of the Company’s common stock. We believe we have additional shareholders who hold their shares on a beneficial basis in “street name.”

Dividends

The Company has not paid any cash dividends to date and does not anticipate paying dividends in the foreseeable future. It is the intention of management to utilize all available funds for the development of the Company’s business.

Securities Authorized for Issuance Under Equity Compensation Plans

None.

Recent sales of unregistered security

Between December 2015 and February 28, 2019,2022, the Company issued 300,000900,000 shares of common stock to its CEO, Ms. Yan Li, under her employment agreement, 279,167550,000 shares to its current CFO, Mr. Lei Wang, 64,583200,000 shares to its current Secretary/Treasurer, Mr. Kecheng Xu, 29,167300,000 shares to its new board director Brian Cheng, 14,583150,000 shares to its new board director Mario Papazoglou for compensation purposes. The issuance of shares to officers were made in reliance upon the exemption from securities registration afforded by Section 4(2) of the 1933 Act. (See Item 11 – Executive Compensation – Employment Agreements and Related Transactions.)

Issuer Purchases of Equity Securities

We did not repurchase any of our equity securities during the years ended February 28, 20192022 and 2018.

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February 28, 2021.

ITEM 6 SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our audited financial statements and notes thereto included herein. In connection with, and because we desire to take advantage of, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward-looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or our behalf. We disclaim any obligation to update forward-looking statements.

Results of Operations

Sales

From last quarter of the fiscal year ended February 28, 2018, we started to promote and sell our new cosmetic products in the United States market. We purchase the Acropass Products and other Products from an affiliated company in China under a Resale Agreement.China. In the beginning of 2020, the Company ceased the marketing and selling of cosmetic products in the United States. From the third quarter of year ended February 29, 2020, the company started to provide technical support services in connection with nutritionally oriented food that include Sea-Buckthourn and Organic Spouting Powder. We recognized $53,143 and $5,103 revenues$0 of revenue during the fiscal yearsyear ended February 28, 2019 and 2018 respectively.2022. The decrease was primarily due to pandemic business slow down. We recognized $0 of revenue during the fiscal year ended February 28, 2021.

Advertising expense

To promote our new cosmetics products, Acropass series, in the United States market, we entered a contract with a third party to run a marketing campaign and manage the sales of the products. We incurred a total of $1,599$0 and $44,472$0 in marketing expenses for the year ended February 28, 20192022 and 2018February 28, 2021 respectively.

 

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Cost and operatingOperating expense

The major components of our expenses for the fiscal years ended February 28, 20192022 and 2018February 28, 2021 are outlined in the table below:

Our cost and operating expenses decreased $222,432by $4,912 for the year ended February 28, 2019,2022, compared to the fiscal year ended February 28, 2018.2021. The decrease was mainly due to $233,250a decrease of $2,250 in officer compensation. We have also incurredcompensation and a decrease expense of $42,873 related to campaign marketing expenses offset with an increase$1,685 in cost of goods of $30,618 and selling expense of $26,625 in 2019, compared to the fiscal year ended February 28, 2018.accounting expense.

Other Expensesincome

Other expenses decreasedincome increased to $ Nil$14,463 and $0 for the year ended February 28, 2019, from $7,678 for the year ended2022 and February 28, 2018. The decrease in was mainly due to the payoff of convertible notes during the year ended February 28, 2018.2021, respectively.

Net Loss

During the years ended February 28, 20192022 and 2018,February 28, 2021, the Company realized a net loss of $316,099$64,811 and $594,249,$84,186, respectively.

 

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Liquidity and Capital Resources

The increase in the Company’s working capital deficit between the fiscal years ended February 28, 20192022 and 2018February 28, 2021 was mainly due to the increase of total $128,153 in accrued officer compensation and$40,818 due to the CEO.

Cash Flows

The table below, for the periods indicated, provides selected cash flow information:

Cash Flows from Operating Activities

During the fiscal year ended February 28, 2019,2022, we used $48,700 in operating activitiesincurred a net loss of $64,811, compared to $102,757a net loss of $84,186 during the fiscal year ended February 28, 2018, the decrease is mainly due to $48,040 increase of sales of goods.

