Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 30, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | BIO ESSENCE CORP. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 33,009,000 | |
Amendment Flag | false | |
Entity Central Index Key | 0001723059 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | true | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 333-232839 | |
Entity Incorporation, State or Country Code | CA | |
Entity Tax Identification Number | 94-3349551 | |
Entity Address, Address Line One | 8 Studebaker | |
Entity Address, Address Line Two | Drive in | |
Entity Address, City or Town | Irvine | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92618 | |
City Area Code | (949) | |
Local Phone Number | 706-9966 | |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash and equivalents | $ 26,713 | $ 5,325 |
Accounts receivable, net | 29,789 | 45,077 |
Prepaid expenses | 36,984 | 2,259 |
Advance to suppliers | 4,732 | |
Inventory, net | 230,942 | 272,232 |
Total current assets | 324,428 | 329,625 |
NONCURRENT ASSETS | ||
Security deposit | 41,841 | 41,841 |
Right-of-use assets, net | 1,254,385 | 1,374,158 |
Property and equipment, net | 151,281 | 92,477 |
Intangible assets, net | 1,096 | 7,386 |
Total non-current assets | 1,448,603 | 1,515,862 |
TOTAL ASSETS | 1,773,031 | 1,845,487 |
CURRENT LIABILITIES | ||
Bank overdraft | 63,895 | |
Accounts payable | 58,128 | 50,382 |
Taxes payable | 20,762 | 22,967 |
Accrued liabilities and other payables | 57,946 | 357,138 |
Operating lease liabilities | 161,798 | 157,170 |
Finance lease liabilities | 10,135 | |
Accrued interest on government loans | 10,983 | 4,740 |
Government loans payable - current portion | 119,630 | 130,591 |
Loan from shareholder | 2,258,786 | 1,108,008 |
Total current liabilities | 2,698,168 | 1,894,891 |
NONCURRENT LIABILITIES | ||
Accrued rent | 234,383 | |
Operating lease liabilities | 1,163,645 | 1,284,635 |
Finance lease liabilities | 38,105 | |
Government loans payable | 211,215 | 212,750 |
Total non-current liabilities | 1,412,965 | 1,731,768 |
TOTAL LIABILITIES | 4,111,133 | 3,626,659 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock $0.0001 par value; authorized shares 10,000,000 | ||
Common stock $0.0001 par value; authorized shares 100,000,000; issued and outstanding shares 33,009,000 as of September 30, 2021 and December 31, 2020 | 3,301 | 3,301 |
Additional paid in capital | 4,926,879 | 4,926,879 |
Accumulated deficit | (7,268,282) | (6,711,352) |
TOTAL STOCKHOLDERS' DEFICIT | (2,338,102) | (1,781,172) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 1,773,031 | $ 1,845,487 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 33,009,000 | 33,009,000 |
Common stock, shares outstanding | 33,009,000 | 33,009,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Net sales | $ 226,990 | $ 228,333 | $ 674,945 | $ 739,770 |
Cost of sales | 131,609 | 145,512 | 438,345 | 450,434 |
Gross profit | 95,381 | 82,821 | 236,600 | 289,336 |
Operating expenses | ||||
Selling | 17,611 | 38,485 | 51,544 | 120,283 |
Bad debts | 380 | 342 | ||
General and administrative | 270,702 | 231,477 | 843,434 | 672,453 |
Total operating expenses | 288,313 | 269,962 | 895,358 | 793,078 |
Loss from operations | (192,932) | (187,141) | (658,758) | (503,742) |
Other income (expenses) | ||||
Interest income | 5 | 5 | ||
Interest expense | (3,821) | (18,912) | (33,493) | (20,726) |
Financial expense | (1,284) | (7,528) | (7,702) | (20,329) |
Other income | 15,000 | 9,032 | 151,219 | 43,540 |
Other expense | (161) | (4,896) | (1,744) | |
Other income, net | 9,895 | (17,564) | 105,128 | 746 |
Loss before income tax | (183,037) | (204,705) | (553,630) | (502,996) |
Income tax expense | 3,300 | 3,300 | ||
Net loss | $ (183,037) | $ (204,705) | $ (556,930) | $ (506,296) |
Basic and diluted weighted average shares outstanding (in Shares) | 33,009,000 | 33,009,000 | 33,009,000 | 33,034,547 |
Basic and diluted net loss per share (in Dollars per share) | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.02) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (556,930) | $ (506,296) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 26,002 | 24,815 |
Bad debts | 380 | 342 |
Gain on disposal of fixed assets | (1,089) | |
PPP loans forgiveness | (127,740) | |
Stock compensation expense | 8,890 | |
Operating lease expense | 171,935 | 171,951 |
Changes in assets / liabilities: | ||
Accounts receivable | 14,908 | (22,593) |
Prepaid expenses | (34,725) | |
Advance to suppliers | 4,733 | 1,373 |
Inventory | 41,290 | 75,302 |
Security deposit | 30,023 | |
Accounts payable | 7,749 | (26,520) |
Accrued liabilities and other payables | (527,338) | (93,147) |
Taxes payable | (2,205) | 3,823 |
Payment on lease liabilities | (168,523) | (163,981) |
Net cash used in operating activities | (1,151,553) | (496,018) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sales of fixed assets | 2,700 | |
Purchase of fixed assets | (29,649) | (1,617) |
Net cash used in investing activities | (26,949) | (1,617) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Bank overdraft | (63,895) | (19,110) |
Return of investment to investor | (100,000) | |
Finance lease liabillity | (2,238) | |
Proceeds from government loans | 115,245 | 343,340 |
Loan from shareholder | 1,150,778 | 273,890 |
Net cash provided by financing activities | 1,199,890 | 498,120 |
NET INCREASE IN CASH & EQUIVALENTS | 21,388 | 485 |
CASH & EQUIVALENTS, BEGINNING OF PERIOD | 5,325 | |
CASH & EQUIVALENTS, END OF PERIOD | 26,713 | 485 |
Supplemental Cash Flow Data: | ||
Income tax paid | 3,300 | 3,300 |
Interest paid | 33,493 | 18,039 |
Supplemental disclosures of non-cash financing activities: | ||
Right-of-use assets obtained in exchange for new finance lease liabilities | $ 50,486 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($) | COMMON STOCK | ADDITIONAL PAID IN CAPITAL | ACCUMULATED DEFICIT | Total |
Balance at Dec. 31, 2019 | $ 3,321 | $ 5,026,859 | $ (6,115,514) | $ (1,085,334) |
Balance (in Shares) at Dec. 31, 2019 | 33,209,000 | |||
Net loss | (117,144) | (117,144) | ||
Return of investment to investor | $ (20) | (99,980) | (100,000) | |
Return of investment to investor (in Shares) | (200,000) | |||
Balance at Mar. 31, 2020 | $ 3,301 | 4,926,879 | (6,232,658) | (1,302,478) |
Balance (in Shares) at Mar. 31, 2020 | 33,009,000 | |||
Net loss | (184,447) | (184,447) | ||
Balance at Jun. 30, 2020 | $ 3,301 | 4,926,879 | (6,417,105) | (1,486,925) |
Balance (in Shares) at Jun. 30, 2020 | 33,009,000 | |||
Net loss | (204,705) | (204,705) | ||
Balance at Sep. 30, 2020 | $ 3,301 | 4,926,879 | (6,621,810) | (1,691,630) |
Balance (in Shares) at Sep. 30, 2020 | 33,009,000 | |||
Balance at Dec. 31, 2020 | $ 3,301 | 4,926,879 | (6,711,352) | (1,781,172) |
Balance (in Shares) at Dec. 31, 2020 | 33,009,000 | |||
Net loss | (210,355) | (210,355) | ||
Balance at Mar. 31, 2021 | $ 3,301 | 4,926,879 | (6,921,707) | (1,991,527) |
Balance (in Shares) at Mar. 31, 2021 | 33,009,000 | |||
Net loss | (163,538) | (163,538) | ||
Balance at Jun. 30, 2021 | $ 3,301 | 4,926,879 | (7,085,245) | (2,155,065) |
Balance (in Shares) at Jun. 30, 2021 | 33,009,000 | |||
Net loss | (183,037) | (183,037) | ||
Balance at Sep. 30, 2021 | $ 3,301 | $ 4,926,879 | $ (7,268,282) | $ (2,338,102) |
Balance (in Shares) at Sep. 30, 2021 | 33,009,000 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Bio Essence Corporation (“the Company” or “Bio Essence”) was incorporated in 2000 in the state of California. Fusion Diet Systems (“FDS”) was incorporated in 2010 in the state of Utah. Bio Essence and FDS were under common control since 2016. Bio Essence and FDS are mainly engaged in manufacturing and distributing health supplement products. In January 2017, Bio Essence incorporated two subsidiaries in the state of California: Bio Essence Pharmaceutical Inc. (“BEP”) and Bio Essence Herbal Essentials, Inc. (“BEH”), Bio Essence transferred its manufacturing operation to BEP, and transferred its distributing operation to BEH. On March 1, 2017, the 100% shareholder of FDS transferred all of her ownership in FDS to Bio Essence. As a result of the ownership restructure, FDS, BEP and BEH became wholly owned subsidiaries of Bio Essence. In December 2019, a novel strain of coronavirus, causing a disease referred to as COVID-19, was reported. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic, and the pandemic has resulted in quarantines, travel restrictions, and the temporary closure of office buildings and facilities in the US. The state of California, where the Company is headquartered, has been affected by COVID-19. The global economy has also been materially negatively affected by COVID-19 and there is continued uncertainty about the duration and intensity of its impacts. While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing the Company’s ability to access capital, which could negatively affect the Company’s liquidity. