Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 13, 2022 | |
Document Information Line Items | ||
Entity Registrant Name | BIO ESSENCE CORP. | |
Trading Symbol | N/A | |
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 | Jun. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
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 | 000-56263 | |
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 | |
Title of 12(b) Security | N/A | |
Security Exchange Name | NONE |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
CURRENT ASSETS | ||
Cash and equivalents | $ 121 | $ 303 |
Accounts receivable, net | 44,239 | 16,820 |
Prepaid expenses | 60,834 | 31,870 |
Inventory, net | 209,950 | 212,969 |
Total current assets | 315,144 | 261,962 |
NONCURRENT ASSETS | ||
Security deposit | 41,841 | 41,841 |
Right-of-use assets, net | 1,132,943 | 1,213,472 |
Property and equipment, net | 220,283 | 180,909 |
Intangible assets, net | 920 | 1,037 |
Total non-current assets | 1,395,987 | 1,437,259 |
TOTAL ASSETS | 1,711,131 | 1,699,221 |
CURRENT LIABILITIES | ||
Bank overdraft | 57,577 | 19,032 |
Accounts payable | 93,455 | 62,583 |
Taxes payable | 12,117 | 12,428 |
Accrued liabilities and other payables | 43,371 | 77,109 |
Operating lease liabilities | 150,260 | 161,732 |
Accrued interest on government loans | 14,168 | 13,054 |
Government loans payable - current portion | 4,510 | 4,427 |
Loan payables | 11,650 | 11,814 |
Finance Lease Liability | 12,477 | |
Loan from shareholder | 2,807,786 | 2,393,785 |
Total current liabilities | 3,207,371 | 2,755,964 |
NONCURRENT LIABILITIES | ||
Operating lease liabilities | 1,040,531 | 1,122,902 |
Finance Lease Liability | 46,267 | |
Loan payables | 31,922 | 37,918 |
Government loans payable | 211,089 | 211,173 |
Total non-current liabilities | 1,329,809 | 1,371,993 |
TOTAL LIABILITIES | 4,537,180 | 4,127,957 |
COMMITMENTS AND CONTINGENCIES | ||
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 June 30, 2022 and December 31, 2021 | 3,301 | 3,301 |
Additional paid in capital | 4,926,879 | 4,926,879 |
Accumulated deficit | (7,756,229) | (7,358,916) |
TOTAL STOCKHOLDERS’ DEFICIT | (2,826,049) | (2,428,736) |
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ 1,711,131 | $ 1,699,221 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
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 | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenues | ||||
Total revenues | $ 288,136 | $ 235,927 | $ 594,550 | $ 447,955 |
Cost of revenues | ||||
Total cost of revenues | 130,788 | 171,427 | 366,746 | 306,736 |
Gross profit | 157,348 | 64,500 | 227,804 | 141,219 |
Operating expenses | ||||
Selling | 37,879 | 18,410 | 48,493 | 33,933 |
Bad debts | 380 | |||
General and administrative | 275,364 | 307,385 | 561,638 | 572,732 |
Total operating expenses | 313,243 | 325,795 | 610,131 | 607,045 |
Loss from operations | (155,895) | (261,295) | (382,327) | (465,826) |
Other income (expenses) | ||||
Interest expense | (5,159) | (26,909) | (10,319) | (29,672) |
Finance Lease interest expense | (196) | (196) | ||
Financial expense | (2,110) | (3,119) | (3,678) | (6,418) |
Other income | 2,500 | 127,872 | 3,035 | 136,219 |
Other expense | (133) | (87) | (630) | (4,896) |
Other income (expenses), net | (5,098) | 97,757 | (11,788) | 95,233 |
Loss before income tax | (160,993) | (163,538) | (394,115) | (370,593) |
Income tax expense | 3,200 | 3,200 | 3,300 | |
Net loss | $ (164,193) | $ (163,538) | $ (397,315) | $ (373,893) |
Basic and diluted weighted average shares outstanding (in Shares) | 33,009,000 | 33,009,000 | 33,009,000 | 33,009,000 |
Basic and diluted net loss per share (in Dollars per share) | $ 0 | $ 0 | $ (0.01) | $ (0.01) |
Sales of goods [Member] | ||||
Revenues | ||||
Total revenues | $ 138,511 | $ 235,927 | $ 320,090 | $ 447,955 |
Manufacture service revenue [Member] | ||||
Revenues | ||||
Total revenues | 149,625 | 274,460 | ||
Cost of goods sold [Member] | ||||
Cost of revenues | ||||
Total cost of revenues | 112,140 | 171,427 | 257,805 | 306,736 |
Cost of manufacture service [Member] | ||||
Cost of revenues | ||||
Total cost of revenues | $ 18,648 | $ 108,941 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Weighted average shares outstanding, diluted | 33,009,000 | 33,009,000 | 33,009,000 | 33,009,000 |
Net loss per share, diluted | $ 0 | $ 0 | $ (0.01) | $ (0.01) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (397,315) | $ (373,893) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 22,377 | 17,306 |
Bad debts | 380 | |
PPP Loan forgiveness | (127,740) | |
Operating lease expense | 111,789 | 114,620 |
Gain on disposal of fixed assets | (1,089) | |
Accounts receivable | (27,419) | 20,432 |
Prepaid expenses | (28,964) | (12,249) |
Advance to suppliers | 4,733 | |
Inventory | 3,019 | 28,155 |
Accounts payable | 30,872 | 12,602 |
Customer deposit | (28,283) | |
Accrued liabilities and other payables | (6,496) | (546,454) |
Accrued interest | 1,113 | |
Taxes payable | (311) | (3,920) |
Deferred revenue | 1,042 | |
Payment on lease liabilities | (125,104) | (111,313) |
Net cash used in operating activities | (443,680) | (978,430) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sales of fixed assets | 2,700 | |
Purchase of fixed assets | (1,540) | (20,629) |
Net cash used in investing activities | (1,540) | (17,929) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Bank overdraft | 38,545 | (21,765) |
Proceeds from government loans (SBA) | 115,245 | |
Payment of finance lease liability | (1,347) | |