2021. During the fiscal year ended February 28, 2019,2022, we incurred a net loss of $316,099, compareused $39,677 in operating activities compared to a net loss of $594,249$69,366 during the fiscal year ended February 28, 2018,2021, the operating cash use decrease is mainly due to $233,250$22,000 other income and $2,491 decrease of officer compensation.professional fee due.

Cash Flows from Investing Activities

We did not spend funds in investing activities during the yearyears ended February 28, 20192022 and 2018.February 28, 2021.

Cash Flows from Financing Activities

During the year ended February 28, 2019,2022, we generated $52,778$40,818 in financing activities compared to $107,139$61,179 during the year ended February 28, 2018,2021, the decrease is due to proceed decrease from the CEO.

Going Concern

The audit report of the Company’s independent registered accounting firm includes a matter of emphasisan explanatory paragraph related to our ability to continue as a going concern.

Off-Balance Sheet Arrangements

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

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

JUBILANT FLAME INTERNATIONAL, LTD.

FOR THE YEARS ENDED FEBRUARY 28, 20192022 AND FEBRUARY 28, 20182021

Index to Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TheTo the Board of Directors and shareholders of

Jubilant Flame International, Ltd.

Shanghai, China

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Jubilant Flame International, Ltd. (the “Company”(“the Company”), as of February 28, 20192022 and 2018,2021, and the related statements of operations, changes in stockholders’ deficit and cash flows for each of the two years thenin the period ended February 28, 2022 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of February 28, 20192022 and 2018,2021, and the results of its operations and its cash flows for each of the two years in the period ended February 28, 2019,2022, in conformity with U.S generally accepted accounting principles.principles

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 3 to the financial statements and going concern assessment of critical audit matter below, the Company has suffered recurring losses from operations and has stockholders’ deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform anthe audit to obtain reasonable assurance thatabout whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatementmisstatements of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provideprovides a reasonable basis for our opinion.

Critical Audit Matter of Emphasis

The accompanyingcritical audit matter communicated below is a matter arising from the current period audit of the financial statements have been prepared assuming that was communicated or required to be communicated to the Company will continueaudit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgement. The communication of a critical audit matter does not alter in anyway our opinion on the financial statements, taken as a going concern. whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Going Concern Assessment

As described in Note 3 to the financial statements, the Company prepared its financial statements on a going concern basis, and management has suffered recurringconcluded that the Company has not generated sufficient income to sustain the operations. For the years ended February 28, 2022 and 2021, the Company incurred net losses from operationsof USD 0.064 million and negative cash flows from operating activitiesUSD 0.084 million, respectively. As of February 28, 2022 and 2021, the accumulated deficit amounted to USD 3.66 million and USD 3.59 million, respectively and the current liabilities exceeded the current assets in the amount of USD 1.17 million and USD 1.12 million, respectively.

The principal consideration for our determination that raise substantial doubt about itsperforming procedures relating to the Company’s going concern assessment is a critical audit matter is the significant judgment by management related to the Company’s ability to raise funds and continue as a going concern. Management’s plans regarding these matters are also describedoperations.

Addressing the matter involved performing procedures and evaluating audit evidence in Note 3.connection with forming our overall opinion on the financial statements. The procedure included confirming the personal commitment to provide financial statements do not include any adjustments that might resultsupport for the next twelve-months from the outcomebalance sheet date by the Chief Executive Officer of this uncertainty.the Company.

/S/ TPS Thayer, O’Neal Company, LLC

TPS Thayer, LLC

We have served as the Company’s auditor since 20172020

Sugar Land, Texas

May 9, 2022

Houston, TX

May 17, 2019

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JUBILANT FLAME INTERNATIONAL, LTD

BALANCE SHEETS

FEBRUARY 28, 20192022 AND 2018FEBRUARY 28, 2021

The accompanying Notesnotes are an Integral Partintegral part of these Financial Statementsfinancial statements.