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation The accompanying consolidated financial statements (“CFS”) are prepared in conformity with U.S. Generally Accepted Accounting Principles (“US GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The functional currency of Bio Essence is U.S. dollars (“$’’). The accompanying financial statements are presented in U.S. dollars (“$”). The consolidated financial statements include the financial statements of the Company and its subsidiaries, BEP, BEH and FDS. All significant inter-company transactions and balances were eliminated in consolidation. The interim consolidated financial information as of September 30, 2021 and for the nine and three months ended September 30, 2021 and 2020 was prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures, which are normally included in CFS prepared in accordance with U.S. GAAP were not included. The interim consolidated financial 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 fiscal year ended December 31, 2020, previously filed with the SEC on April 14, 2021. In the opinion of management, all adjustments (which include all significant normal and recurring adjustments) necessary to present a fair statement of the Company’s consolidated financial position as of September 30, 2021, its consolidated results of operations and cash flows for the nine and three months ended September 30, 2021 and 2020, as applicable, were made. Going Concern The Company incurred net losses of $0.56 million and $0.51 million for the nine months ended September 30, 2021 and 2020, respectively. The Company incurred net losses of $0.18 million and $0.20 million for the three months ended September 30, 2021 and 2020, respectively. The Company also had an accumulated deficit of $7.27 million as of September 30, 2021. These conditions raise a substantial doubt about the Company’s ability to continue as a going concern. The Company plans to increase its income by strengthening its sales force, providing attractive sales incentive program, and increasing marketing and promotion activities. Management also intends to raise additional funds by way of a private or public offering, or by obtaining loans from banks or others. While the Company believes in the viability of its strategy to generate sufficient revenue and in its ability to raise additional funds on reasonable terms and conditions, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Use of Estimates In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates, required by management, include the recoverability of long-lived assets, allowance for doubtful accounts, and the reserve for obsolete and slow-moving inventories. Actual results could differ from those estimates. Leases The Company determines if an arrangement is a lease or contains a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, and operating lease liabilities (current and non-current) in the Company’s consolidated balance sheets. Finance leases are included in property and equipment, and finance lease liabilities (current and non-current) in the Company’s consolidated balance sheets. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company generally uses the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company elected the package of practical expedients permitted under the transition guidance to combine the lease and non-lease components as a single lease component for operating leases associated with the Company’s office space lease, and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements of income on a straight-line basis over the lease term. ROU assets are reviewed for impairment when indicators of impairment are present. ROU assets from operating and finance leases are subject to the impairment guidance in ASC 360, Property, Plant, and Equipment, as ROU assets are long-lived nonfinancial assets. The Company recognized no impairment of ROU assets as of September 30, 2021 and December 31, 2020. Cash and Equivalents For financial statement purposes, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Accounts Receivable The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. As of September 30, 2021 and December 31, 2020, the bad debt allowance was $151,752 and $151,372, respectively. Inventory Inventories are stated at the lower of cost or net realizable value with cost determined on a weighted-average basis. Management compares the cost of inventories with the net realizable value and an allowance is made for writing down their inventories to net realizable value, if lower. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation, and impairment losses, if any. Major repairs and betterments that significantly extend original useful lives or improve productivity are capitalized and depreciated over the period benefited. Maintenance and repairs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets as follows: Leasehold improvements 7-10 years Office furniture 5 years Impairment of Long-Lived Assets Long-lived assets, which include property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by comparing of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by it. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds its fair value (“FV”). FV is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of September 30, 2021 and December 31, 2020, there was no significant impairments of its long-lived assets. Income Taxes Income taxes are accounted for using an asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current period and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets also include the prior years’ net operating losses carried forward. 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 results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. The Company follows ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Under the provisions of ASC Topic 740, when tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statement of income. At September 30, 2021 and December 31, 2020, the Company did not take any uncertain positions that would necessitate recording a tax related liability. The Company files a U.S. income tax return. With few exceptions, the Company’s U.S. income tax return filed for the years ending on December 31, 2018 and thereafter are subject to examination by the relevant taxing authorities. The Company accounts for income taxes in interim periods in accordance with FASB ASC 740-270, “Interim Reporting.” The Company has determined an estimated annual effective tax rate. The rate will be revised, if necessary, as of the end of each successive interim period during the Company’s fiscal year to its best current estimate. The estimated annual effective tax rate is applied to the year-to-date ordinary income (or loss) at the end of the interim period. Revenue Recognition The Company recognizes revenues following the five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. Revenue is measured at the amount of consideration we expect to receive in exchange for the sale of our product., which occurs at a point in time, typically upon delivery to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that it would have recognized is one year or less or the amount is immaterial. Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers. Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, returns and rebates. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable as the amount is payable to the Company’s customers. The Company’s return policy allows for the return of damaged or defective products and shipment errors. A notice of damage or wrong items should make within five days from receiving the goods, and actual return of the products must be completed within 30 days from the date of receiving the goods. Delayed notification for damaged or wrong products will not be accepted for return or exchange. Custom formulas and capsules are not returnable. The amount for return of products was immaterial for the nine and three months ended September 30, 2021 and 2020. Cost of Sales Cost of sales (“COS”) consists primarily of finished goods purchased from other manufacturers, material costs, labor costs and related overhead that are directly attributable to the production of the products. Write-down of inventory to lower of cost or net realizable value is also recorded in COS. Shipping and Handling Costs Shipping and handling costs related to delivery of finished goods are included in selling expenses. During the nine months ended September 30, 2021 and 2020, shipping and handling costs were $25,179 and $38,887, respectively. During the three months ended September 30, 2021 and 2020, shipping and handling costs were $7,848 and $10,528, respectively. Advertising Advertising expenses consist primarily of costs of promotion and marketing for the Company’s image and products, and costs of direct advertising, and are included in selling expenses. The Company expenses all advertising costs as incurred. During the nine months ended September 30, 2021 and 2020, advertising expense was $24,114 and $24,899, respectively. During the three months ended September 30, 2021 and 2020, advertising expense was $8,990 and $6,112, respectively. Fair Value (“FV”) of Financial Instruments Certain of the Company’s financial instruments, including cash and equivalents, accrued liabilities and accounts payable, carrying amounts approximate their FV due to their short maturities. FASB ASC Topic 825, “Financial Instruments,” requires disclosure of the FV of financial instruments held by the Company. The carrying amounts reported in the balance sheets for