Repayment of loan payables | (6,160) | |
Loan from shareholder | 414,000 | 905,776 |
Net cash provided by financing activities | 445,038 | 999,256 |
NET INCREASE (DECREASE) IN CASH & EQUIVALENTS | (182) | 2,897 |
CASH & EQUIVALENTS, BEGINNING OF PERIOD | 303 | 5,325 |
CASH & EQUIVALENTS, END OF PERIOD | 121 | 8,222 |
Supplemental Cash Flow Data: | ||
Income tax paid | 3,200 | 3,300 |
Interest paid | 2,807 | 29,672 |
Supplemental disclosures of non-cash financing activities: | ||
fix assets obtained in exchange for new financing lease liabilities | $ 60,091 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Deficit - USD ($) | COMMON - STOCK | ADDITIONAL PAID IN CAPITAL | ACCUMULATED DEFICIT | Total |
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 | |||
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 | (373,893) | |||
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 | |||
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 | |||
Balance at Dec. 31, 2021 | $ 3,301 | 4,926,879 | (7,358,916) | (2,428,736) |
Balance (in Shares) at Dec. 31, 2021 | 33,009,000 | |||
Net loss | (233,120) | (233,120) | ||
Balance at Mar. 31, 2022 | $ 3,301 | 4,926,879 | (7,592,036) | (2,661,856) |
Balance (in Shares) at Mar. 31, 2022 | 33,009,000 | |||
Balance at Dec. 31, 2021 | $ 3,301 | 4,926,879 | (7,358,916) | (2,428,736) |
Balance (in Shares) at Dec. 31, 2021 | 33,009,000 | |||
Net loss | (397,315) | |||
Balance at Jun. 30, 2022 | $ 3,301 | 4,926,879 | (7,756,299) | (2,826,049) |
Balance (in Shares) at Jun. 30, 2022 | 33,009,000 | |||
Balance at Mar. 31, 2022 | $ 3,301 | 4,926,879 | (7,592,036) | (2,661,856) |
Balance (in Shares) at Mar. 31, 2022 | 33,009,000 | |||
Net loss | (164,193) | (164,193) | ||
Balance at Jun. 30, 2022 | $ 3,301 | $ 4,926,879 | $ (7,756,299) | $ (2,826,049) |
Balance (in Shares) at Jun. 30, 2022 | 33,009,000 |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2022 | |
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. On December 7, 2021, the Company dissolved FDS. On November 12, 2021, Bio Essence incorporated a wholly owned subsidiary McBE Pharma Inc. (“McBE”) in the state of California, McBE will be engaged in developing, manufacturing and sales of prescription medicine. As a result of the ownership restructure, BEP BEH and McBE became wholly owned subsidiaries of Bio Essence. McBE has not engaged any operations since its inception. 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 | 6 Months Ended |
Jun. 30, 2022 | |
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 McBE. All significant inter-company transactions and balances were eliminated in consolidation. The interim consolidated financial information as of June 30, 2022 and for the six and three months periods ended June 30, 2022 and 2021 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, 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 June 30, 2022, its consolidated results of operations and cash flows for the six and three months ended June 30, 2022 and 2021, as applicable, were made. The results for the period ended June 30, 2022 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2022 or for any future period. Going Concern The Company incurred net losses of $397,315 and $373,893 for the six months ended June 30, 2022 and 2021, respectively. The Company incurred net losses of $164,193 and $163,538 for the three months ended June 30, 2022 and 2021, respectively. The Company also had an accumulated deficit of $7,756,299 as of June 30, 2022. 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 follows ASC 842 and 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 June 30, 2022 and December 31, 2021. 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 June 30, 2022 and December 31, 2021, the bad debt allowance was $2,252 and $2,252, 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 June 30, 2022 and December 31, 2021, 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 June 30, 2022 and December 31, 2021, 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, 2019 and thereafter are subject to examination by the relevant taxing authorities. 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 sales of goods are measured at net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers, and are recognized when the goods are delivered to the 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. Revenues from manufacture services are recognized when the manufacture process is completed pursuant to the customers’ requirement and the manufactured goods were delivered to the 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 six and three months ended June 30, 2022 and 2021. Cost of Revenue Cost of goods sold (“COGS”) 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 COGS. Cost of manufacture service consists primarily of direct labor costs and related overhead that are directly attributable to the manufacture process. Shipping and Handling Costs Shipping and handling costs related to delivery of finished goods are included in selling expenses. During the six months ended June 30, 2022 and 2021, shipping and handling costs were $19,753 and $17,331, 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 six months ended June 30, 2022 and 2021, advertising expense was $28,740and $15,125, respectively. During the three months ended June 30, 2022 and 2021, advertising expense was $27,466 and $9,160, 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 June 30, 2022 and December 31, 2021, 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 in accordance with ASC 718, “Compensation – Stock Compensation”. The cost of services received from employees and non-employees in exchange for awards of equity instruments is recognized in the consolidated statement of operations based on the estimated fair value of those awards on the grant date and amortized on a straight-line basis over the requisite service period or vesting period. The Company records forfeitures as they occur. 