| Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES Basis of Presentation The
accompanying financial statements are prepared in conformity with U.S. Generally Accepted Accounting Principles (“US GAAP”).
The functional currency of Aixin is Chinese Renminbi (“RMB’’). The accompanying financial statements are translated
from RMB and presented in U.S. dollars (“USD”). Going
Concern The
Company incurred net losses of $0.92 million and $0.24 million for the nine months ended September 30, 2017 and 2016 respectively.
The Company also had a stockholders’ deficit of $3.05 million as of September 30, 2017. 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. 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. 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. During the nine months ended September 30, 2017 and 2016, bad debt
expense was $16,963 and $12,191, respectively. As of September 30, 2017 and December 31, 2016, the bad debt allowance was $27,279
and $9,475, respectively. Inventory Inventory
mainly consists of health supplement products. Inventory is valued at the lower of average cost or market, cost being determined
on a moving weighted average method. Management compares the cost of inventories with the net realizable value and an allowance
is made to write down their inventories to market value, if lower. The Company did not record any write-downs of inventory at September
30, 2017 and December 31,2016. 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.
Building 20 years
Office furniture 5 years
Electronic Equipment 3 years
Vehicles 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, but at least annually. Recoverability of long-lived assets
to be held and used is measured by comparing of the carrying amount of an asset to the estimated undiscounted future cash flows
expected to be generated by it. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment
charge is recognized by the amount by which the carrying amount of the asset exceeds its fair value (“FV”). FV is generally
determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its
review, the Company believes that, as of September 30, 2017 and December 31, 2016, there was no significant impairments of its
long-lived assets. Income Taxes Income taxes are accounted for using
an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences in future years
of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on
enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company follows ASC Topic 740, which
prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected
to be taken in a tax return. ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification
of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions,
accounting for income taxes in interim periods, and income tax disclosures. Under the provisions of ASC Topic 740,
when tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities,
while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately
sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available
evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution
of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions
that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50%
likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax
positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in
the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities
upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified
in selling, general and administrative expenses in the statement of income. At September 30, 2017 and December 31,
2016, the Company did not take any uncertain positions that would necessitate recording a tax related liability. Revenue Recognition The Company’s revenue recognition
policies comply with FASB ASC Topic 605, “Revenue Recognition”. Sales are recognized when a formal arrangement exists;
the price is fixed or determinable; title has passed to the buyer, which generally is at the time of delivery of the products or
services; no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before
all of the relevant criteria for revenue recognition are recorded as unearned revenue. Sales revenue represents the invoiced
value of goods, net of value-added taxes (“VAT”). All of the Company’s products sold in China are subject to
the PRC VAT of 17% of the gross sales price. This VAT may be offset by VAT paid by the Company on raw materials and other materials
purchased in China. The Company records VAT payable and VAT receivable net of payments in the financial statements. The VAT tax
return is filed offsetting the payables against the receivables. Sales and purchases are recorded net of VAT collected and paid
as the Company acts as an agent for the government. The Company’s sales policy allows
for the return of unopened products for cash after deducting certain service and transaction fees. As alternatives for product
returns, the customers can ask for an exchange of the products with same value. The amount for return of products was immaterial
for the nine months ended September 30, 2017 and 2016. Cost of Sales Cost of sales (“COS”) consists
primarily of cost of purchasing inventory. Write-down of inventory to lower of cost or market is also recorded in COS. Concentration of Credit Risk The operations of the Company are in
the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by the political,
economic, and legal environments in the PRC, and by the general state of the PRC economy. The Company has cash on hand and demand
deposits in accounts maintained with state-owned banks within the PRC. Cash in state-owned banks is covered by insurance up to
RMB 500,000 ($72,500) per bank. The Company have not experienced any losses in such accounts and believe they are not exposed to
any risks on their cash in these bank accounts. Statement
of Cash Flows In accordance with ASC Topic 230, “Statement
of Cash Flows,” Fair Value (“FV”) of
Financial Instruments Certain of the Company’s financial
instruments, including cash and equivalents, accrued liabilities and accounts payable, carrying amounts approximate their FV due
to their short maturities. FASB ASC Topic 825, “Financial Instruments,” requires disclosure of the FV of financial
instruments held by the Company. The carrying amounts reported in the balance sheets for current liabilities each qualify as financial
instruments and are a reasonable estimate of their FV because of the short period of time between the origination of such instruments
and their expected realization and the current market rate of interest. Fair Value Measurements and Disclosures ASC Topic 820, “Fair Value Measurements
and Disclosures,” defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances
disclosure requirements for FV measures. The three levels are defined as follow:
● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
● Level 3 inputs to the valuation methodology are unobservable and significant to the FV measurement. As of September 30, 2017 and December
31, 2016, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at FV. Foreign
Currency Translation and Comprehensive Income (Loss) The
functional currency of the Company is RMB. For financial reporting purposes, RMB is translated into USD as the reporting currency.
