UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form FORM 10-Q

(Mark One)

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

For the quarterly period ended JanuaryJuly 31, 20132021

Or

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

For the transition period from _____to____________ to ______

Commission File Number: file number 001-34808

CHINA BOTANIC PHARMACEUTICAL INC.

(Exact name of registrant as specified in its charter)

6770

(Primary Standard Industrial Classification Code Number)

Registrant’s telephone number, including area code (646) (646) 768 -8417

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

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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.

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). ☐ Act.) Yes ☒    No ☐

AsThe number of August 10, 2021 there were 37,239,536 shares outstanding of the registrant’s $0.001 par value common stock issued and outstanding.as of September 17, 2021, was 37,239,536 shares.

DOCUMENTS INCORPORATED BY REFERENCE — NONE 

TABLE OF CONTENTS

PART I

InPART I FINANCIAL INFORMATION

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Information contained in this Quarterly Reportquarterly report on Form 10-Q references to “dollars”contains “forward-looking statements.” These forward-looking statements are contained principally in the section titled “Management’s Discussion and “$Analysis of Financial Condition and Results of Operations,” and are to United States dollars and, unless the context otherwise requires, references to “we,” “us” and “our” refer to China Botanic Pharmaceutical Inc. and its consolidated subsidiaries.

This Quarterly Report contains certain forward-looking statements. When used in this Quarterly Report, statements which are not historical in nature, includinggenerally identifiable by use of the words “anticipate,“may,” “estimate,“will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “may,” “project,” “plan”“intend” or “continue,” and similar expressions are intended to identify forward-looking statements. They also include statements containing anticipated business developments, a projection“project” or the negative of revenues, earnings or losses, capital expenditures, dividends, capital structurethese words or other financial terms.

variations on these words or comparable terminology. The forward-looking statements herein represent our expectations, beliefs, plans, intentions or strategies concerning future events, including, but not limited to: our ability to consummate the Merger, as such term is defined below; the continued services of the Custodian as such term is defined below; our future financial performance; the continuation of historical trends; the sufficiency of our resources in this Quarterly Reportfunding our operations; our intention to engage in mergers and acquisitions; and our liquidity and capital needs. Our forward-looking statements are based upon management’s beliefs,on assumptions that may be incorrect, and there can be no assurance that any projections or other expectations ofincluded in any forward-looking statements will come to pass. Moreover, our future operations and economic performance, taking into account the information currently available to them. Theseforward-looking statements are not statements of historical fact. Forward-looking statements involvesubject to various known and unknown risks, uncertainties and uncertainties, some of which are not currently known to usother factors that may cause our actual results, performance, or financial conditionachievements to be materially different from the expectations of future results, performance or financial condition we expressachievements expressed or imply inimplied by any forward-looking statements. These forward-looking statements are based on our current plans and expectations and are subject to a number ofrisks, uncertainties and other factors include but are not limited to: the risks that could significantly affect current plansof limited management, labor, and expectationsfinancial resources; our ability to establish and maintain adequate internal controls; our ability to develop and maintain a market in our securities; and our future financial conditionability obtain financing, if and results.

Wewhen needed, on terms that are acceptable. Except as required by applicable laws, we undertake no obligation to publicly update or revisepublicly any forward-looking statements whether as a result offor any reason, even if new information futurebecomes available or other events or otherwise. In light of these risks, uncertainties and assumptions,occur in the forward-looking events discussedfuture.

As used in this filing might not occur. We qualify anyquarterly report on Form 10-Q, “we”, “our”, “us” and all of our forward-looking statements entirely by these cautionary factors. Asthe “Company” refer to China Botanic Pharmaceutical Inc. a consequence, current plans, anticipated actions and future financial conditions and results may differ from those expressed in any forward-looking statements made by or on our behalf. You are cautioned not to unduly rely on such forward-looking statements when evaluatingNevada corporation unless the information presented herein.context requires otherwise.

PART I

Item 1.  Financial Statements.

CHINA BOTANIC PHARMACEUTICAL INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

CHINA BOTANIC PHARMACEUTICAL INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

The accompanying notes are an integral part of these consolidated financial statements.Item 1. Financial Statements.

Index to Financial Statements

CHINA BOTANIC PHARMACEUTICALS,PHARMACEUTICAL INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ (DEFICIT) EQUITYBALANCE SHEETS

FOR THE THREE MONTHS ENDED JANUARY 31, 2013 AND 2012(Unaudited)

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

CHINA BOTANIC PHARMACEUTICALS,PHARMACEUTICAL INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSOPERATIONS

(Unaudited)

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

CHINA BOTANIC PHARMACEUTICAL INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

JANUARY 31, 2013(Unaudited)(Unaudited)

1.  ORGANIZATION AND NATURE OF OPERATION

The accompanying condensed consolidatednotes are an integral part of these financial statements include thestatements.