current liabilities each qualify as financial instruments and are a reasonable estimate of their FV because of the short period of time between the origination of such instruments and their expected realization and the current market rate of interest. Fair Value Measurements and Disclosures ASC Topic 820, “Fair Value Measurements and Disclosures,” defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The three levels are defined as follow: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to the FV measurement. As of September 30, 2021 and December 31, 2020, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at FV. The carrying value of cash, accounts receivable, prepaid expenses, advances to suppliers, accounts payable, taxes payable, other payables and accrued liabilities approximate estimated fair values because of their short maturities. Share-based Compensation The Company accounts for share-based compensation awards to employees in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”, which requires that share-based payment transactions with employees be measured based on the grant-date FV of the equity instrument issued and recognized as compensation expense over the requisite service period. The Company accounts for share-based compensation awards to non-employees in accordance with FASB ASC Topic 718 and FASB ASC Subtopic 505-50, “Equity-Based Payments to Non-employees”. Share-based compensation associated with the issuance of equity instruments to non-employees is measured at the FV of the equity instrument issued or committed to be issued, as this is more reliable than the FV of the services received. The FV is measured at the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. Earnings (Loss) per Share (EPS) Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares pertaining to warrants, stock options, and similar instruments had been issued and if the additional common shares were dilutive. Diluted EPS are based on the assumption that all dilutive convertible shares and stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding unvested restricted stock, options and warrants, and the if-converted method for the outstanding convertible instruments. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later) and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, outstanding convertible instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist primarily of accounts and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable. For the nine months ended September 30, 2021 and 2020, no customer accounted for more than 10% of the Company’s total sales. For the three months ended September 30, 2021 one customer accounted for more than 10% of the Company’s total sales. For the three months ended September 30, 2020, no customer accounted for more than 10% of the Company’s total sales The Company had three major vendors accounted for 27%, 23% and 15%, respectively, of total purchases during the nine months ended September 30, 2021. The Company had two major vendors accounted for 24% and 13%, respectively, of total purchase during nine months ended September 30, 2020. The Company had three major vendors accounted 38%, 17% and 13%, respectively of total purchases during the three months ended September 30, 2021. The Company had one vendor accounted for 17% of total purchases during the three months ended September 30, 2020. Segment Reporting ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s chief operating decision maker organizes segments within the Company for making operating decisions assessing performance and allocating resources. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Management determined the Company’s operations constitute a single reportable segment in accordance with ASC 280. The Company operates exclusively in one business and industry segment: manufacture and sale of health supplement products. New Accounting Pronouncements Recently issued accounting pronouncements not yet adopted In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance should be adopted on a prospective basis. As a smaller reporting company, the standard will be effective for the Company for interim and annual reporting periods beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of adopting this standard on its CFS. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company continues to evaluate the impact of the guidance and may apply the elections as applicable as changes in the market occur. In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. The Company is currently evaluating the impact that ASU 2020-06 may have on its CFS and related disclosures. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORY | 3. INVENTORY Inventory consisted of the following at September 30, 2021 and December 31, 2020: September 30, December 31, (unaudited) Raw materials $ 70,822 $ 42,423 Finished goods – health supplements 186,217 255,906 Less: Inventory impairment allowance (26,097 ) (26,097 ) Total $ 230,942 $ 272,232 |
Security Deposit
Security Deposit | 9 Months Ended |
Sep. 30, 2021 | |
Security Deposit [Abstrct] | |
SECURITY DEPOSIT | 4. SECURITY DEPOSIT As of September 30, 2021 and December 31, 2020, the security deposit was for rent of the Company’s office and warehouse of $41,841. |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 5. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following at September 30, 2021 and December 31, 2020: September 30, December 31, (unaudited) Leaseholder improvements $ 57,757 $ 57,067 Office furniture and equipment 246,970 170,917 Total 304,727 227,984 Less: Accumulated depreciation (153,446 ) (135,507 ) Net $ 151,281 $ 92,477 Depreciation for the nine months ended September 30, 2021 and 2020 was $19,712 and $16,779, respectively. Depreciation for the three months ended September 30, 2021 and 2020 was $7,764 and $5,473, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | 6. INTANGIBLE ASSETS, NET Intangible assets consisted of the following as of September 30, 2021 and December 31, 2020: September 30, December 31, (unaudited) Computer Software $ 36,928 $ 36,928 Trademark 2,350 2,350 Total 39,278 39,278 Less: Accumulated amortization (38,182 ) (31,892 ) Net $ 1,096 $ 7,386 Amortization of intangible assets was $6,290 and $8,036 for the nine months ended September 30, 2021 and 2020, respectively. Amortization of intangible assets was $932 and $2,679 for the three months ended September 30, 2021 and 2020, respectively. Estimated amortization for the existing intangible assets with finite lives for each of the next five years at September 30, 2021 is as follows: $240, $240, $240, $240 and $123. |
Taxes Payable
Taxes Payable | 9 Months Ended |
Sep. 30, 2021 | |
Tax Payable [Abstract] | |
TAXES PAYABLE | 7. TAXES PAYABLE Taxes payable at September 30, 2021 and December 31, 2020 was for sales tax and payroll tax payable of $20,762 and $22,967, respectively. |
Accrued Liabilities and Other P
Accrued Liabilities and Other Payables | 9 Months Ended |
Sep. 30, 2021 | |
Accrued Liabilities And Other Payables [Abstract] | |
ACCRUED LIABILITIES AND OTHER PAYABLES | 8. ACCRUED LIABILITIES AND OTHER PAYABLES Accrued liabilities and other payables consisted of the following September 30, 2021 and December 31, 2020: September 30, December 31, (unaudited) Accrued legal and merchant fee $ - $ 720 Credit card payable 37,353 14,538 Payroll payable 6,834 - Accrued litigation liabilities - rent - 341,880 Other 13,759 - Total $ 57,946 $ 357,138 Accrued litigation liabilities – rent, non-current $ - $ 234,383 The Company was involved in legal proceedings involving a lease with its former landlord, and its former sublessor. On December 9, 2016, the Company entered into a lease with its former landlord for a warehouse facility located in San Leandro, California (the “Premises”). On November 1, 2017, the Company entered into a sublease with a former sublessor, whereby the former sublessor would occupy a portion of the Premises. Beginning in April of 2018, the former sublessor began violating its sublease by failing to pay rent, utilities, and operating a cannabis operation in the Premises, which constituted a violation of the sublease. The former landlord instructed the Company to evict the former sublessor. Thereafter, the Company was forced to leave the Premises because of the former sublessor’s activities. The former landlord initiated litigation against the Company seeking $2.09 million in damages for lost rental profits. The Company filed a cross-complaint against the former sublessor for breach of the sublease agreement, seeking damages related to the Company’s breach of the lease, costs, and attorney’s fees. On August 7, 2020, the Company executed a Settlement Agreement and Release with the former landlord, wherein the Company shall pay the former landlord the sum of $750,000 through 24 equal installment payment at 10% interest pursuant to a payment schedule. The Company shall have the Early Payment Option (“EPO”), to fully satisfy its obligation to former landlord through a payment of $700,000, to be made no later than January 1, 2021, or the option is waived if the EPO is not fully paid by January 1, 2021. Concurrently with execution of this settlement agreement, the Company shall also execute the Stipulation for Dismissal of Bio Essence, Retention of Jurisdiction, and Entry of Judgment in event of default on the settlement agreement. The Company did not utilize the EPO. For the three months ended March 31, 2021, the Company didn’t make any repayment. In May 2021, The Company’s major shareholder loaned the Company for repaying the entire outstanding liability of $608,631, including principal of $576,263, interest expense of $23,840, and other costs of $8,528. |