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). There were no potentially dilutive securities outstanding (options and warrants) for the six and three months ended June 30, 2022 and 2021. 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 six months ended June, 2022, the company had two major customers accounted for 16% and 15%, respectively, of the Company’s total sales. During the six months ended June 30, 2021, no customer accounted for more than 10% of the Company’s total sales. For the three months ended June, 2022, the company had one major customer accounted for 34% of the Company’s total sales. During the three months ended June 30, 2021, no customer accounted for more than 10% of the Company’s total sales. The Company had three major vendors accounted for 20%, 17% and 14%, respectively, of total purchases during the six months ended June 30, 2022. The Company had no vendors accounts more than 10% of total purchases during the six months ended June 30, 2021. The Company had two major vendors accounted for 47% and 10% respectively, of total purchases during the three months ended June 30, 2022. The Company had no vendors accounts more than 10% of total purchases during the three months ended June 30, 2021. 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 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 | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY | 3. INVENTORY Inventory consisted of the following at June 30, 2022 and December 31, 2021: June 30, December 31, (unaudited) Raw materials $ 52,865 $ 49,706 Finished goods – health supplements 183,182 189,360 Less: Inventory impairment allowance (26,097 ) (26,097 ) Total $ 209,950 $ 212,969 |
Security Deposit
Security Deposit | 6 Months Ended |
Jun. 30, 2022 | |
Security Deposit [Abstract] | |
SECURITY DEPOSIT | 4. SECURITY DEPOSIT As of June 30, 2022 and December 31, 2021, the security deposit was for rent of the Company’s office and warehouse of $41,841. |
Property and Equipment, Net
Property and Equipment, Net | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 5. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following at June 30, 2022 and December 31, 2021: June 30, December 31, (unaudited) Leaseholder improvements $ 57,067 $ 57,067 Office furniture and equipment 348,663 287,029 Total 405,730 344,096 Less: Accumulated depreciation (185,447 ) (163,187 ) Net $ 220,283 $ 180,909 Depreciation for the six months ended June 30, 2022 and 2021 was $22,260 and $11,948, respectively. Depreciation for the three months ended June 30, 2022 and 2021 was $11,445 and $6,112, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | 6. INTANGIBLE ASSETS, NET Intangible assets consisted of the following as of June 30, 2022 and December 31, 2021: June 30, December 31, (unaudited) Computer Software $ 36,928 $ 36,928 Trademark 2,350 2,350 Total 39,278 39,278 Less: Accumulated amortization (38,358 ) (38,241 ) Net $ 920 $ 1,037 Amortization of intangible assets was $117 and $5,358 for the six months ended June 30, 2022 and 2021, respectively. Amortization of intangible assets was $59 and $2,679 for the three months ended June 30, 2022 and 2021, respectively. Estimated amortization for the existing intangible assets with finite lives for each of the next five years at June 30 , 2022 is as follows: $235, $235, $235 and $215. |
Taxes Payable
Taxes Payable | 6 Months Ended |
Jun. 30, 2022 | |
Tax Payable [Abstract] | |
TAXES PAYABLE | 7. TAXES PAYABLE Taxes payable at June 30, 2022 and December 31, 2021 was for sales tax and payroll tax payable of $7,104 and $12,428, respectively. |
Accrued Liabilities and Other P
Accrued Liabilities and Other Payables | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022 and December 31, 2021: June 30, December 31, (unaudited) Accrued expenses $ 3,852 $ 9,686 Credit card payable 39,518 39,190 Customer deposit - 28,283 Deferred income - Total $ 43,371 $ 77,109 |
Government Loans Payable
Government Loans Payable | 6 Months Ended |
Jun. 30, 2022 | |
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. Subsequently, 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. 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. As of December 31, 2021, all BEH, BEP and FDS’ PPP loans’ forgiveness were approved and the Company recorded $242,985 PPP loan forgiveness as other income in the year ended December 31, 2021. 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. On March 4, 2022, The FDS transferred its EIDL loan to BEC due to the dissolution of FDS. As of June 30, 2022, the future minimum loan payments (including the PPP loan and EIDL loan) to be paid by year are as follows: Year Ending Amount (unaudited) June 30, 2023 $ 4,510 June 30, 2024 4,683 June 30, 2025 4,862 June 30, 2026 5,047 June 30, 2027 5,240 Thereafter 191,258 Total $ 215,600 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 10. RELATED PARTY TRANSACTIONS Loans from Shareholder At June 30, 2022 and December 31, 2021, the Company had loans from one major shareholder (also the Company’s senior officer) for $2,199,155 and $1,785,154, respectively. At June 30, 2022 and December 31, 2021, the Company had loan from another major shareholder for $608,631 for settling the litigation 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 | 6 Months Ended |