CHINA BOTANIC PHARMACEUTICAL INC.

STATEMENTS OF CASH FLOWS

(Unaudited)

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

NOTES TO (UNAUDITED) FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

China Botanic Pharmaceutical Inc. (“CBP”) and its subsidiaries.  CBP and its subsidiaries are collectively referred to as the “Company.”

CBPCompany”, CBPI, “we” “us”) was incorporated in the State of Nevada on August 18, 1988, originally under the corporate name of Solutions, Incorporated.  It was inactive until August 16, 1996, when it changed its corporate name to Suarro Communications, Inc, and engaged in the business of providing internet basedinternet-based business services.  This line of business was discontinued in 2006, and CBPCBPI became a non-operating public company.  CBPCBPI underwent a number ofseveral corporate name changes as follows:

This filing was prepared in August, 2021. Due to the lack of accounting records for the relevant period all assets have been written off and all liabilities have been carried forward from the Company most recent filings prior to this date on October 31, 2010.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company has included all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of the result of operations for the three months ended January 31, 2013 and 2012. The condensed consolidated financial statements and notes thereto should be read in conjunction with the audited financial statements and notes for the year ended October 31, 2012 included in the Company’s Annual Report on Form 10-K. Interim results are not necessarily indicative of results for the full year due to seasonal and other factors.

This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s condensed consolidated financial statements. The condensed consolidated financial statements and notes are representation of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the consolidated financial statements for January 31, 2013 and October 31, 2012.

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and are expressed in terms of US dollars.

The condensed consolidated financial statements include the financial statements of CBP and its subsidiaries.

All inter-company transactions and balances have been eliminated in consolidation.

FASB ASC Topic 810, “Consolidation”, requires noncontrolling minority interests to represent the portion of earnings that is not within the parent company’s control. The noncontrolling minority interests are required to be reported as equity instead of as a liability on the balance sheet.  In addition, this statement requires net income from noncontrolling minority interest to be shown separately on the condensed consolidated statements of operations and comprehensive income. The Company has no noncontrolling interest as of January 31, 2013 and October 31, 2012.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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 had no cash on hand and had an accumulated deficit of $10,229,681. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date of the financial statements being issued. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its business plan. The Company does not have any commitments for additional capital. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The preparation of these condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affected the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the condensed consolidated financial statements and the reported amounts of net sales and expenses during the reported periods.

Significant estimates and assumptions by management include, among others, uncollectible accounts receivable, slow moving, obsolete and/or damaged inventory, the carrying amount of property and equipment and intangible assets, reserve for employee benefit obligations, stock warrant valuation, noncash rental expense and other uncertainties. Actual results may differ from these estimates.  The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.

The Company’s principal country of operations is in PRC. The financial position and results of operations of the subsidiaries are determined using the local currency (“Renminbi” or “RMB”) as the functional currency.

Translation of amounts from RMB into US dollars for reporting purposes is performed by translating the results of operations denominated in foreign currency at the weighted average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the market rate of exchange ruling at that date. The registered equity capital denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. All translation adjustments resulting from the translation of the financial statements into the reporting currency (US dollars) are reported as a component of accumulated other comprehensive income in shareholders’ equity.

As of January 31, 2013, and October 31, 2012, the exchange rates were -0-, respectively. For the three months ended January 31, 2013 and 2012, the average exchange rates were RMB 0.00 and RMB 6.33 and the translation adjustments totaled $-0- and $1,485,999, respectively.

The FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements.

Various inputs are considered when determining the fair value of the Company’s financial instruments. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities.  These inputs are summarized in the three broad levels listed below.

The Company’s adoption of FASB ASC Topic 825 did not have a material impact on the Company’s condensed consolidated financial statements.

The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared.

The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded, and other characteristics particular to the transaction. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue is recognized in accordance with Staff Accounting Bulletin No. 104, “Revenue Recognition,” which states that revenue should be recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the service has been rendered; (3) the selling price is fixed or determinable; and (4) collection of the resulting receivable is reasonably assured.

Interest income is recognized when earned, considering the average principal amounts outstanding and the interest rates applicable.

During the three months ended January 31, 2013 and 2012, the Company has no sales or contracts that included multiple deliverables that would fall under the scope of FASB ASC Topic 605, “Multiple Deliverable Revenue Arrangements – A Consensus of the FASB Emerging Issues Task Force.”