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JUBILANT FLAME INTERNATIONAL, LTD

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED FEBRUARY 28, 20192022 AND 2018FEBRUARY 28, 2021

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

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JUBILANT FLAME INTERNATIONAL, LTD

STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED FEBRUARY 28, 20192022 AND 2018FEBRUARY 28, 2021

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

JUBILANT FLAME INTERNATIONAL, LTD

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED FEBRUARY 28, 2022 AND FEBRUARY 28, 2021

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

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JUBILANT FLAME INTERNATIONAL, LTD

NOTES TO FINANCIAL STATEMENTS OF CASH FLOW

FOR THE YEARS ENDED FEBRUARY 28, 20192022 AND 2018

The accompanying notes are an integral part of these financial statements.FEBRUARY 28, 2021

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JUBILANT FLAME INTERNATIONAL, LTD

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED FEBRUARY 28, 2019 AND 2018

NOTE 1 – ORGANIZATION AND OPERATIONS

Jubilant Flame International, Ltd. (the “Company”), was formed on September 29, 2009 under the name Liberty Vision, Inc. The Company provided web development and marketing services for clients. On August 18, 2015, the Company changed its name to Jubilant Flame International, Ltd.

From the fourth quarter of the fiscal year ended February 28, 2018, the Company started to market and sell cosmetics products imported from Asia, Acropass Series products, in the United States market. The Company purchased the inventory from a related party company in China. The Company contracted with a third party to operate the online shopping platform and marketing campaign in the United States until January 2020. In the beginning of 2020, the Company ceased the marketing and selling of cosmetic products in the United States.

From the third quarter of the year ended February 29, 2020, the company began its new business line of providing technical support services for development of new nutrition food products to sell to customers in USA. The company had not generated significant revenue from this new business by the year ended at February 28, 2022.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

The Company’s significant estimates include income tax provisions and valuation allowances of deferred tax assets; the fair value of financial instruments and the assumption that the company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less to be cash and cash equivalents.

Receivables

Receivables are stated at their carrying values, net of a reserve for doubtful accounts. Receivables consist primarily of amounts due from Amazon reserve holding balanceSea-Buckthourn nutrition food technical support fee. At the year end of February 28, 2022, the company decided to write off total of $7,384 account receivable of support fee.

Inventories

The Company values inventories at the lower of cost or market as determined primarily by the retail inventory method of accounting, using the first-in, first-out (“FIFO”) method.

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Website and Amortization

Website development costs are capitalized and stated at cost, less accumulated amortization. Amortization is provided using the straight-line method over the estimated useful life of three years.

Carrying Value, Recoverability and Impairment of Long-Lived Assets

The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.

The impairment charges, if any, are included in operating expense in the accompanying statements of income and comprehensive income (loss).

Recent Accounting Pronouncements

Pronouncements Adopted in Fiscal 2018

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU represents a single comprehensive model to recognize revenue to depict the transfer of promised goods or services to a customer at an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. The Company adopted this ASU fromhas implemented all new accounting pronouncements that are in effect as of the interim period ending May 31, 2018, underdate of the modified retrospective approach. The implementationissuance of this ASU didn’t result in no adjustment to retained earnings and currentthese financial statements.

In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. This guidance will be effective for entities for the fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020 on a prospective basis, with early adoption permitted. We adopted the new standard effective January 1, 2021 and the adoption of this guidance doesn’t have an impact on our consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

On December 22, 2017,June 16, 2016, the SecuritiesFASB issued Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, which introduced an expected credit loss model for the impairment of financial assets measured at amortized cost basis. That model replaces the probable, incurred loss model for those assets. Through the amendments in that Update, the Board added Topic 326, Financial Instruments— Credit Losses, and Exchange Commission (SEC) staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), in responsemade several consequential amendments to the Tax CutsCodification. This guidance will be effective for entities for the fiscal years, and Jobs Actinterim periods within those fiscal years, beginning after January 1, 2023. The Company will adopt the new standard effective March 1, 2023 and does not expect the adoption of 2017 (“Tax Act”). this guidance to have a material impact on its consolidated financial statements.