Government Loans Payable
Government Loans Payable | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
GOVERNMENT LOANS PAYABLE | 9. GOVERNMENT LOANS PAYABLE In May and June 2020, BEH, BEP and FDS received a total of $127,740 from the Paycheck Protection Program loan (“PPP loan”) from US Small Business Administration (“the SBA”). The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (at least 60% of the forgiven amount must have been used for payroll). The loan amount not forgiven, will have annual interest of 1%. Loan payments will be deferred to either (1) the date that SBA remits the borrower’s loan forgiveness amount to the lender or (2) if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness covered period. Loans issued prior to June 5, 2020 have a maturity of two years, loans issued after June 5, 2020 have a maturity of five years. No collateral or personal guarantees are required. A borrower may apply for loan forgiveness any time on or before the maturity date of the loan, including before the end of the Covered Period (either (1) the 24-week (168-day) period beginning on the PPP Loan Disbursement Date, or (2) if the Borrower received its PPP loan before June 5, 2020, the Borrower may elect to use an eight-week (56-day) Covered Period); provided such application for loan forgiveness is made within 10 months after the last day of the covered period, otherwise the loan is no longer deferred and the borrower must begin paying principal and interest. Just recently, The U.S. Treasury and SBA announced a streamlined PPP forgiveness application for loans of $50,000 or less (unless those borrowers together with their affiliates received loans totaling $2 million or more). It requires fewer calculations and may call for less documentation. It does not require borrowers to reduce their loan forgiveness calculations if they have reduced full-time equivalent (“FTE”) or salaries. BEH, BEP and FDS’ PPP loan forgiveness were all approved as of September 30, 2021, and the Company recorded $127,740 PPP loan forgiveness as other income during the nine months ended September 30, 2021. In addition, in February 2021, BEH, BEP and FDS received a total of $115,245 from the second round of PPP loan from the SBA. On October 28, 2021, the forgiveness of BEH’s 2 nd In May and June 2020, BEH, BEP and FDS received total of $215,600 from the Economic Injury Disaster Loan (“EIDL loan”) from the SBA after deducting $100 Uniform Commercial Code (“UCC”) handling charge and filing fee for each company. This is a low-interest federal disaster loan for working capital to small businesses and non-profit organizations of any size suffering substantial economic injury as a result of the Coronavirus (COVID-19), to help the businesses to meet financial obligations and operating expenses that could have been met had the disaster not occurred. This loan has interest of 3.75% and is not forgivable. The maturity of the loan is 30 years, installment payments including principal and interest of $515 monthly will begin 12 months from the date of the promissory note. As of September 30, 2021, the future minimum loan payments (including the PPP loan and EIDL loan) to be paid by year are as follows: Year Ending Amount (unaudited) September 30, 2022 $ 119,630 September 30, 2023 4,553 September 30, 2024 4,727 September 30, 2025 4,920 September 30, 2026 5,082 Thereafter 191,933 Total $ 330,845 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 10. RELATED PARTY TRANSACTIONS Loans from Shareholder At September 30, 2021 and December 31, 2020, the Company had loans from one major shareholder (also the Company’s senior officer) of $1,650,155 and $1,108,008, respectively. At September 30, 2021, the Company had loan from another major shareholder for $608,631 for settling the litigation (see Note 8). There are no written loan agreements for these loans. These loans are unsecured, non-interest bearing and have no fixed terms of repayment, and therefore, deemed payable on demand. Cash flows from loans form shareholder are classified as cash flows from financing activities. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 11. INCOME TAXES The Company and its subsidiaries are subject to 21% federal corporate income tax in US. At September 30, 2021 and December 31, 2020, the Company had net operating loss (“NOL”) for income tax purposes; for federal income tax purposes, the NOL arising in tax years beginning after 2017 may only reduce 80% of a taxpayer’s taxable income, and may be carried forward indefinitely; for California income tax purposes, the entire NOL can be carried forward up to 20 years. However, the coronavirus Aid, Relief and Economic Security Act (“the CARES Act”) issued in March 2020, provides tax relief to both corporate and noncorporate taxpayers by adding a five-year carryback period and temporarily repealing the 80% limitation for NOLs arising in 2018, 2019 and 2020. The Company has NOL carry-forwards for Federal and California income tax purposes of $5.60 million and $5.22 million at September 30, 2021 and December 31, 2020, respectively. No tax benefit was reported with respect to these NOL carry-forwards in the accompanying consolidated financial statements because the Company believes the realization of the Company’s net deferred tax assets for the NOL for both federal and California State of approximately $1.57 million as of September 30, 2021, was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by a full valuation allowance. Components of the Company’s deferred tax assets as of September 30, 2021 and December 31, 2020 are as follows: September 30, December 31, (unaudited) Net deferred tax assets: Bad debt expense $ 43,813 $ 42,359 Inventory impairment (reversal) 27,501 (1,847 ) Operating lease charge 14,798 6,995 Depreciation and amortization (2,561 ) (168 ) Expected income tax benefit from NOL carry-forwards 1,568,007 1,459,675 Less: valuation allowance (1,651,559 ) (1,507,014 ) Deferred tax assets, net of valuation allowance $ - $ - Income Tax Provision in the Statements of Operations A reconciliation of the consolidated federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes for the nine months ended September 30, 2021 and 2020 is as follows: 2021 2020 (unaudited) (unaudited) Federal statutory income tax expense (benefit) rate (21.00 )% (21.00 )% State statutory income tax (benefit) rate, net of effect of state income tax deductible to federal income tax (6.30 )% (6.98 )% Permanent difference - % 0.01 % Change in valuation allowance 26.71 % 27.31 % Effective income tax rate 0.60 % 0.66 % A reconciliation of the consolidated federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes for the three months ended September 30, 2021 and 2020 is as follows: 2021 2020 (unaudited) (unaudited) Federal statutory income tax expense (benefit) rate (21.00 )% (21.00 )% State statutory income tax (benefit) rate, net of effect of state income tax deductible to federal income tax (6.93 )% (6.98 )% Permanent difference - % 0.02 % Change in valuation allowance 27.93 % 27.96 % Effective income tax rate 0.00 % 0.00 % The provision for income tax expense for the nine months ended September 30, 2021 and 2020 consisted of the following: 2021 2020 (unaudited) (unaudited) Income tax expense – current $ 3,300 $ 3,300 Income tax benefit – current - - Total income tax expense $ 3,300 $ 3,300 The provision for income tax expense for the three months ended September 30, 2021 and 2020 consisted of the following: 2021 2020 (unaudited) (unaudited) Income tax expense – current $ - $ - Income tax benefit – current - - Total income tax expense $ - $ - |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Disclosure Text Block [Abstract] | |