The Company provided annual sales rebates to its distributors based upon sales volumes.  Sales rebates are recorded as a current liability at the time of the sale based upon the Company’s estimates of whether each customer would be entitled to rebates for the period.  At quarter end, the accrued rebate amount is adjusted to the actual amount earned and reclassified to trade receivables in accordance with legal right of offset

3. COMMITMENTS AND CONTINGENCIES

The Company has various purchase commitments for materials, supplies and services incident to the ordinary conduct of business, generally for quantities required for the Company’s business and at prevailing market prices. No material annual loss is expected from these commitments and there are no minimum purchase commitments.

The Company and its subsidiaries are self-insured, and they do not carry any property insurance, general liability insurance, or any other insurance that covers the risks of their business operations. As a result, any material loss or damage to its properties or other assets, or personal injuries arising from its business operations would have a material adverse effect on the Company’s financial condition and operations.

The Company is not involved in any legal matters arising in the normal course of business. While incapable of estimation, in the opinion of the management, the individual regulatory and legal matters in which it might involve in the future are not expected to have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

(1)  Operating lease arrangements

We currently have no lease agreement with any company.

(2)  Capital commitments

On October 12, 2009, we entered into a purchase agreement with Harbin Renhuang Pharmaceutical Stock Co. Ltd (“Renhuang Stock”) to acquire the land use right, property and plant located at our Ah City Natural and Biopharmaceutical plant for a total consideration of $25,448,125. Pursuant to the purchase agreement, a payment of $15,905,078 was made to Renhuang Stock in October 2009 and a payment of $7,952,539 was made to Renhuang Stock in January 2011, with a final payment of $1,590,508 will be paid once we received all the related title transfer documents from local government, at which time title for the assets will be transferred. According to the agreement, we were exempted from lease payments for the underlying assets starting from May 1, 2010.

On April 10, 2010, CBP China entered into a Purchase Agreement with Hongxiangmingyuan of Heilongjiang Yongtai Company, to acquire two office floors for a total consideration of $6,101,920.  Pursuant to the Purchase Agreement, a payment of $4,271,344 was made in April 2010 and recorded as deposits on the condensed consolidated balance sheet.  Pursuant to the Purchase Agreement, final payment of $1,830,576 is due by December 20, 2012, at which time title for the assets will be transferred. 

3. COMMITMENTS AND CONTINGENCIES (continued)

(2)  Capital commitments (continued)

In January 2011, CBP China started its Ah City Phase Two project for Siberian Ginseng products development and industrialization and entered into a Construction and Engineering Design Contract (the “Contract”) with Heilongjiang Medical Architecture Design Institute (the “Institute”) for architectural design. A few payments have been made to Institute and relevant local government departments for design and start up fees and we recorded $1,964,277 as Construction-in-progress for Ah City Phase Two project. The estimated total investment for Ah City Phase Two is $19,086,094. In anticipation of the project proceeding, we expect to pay approximately $9,487,379 in our fiscal year 2012 and $7,634,438 in our fiscal year 2013. The project is anticipated to be finished in 2013.

On January 11, 2011, CBP China entered into an Exclusive Licensing Agreement for Harbin Renhuang Pharmaceutical Co., Ltd. to Use Forest Resources under Yichun Red Star Forestry Bureau (the “Agreement”) with Yichun Red Star Forestry Bureau of Heilongjiang Province (the “Forestry Bureau”) which provides us with 30 years exclusive license right to use approximately 6,667 hectares of undergrowth resources including approximately 67 hectares of Siberian Ginseng GAP cultivation base in Heilongjiang Province. Pursuant to the Agreement, a payment of $7,952,539 was made to Forestry Bureau in January 2011, second payment of $6,362,031 was made in October 2011 and with a final payment of $1,590,508 remaining until receive all the required material from local government authorities for a total consideration of $15,905,078. Siberian Ginseng is a plant with medically-established anti-depressant and mood regulation qualities and is also an active ingredient in our market-leading line of all-natural anti-depressant medications. We will be responsible for continued maintenance and protection of wild resources to make this area a professional Siberian Ginseng base.

In the fiscal year 2011, we purchased the following intangible assets:

On January 24, 2012, the Company entered into an advertising contract with Harbin Weishi Advertising Company to advertise its products from February 1, 2012 to January 31, 2013 as shown on the following table.

3. COMMITMENTS AND CONTINGENCIES (continued)

(2)  Capital commitments (continued)

As of January 31, 2013, the Company has capital commitments for purchase of Ah City Nature and Pharmaceutical Plant, two office floors, undergrowth resources right, product patents, advertising contract and Ah City Phase Two construction-in-progress of approximately $38,563,356. The amounts to be paid in the future years are as follows:

4. SUBSEQUENT EVENT

The Company has been inactive since September 2012.