The Company has elected to record provisional amounts, as allowed by SAB 118, duringconsidered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a measurement period not to extend beyond one year of the enactment date. The company adopted it from the fourth quarter of Fiscal 2017.material impact on its consolidated financial statements.

Original Issuance Discount

For certain convertible debt issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded as a debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt.

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Derivative Financial Instruments

Fair value accounting requires bifurcation of embedded derivative instruments such as convertible features in convertible debts or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the binomial option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments.

Fair Value of Financial Instruments

The Company measures assets and liabilities at fair value based on expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale date of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.

The following are the hierarchical levels of inputs to measure fair value:

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, accounts payable, due to related party and loan payable, approximate their fair values because of the current nature of these instruments. .

The company converted and paid off its convertible note in full in August 2017. The fair value of derivatives liability is Zero as of February 28, 2019 and 2018 respectively.

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Income Taxes

Deferred income tax assets and liabilities are provided for based upon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.

 

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Revenue Recognition

Sales

The Company recognizes eCommerce sales revenue, net of sales taxes and estimated sales returns, upon delivery to the customer. Additionally, estimated sales returns are calculated using historical experience of actual returns as a percent of sales. The company started to market and sell cosmetics products from the fourth quarter of the fiscal year ended February 28, 2018 and collected all receivable from customers by the year end. No estimated sales returns were recorded by the year end February 28, 2019.

Cost of Sales

Cost of sales includes actual product cost, the cost of transportation to the Company’s distribution facilities.

Operating, Selling, General and Administrative Expenses

Operating, selling, general and administrative expenses include all operating costs of the Company, except cost of sales, as described above.Company.

Advertising Costs

Advertising costs are expensed as incurred, consist primarily of video advertisements and are recorded in operating, selling, general and administrative expenses in the Company’s Statements of Income. Advertising costs $1,599 and $44,472 for fiscal 2019 and 2018, respectively.

Net Loss Per Common Share

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period.

Since the company has incurred losses for all periods, the impact of the common stock equivalents would be anti- dilutive and therefore are not included in the calculation.

NOTE 3 – GOING CONCERN

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. As of February 28, 2019,2022, the Company had a working capital deficit of $994,608.$1,168,003. The Company currently has limited profitable trading activities and has an accumulated deficit of $3,431,889$3,657,034 as of February 28, 2019.2022.

The COVID-19 pandemic has had and continues to have a major slowdown effect on worldwide business activity. Although the Company does not anticipate any fundamental change in its business plans, management does expect some degree of unavoidable slowdown due to the Company’s inherent reliance on business activities from multiple external partners, clients outside our control. This raises substantial doubt about the Company’s ability to continue as a going concern.

The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions or related parties. By doing so, the Company hopes to generate sufficient capital to execute its new business plan in the medical and cosmeticsnutrition food technical service sector on an ongoing basis. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. There is no guarantee the Company will be successful in achieving these objectives. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 4 -- CONVERTIBLE DEBT

On December 9, 2015, the Company issued a convertible debenture of $60,000 which was determined to contain embedded conversion features required to be bifurcated from the host contract and reported at fair value. During the second quarter ended at August 31, 2017, the company paid off the remaining outstanding balance of $800 in full plus 40% interest. As a result, the convertible debenture balance net of discount amortization as of February 28, 2018 was zero.

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Before the company paid off the remaining balance of $800 in full in year 2018, the holder of the convertible note converted $6,600 of principal into 1,627,777 common shares during the year end February 28, 2018. The following is a summary of the debt conversions:

NOTE 5 – RELATED PARTY TRANSACTIONS

In support of the Company’s efforts and cash requirements, it must rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is noa formal written commitment for continued support by shareholders. The advances are considered temporary in nature and have not been formalized by a promissory note.

The CEO confirmed the personal commitment to provide financial support for the next twelve-months from the balance sheet date.

