| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis
of presentation and consolidation The
accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted
accounting principles in the United States (“GAAP”) for interim financial reporting, and in accordance with instructions
for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion of management, the unaudited consolidated financial
statements contained in this report reflect all adjustments that are normal and recurring in nature and considered necessary for a fair
presentation of the financial position and the results of operations for the interim periods presented. The year-end balance sheet data
was derived from audited financial statements but does not include all disclosures required by GAAP. The results of operations for the
interim period are not necessarily indicative of the results expected for the full year. These unaudited consolidated financial statements,
footnote disclosures and other information should be read in conjunction with the financial statements and the notes thereto included
in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The
unaudited condensed consolidated financial statements are presented in US Dollars and include the accounts of the Company and its subsidiaries.
All significant inter-company accounts and transactions have been eliminated in consolidation. The results of subsidiaries acquired or
disposed of during the years are included in the consolidated statements of operations from the effective date of acquisition or up to
the effective date of disposal. The
following table depicts the description of the Company’s subsidiaries: SCHEDULE
OF SUBSIDIARIES INFORMATION
Name Place of incorporation Principal activities Particulars of registered/ Effective interest
Elite Creation Group Limited BVI, a limited liability company Investment holding 50,000 1 100 %
Alpha Wellness (HK) Limited Hong Kong, a limited liability company Investment holding 300,000 300,000 100 %
Guangzhou Xiao Xiang Health Industry Company Limited The PRC, a limited liability company Sales of healthcare products RMB 8,300,000 100 % Cash
and cash equivalents Cash
and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions
and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. Inventories Inventories
are stated at the lower of cost or market value (net realizable value), cost being determined on a first-in-first-out method. Costs include
material and manufacturing overhead costs. The Company provides inventory allowances based on excess and obsolete inventories determined
principally by customer demand. As of March 31, 2022 and December 31, 2021, the Company did not record an allowance for obsolete inventories,
nor have there been any write-offs. Plant
and equipment Plant
and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated
on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking
into account their estimated residual values: SCHEDULE
OF ESTIMATED USEFUL LIVES
Expected useful lives Residual value
Furniture, fixture and equipment 3 5 %
Motor vehicle 3.33 4 5 %
Leasehold improvement 2 5 % Expenditures
for repairs and maintenance are expensed as incurred. When assets have been retired or sold, the cost and related accumulated depreciation
are removed from the accounts and any resulting gain or loss is recognized in the results of operations. Depreciation
expense for the three months ended March 31, 2022 and 2021 were $ 19,618 21,430 Intangible
assets Intangible
assets represented trademarks of their products and are stated at cost less accumulated amortization and any recognized impairment loss.
Amortization is provided over the term of their registrations on a straight-line basis, which is 10 Amortization
expense for the three months ended March 31, 2022 and 2021 were $ 132 130 Impairment
of long-lived assets In
accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such
as plant and equipment, as well as intangible assets held and used by the Company are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is
evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated
by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying
amounts of the assets exceed the fair value of the assets. There has been no impairment charge for the periods presented. Revenue
recognition The
Company adopted Accounting Standards Codification (“ASC”) 606 – Revenue from Contracts with Customers” (“ASC
606”). Under ASC 606, a performance obligation is a promise within a contract to transfer a distinct good or service, or a series
of distinct goods and services, to a customer. Revenue is recognized when performance obligations are satisfied and the customer obtains
control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be
entitled to receive in exchange for goods or services. Under the standard, a contract’s transaction price is allocated to each
distinct performance obligation. To determine revenue recognition for arrangements that the Company determines are within the scope of
ASC 606, the Company performs the following five steps:
● identify
the contract with a customer;
● identify
the performance obligations in the contract;
● determine
the transaction price;
● allocate
the transaction price to performance obligations in the contract; and
● recognize
revenue as the performance obligation is satisfied. Currently,
the Company operates two business segments. Healthcare Business mainly provides health consulting advisory services and healthcare and
wellness products to the customers and our Wine Business provides wine products to the customers. Revenue
is earned from the rendering of health consulting advisory services to the customers. The Company recognizes services revenue over the
period in which such services are performed. Amounts expected to be recognized as revenue within the 12 months following the balance
sheet date are classified as current portion of deferred revenue in the accompanying consolidated balance sheets. Amounts not expected
to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current
portion. The
sale and distribution of the healthcare products, such as (i) Nutrition Catering (ii) Special Health Food (iii) Health Supplement and
(iv) Skincare, is the only performance obligation under the fixed-fee arrangements. Revenue is recognized from the sale of their healthcare
products upon delivery to the customers, whereas the title and risk of loss are fully transferred to the customers. The Company records
its revenues, net of value added taxes (“VAT”) on the majority of the products at the rate of 17 Our Wine Business mainly provides wine products
to the customers, with a right to return. The Company acts as the principal in substantially all of its customer arrangements and as such, generally
records revenues on a gross basis. Revenues exclude any taxes that the Company collects from customers and remits to tax
authorities. Revenue is recognized from the sale of wine products upon delivery to the customers, whereas the title and risk of loss
are fully transferred to the customers. The Company records its revenues, net of value added taxes (“VAT”) on the
majority of the products at the rate of 17 4,741 0 Income
taxes The
Company adopted the ASC 740 Income tax provisions of paragraph 740-10-25-13, which addresses the determination of whether tax benefits
claimed or expected to be claimed on a tax return should be recorded in the condensed consolidated financial statements. Under paragraph
740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax
position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits
recognized in the condensed consolidated financial statements from such a position should be measured based on the largest benefit that