On February 4, 2021, as a result of a custodianship in Clark County, Nevada, Case Number: A-20-827231-B Custodian Ventures LLC (“Custodian”) was appointed custodian of China Botanic Pharmaceutical, Inc. (the “Company”). On the same date, Custodian appointed David Lazar as the Company’s Chief Executive Officer, President, Secretary, Chief Financial Officer, Chief Executive Officer, and Chairman of the Board of Directors.

David Lazar, 30,The Company’s year-end is October 31.

On August 24, 2021, as a result of a private investor. Mr. Lazar has been a partner at Zenith Partners International since 2013, where he specializes in research and development, sales, and marketing. From 2014 through 2015. Since Februarytransaction, 1,000,000 shares of 2018, Mr. Lazar has beenSeries A-1 Preferred Stock, $0.001 par value per share (the “Shares”) of the managing member ofCompany were transferred from Custodian Ventures, LLC where he specializes in assisting distressed public companies. Since March 2018,to Issamar Ginzberg, Israel Moshe Levy, Shmuel Rotbard, and Benjamin Levin (collectively, the “Purchasers”). As a result, the Purchasers became holders of approximately 96% of the voting rights of the issued and outstanding share capital of the Company on a fully diluted basis of the Company, and became the controlling shareholder. The consideration paid for the Shares was $250,000. The source of the cash consideration for the Shares was personal funds. In connection with the transaction, David has actedLazar released the Company from all debts owed to him and/or Custodian Ventures, LLC.

On August 24, 2021, the existing director and officer resigned immediately. Accordingly, David Lazar, serving as a director and an officer, ceased to be the Company’s Chief Executive Officer, Chief Financial Officer, President, Treasurer, Secretary, and a Director. At the effective date of the transfer, Issamar Ginzberg consented to act as the managing membernew Chief Executive Officer, Chief Financial Officer, President, Treasurer, Secretary, and Director of Activist Investingthe Company, Issamar Ginzberg, Chairman/CEO – Mr. Ginzberg is a serial entrepreneur who has assisted entrepreneurs and organizations, consulting on business strategy and marketing insights. In 2005, Mr. Ginzberg began his own consulting business specializing in the field of strategic marketing for emerging companies. In 2012, Issamar founded Monetized Intellect Consulting to assist companies with advice and strategy for communicating their offerings and vision with their current and potential customers and stakeholders. Since 2013, Mr. Ginzberg has been CEO of It’s All From Above, LLC, a consulting firm that has advised hundreds of companies across the world to improve their business strategy, processes, and marketing and grow their brands. Services include copywriting, brand creation, advisory services on M&A, and business strategy.

Aside from his normal business activities, Issamar serves in an advisory role to several companies including Marx Bio and Shtar. Additionally, Mr. Ginzberg is often called upon to give marketing lectures at various companies (i.e. Google, Tel Aviv University, and the Jewish National Fund). Mr. Ginzberg has authored or been interviewed for many articles that have been featured in various publications including The Washington Post, Prevention Magazine, The Jerusalem Post, CNBC, and Fox Business.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™” (the “Codification”) which specializesis the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in active investing in distressed public companies. David has a diverse knowledgethe preparation of financial legal,statements in conformity with generally accepted accounting principles (“GAAP”) in the United States. 

Management’s Representation of Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto on October 31, 2020, as presented in the Company’s Annual Report on Form 10-K.

Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve months following the date of these financial statements. As of July 31, 2021, the Company had 0 cash and an accumulated deficit of $11,997,559 (12,035,799).

Because the Company does not expect that existing operational cash flow will be sufficient to fund presently anticipated operations, management; public companythis raises substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing. Recently the Company has been funded by David Lazar who extended interest-free demand loans to the Company. He will no longer continue to so now that he has sold his controlling interest in the Company. Historically, the Company raised capital through private placements, to finance working capital needs and may attempt to raise capital through the sale of common stock or other securities and obtaining some short-term loans. The Company will be required to continue to do so until its operations become profitable. Also, the Company has, in the past, paid for consulting services with its common stock to maximize working capital, and intends to continue this practice where feasible.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management accounting, audit preparation, due diligence reviews,to make estimates and SEC regulations.assumptions that affect the reported amounts of 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. The most significant estimates relate to income taxes and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

Cash and cash equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. As of July 31, 2021, and October 31, 2020, the Company had no cash on hand.

Income taxes

The Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes”. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. 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. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FASB ASC 740-10-05, “Accounting for Uncertainty in Income Taxes” prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.  

The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit.

Net Loss per Share

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.

Recent Accounting Pronouncements

There are no recent accounting pronouncements that impact the Company’s operations.