Jun. 30, 2022 | |
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 June, 2022 and December 31, 2021, 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 $4.60 million and $4.22 million at June 30, 2022 and December 31, 2021, 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 $1.29 million as of June 30, 2022, 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 June 30, 2022 and December 31, 2021 are as follows: June 30, December 31, (unaudited) Net deferred tax assets: Bad debt expense $ 1,978 $ 1,978 Inventory impairment (reversal) 697 697 Operating lease charge 14,844 14,821 Depreciation and amortization (2,561 ) (2,561 ) Expected income tax benefit from NOL carry-forwards 1,288,412 1,181,525 Less: valuation allowance (1,303,370 ) (1,196,460 ) 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 six months ended June 30, 2022and 2021 is as follows: 2022 2021 (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 (6.17 )% (5.99 )% Change in valuation allowance 26.36 % 26.10 % Effective income tax rate (0.81 )% (0.89 )% 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 June 30, 2022 and 2021 is as follows: 2022 2021 (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 (4.84 )% (6.76 )% Change in valuation allowance 23.85 % 27.76 % Effective income tax rate (1.99 )% 0.00 % The provision for income tax expense for the six months ended June 30, 2022 and 2021 consisted of the following: 2022 2021 (unaudited) (unaudited) Income tax expense – current $ 3,200 $ 3,300 Income tax benefit – current - - Total income tax expense $ 3,200 $ 3,300 The provision for income tax expense for the three months ended June 30, 2022 and 2021 consisted of the following: 2022 2021 (unaudited) (unaudited) Income tax expense – current $ 3,200 $ Income tax benefit – current - - Total income tax expense $ 3,200 $ |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases [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: Six Months Ended Six Months Ended (unaudited) (unaudited) Operating lease cost $ 106,562 $ 106,562 Weighted Average Remaining Lease Term - Operating leases including options to renew 6.26 years 7.26 years Weighted Average Discount Rate - Operating leases 5 % 5 % Three Months Three Months Operating lease cost $ 53,281 $ 53,281 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 June 30, 2022: For the 12 months ending Operating June 30, 2023 $ 200,915 June 30, 2024 255,757 June 30, 2025 225,757 June 30, 2026 225,757 June 30, 2027 225,757 Thereafter 282,195 Total undiscounted cash flows 1,386,138 Less: imputed interest (196,145 ) Present value of lease liabilities $ 1,189,993 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: Six Months Six Months June 30, June 30, Operating lease cost $ 5,227 $ 8,060 Weighted Average Remaining Lease Term - Operating leases 0.49 years 1.49 years Weighted Average Discount Rate - Operating leases 5 % 5 % Three Months Three Months June 30, June 30, Operating lease cost $ 1,305 $ 4,030 Weighted Average Discount Rate - Operating leases 5 % 5 % The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2022: For the 12 months ending Operating June 30, 2023 $ 808 Total undiscounted cash flows 808 Less: imputed interest (10 ) Present value of lease liabilities $ 798 Finance lease Effective March 15, 2022, the company entered two 39-months lease for two copiers with same vendor for a monthly payment of $234 and $214, respectively. Effective June 24, 2022, the company entered two leases for two forklifts with a term of 60 months for each, and the monthly payment was $383 and $451, respectively. At the lease expiration date, the Company has the option to purchase the copier for $1 each. The components of lease costs, lease term and discount rate with respect of the copier lease with an initial term of more than 12 months are as follows: Six Months Finance lease cost Amortization $ 1,147 Interest on lease liabilites 196 Total finance lease cost $ 1,343 Weighted Average Remaining Lease Term - Finance leases 4.49 Weighted Average Discount Rate – Finance leases 5 % Six Months Finance lease cost Amortization $ 1,147 Interest on lease liabilites 196 Total finance lease cost $ 1,343 Weighted Average Discount Rate – Finance leases 5 % The following is a schedule, by years, of maturities of finance lease liabilities as of June 30, 2022: For the 12 months ending Finance June 30, 2023 $ 15,136 June 30, 2024 15,337 June 30, 2025 15,337 June 30, 2026 9,967 June 30, 2027 9,967 Total undiscounted cash flows 65,744 Less: imputed interest (7,000 ) Present value of finance lease liabilities $ 58,744 |
Loan Payables
Loan Payables | 6 Months Ended |
Jun. 30, 2022 | |
Loan Payables [Abstract] | |
LOAN PAYABLES | 13. LOAN PAYABLES In June 2021, the Company entered a loan agreement of $14,549 for purchasing a Videojet with interest rate of 14.11% and a term of three-years. In September 2021, the Company entered another loan agreement of $39,218 for purchasing a spectrophotometer workstation with interest rate of 10.26% and a term of five-years. The Company recorded interest expense of $2,611 and $1,266 during the six and three months ended June 30, 2022. The following is a schedule, by years, of maturities of loan payable as of June 30, 2022: For the 12 months ending Loan Payable June 30, 2023 $ 15,882 June 30, 2024 15,389 June 30, 2025 9,975 June 30, 2026 9,975 June 30, 2027 1,662 Total undiscounted cash flows 52,883 Less: imputed interest (9,311 ) Present value of loan payable $ 43,572 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 14. 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) | 6 Months Ended |