As of February 28, 2019,2022, the Company had a $443,607$591,942 loan outstanding withfrom its CEO, Ms. Yan Li. This compares with thean outstanding balance of $390,828$551,124 for Ms. Yan Li atas of February 28, 2018.2021. The loans areloan is non-interest bearing, due upon demand and unsecured.

A related party created a website that was active beginning in August of 2015 and billed The company business is operated from an office provided by the Company $25,000. The expense of this website is being amortized over 36 months at the rate of $694 per month. It was fully amortized by August of 2018.CEO.

A related party company is providing accounting service to the company at an estimated annual service fee of $23,000.$19,000. The company paid a separate legal entity controlled by Mr. Wang. Total service fee of $19,000 during year end of February 28, 2022 and $21,000 during the year end of February 29, 2021 respectively.

From November 2017, the Company started to purchasebegan purchasing cosmetic and sprout products from atwo related partyparties controlled by our CEO. The Company purchased a total of $33,093 and $8,842 in$47,643 of inventory from two related parties which was sold during the year ended February 29, 2020, and is recorded as the due to related party at the endparties balance which was outstanding as of February 28, 20192022 and 2018 respectively.February 28, 2021.

NOTE 65 – ACCRUED OFFICER COMPENSATION AND STOCK COMPENSATION

On December 15, 2015, the Company entered into an employment agreementsagreement with its president, Ms. Yan Li, and its former secretary and treasurer, Mr. Robert Ireland. Both agreements wereLi. The agreement was retroactively effective as of December 4, 2015, for a term of 36 months (measured from December 4, 2015). Pursuant to the agreement, both Ms. Yan and Mr. Ireland shall receive an annual salary of $100,500 and 100,000 shares of the Company’s common stock.

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On August 30, 2017, Mr. Robert Ireland resigned as Secretary/Treasurer of the company. Additionally, upon his resignation, he surrendered all outstanding equity compensation to the company and agreed to cancel all outstanding debt of the company that was owed to him for past compensation in the amount of $410,715.

On January 15, 2019, the board of the company approved new compensation to its five officers including two new appointed directors. The five directors waived their salary and receiveswill receive a total of 500,000 shares each year for a term of three years.

As of February 28, 2019,2022, a total of $535,500 had been accrued as salaryaccrued officer compensation payable to its president compared to $460,125 to her at$535,500 as of February 28, 2018.2021.

As of February 28, 2019,2022, a total of $159,750$15,750 in stock compensation expense had been recorded tofor five officers compared to a total of $317,625$18,000 in stock compensation had been recorded for the same period inas of February 28, 2021.

NOTE 6 – OTHER INCOME(EXPENSE)

Other income (expense) includes $22,000 of other income and the write off of $7,384.

During the year ended February 28, 2022, the company received a total of $22,000 as other income for a portion of the prior year to four officers, including one resigned officer.year’s operating expenses recovered from the settlement with a Acropass product vendor.

At the year ended February 28, 2022, the company decided to write off a total of $7,384 account receivable of support fee as other expense, as the amount was not collectable. 

NOTE 7 – INCOME TAX

At February 28, 2019,2022, the Company had unused federal and state net operating loss carryforwards available of approximately $900,194,$1,052,454, which may be applied against future taxable income, if any, and which expire in various years through 2038.2042.

This loss carry-forward expires according to the following schedule:

The following is a reconciliation of the tax provision as calculated at the statutory tax rate to the provision as recognized for the years ended February 28, 20192022 and February 28, 2018:2021:

There were permanent differences and temporary differences to reconcile the tax provision for the years ended February 28, 20192022 and 2018,2021, other than the change in valuation allowance of $16,862$8,832 and $41,590,$12,744, respectively. All tax years from inception remain open for examination by the tax authorities.

In addition to tax loss carry forward, unrecognized deferred tax assets as of February 28, 20192022 and 2018,February 28, 2021, primarily related to accrued officer compensation and other accrued expense not deductible until paid for income tax purposes amounted to $ 15,829$630 and $52,763,$1,155, respectively.