NOTE 3 – RELATED PARTY TRANSACTIONS

During the nine months ended July 31, 2021, the Custodian has extended to the Company interest-free demand loan of $43,650 to help fund the Company’s expenses. On August 24, 2021, as part of the transaction in which Custodian Ventures sold its 1,000,000 shares of Series A Preferred Stock described in Note 1. “Organization and Description of Business “, Custodian agreed to forgive any amounts due to Custodian. As a result, the $43,650 due to Custodian was reclassified as a capital contribution through Equity and had no impact on the Company’s Statement of Operations for the period ended July 31, 2021. As of July 31, 2021, and October 31, 2020, the balance of related party loans was $-0- and $-0-, respectively.

NOTE 4 – EQUITY

Common Stock

The Company has authorized 100,000,000 shares of $0.001 par value, common stock. As of July 31, 2021, and October 31, 2020, there were 37,239,536 shares of Common Stock issued and outstanding.

Preferred Stock

On June 23, 2021, the Company amended its Articles of Incorporation and designated 2,500,000 Preferred A-1 shares. On July 2, 2021, the Company awarded Custodian Ventures/David Lazar 1,000,000 Series A-1 Preferred Stock for services performed as Custodian. Each share of Series A-1 Preferred stock is convertible to 1,000 shares of common stock. Based on this conversion rate, Custodian would control approximately 96% of the Company. As a result, since this share issuance represented substantially all of the Company’s value, the shares were valued at the purchase price of the Preferred Shares of $250,000 on August 24, 2021. The $250,000 was recognized as stock-based compensation, related party in the Company’s Statement of Operations for the period ended July 31, 2021.

The attributes of the Series A Preferred Stock are as follows:

Item 2. Management’s DiscussionDividend Provisions.

Subject to the rights of any existing series of Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, the holders of shares of Series A-1 Preferred Stock shall be entitled to receive dividends, out of any assets legally available therefor, upon any payment of any dividend (payable other than in Common Stock or other securities and Analysisrights convertible into or entitling the holder thereof to receive, directly or indirectly, additional shares of Financial ConditionCommon Stock of the Corporation) on the Common Stock of the Corporation, as and Resultsif declared by the Board of Operations.Directors, as if the Series A-1 Preferred Stock had been converted into Common Stock.

Liquidation Preference.

In the event of any liquidation, dissolution, or winding up of the Corporation, either voluntary or involuntary, the holders of the Series A-1 Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Corporation to the holders of Common Stock, or any other series or class of common stock of the Corporation, whether now in existence or hereafter created by amendment to the articles of incorporation of the Corporation or by a certificate of designation, by reason of their ownership thereof, and senior, prior, and in preference to any other series or class of preferred stock of the Corporation, whether now in existence or hereafter created by amendment to the articles of incorporation of the Corporation or by a certificate of designation, an amount per share equal to the price per share actually paid to the Corporation upon the initial issuance of the Series A-1 Preferred Stock (each, the “the Original Issue Price”) for each share of Series A-1 Preferred Stock then held by them, plus declared but unpaid dividends. Unless the Corporation can establish a different Original Issue Price in connection with a particular sale of Series A-1 Preferred Stock, the Original Issue Price shall be $0.001 per share for the Series A-1 Preferred Stock. If, upon the occurrence of any liquidation, dissolution, or winding up of the Corporation, the assets and funds thus distributed among the holders of the Series A-1 Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then, the entire assets and funds of the corporation legally available for distribution shall be distributed first to the Series A-1 Preferred Stock, and then ratably among the holders of each other series of Preferred Stock in proportion to the preferential amount each such holder is otherwise entitled to receive

Redemption.

The following discussionSeries A-1 Preferred Stock shares are non-redeemable other than upon the mutual agreement of the Corporation and analysisthe holder of our financial conditionshares to be redeemed and resultseven in such case only to the extent permitted by this Certificate of Designation, the Corporation’s Articles of Incorporation, and applicable law.

Conversion.

The holders of the Series A-1 Preferred Stock, shall have conversion rights as follows (the “Conversion Rights”):

Right to Convert.

Subject to Section 4(c), each share of Series A-1 Preferred Stock shall be convertible, at the option of the holder(s) thereof only, at any time after the date of issuance of such share, at the office of the Corporation or any transfer agent for such stock, into one thousand (1,000) fully paid and nonassessable shares of Common Stock (the “Series A-1 Conversion Ratio”)

NOTE 5 – COMMITMENTS AND CONTINGENCIES

The Company did not have any contractual commitments as of July 31, 2021, and October 31, 2020.

NOTE 6 – SUBSEQUENT EVENTS

In accordance with FASB ASC 855-10, Subsequent Events, the Company has analyzed its operations should be read in conjunction with our unaudited condensedsubsequent to July 31, 2021, to the date these consolidated financial statements were issued, and related notes appearing elsewherehas determined that it does not have any material subsequent events to disclose in this Quarterly Report.  In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs.  Our actual results could differ materially from those discussed in the forward-looking statements.  Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report. See also Risk Factors contained in our Form 10-K for the year ended October 31, 2012.