Jun. 30, 2022 | |
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 McBE. All significant inter-company transactions and balances were eliminated in consolidation. The interim consolidated financial information as of June 30, 2022 and for the six and three months periods ended June 30, 2022 and 2021 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, 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 June 30, 2022, its consolidated results of operations and cash flows for the six and three months ended June 30, 2022 and 2021, as applicable, were made. The results for the period ended June 30, 2022 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2022 or for any future period. |
Going Concern | Going Concern The Company incurred net losses of $397,315 and $373,893 for the six months ended June 30, 2022 and 2021, respectively. The Company incurred net losses of $164,193 and $163,538 for the three months ended June 30, 2022 and 2021, respectively. The Company also had an accumulated deficit of $7,756,299 as of June 30, 2022. 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 follows ASC 842 and 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 June 30, 2022 and December 31, 2021. |
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 June 30, 2022 and December 31, 2021, the bad debt allowance was $2,252 and $2,252, 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 June 30, 2022 and December 31, 2021, 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 June 30, 2022 and December 31, 2021, 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, 2019 and thereafter are subject to examination by the relevant taxing authorities. |
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 sales of goods are measured at net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers, and are recognized when the goods are delivered to the 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. Revenues from manufacture services are recognized when the manufacture process is completed pursuant to the customers’ requirement and the manufactured goods were delivered to the 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 six and three months ended June 30, 2022 and 2021. |
Cost of Revenue | Cost of Revenue Cost of goods sold (“COGS”) 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 COGS. Cost of manufacture service consists primarily of direct labor costs and related overhead that are directly attributable to the manufacture process. |
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 six months ended June 30, 2022 and 2021, shipping and handling costs were $19,753 and $17,331, 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 six months ended June 30, 2022 and 2021, advertising expense was $28,740and $15,125, respectively. During the three months ended June 30, 2022 and 2021, advertising expense was $27,466 and $9,160, 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 June 30, 2022 and December 31, 2021, 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 in accordance with ASC 718, “Compensation – Stock Compensation”. The cost of services received from employees and non-employees in exchange for awards of equity instruments is recognized in the consolidated statement of operations based on the estimated fair value of those awards on the grant date and amortized on a straight-line basis over the requisite service period or vesting period. The Company records forfeitures as they occur. |
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). There were no potentially dilutive securities outstanding (options and warrants) for the six and three months ended June 30, 2022 and 2021. |
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 six months ended June, 2022, the company had two major customers accounted for 16% and 15%, respectively, of the Company’s total sales. During the six months ended June 30, 2021, no customer accounted for more than 10% of the Company’s total sales. For the three months ended June, 2022, the company had one major customer accounted for 34% of the Company’s total sales. During the three months ended June 30, 2021, no customer accounted for more than 10% of the Company’s total sales. The Company had three major vendors accounted for 20%, 17% and 14%, respectively, of total purchases during the six months ended June 30, 2022. The Company had no vendors accounts more than 10% of total purchases during the six months ended June 30, 2021. The Company had two major vendors accounted for 47% and 10% respectively, of total purchases during the three months ended June 30, 2022. The Company had no vendors accounts more than 10% of total purchases during the three months ended June 30, 2021. |