LEASES | 12. LEASES Operating Leases Warehouse and office lease Effective October 1, 2018, the Company entered a 62.5 months lease for a facility including warehouse and office in the City of Irvine, California, with a security deposit of $41,841. The monthly rent is approximately $16,200 with a 3% increase each year. The lease provided an option to extend at lease maturity for another five-years, with six months prior written notice of lessee’s intention to extend the lease. The Company’s CEO is the guarantor of this lease. Lessor will have the right to proceed against guarantor following any breach or default by lessee without first proceeding against lessee and without previous notice to or demand upon either lessee or guarantor. The components of lease costs, lease term and discount rate with respect of warehouse and office lease in the City of Irvine with an initial term of more than 12 months are as follows: Nine Months Ended Nine Months Ended (unaudited) (unaudited) Operating lease cost $ 159,844 $ 159,844 Weighted Average Remaining Lease Term - Operating leases including options to renew 7.01 years 8.01 years Weighted Average Discount Rate - Operating leases 5 % 5 % Three Months Three Months (unaudited) (unaudited) Operating lease cost $ 53,281 $ 53,313 Weighted Average Discount Rate - Operating leases 5 % 5 % The following is a schedule, by years, of maturities of warehouse and office lease liabilities as of September 30, 2021: For the 12 months ending Operating (unaudited) September 30, 2022 $ 214,393 September 30, 2023 220,825 September 30, 2024 225,757 September 30, 2025 225,757 September 30, 2026 225,757 Thereafter 451,512 Total undiscounted cash flows 1,564,001 Less: imputed interest (248,629 ) Present value of lease liabilities $ 1,315,372 Equipment leases In 2017, the Company entered two leases for two copiers with terms of 60 and 63 months respectively, and monthly payments of $162 and $213, respectively. The Company also entered two leases for two forklifts with a term of 60 months for each, and the monthly payment was $292 and $669, respectively. The components of lease costs, lease term and discount rate with respect of equipment lease with an initial term of more than 12 months are as follows: Nine Months Ended Nine Months Ended September 30, September 30, (unaudited) (unaudited) Operating lease cost $ 12,091 $ 12,107 Weighted Average Remaining Lease Term - Operating leases 0.69 years 1.69 years Weighted Average Discount Rate - Operating leases 5 % 5 % Three Months Three Months September 30, September 30, (unaudited) (unaudited) Operating lease cost $ 4,031 $ 4,047 Weighted Average Discount Rate – Operating leases 5 % 5 % The following is a schedule, by years, of maturities of lease liabilities as of September 30, 2021: For the 12 months ending Operating September 30, 2022 $ 9,947 September 30, 2023 323 Total undiscounted cash flows 10,270 Less: imputed interest (199 ) Present value of lease liabilities $ 10,071 Finance Leases As of September 30, 2021, the Company had two finance leases for Videojet and spectrophotometer workstation. The components of lease costs, lease term and discount rate with respect of equipment finance lease with an initial term of more than 12 months are as follows: Nine Months Ended September 30, (unaudited) Finance lease cost $ 886 Weighted Average Remaining Lease Term - Finance leases 4.37 years Weighted Average Discount Rate - Finance leases 11.28 % For the 12 months ending Finance (unaudited) September 30, 2022 $ 15,540 September 30, 2023 15,047 September 30, 2024 13,078 September 30, 2025 9,140 September 30, 2026 8,378 Total undiscounted cash flows 61,183 Less: imputed interest (12,943 ) Present value of lease liabilities 48,240 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS The Company follows the guidance in FASB ASC 855-10 for the disclosure of subsequent events. The Company evaluated subsequent events through the date the financial statements were issued and determined the Company did not have any material subsequent event. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements (“CFS”) are prepared in conformity with U.S. Generally Accepted Accounting Principles (“US GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The functional currency of Bio Essence is U.S. dollars (“$’’). The accompanying financial statements are presented in U.S. dollars (“$”). The consolidated financial statements include the financial statements of the Company and its subsidiaries, BEP, BEH and FDS. All significant inter-company transactions and balances were eliminated in consolidation. The interim consolidated financial information as of September 30, 2021 and for the nine and three months ended September 30, 2021 and 2020 was prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures, which are normally included in CFS prepared in accordance with U.S. GAAP were not included. The interim consolidated financial 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 fiscal year ended December 31, 2020, previously filed with the SEC on April 14, 2021. In the opinion of management, all adjustments (which include all significant normal and recurring adjustments) necessary to present a fair statement of the Company’s consolidated financial position as of September 30, 2021, its consolidated results of operations and cash flows for the nine and three months ended September 30, 2021 and 2020, as applicable, were made. |
Going Concern | Going Concern The Company incurred net losses of $0.56 million and $0.51 million for the nine months ended September 30, 2021 and 2020, respectively. The Company incurred net losses of $0.18 million and $0.20 million for the three months ended September 30, 2021 and 2020, respectively. The Company also had an accumulated deficit of $7.27 million as of September 30, 2021. These conditions raise a substantial doubt about the Company’s ability to continue as a going concern. The Company plans to increase its income by strengthening its sales force, providing attractive sales incentive program, and increasing marketing and promotion activities. Management also intends to raise additional funds by way of a private or public offering, or by obtaining loans from banks or others. While the Company believes in the viability of its strategy to generate sufficient revenue and in its ability to raise additional funds on reasonable terms and conditions, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Use of Estimates | Use of Estimates In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates, required by management, include the recoverability of long-lived assets, allowance for doubtful accounts, and the reserve for obsolete and slow-moving inventories. Actual results could differ from those estimates. |
Leases | Leases The Company determines if an arrangement is a lease or contains a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, and operating lease liabilities (current and non-current) in the Company’s consolidated balance sheets. Finance leases are included in property and equipment, and finance lease liabilities (current and non-current) in the Company’s consolidated balance sheets. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company generally uses the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company elected the package of practical expedients permitted under the transition guidance to combine the lease and non-lease components as a single lease component for operating leases associated with the Company’s office space lease, and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements of income on a straight-line basis over the lease term. ROU assets are reviewed for impairment when indicators of impairment are present. ROU assets from operating and finance leases are subject to the impairment guidance in ASC 360, Property, Plant, and Equipment, as ROU assets are long-lived nonfinancial assets. The Company recognized no impairment of ROU assets as of September 30, 2021 and December 31, 2020. |
Cash and Equivalents | Cash and Equivalents For financial statement purposes, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Accounts Receivable | Accounts Receivable The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. As of September 30, 2021 and December 31, 2020, the bad debt allowance was $151,752 and $151,372, respectively. |
Inventory | Inventory Inventories are stated at the lower of cost or net realizable value with cost determined on a weighted-average basis. Management compares the cost of inventories with the net realizable value and an allowance is made for writing down their inventories to net realizable value, if lower. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation, and impairment losses, if any. Major repairs and betterments that significantly extend original useful lives or improve productivity are capitalized and depreciated over the period benefited. Maintenance and repairs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets as follows: Leasehold improvements 7-10 years Office furniture 5 years |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, which include property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by comparing of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by it. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds its fair value (“FV”). FV is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of September 30, 2021 and December 31, 2020, there was no significant impairments of its long-lived assets. |
Income Taxes | Income Taxes Income taxes are accounted for using an asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current period and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets also include the prior years’ net operating losses carried forward. 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 results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. The Company follows ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Under the provisions of ASC Topic 740, when tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statement of income. At September 30, 2021 and December 31, 2020, the Company did not take any uncertain positions that would necessitate recording a tax related liability. The Company files a U.S. income tax return. With few exceptions, the Company’s U.S. income tax return filed for the years ending on December 31, 2018 and thereafter are subject to examination by the relevant taxing authorities. The Company accounts for income taxes in interim periods in accordance with FASB ASC 740-270, “Interim Reporting.” The Company has determined an estimated annual effective tax rate. The rate will be revised, if necessary, as of the end of each successive interim period during the Company’s fiscal year to its best current estimate. The estimated annual effective tax rate is applied to the year-to-date ordinary income (or loss) at the end of the interim period. |