Overview

We are a high-tech enterprise engaged in the research, development, manufacture, and distribution of botanical products, bio-pharmaceutical products, and traditional Chinese medicines, or TCM, in the People’s Republic of China (“PRC” or “China”). We have three “Good Manufacturing Practice” or GMP certified production facilities - Ah City Natural and Biopharmaceutical plant, Dongfanghong pharmaceutical plant and Qingyang natural extraction plant - capable of producing 18 dosage forms and over 200 different products. Our products include but are not limited to (i) botanical anti-depression and nerve-regulation products, (ii) biopharmaceutical products, and (iii) botanical antibiotic and traditional over-the-counter (“OTC”) Chinese medicines. Botanical anti-depression and nerve-regulation products account for approximately 70% of our revenues and we intend to strengthen our development in this area. We have entered into sales agency agreements with our sales agents. Through our sales agent, we have sold our products to over 3,000 distributors and over 70 sales centers across 24 provinces in the PRC.

Recent Developments

Siberian Ginseng Polysaccharide Extract Powder. On December 13, 2011, the Company issued a press release to announce that we have successfully developed a new Siberian Ginseng Polysaccharide Extract Powder and was awarded the Scientific and Technological Achievements Appraisal Certificate by the Science and Technology Bureau of Heilongjiang Province. The Siberian Ginseng (Acanthopanax) Polysaccharide Extract Powder is an all-natural substance extracted from the stem of Siberian Ginseng utilizing proprietary extraction technology developed by the China Botanic research team. The Company’s Extract Powder technology was developed using its patented process of separating and extracting effective parts of the Siberian Ginseng (the PRC Patent Number: ZL200710301682X), which was granted by the State Intellectual Property Office of the People’s Republic of China in December 2010. According to pharmacological research, Siberian Ginseng Extract Powder contains strong immunogenic and antitumor properties with minimal side effects. Our management estimates a significant market potential for Extract Powder based products, such as Siberian Ginseng Polysaccharide Extract Powder tablets and capsules.

Ah City Phase Two project. We have finished the architectural design of Ah City Phase Two project and are in the process of obtaining approval from relevant government authorities. We expect to finish all the procedures by April 2012 and will start the construction once we receive approval documents. As of January 31, 2013, we have incurred a total of $1,964,277 of construction-in-progress. The Ah City Phase Two project is expected to be completed in the year of 2013.

Tax Treatment of Subsidiary

As a recipient of the PRC’s State High-Tech Enterprise certificate, Harbin Renhuang Pharmaceutical Co. LTD (“CBP China”) is eligible for a number of national and local government support programs, including preferential tax treatment.  In order to receive these benefits CBP China must, on an annual basis, pass a High-Tech Enterprise assessment.  CBP China passed this assessment in February 2012 and, as a result, pays a reduced enterprise income tax rate of 15% in the year of 2012 compared with statutory enterprise income tax rate of 25%.

Critical Accounting Policies

The unaudited condensed consolidated financial statements include the financial statements of the Company and our subsidiaries.  All transactions and balances among us and our subsidiaries have been eliminated upon consolidation.statements.

Accounting Judgments

Item 2. Management’s Discussion and EstimatesAnalysis of Financial Condition and Results of Operations.

Certain amounts included in or affecting our unaudited condensed consolidated financial statementsOrganizational History of the Company and Overview

No Current Operations

Plan of Operation

The Company has no operations from a continuing business other than the expenditures related disclosures must be estimated, requiring us to make certain assumptions with respect to values or conditions that cannot be known with certainty atrunning the time the condensed consolidated financial statements are prepared. These estimatesCompany and assumptions affect the amounts we report for assets and liabilities and our disclosurehas no revenue from continuing operations as of contingent assets and liabilities at the date of this Report.

Management intends to explore and identify business opportunities within the U.S., including a potential acquisition of an operating entity through a reverse merger, asset purchase or similar transaction. Our Chief Executive Officer has experience in business consulting, although no assurances can be given that he can identify and implement a viable business strategy or that any such strategy will result in profits. Our ability to effectively identify, develop and implement a viable plan for our condensed consolidated financial statements. We routinely evaluate these estimates, utilizing historical experience, consulting with expertsbusiness may be hindered by risks and other methods we consider reasonable inuncertainties which are beyond our control, including without limitation, the particular circumstances. Nevertheless, actual results may differ significantly from our estimates. Anycontinued negative effects of the coronavirus pandemic on the U.S. and global economies. For more information about the risk of coronavirus on our business, see Item 1A “Risk Factors.”

We do not currently engage in any business activities that provide revenue or cash flow. During the next 12-month period we anticipate incurring costs in connection with investigating, evaluating, and negotiating potential business combinations, filing SEC reports, and consummating an acquisition of an operating business.