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 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) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of depreciation of property and equipment | Leasehold improvements 7-10 years Office furniture 5 years |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | June 30, December 31, (unaudited) Raw materials $ 52,865 $ 49,706 Finished goods – health supplements 183,182 189,360 Less: Inventory impairment allowance (26,097 ) (26,097 ) Total $ 209,950 $ 212,969 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | June 30, December 31, (unaudited) Leaseholder improvements $ 57,067 $ 57,067 Office furniture and equipment 348,663 287,029 Total 405,730 344,096 Less: Accumulated depreciation (185,447 ) (163,187 ) Net $ 220,283 $ 180,909 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible assets | June 30, December 31, (unaudited) Computer Software $ 36,928 $ 36,928 Trademark 2,350 2,350 Total 39,278 39,278 Less: Accumulated amortization (38,358 ) (38,241 ) Net $ 920 $ 1,037 |
Accrued Liabilities and Other_2
Accrued Liabilities and Other Payables (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Accrued Liabilities and Other Payables [Abstract] | |
Schedule of accrued liabilities and other payables | June 30, December 31, (unaudited) Accrued expenses $ 3,852 $ 9,686 Credit card payable 39,518 39,190 Customer deposit - 28,283 Deferred income - Total $ 43,371 $ 77,109 |
Government Loans Payable (Table
Government Loans Payable (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of future minimum loan payments | Year Ending Amount (unaudited) June 30, 2023 $ 4,510 June 30, 2024 4,683 June 30, 2025 4,862 June 30, 2026 5,047 June 30, 2027 5,240 Thereafter 191,258 Total $ 215,600 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred tax assets | June 30, December 31, (unaudited) Net deferred tax assets: Bad debt expense $ 1,978 $ 1,978 Inventory impairment (reversal) 697 697 Operating lease charge 14,844 14,821 Depreciation and amortization (2,561 ) (2,561 ) Expected income tax benefit from NOL carry-forwards 1,288,412 1,181,525 Less: valuation allowance (1,303,370 ) (1,196,460 ) Deferred tax assets, net of valuation allowance $ - $ - |
Schedule of federal statutory income tax rate and the effective income tax | 2022 2021 (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 (6.17 )% (5.99 )% Change in valuation allowance 26.36 % 26.10 % Effective income tax rate (0.81 )% (0.89 )% 2022 2021 (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 (4.84 )% (6.76 )% Change in valuation allowance 23.85 % 27.76 % Effective income tax rate (1.99 )% 0.00 % |
Schedule of income tax expense | 2022 2021 (unaudited) (unaudited) Income tax expense – current $ 3,200 $ 3,300 Income tax benefit – current - - Total income tax expense $ 3,200 $ 3,300 2022 2021 (unaudited) (unaudited) Income tax expense – current $ 3,200 $ Income tax benefit – current - - Total income tax expense $ 3,200 $ |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Schedule of lease costs, lease term and discount rate | Six Months Ended Six Months Ended (unaudited) (unaudited) Operating lease cost $ 106,562 $ 106,562 Weighted Average Remaining Lease Term - Operating leases including options to renew 6.26 years 7.26 years Weighted Average Discount Rate - Operating leases 5 % 5 % Three Months Three Months Operating lease cost $ 53,281 $ 53,281 Weighted Average Discount Rate - Operating leases 5 % 5 % Six Months Six Months June 30, June 30, Operating lease cost $ 5,227 $ 8,060 Weighted Average Remaining Lease Term - Operating leases 0.49 years 1.49 years Weighted Average Discount Rate - Operating leases 5 % 5 % Three Months Three Months June 30, June 30, Operating lease cost $ 1,305 $ 4,030 Weighted Average Discount Rate - Operating leases 5 % 5 % Six Months Finance lease cost Amortization $ 1,147 Interest on lease liabilites 196 Total finance lease cost $ 1,343 Weighted Average Remaining Lease Term - Finance leases 4.49 Weighted Average Discount Rate – Finance leases 5 % Six Months Finance lease cost Amortization $ 1,147 Interest on lease liabilites 196 Total finance lease cost $ 1,343 Weighted Average Discount Rate – Finance leases 5 % |
Schedule of lease liabilities | For the 12 months ending Operating June 30, 2023 $ 200,915 June 30, 2024 255,757 June 30, 2025 225,757 June 30, 2026 225,757 June 30, 2027 225,757 Thereafter 282,195 Total undiscounted cash flows 1,386,138 Less: imputed interest (196,145 ) Present value of lease liabilities $ 1,189,993 For the 12 months ending Operating June 30, 2023 $ 808 Total undiscounted cash flows 808 Less: imputed interest (10 ) Present value of lease liabilities $ 798 For the 12 months ending Finance June 30, 2023 $ 15,136 June 30, 2024 15,337 June 30, 2025 15,337 June 30, 2026 9,967 June 30, 2027 9,967 Total undiscounted cash flows 65,744 Less: imputed interest (7,000 ) Present value of finance lease liabilities $ 58,744 |
Loan Payables (Tables)
Loan Payables (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Loan Payables [Abstract] | |
Schedule of maturities of loan payable | For the 12 months ending Loan Payable June 30, 2023 $ 15,882 June 30, 2024 15,389 June 30, 2025 9,975 June 30, 2026 9,975 June 30, 2027 1,662 Total undiscounted cash flows 52,883 Less: imputed interest (9,311 ) Present value of loan payable $ 43,572 |
Organization and Description _2
Organization and Description of Business (Details) | Mar. 01, 2017 |
Ownership [Member] | |
Organization and Description of Business (Details) [Line Items] | |
Shareholder, percentage | 100% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Net losses | $ 164,193 | $ 163,538 | $ 397,315 | $ 373,893 | |
Accumulated deficit | (7,756,229) | (7,756,229) | $ (7,358,916) | ||
Bad debt allowance | $ 2,252 | $ 2,252 | |||
Tax benefit | 50% | ||||
Shipping and handling costs | 10,413 | 9,197 | $ 19,753 | 17,331 | |