Assets and liabilities are translated at the exchange rate in effect at the balance sheet dates. Revenues and expenses are translated
at the average rate of exchange prevailing during the reporting period. Translation
adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’
equity as “Accumulated other comprehensive income”. Gains and losses resulting from foreign currency transactions are
included in income. There was no significant fluctuation in the exchange rate for the conversion of RMB to USD after the balance
sheet date. The
Company uses FASB ASC Topic 220, “Comprehensive Income”. Comprehensive income (loss) is comprised of net income (loss)
and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in
capital and distributions to stockholders. Comprehensive loss for the nine months ended September 30, 2017 and 2016 consisted of
net loss and foreign currency translation adjustments. Basic and Diluted Earnings per Share The Company is a limited Company (“LC”)
formed under the laws of the PRC. Like limited liability company in the US, limited company in the PRC do not issue shares to the
owners. The owners however, are called shareholders. Ownership interest is determined in proportion to capital contributed. Accordingly,
earnings per share data is not presented. 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 that the Company’s
operations constitute a single reportable segment in accordance with ASC 280. The Company operates exclusively in one business
and industry segment: sale of health supplement products. New Accounting Pronouncements In May 2014, the FASB issued No. 2014-09,
Revenue from Contracts with Customers, which supersedes the revenue recognition requirements in Accounting Standards Codification
605 - Revenue Recognition and most industry-specific guidance throughout the Codification. The standard requires that an entity
recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration
to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB approved a one-year
deferral of the effective date of the new revenue recognition standard. Public business entities, certain not-for-profit entities,
and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December
15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual
reporting periods beginning after December 31, 2016, including interim reporting periods within that reporting period. In March
2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting
Revenue versus Net). In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606), Identifying
Performance Obligations and Licensing. In May 2016, the FASB issued ASU 2016-11, Revenue from Contracts with Customers (Topic 606)
and Derivatives and Hedging (Topic 815) - Rescission of SEC Guidance Because of ASU 2014-09 and 2014-16, and ASU 2016-12, Revenue
from Contracts with Customers (Topic 606) - Narrow Scope Improvements and Practical Expedients. These ASUs clarify the implementation
guidance on a few narrow areas and adds some practical expedients to the guidance Topic 606. The Company is evaluating the effect
that these ASUs will have on its financial statements and related disclosures. In June 2016, the FASB issued ASU No.
2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial
assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.
This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured
at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after
December 15, 2019. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal
years, beginning after December 15, 2018. The Company is currently evaluating the impact that the standard will have on its financial
statements and related disclosures. In August 2016, the FASB issued ASU
No. 2016-15, Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 clarifies the presentation and classification
of certain cash receipts and cash payments in the statement of cash flows. This ASU is effective for public business entities for
fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. The Company
is currently assessing the potential impact of ASU 2016-15 on its financial statements and related disclosures. In November 2016, the FASB issued ASU
No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The guidance requires that a statement of cash flows explain
the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted
cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included
with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement
of cash flows. The standard is effective for fiscal years beginning after December 15, 2017, and interim period within those fiscal
years. Early adoption is permitted, including adoption in an interim period. The standard should be applied using a retrospective
transition method to each period presented. The Company does not anticipate the adoption of this ASU will have a significant impact
on its financial statements. In January 2017, the FASB issued ASU
No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business
with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions
or disposals of assets or businesses. The standard is effective for fiscal years beginning after December 15, 2017, including interim
periods within those fiscal years. Early adoption is permitted. The standard should be applied prospectively on or after the effective
date. The Company will evaluate the impact of adopting this standard prospectively upon any transactions of acquisitions or disposals
of assets or businesses. In January 2017, the FASB issued ASU
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
for the annual or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim
or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact
of adopting this standard on its CFS. Other recent accounting pronouncements
issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC
did not or are not believed by management to have a material impact on the Company’s present or future CFS. | 2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES Basis of Presentation The
accompanying financial statements are prepared in conformity with U.S. Generally Accepted Accounting Principles (“US GAAP”).