Given our limited capital resources, we may consider a business combination with an entity that has recently commenced operations, is a developing company or is otherwise in need of additional funds for the development of new products or services or expansion into new markets, or is an established business experiencing financial position or resultsoperating difficulties and requires additional capital. Alternatively, a business combination may involve the acquisition of, operations resulting from revisionsor a merger with, an entity that desires access to these estimates are recordedthe U.S. capital markets.

As of the date of this Report, our management has not had any discussions with any representative of any other entity regarding a potential business combination. Any target business that is selected may be financially unstable or in the periodearly stages of development. In such an event, we expect to be subject to numerous risks inherent in the business and operations of a financially unstable or early-stage entity. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk or in which our management has limited experience, and, although our management will endeavor to evaluate the factsrisks inherent in a particular target business, there can be no assurance that give risewe will properly ascertain or assess all significant risks.

Our management anticipates that we will likely only be able to effect one business combination due to our limited capital. This lack of diversification will likely pose a substantial risk in investing in the Company for the indefinite future because it will not permit us to offset potential losses from one venture or operating territory against gains from another. The risks we face will likely be heightened to the revision become known.extent we acquire a business operating in a single industry or geographical region.

We believeanticipate that certain accounting policiesthe selection of a business combination will be a complex and risk-prone process. Because of general economic conditions, including unfavorable conditions caused by the coronavirus pandemic, rapid technological advances being made in some industries, and shortages of available capital, management believes that there are a number of more significancefirms seeking business opportunities at this time at discounted rates with which we will compete. We expect that any potentially available business combinations may appear in a variety of different industries or regions and at various stages of development, all of which will likely render the task of comparative investigation and analysis of such business opportunities extremely difficult and complicated. Once we have developed and begun to implement our unaudited condensed consolidated financial statement preparation process than others, which policies are discussed below. See also Note 2business plan, management intends to the unaudited condensed consolidated financial statements forfund our working capital requirements through a summarycombination of our significant accounting policies.

Estimatesexisting funds and future issuances of allowances for bad debts – We must periodically review our trade and other receivablesdebt or equity securities. Our working capital requirements are expected to determine if all are collectible or whether an allowance is required for possible uncollectible balances.

Estimate of the useful lives of property and equipment – We must estimate the useful lives and proper salvage values of our property and equipment. We must also review property and equipment for possible impairment.

Estimate of the useful lives of intangible assets – We must estimate the useful lives of our intangible assets. We must also review intangible assets for possible impairment.

Inventory – We must determine whether we have any obsolete or impaired inventory.

Revenue recognition – Revenue from the sale of goods is recognized on the transfer of risks and rewards of ownership, which generally coincidesincrease in line with the time when the goods are shipped to customersimplementation of a business plan and the title has passed.commencement of operations.

Please refer to the notes to the unaudited condensed consolidated financial statements included elsewhere in this filing for a more complete listing of all of our significant accounting policies.

Factors Affecting our Results of Operations

Our operating results are primarily affected by the following factors:

ResultsBased on our current operations, we do not have sufficient working capital to fund our operations over the next 12 months. If we can close a reverse merger, it is likely we will need capital as a condition of Operationsclosing that acquisition. Because of the uncertainties, we cannot be certain as to how much capital we need to raise or the type of securities we will be required to issue. In connection with a reverse merger, we will be required to issue a controlling block of our securities to the target’s shareholders which will be very dilutive. 

Three-Month Period Ended January 31, 2013 ComparedAdditional issuances of equity or convertible debt securities will result in dilution to Three-Month Period Ended January 31, 2012our current shareholders. Further, such securities might have rights, preferences, or privileges senior to our Common Stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

The following table sets forth certain information regardingWe anticipate that we will incur operating losses in the next 12 months, principally costs related to our being obligated to file reports with the SEC. Our prospects must be considered in light of the risks, expenses, and difficulties frequently encountered by companies in their early stage of development.  Such risks for us include but are not limited to, an evolving and unpredictable business model, recognition of revenue sources, and the management of growth. To address these risks, we must, among other things, develop, implement, and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain, and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business prospects, financial condition, and results of operation.operations.

Critical Accounting Policies and Estimates

Outstanding Long-Term Indebtedness

None

Expansion Strategy

We believe the market for pharmaceutical products in the PRC is growing.  Our growth strategy involves capturing as much of this market as possible during this growth phase.  To implement this strategy we plan to strengthen our dominant position in the Siberian Ginseng (Acanthopanax) market, expand our Siberian Ginseng (Acanthopanax) cultivating basesmanagement’s discussion and improving the quality standards of Siberian Ginseng (Acanthopanax), and extend our distribution network through internal distribution channels reforms. Our expansion strategy will require the continued retention and investmentanalysis of our earningsfinancial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or “GAAP.” The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. In accordance with GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from operationsthese estimates under different assumptions or conditions.