Advertising expense | 27,466 | $ 9,160 | $ 15,125 | ||
Number of customers | 2 | ||||
Concentration of credit risk | 10% | 10% | |||
Total sales percentage | $ 0.34 | $ 0.10 | |||
Number of vendors | 2 | ||||
One Vendor [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Concentration of credit risk | 47% | 20% | |||
Two Vendor [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Concentration of credit risk | 17% | ||||
Three Vendor [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Concentration of credit risk | 14% | ||||
Four Vendor [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Concentration of credit risk | 10% | ||||
Customer One [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Concentration of credit risk | 16% | ||||
Customer Two [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Concentration of credit risk | 15% | ||||
Total Sales [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Total sales percentage | $ 0.10 | ||||
Going Concern [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Accumulated deficit | $ 7,756,299 | $ 7,756,299 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of depreciation of property and equipment | 6 Months Ended |
Jun. 30, 2022 | |
Leasehold improvements [Member] | Minimum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 7 years |
Leasehold improvements [Member] | Maximum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 10 years |
Office furniture [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 5 years |
Inventory (Details) - Schedule
Inventory (Details) - Schedule of Inventory - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Schedule of Inventory [Abstract] | ||
Raw materials | $ 52,865 | $ 49,706 |
Finished goods – health supplements | 183,182 | 189,360 |
Less: Inventory impairment allowance | (26,097) | (26,097) |
Total | $ 209,950 | $ 212,969 |
Security Deposit (Details)
Security Deposit (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Statistical Disclosure for Banks [Abstract] | ||
Security deposit | $ 41,841 | $ 41,841 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 11,445 | $ 6,112 | $ 22,260 | $ 11,948 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details) - Schedule of property and equipment - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, total | $ 405,730 | $ 344,096 |
Less: Accumulated depreciation | (185,447) | (163,187) |
Property and equipment, net | 220,283 | 180,909 |
Leaseholder improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, total | 57,067 | 57,067 |
Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, total | $ 348,663 | $ 287,029 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible of assets | $ 59 | $ 2,679 | $ 117 | $ 5,358 |
Intangible assets useful life | 5 years | |||
Amortization expense, year 1 | 235 | $ 235 | ||
Amortization expense, year 2 | 235 | 235 | ||
Amortization expense, year 3 | 235 | 235 | ||
Amortization expense, year 4 | $ 215 | $ 215 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details) - Schedule of Intangible assets - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, total | $ 39,278 | $ 39,278 |
Less: Accumulated amortization | (38,358) | (38,241) |
Intangible assets, net | 920 | 1,037 |
Computer Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, total | 36,928 | 36,928 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, total | $ 2,350 | $ 2,350 |
Taxes Payable (Details)
Taxes Payable (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Tax Payable [Abstract] | ||
Sales tax and payroll tax payable | $ 7,104 | $ 12,428 |
Accrued Liabilities and Other_3
Accrued Liabilities and Other Payables (Details) - Schedule of accrued liabilities and other payables - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Schedule of accrued liabilities and other payables [Abstract] | ||
Accrued expenses | $ 3,852 | $ 9,686 |
Credit card payable | 39,518 | 39,190 |
Customer deposit | 28,283 | |
Deferred income | ||
Total | $ 43,371 | $ 77,109 |
Government Loans Payable (Detai
Government Loans Payable (Details) | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
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. Subsequently, 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. 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. As of December 31, 2021, all BEH, BEP and FDS’ PPP loans’ forgiveness were approved and the Company recorded $242,985 PPP loan forgiveness as other income in the year ended December 31, 2021. |
PPP Loan [Member] | |
Government Loans Payable (Details) [Line Items] | |
Paycheck protection program loan | $ 127,740 |
Percentage of forgiven amount | 60% |
Annual interest | 1% |
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 $515 monthly will begin 12 months from the date of the promissory note. |
Government Loans Payable (Det_2
Government Loans Payable (Details) - Schedule of future minimum loan payments | Jun. 30, 2022 USD ($) |
Schedule of future minimum loan payments [Abstract] | |
June 30, 2023 | $ 4,510 |
June 30, 2024 | 4,683 |
June 30, 2025 | 4,862 |
June 30, 2026 | 5,047 |
June 30, 2027 | 5,240 |
Thereafter | 191,258 |
Total | $ 215,600 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Shareholder [Member] | ||
Related Party Transactions (Details) [Line Items] | ||
Loan amount | $ 608,631 | $ 608,631 |
Senior Officer [Member] | ||
Related Party Transactions (Details) [Line Items] | ||
Loan amount | $ 2,199,155 | $ 1,785,154 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
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] | ||