Revenue Recognition | Revenue Recognition The Company recognizes revenues following the five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. Revenue is measured at the amount of consideration we expect to receive in exchange for the sale of our product., which occurs at a point in time, typically upon delivery to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that it would have recognized is one year or less or the amount is immaterial. Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers. Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, returns and rebates. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable as the amount is payable to the Company’s customers. The Company’s return policy allows for the return of damaged or defective products and shipment errors. A notice of damage or wrong items should make within five days from receiving the goods, and actual return of the products must be completed within 30 days from the date of receiving the goods. Delayed notification for damaged or wrong products will not be accepted for return or exchange. Custom formulas and capsules are not returnable. The amount for return of products was immaterial for the nine and three months ended September 30, 2021 and 2020. |
Cost of Sales | Cost of Sales Cost of sales (“COS”) consists primarily of finished goods purchased from other manufacturers, material costs, labor costs and related overhead that are directly attributable to the production of the products. Write-down of inventory to lower of cost or net realizable value is also recorded in COS. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs related to delivery of finished goods are included in selling expenses. During the nine months ended September 30, 2021 and 2020, shipping and handling costs were $25,179 and $38,887, respectively. During the three months ended September 30, 2021 and 2020, shipping and handling costs were $7,848 and $10,528, respectively. |
Advertising | Advertising Advertising expenses consist primarily of costs of promotion and marketing for the Company’s image and products, and costs of direct advertising, and are included in selling expenses. The Company expenses all advertising costs as incurred. During the nine months ended September 30, 2021 and 2020, advertising expense was $24,114 and $24,899, respectively. During the three months ended September 30, 2021 and 2020, advertising expense was $8,990 and $6,112, respectively. |
Fair Value (“FV”) of Financial Instruments | Fair Value (“FV”) of Financial Instruments Certain of the Company’s financial instruments, including cash and equivalents, accrued liabilities and accounts payable, carrying amounts approximate their FV due to their short maturities. FASB ASC Topic 825, “Financial Instruments,” requires disclosure of the FV of financial instruments held by the Company. The carrying amounts reported in the balance sheets for current liabilities each qualify as financial instruments and are a reasonable estimate of their FV because of the short period of time between the origination of such instruments and their expected realization and the current market rate of interest. |
Fair Value Measurements and Disclosures | Fair Value Measurements and Disclosures ASC Topic 820, “Fair Value Measurements and Disclosures,” defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The three levels are defined as follow: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to the FV measurement. As of September 30, 2021 and December 31, 2020, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at FV. The carrying value of cash, accounts receivable, prepaid expenses, advances to suppliers, accounts payable, taxes payable, other payables and accrued liabilities approximate estimated fair values because of their short maturities. |
Share-based Compensation | Share-based Compensation The Company accounts for share-based compensation awards to employees in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”, which requires that share-based payment transactions with employees be measured based on the grant-date FV of the equity instrument issued and recognized as compensation expense over the requisite service period. The Company accounts for share-based compensation awards to non-employees in accordance with FASB ASC Topic 718 and FASB ASC Subtopic 505-50, “Equity-Based Payments to Non-employees”. Share-based compensation associated with the issuance of equity instruments to non-employees is measured at the FV of the equity instrument issued or committed to be issued, as this is more reliable than the FV of the services received. The FV is measured at the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. |
Earnings (Loss) per Share (EPS) | Earnings (Loss) per Share (EPS) Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares pertaining to warrants, stock options, and similar instruments had been issued and if the additional common shares were dilutive. Diluted EPS are based on the assumption that all dilutive convertible shares and stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding unvested restricted stock, options and warrants, and the if-converted method for the outstanding convertible instruments. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later) and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, outstanding convertible instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist primarily of accounts and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable. For the nine months ended September 30, 2021 and 2020, no customer accounted for more than 10% of the Company’s total sales. For the three months ended September 30, 2021 one customer accounted for more than 10% of the Company’s total sales. For the three months ended September 30, 2020, no customer accounted for more than 10% of the Company’s total sales The Company had three major vendors accounted for 27%, 23% and 15%, respectively, of total purchases during the nine months ended September 30, 2021. The Company had two major vendors accounted for 24% and 13%, respectively, of total purchase during nine months ended September 30, 2020. The Company had three major vendors accounted 38%, 17% and 13%, respectively of total purchases during the three months ended September 30, 2021. The Company had one vendor accounted for 17% of total purchases during the three months ended September 30, 2020. |
Segment Reporting | Segment Reporting ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s chief operating decision maker organizes segments within the Company for making operating decisions assessing performance and allocating resources. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Management determined the Company’s operations constitute a single reportable segment in accordance with ASC 280. The Company operates exclusively in one business and industry segment: manufacture and sale of health supplement products. |
New Accounting Pronouncements | New Accounting Pronouncements Recently issued accounting pronouncements not yet adopted In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance should be adopted on a prospective basis. As a smaller reporting company, the standard will be effective for the Company for interim and annual reporting periods beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of adopting this standard on its CFS. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company continues to evaluate the impact of the guidance and may apply the elections as applicable as changes in the market occur. In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. The Company is currently evaluating the impact that ASU 2020-06 may have on its CFS and related disclosures. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of property and equipment | Leasehold improvements 7-10 years Office furniture 5 years |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | September 30, December 31, (unaudited) Raw materials $ 70,822 $ 42,423 Finished goods – health supplements 186,217 255,906 Less: Inventory impairment allowance (26,097 ) (26,097 ) Total $ 230,942 $ 272,232 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | September 30, December 31, (unaudited) Leaseholder improvements $ 57,757 $ 57,067 Office furniture and equipment 246,970 170,917 Total 304,727 227,984 Less: Accumulated depreciation (153,446 ) (135,507 ) Net $ 151,281 $ 92,477 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible assets | September 30, December 31, (unaudited) Computer Software $ 36,928 $ 36,928 Trademark 2,350 2,350 Total 39,278 39,278 Less: Accumulated amortization (38,182 ) (31,892 ) Net $ 1,096 $ 7,386 |
Accrued Liabilities and Other_2