has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement The
estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying
balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred
tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary. Uncertain
tax positions The
Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC
740 provisions of Section 740-10-25 for the three months ended March 31, 2022 and 2021. Foreign
currencies translation Transactions
denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing
at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated
into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded
in the condensed consolidated statement of operations. The
reporting currency of the Company is United States Dollar (“US$”) and the accompanying financial statements have been expressed
in US$. In addition, the Company is operating in Hong Kong SAR and the People’s Republic of China and maintain its books and record
in its local currency, Hong Kong Dollars (“HK$”) and Renminbi (“RMB”), which is a functional currency as being
the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets
and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30,
“ Translation of Financial Statement Translation
of amounts from HK$ and RMB into US$ has been made at the following exchange rates for the three months ended March 31, 2022 and 2021: SCHEDULE
OF FOREIGN CURRENCIES TRANSLATION EXCHANGE RATES
2022 2021
Period-end HK$:US$ exchange rate 0.12711 0.12863
Period average HK$:US$ exchange rate 0.12811 0.12891
Period-end RMB:US$ exchange rate 0.15764 0.15248
Period average RMB:US$ exchange rate 0.15752 0.15431 Net loss per share The Company calculates net loss per
share in accordance with ASC Topic 260, “ Earnings per Share.” Comprehensive
income ASC
Topic 220, “ Comprehensive Income Leases The
Company adopted Topic 842, Leases At
the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and
circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use (“ROU”)
assets, lease liabilities and long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with
terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present
value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required
for items such as prepaid or accrued lease payments. The interest rate implicit in lease contracts is typically not readily determinable.
As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over
a similar term an amount equal to the lease payments in a similar economic environment. In
accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g. land, building,
etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.).
Subsequently, the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based
on the respective relative fair values to the lease components and non-lease components. Lease
expense is recognized on a straight-line basis over the lease terms. Lease expense includes amortization of the ROU assets and accretion
of the lease liabilities. Amortization of ROU assets is calculated as the periodic lease cost less accretion of the lease liability.
The amortized period for ROU assets is limited to the expected lease term. The
Company has elected a practical expedient to combine the lease and non-lease components into a single lease component. The Company also
elected the short-term lease measurement and recognition exemption and does not establish ROU assets or lease liabilities for operating
leases with terms of 12 months or less. Related
parties The
Company follows the ASC 850-10, Related Party Pursuant
to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities
would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15,
to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing
trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company;
f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies
of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and
g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership
interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting
parties might be prevented from fully pursuing its own separate interests. The
financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense
allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the
preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the
nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts
were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding
of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which
income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding
period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the
terms and manner of settlement. Commitments
and contingencies The
Company follows the ASC 450-20, Commitments If
the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability
can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates
that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then
the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss
contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.
Management does not believe, based upon information available at this time that these matters will have a material adverse effect on
the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not
materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. Fair
value of financial instruments The
Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial
instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”)
to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes
a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements.
To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting
Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value
into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for
identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined
by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:
Level
1 Quoted
market prices available in active markets for identical assets or liabilities as of the reporting date.
Level
2 Pricing
inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the
reporting date.
Level
3 Pricing
inputs that are generally observable inputs and not corroborated by market data. Financial
assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar
techniques and at least one significant model assumption or input is unobservable. The
fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and
the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than
one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of
the instrument. The
carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, approximate their fair values
because of the short maturity of these instruments. Recent
accounting pronouncements From
time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard
setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the
impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of
operations upon adoption. In
May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock
Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) Segment
Reporting Accounting
Standards Codification (“ASC”) Topic 280, “ Segment Reporting Disaggregation
of Revenue The following table provides information about disaggregated revenue from customers into the nature of the products and services, and
geographic regions, and includes a reconciliation of the disaggregated revenue with reportable segments. SCHEDULE OF DISAGGREGATED REVENUE WITH REPORTABLE SEGMENTS
For the Period Ended March 31,
2022 For
the Period Ended March 31, 2021
Consultancy service fee income $ 64,058 $ -
Sales of wine products 4,741 166,384
Sale of healthcare products - 1,259
TOTAL $ 68,799 $ 167,643 The
Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption
of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations. |