Federal corporate income tax | 21% | |
Federal and California [Member] | ||
Income Taxes (Details) [Line Items] | ||
NOL carry-forwards | $ 4,600 | $ 4,220 |
Net deferred tax assets for NOL | $ 1,290 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of deferred tax assets - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Net deferred tax assets: | ||
Bad debt expense | $ 1,978 | $ 1,978 |
Inventory impairment (reversal) | 697 | 697 |
Operating lease charge | 14,844 | 14,821 |
Depreciation and amortization | (2,561) | (2,561) |
Expected income tax benefit from NOL carry-forwards | 1,288,412 | 1,181,525 |
Less: valuation allowance | (1,303,370) | (1,196,460) |
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 | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
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 | (4.84%) | (6.76%) | (6.17%) | (5.99%) |
Change in valuation allowance | 23.85% | 27.76% | 26.36% | 26.10% |
Effective income tax rate | (1.99%) | 0% | (0.81%) | (0.89%) |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of income tax expense - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Schedule of income tax expense [Abstract] | ||||
Income tax expense – current | $ 3,200 | $ 3,200 | $ 3,300 | |
Income tax benefit – current | ||||
Total income tax expense | $ 3,200 | $ 3,200 | $ 3,300 |
Leases (Details)
Leases (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Mar. 15, 2022 | Oct. 01, 2018 | Dec. 31, 2017 | Mar. 31, 2022 | |
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% | |||
Leases terms | 60 months | |||
Finance lease, description | the company entered two 39-months lease for two copiers with same vendor for a monthly payment of $234 and $214, respectively. Effective June 24, 2022, the company entered two leases for two forklifts with a term of 60 months for each, and the monthly payment was $383 and $451, respectively. At the lease expiration date, the Company has the option to purchase the copier for $1 each. | |||
Leases One [Member] | ||||
Leases (Details) [Line Items] | ||||
Leases terms | 60 months | |||
Monthly payments | $ 162 | |||
Leases Two [Member] | ||||
Leases (Details) [Line Items] | ||||
Leases terms | 63 months | |||
Monthly payments | $ 213 | |||
Leases Three [Member] | ||||
Leases (Details) [Line Items] | ||||
Monthly payments | 292 | |||
Leases Four [Member] | ||||
Leases (Details) [Line Items] | ||||
Monthly payments | $ 669 |
Leases (Details) - Schedule of
Leases (Details) - Schedule of lease costs, lease term and discount rate - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Finance Lease [Member] | ||||
Finance lease cost | ||||
Amortization | $ 1,147 | |||
Interest on lease liabilites | 196 | |||
Total finance lease cost | $ 1,343 | |||
Weighted Average Remaining Lease Term - Finance leases | 4 years 5 months 26 days | |||
Weighted Average Discount Rate – Finance leases | 5% | |||
Warehouse and Office Lease [Member] | ||||
Leases (Details) - Schedule of lease costs, lease term and discount rate [Line Items] | ||||
Operating lease cost | $ 53,281 | $ 53,281 | $ 106,562 | $ 106,562 |
Weighted Average Remaining Lease Term - Operating leases including options to renew | 6 years 3 months 3 days | 7 years 3 months 3 days | ||
Weighted Average Discount Rate - Operating leases | 5% | 5% | 5% | 5% |
Equipment Leases [Member] | ||||
Leases (Details) - Schedule of lease costs, lease term and discount rate [Line Items] | ||||
Operating lease cost | $ 1,305 | $ 4,030 | $ 5,227 | $ 8,060 |
Weighted Average Remaining Lease Term - Operating leases | 5 months 26 days | 1 year 5 months 26 days | ||
Weighted Average Discount Rate - Operating leases | 5% | 5% | 5% | 5% |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of lease liabilities | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Warehouse and Office Lease [Member] | |
Leases (Details) - Schedule of lease liabilities [Line Items] | |
June 30, 2023 | $ 200,915 |
June 30, 2024 | 255,757 |
June 30, 2025 | 225,757 |
June 30, 2026 | 225,757 |
June 30, 2027 | 225,757 |
Thereafter | 282,195 |
Total undiscounted cash flows | 1,386,138 |
Less: imputed interest | (196,145) |
Present value of lease liabilities | 1,189,993 |
Operating Leases [Member] | |
Leases (Details) - Schedule of lease liabilities [Line Items] | |
June 30, 2023 | 808 |
Total undiscounted cash flows | 808 |
Less: imputed interest | (10) |
Present value of lease liabilities | 798 |
Finance Leases [Member] | |
Leases (Details) - Schedule of lease liabilities [Line Items] | |
June 30, 2023 | 15,136 |
June 30, 2024 | 15,337 |
June 30, 2025 | 15,337 |
June 30, 2026 | 9,967 |
June 30, 2027 | 9,967 |
Total undiscounted cash flows | 65,744 |
Less: imputed interest | (7,000) |
Present value of finance lease liabilities | $ 58,744 |
Loan Payables (Details)
Loan Payables (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | |
Loan Payables [Abstract] | ||||
Loan agreement | $ 39,218 | $ 14,549 | ||
Interest rate | 10.26% | 14.11% | ||
Interest expense | $ 1,266 | $ 2,611 |
Loan Payables (Details) - Sched
Loan Payables (Details) - Schedule of maturities of loan payable - Operating Leases [Member] | Jun. 30, 2022 USD ($) |
Loan Payables (Details) - Schedule of maturities of loan payable [Line Items] | |
June 30, 2023 | $ 15,882 |
June 30, 2024 | 15,389 |
June 30, 2025 | 9,975 |
June 30, 2026 | 9,975 |
June 30, 2027 | 1,662 |
Total undiscounted cash flows | 52,883 |
Less: imputed interest | (9,311) |
Present value of loan payable | $ 43,572 |