Accrued Liabilities and Other Payables (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accrued Liabilities And Other Payables [Abstract] | |
Schedule of accrued liabilities and other payables | September 30, December 31, (unaudited) Accrued legal and merchant fee $ - $ 720 Credit card payable 37,353 14,538 Payroll payable 6,834 - Accrued litigation liabilities - rent - 341,880 Other 13,759 - Total $ 57,946 $ 357,138 Accrued litigation liabilities – rent, non-current $ - $ 234,383 |
Government Loans Payable (Table
Government Loans Payable (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of future minimum loan payments | Year Ending Amount (unaudited) September 30, 2022 $ 119,630 September 30, 2023 4,553 September 30, 2024 4,727 September 30, 2025 4,920 September 30, 2026 5,082 Thereafter 191,933 Total $ 330,845 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred tax assets | September 30, December 31, (unaudited) Net deferred tax assets: Bad debt expense $ 43,813 $ 42,359 Inventory impairment (reversal) 27,501 (1,847 ) Operating lease charge 14,798 6,995 Depreciation and amortization (2,561 ) (168 ) Expected income tax benefit from NOL carry-forwards 1,568,007 1,459,675 Less: valuation allowance (1,651,559 ) (1,507,014 ) Deferred tax assets, net of valuation allowance $ - $ - |
Schedule of federal statutory income tax rate and the effective income tax | 2021 2020 (unaudited) (unaudited) Federal statutory income tax expense (benefit) rate (21.00 )% (21.00 )% State statutory income tax (benefit) rate, net of effect of state income tax deductible to federal income tax (6.30 )% (6.98 )% Permanent difference - % 0.01 % Change in valuation allowance 26.71 % 27.31 % Effective income tax rate 0.60 % 0.66 % 2021 2020 (unaudited) (unaudited) Federal statutory income tax expense (benefit) rate (21.00 )% (21.00 )% State statutory income tax (benefit) rate, net of effect of state income tax deductible to federal income tax (6.93 )% (6.98 )% Permanent difference - % 0.02 % Change in valuation allowance 27.93 % 27.96 % Effective income tax rate 0.00 % 0.00 % |
Schedule of income tax expense | 2021 2020 (unaudited) (unaudited) Income tax expense – current $ 3,300 $ 3,300 Income tax benefit – current - - Total income tax expense $ 3,300 $ 3,300 2021 2020 (unaudited) (unaudited) Income tax expense – current $ - $ - Income tax benefit – current - - Total income tax expense $ - $ - |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Disclosure Text Block [Abstract] | |
Schedule of lease costs, lease term and discount rate | Nine Months Ended Nine Months Ended (unaudited) (unaudited) Operating lease cost $ 159,844 $ 159,844 Weighted Average Remaining Lease Term - Operating leases including options to renew 7.01 years 8.01 years Weighted Average Discount Rate - Operating leases 5 % 5 % Three Months Three Months (unaudited) (unaudited) Operating lease cost $ 53,281 $ 53,313 Weighted Average Discount Rate - Operating leases 5 % 5 % Nine Months Ended Nine Months Ended September 30, September 30, (unaudited) (unaudited) Operating lease cost $ 12,091 $ 12,107 Weighted Average Remaining Lease Term - Operating leases 0.69 years 1.69 years Weighted Average Discount Rate - Operating leases 5 % 5 % Three Months Three Months September 30, September 30, (unaudited) (unaudited) Operating lease cost $ 4,031 $ 4,047 Weighted Average Discount Rate – Operating leases 5 % 5 % Nine Months Ended September 30, (unaudited) Finance lease cost $ 886 Weighted Average Remaining Lease Term - Finance leases 4.37 years Weighted Average Discount Rate - Finance leases 11.28 % |
Schedule of maturities of lease liabilities | For the 12 months ending Operating (unaudited) September 30, 2022 $ 214,393 September 30, 2023 220,825 September 30, 2024 225,757 September 30, 2025 225,757 September 30, 2026 225,757 Thereafter 451,512 Total undiscounted cash flows 1,564,001 Less: imputed interest (248,629 ) Present value of lease liabilities $ 1,315,372 For the 12 months ending Operating September 30, 2022 $ 9,947 September 30, 2023 323 Total undiscounted cash flows 10,270 Less: imputed interest (199 ) Present value of lease liabilities $ 10,071 For the 12 months ending Finance (unaudited) September 30, 2022 $ 15,540 September 30, 2023 15,047 September 30, 2024 13,078 September 30, 2025 9,140 September 30, 2026 8,378 Total undiscounted cash flows 61,183 Less: imputed interest (12,943 ) Present value of lease liabilities 48,240 |
Organization and Description _2
Organization and Description of Business (Details) | Mar. 01, 2017 |
Accounting Policies [Abstract] | |
Ownership, percentage | 100.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Net losses (in Dollars) | $ 180,000 | $ 200,000 | $ 560,000 | $ 510,000 | |
Accumulated deficit (in Dollars) | 7,270,000 | 7,270,000 | |||
Bad debt allowance (in Dollars) | $ 151,752 | $ 151,372 | |||
Tax benefit | 50.00% | ||||
Shipping and handling costs (in Dollars) | 7,848 | 10,528 | $ 25,179 | 38,887 | |
Advertising expense (in Dollars) | $ 8,990 | $ 6,112 | $ 24,114 | $ 24,899 | |
Concentration of credit risk | 10.00% | ||||
Number of customer | 1 | ||||
Vendors | 3 | ||||
Major vendors | 3 | 1 | 2 | ||
Total Sales [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Concentration of credit risk | 10.00% | 10.00% | |||
One Vendor [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Concentration of credit risk | 38.00% | 17.00% | 27.00% | 24.00% | |
Two Vendor [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Concentration of credit risk | 17.00% | 23.00% | 13.00% | ||
Three Vendor [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Concentration of credit risk | 13.00% | 15.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment | 9 Months Ended |
Sep. 30, 2021 | |
Office furniture [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 5 years |
Minimum [Member] | Leasehold improvements [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 7 years |
Maximum [Member] | Leasehold improvements [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 10 years |
Inventory (Details) - Schedule
Inventory (Details) - Schedule of Inventory - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of Inventory [Abstract] | ||
Raw materials | $ 70,822 | $ 42,423 |
Finished goods – health supplements | 186,217 | 255,906 |
Less: Inventory impairment allowance | (26,097) | (26,097) |
Total | $ 230,942 | $ 272,232 |
Security Deposit (Details)
Security Deposit (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Security Deposit [Abstract] | ||
Office and warehouse rent | $ 41,841 | $ 41,841 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 7,764 | $ 5,473 | $ 19,712 | $ 16,779 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details) - Schedule of property and equipment - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 304,727 | $ 227,984 |
Less: Accumulated depreciation | (153,446) | (135,507) |
Net | 151,281 | 92,477 |
Leaseholder improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 57,757 | 57,067 |
Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 246,970 | $ 170,917 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible of assets | $ 932 | $ 2,679 | $ 6,290 | $ 8,036 |
Intangible assets useful life | 5 years | |||
Amortization expense, year 2 | 240 | $ 240 | ||
Amortization expense, year 3 | 240 | 240 | ||
Amortization expense, year 4 | 240 | 240 | ||
Amortization expense, year 5 | 240 | 240 | ||
Amortization expense, year 1 | $ 123 | $ 123 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details) - Schedule of Intangible assets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of Intangible assets [Abstract] | ||
Computer Software | $ 36,928 | $ 36,928 |
Trademark | 2,350 | 2,350 |
Total | 39,278 | 39,278 |
Less: Accumulated amortization | (38,182) | (31,892) |
Net | $ 1,096 | $ 7,386 |
Taxes Payable (Details)
Taxes Payable (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Tax Payable [Abstract] | ||
Sales tax and payroll tax payable | $ 20,762 | $ 22,967 |
Accrued Liabilities and Other_3
Accrued Liabilities and Other Payables (Details) - USD ($) | 1 Months Ended | 9 Months Ended |
May 31, 2021 | Sep. 30, 2021 | |
Accrued Liabilities And Other Payables [Abstract] | ||
Damages for lost rental profits | $ 2,090,000 | |
Former landlord initiated litigation, description | the Company executed a Settlement Agreement and Release with the former landlord, wherein the Company shall pay the former landlord the sum of $750,000 through 24 equal installment payment at 10% interest pursuant to a payment schedule. The Company shall have the Early Payment Option (“EPO”), to fully satisfy its obligation to former landlord through a payment of $700,000, to be made no later than January 1, 2021, or the option is waived if the EPO is not fully paid by January 1, 2021. | |
Outstanding liability | $ 608,631 | |
Annual principal amount | 576,263 | |
Interest expense | 23,840 | |
Other costs | $ 8,528 |
Accrued Liabilities and Other_4
Accrued Liabilities and Other Payables (Details) - Schedule of accrued liabilities and other payables - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of accrued liabilities and other payables [Abstract] | ||
Accrued legal and merchant fee | $ 720 | |
Credit card payable | 37,353 | 14,538 |
Payroll payable | 6,834 | |