Our significant accounting policies are fully described in Note 2 to our financial statements appearing elsewhere in this Quarterly Report, and we believe additional funding from private debtthose accounting policies are critical to the process of making significant judgments and equity financing.  In general,estimates in the commitmentpreparation of funds to research and development, or acquisition or construction of plant and equipment tends to impair liquidity.  However, we believe that because of the upward trend in our revenues in recent years, even if this trend levels off, our income from continuing operations coupled with such additional financing, if required, should provide sufficient liquidity to meet our expansion needs.  financial statements.

Contractual Obligations

Please refer to Note 21. COMMITMENTS AND CONTINGENCIES.

Off-balanceOff-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.None.

Item 3. Quantitative andAnd Qualitative Disclosures aboutAbout Market RiskRisk.

Because we areAs a smaller reporting company, we are not required to provide the information called for by this Item 3 is not applicable.Item.

Item 4. Controls and ProceduresProcedures.

Evaluation of Disclosure Controls and ProceduresProcedures.

AsOur management is responsible for establishing and maintaining a system of January 31, 2013, we carried out an evaluation,“disclosure controls and procedures” (as defined in Rule 13a-15(e) and 15d-15(e) under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such termExchange Act) that is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act”).   Accordingly, based upon that evaluation, the chief executive officer and chief financial officer have concluded that our disclosure controls and procedures were not effectivedesigned to ensure that information required to be disclosed by us in our periodicthe reports filedthat we file or submit under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified byin the Securities and Exchange Commission’s rules and regulations. Basedforms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and the principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed 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. Our internal control over financial reporting includes those policies and procedures that:

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting based on the management’s assessmentparameters set forth above and reviewhas concluded that as of July 31, 2021, our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles as a result of the following material weaknesses:

We plan to rectify these weaknesses by implementing an independent board of directors, establishing written policies and resultsprocedures for the three months ended January 31, 2013,our internal control of financial reporting, and hiring additional accounting personnel at such time as we have not established effective internal controls.complete a reverse merger or similar business acquisition.

Changes in Internal ControlsControl over Financial Reporting.

Since the third quarter ofThere has been no change in our 2009 fiscal year, we have begun the implementation of remedial measures including hiring of a new chief financial officer in January 2010 (who resigned on August 3, 2010 for personal reason and was replaced by an interim chief financial officer. On December 14, 2010, we subsequently hired Mr. Weiqiu Dong as our new chief financial officer), adding additional staff, appointing three independent Directors to our board of directors, engaging consultants to advise management on the preparation of Sarbanes-Oxley Section 404 compliance with internal controlscontrol over financial reporting for fiscal year 2011, providing relevant trainingduring the nine months ended July 31, 2021, that has materially affected, or is reasonably likely to our staff, implementing more rigorous policies and procedures relating to period-end financial reporting and other key processes, strengthening key controls such as journal-entry approval, reconciliation procedures and maintaining relevant supporting documentation. We expect to continue to implement additional financial and management controls and procedures going forward.  As results of these measures and until we have completed the remediation process, there has been and will be changes and further improvement tomaterially affect, our internal controlscontrol over financial reporting.

PART II
OTHER INFORMATION

Item 1. Legal Proceedings.

AsThe Company may be involved in certain legal proceedings that arise from time to time in the ordinary course of March 10, 2012, weits business. Legal expenses associated with any contingency are expensed as incurred. The Company’s officers and directors are not aware of any threatened or pending litigation to which the Company is a party to, or threatened by,which any legal proceedings.of its property is the subject and which would have any material, adverse effect on the Company.

Item 1A. Risk Factors.

BecauseReference is made to the risks and uncertainties disclosed in Item 1A (“Risk Factors”) of our Annual Report on Form 10-K for the period ended October 31, 2020, which sections are incorporated by reference into this report, as the same may be updated from time to time. Prospective investors are encouraged to consider the risks described in our 2020 Form 10-K, and our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Report, and other information publicly disclosed or contained in documents we arefile with the Securities and Exchange Commission before purchasing our securities.

As a smaller reporting company, this Item 1Athe Company is not applicable.required to disclose material changes to the risk factors that were contained in the October 31, 2020 Form 10-K.

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

None.

Item 3. Defaults uponUpon Senior Securities.

In the three-month period ended January 31, 2013, and subsequent period through the date hereof, we did not default upon any senior securities.None.

Item 4. [Removed and Reserved].Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

The exhibits listed on the Exhibit Index below are provided as part of this report.

* Filed herewith.

SIGNATURES

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

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.