Accrued litigation liabilities - rent | 341,880 | |
Other | 13,759 | |
Total | 57,946 | 357,138 |
Accrued litigation liabilities – rent, non-current | $ 234,383 |
Government Loans Payable (Detai
Government Loans Payable (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Jun. 30, 2020 | May 31, 2020 | Sep. 30, 2021 | |
Government Loans Payable (Details) [Line Items] | |||
Loan maturity description | Loans issued prior to June 5, 2020 have a maturity of two years, loans issued after June 5, 2020 have a maturity of five years. No collateral or personal guarantees are required. A borrower may apply for loan forgiveness any time on or before the maturity date of the loan, including before the end of the Covered Period (either (1) the 24-week (168-day) period beginning on the PPP Loan Disbursement Date, or (2) if the Borrower received its PPP loan before June 5, 2020, the Borrower may elect to use an eight-week (56-day) Covered Period); provided such application for loan forgiveness is made within 10 months after the last day of the covered period, otherwise the loan is no longer deferred and the borrower must begin paying principal and interest. Just recently, The U.S. Treasury and SBA announced a streamlined PPP forgiveness application for loans of $50,000 or less (unless those borrowers together with their affiliates received loans totaling $2 million or more). It requires fewer calculations and may call for less documentation. It does not require borrowers to reduce their loan forgiveness calculations if they have reduced full-time equivalent (“FTE”) or salaries. BEH, BEP and FDS’ PPP loan forgiveness were all approved as of September 30, 2021, and the Company recorded $127,740 PPP loan forgiveness as other income during the nine months ended September 30, 2021. In addition, in February 2021, BEH, BEP and FDS received a total of $115,245 from the second round of PPP loan from the SBA. | ||
PPP Loan [Member] | |||
Government Loans Payable (Details) [Line Items] | |||
Loan amount (in Dollars) | $ 127,740 | $ 127,740 | |
Percentage of forgiven amount | 60.00% | 60.00% | |
Annual interest | 1.00% | 1.00% | |
Uniform Commercial Code [Member] | |||
Government Loans Payable (Details) [Line Items] | |||
Loan description | In May and June 2020, BEH, BEP and FDS received total of $215,600 from the Economic Injury Disaster Loan (“EIDL loan”) from the SBA after deducting $100 Uniform Commercial Code (“UCC”) handling charge and filing fee for each company. This is a low-interest federal disaster loan for working capital to small businesses and non-profit organizations of any size suffering substantial economic injury as a result of the Coronavirus (COVID-19), to help the businesses to meet financial obligations and operating expenses that could have been met had the disaster not occurred. This loan has interest of 3.75% and is not forgivable. The maturity of the loan is 30 years, installment payments including principal and interest of $515 monthly will begin 12 months from the date of the promissory note. |
Government Loans Payable (Det_2
Government Loans Payable (Details) - Schedule of future minimum loan payments | Sep. 30, 2021USD ($) |
Schedule of future minimum loan payments [Abstract] | |
September 30, 2022 | $ 119,630 |
September 30, 2023 | 4,553 |
September 30, 2024 | 4,727 |
September 30, 2025 | 4,920 |
September 30, 2026 | 5,082 |
Thereafter | 191,933 |
Total | $ 330,845 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Related Party Transactions (Details) [Line Items] | ||
Loan amount | $ 1,650,155 | $ 1,108,008 |
Major Shareholder [Member] | ||
Related Party Transactions (Details) [Line Items] | ||
Loan amount | $ 608,631 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Income Taxes (Details) [Line Items] | ||
Net operating loss description | the NOL arising in tax years beginning after 2017 may only reduce 80% of a taxpayer’s taxable income, and may be carried forward indefinitely; for California income tax purposes, the entire NOL can be carried forward up to 20 years. However, the coronavirus Aid, Relief and Economic Security Act (“the CARES Act”) issued in March 2020, provides tax relief to both corporate and noncorporate taxpayers by adding a five-year carryback period and temporarily repealing the 80% limitation for NOLs arising in 2018, 2019 and 2020. | |
Minimum [Member] | ||
Income Taxes (Details) [Line Items] | ||
EffectiveIncomeTaxRatesReconciliationAtFederalStatutoryIncomeTaxRate | 21.00% | |
Federal and California [Member] | ||
Income Taxes (Details) [Line Items] | ||
NOL carry-forwards | $ 5,600 | $ 5,220 |
Net deferred tax assets for NOL | $ 1,570 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of deferred tax assets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Net deferred tax assets: | ||
Bad debt expense | $ 43,813 | $ 42,359 |
Inventory impairment (reversal) | 27,501 | (1,847) |
Operating lease charge | 14,798 | 6,995 |
Depreciation and amortization | (2,561) | (168) |
Expected income tax benefit from NOL carry-forwards | 1,568,007 | 1,459,675 |
Less: valuation allowance | (1,651,559) | (1,507,014) |
Deferred tax assets, net of valuation allowance |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of federal statutory income tax rate and the effective income tax | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of federal statutory income tax rate and the effective income tax [Abstract] | ||||
Federal statutory income tax expense (benefit) rate | (21.00%) | (21.00%) | (21.00%) | (21.00%) |
State statutory income tax (benefit) rate, net of effect of state income tax deductible to federal income tax | (6.93%) | (6.98%) | (6.30%) | (6.98%) |
Permanent difference | 0.02% | 0.01% | ||
Change in valuation allowance | 27.93% | 27.96% | 26.71% | 27.31% |
Effective income tax rate | 0.00% | 0.00% | 0.60% | 0.66% |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of income tax expense - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of income tax expense [Abstract] | ||||
Income tax expense – current | $ 3,300 | $ 3,300 | ||
Income tax benefit – current | ||||
Total income tax expense | $ 3,300 | $ 3,300 |
Leases (Details)
Leases (Details) - USD ($) | Oct. 01, 2018 | Dec. 31, 2017 | Sep. 30, 2021 |
Leases (Details) [Line Items] | |||
Operating lease term, description | the Company entered a 62.5 months lease for a facility including warehouse and office in the City of Irvine, California, with a security deposit of $41,841. | ||
Monthly rent | $ 16,200 | ||
Rent percentage | 3.00% | ||
Leases One [Member] | |||
Leases (Details) [Line Items] | |||
Lease payment | $ 162 | ||
Leases Two [Member] | |||
Leases (Details) [Line Items] | |||
Lease payment | 213 | ||
Leases Three [Member] | |||
Leases (Details) [Line Items] | |||
Lease payment | 292 | ||
Leases Four [Member] | |||
Leases (Details) [Line Items] | |||
Lease payment | $ 669 |
Leases (Details) - Schedule of
Leases (Details) - Schedule of lease costs, lease term and discount rate - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Operating Lease [Member] | ||||
Leases (Details) - Schedule of lease costs, lease term and discount rate [Line Items] | ||||
Operating lease cost | $ 53,281 | $ 53,313 | $ 159,844 | $ 159,844 |
Weighted Average Remaining Lease Term | 7 years 3 days | 8 years 3 days | 7 years 3 days | 8 years 3 days |
Weighted Average Discount Rate | 5.00% | 5.00% | 5.00% | 5.00% |
Equipment leases [Member] | ||||
Leases (Details) - Schedule of lease costs, lease term and discount rate [Line Items] | ||||
Operating lease cost | $ 4,031 | $ 4,047 | $ 12,091 | $ 12,107 |
Weighted Average Remaining Lease Term | 8 months 8 days | 1 year 8 months 8 days | 8 months 8 days | 1 year 8 months 8 days |
Weighted Average Discount Rate | 5.00% | 5.00% | 5.00% | 5.00% |
Finance Lease [Member] | ||||
Leases (Details) - Schedule of lease costs, lease term and discount rate [Line Items] | ||||
Weighted Average Remaining Lease Term | 4 years 4 months 13 days | 4 years 4 months 13 days | ||
Weighted Average Discount Rate | 11.28% | 11.28% | ||
Finance lease cost | $ 886 | $ 886 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of maturities of lease liabilities | Sep. 30, 2021USD ($) |
Operating Lease [Member] | |
Leases (Details) - Schedule of maturities of lease liabilities [Line Items] | |
September 30, 2022 | $ 214,393 |
September 30, 2023 | 220,825 |
September 30, 2024 | 225,757 |
September 30, 2025 | 225,757 |
September 30, 2026 | 225,757 |
Thereafter | 451,512 |
Total undiscounted cash flows | 1,564,001 |
Less: imputed interest | (248,629) |
Present value of lease liabilities | 1,315,372 |
Equipment leases [Member] | |
Leases (Details) - Schedule of maturities of lease liabilities [Line Items] | |
September 30, 2022 | 9,947 |
September 30, 2023 | 323 |
Total undiscounted cash flows | 10,270 |
Less: imputed interest | (199) |
Present value of lease liabilities | 10,071 |
Finance Lease [Member] | |
Leases (Details) - Schedule of maturities of lease liabilities [Line Items] | |
September 30, 2022 | 15,540 |
September 30, 2023 | 15,047 |
September 30, 2024 | 13,078 |
September 30, 2025 | 9,140 |
September 30, 2026 | 8,378 |
Total undiscounted cash flows | 61,183 |
Less: imputed interest | (12,943) |
Present value of lease liabilities | $ 48,240 |