The functional currency of Aixin is Chinese Renminbi (“RMB’’). The accompanying financial statements are translated
from RMB and presented in U.S. dollars (“USD”). Going
Concern The
Company incurred net losses of $2.08 million and $0.19 million for 2016 and 2015 respectively. The Company also had a stockholders’
deficit of $2.02 million as of December 31, 2016. 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. 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. 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. During the years ended December 31, 2016 and 2015, bad debt expense
was $7,018 and $2,800, respectively. As of December 31, 2016 and 2015, the bad debt allowance for accounts receivable was $9,475
and $2,944, respectively. Inventory Inventory
mainly consists of health supplement products. Inventory is valued at the lower of average cost or market, cost being determined
on a moving weighted average method. Management compares the cost of inventories with the net realizable value and an allowance
is made for writing down their inventories to market value, if lower. The Company did not record any write-downs of inventory at
December 31, 2016 and 2015. 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.
Building 20 years
Office furniture 5 years
Electronic Equipment 3 years
Vehicles 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, but at least annually. 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 December 31, 2016 and 2015, there was no significant impairments of its long-lived assets. Income Taxes Income taxes are accounted for using
an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences in future years
of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on
enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to 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 December 31, 2016 and 2015, the Company
did not take any uncertain positions that would necessitate recording a tax related liability. Revenue Recognition The Company’s revenue recognition
policies comply with FASB ASC Topic 605, “Revenue Recognition”. Sales are recognized when a formal arrangement exists;
the price is fixed or determinable; title has passed to the buyer, which generally is at the time of delivery of the products or
services; no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before
all of the relevant criteria for revenue recognition are recorded as unearned revenue. Sales revenue represents the invoiced
value of goods, net of value-added taxes (“VAT”). All of the Company’s products sold in China are subject to
the PRC VAT of 17% of the gross sales price. This VAT may be offset by VAT paid by the Company on raw materials and other materials
purchased in China. The Company records VAT payable and VAT receivable net of payments in the financial statements. The VAT tax
return is filed offsetting the payables against the receivables. Sales and purchases are recorded net of VAT collected and paid
as the Company acts as an agent for the government. The Company’s sales policy allows
for the return of unopened products for cash after deducting certain service and transaction fees. As alternatives for the product
return option, the customers have options of asking an exchange of the products with same value. The amount for return of products
was immaterial for the years ended December 31, 2016 and 2015. Cost of Sales Cost of sales (“COS”) consists
primarily of cost of purchasing inventory. Write-down of inventory to lower of cost or market is also recorded in COS. Concentration of Credit Risk The operations of the Company are in
the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by the political,
economic, and legal environments in the PRC, and by the general state of the PRC economy. The Company has cash on hand and demand
deposits in accounts maintained with state-owned banks within the PRC. Cash in state-owned banks is covered by insurance up to
RMB 500,000 ($72,500) per bank. The Company have not experienced any losses in such accounts and believe they are not exposed to
any risks on their cash in these bank accounts. Statement
of Cash Flows In accordance with ASC Topic 230, “Statement
of Cash Flows,” 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 December 31, 2016 and 2015, the
Company did not identify any assets and liabilities that are required to be presented on the balance sheet at FV. Foreign
Currency Translation and Comprehensive Income (Loss) The
functional currency of the Company is RMB. For financial reporting purposes, RMB is translated into USD as the reporting currency.
Assets and liabilities are translated at the exchange rate in effect at the balance sheet dates. Revenues and expenses are translated
at the average rate of exchange prevailing during the reporting period. Translation
adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’
equity as “Accumulated other comprehensive income”. Gains and losses resulting from foreign currency transactions are
included in income. There was no significant fluctuation in the exchange rate for the conversion of RMB to USD after the balance
sheet date. The
Company uses FASB ASC Topic 220, “Comprehensive Income”. Comprehensive income (loss) is comprised of net income (loss)
and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in
capital and distributions to stockholders. Comprehensive loss for 2016 and 2015 consisted of net loss and foreign currency translation
adjustments. Basic and Diluted Earnings per Share The Company is a limited Company (“LC”)
formed under the laws of the PRC. Like limited liability company in the US, limited company in the PRC do not issue shares to the
owners. The owners however, are called shareholders. Ownership interest is determined in proportion to capital contributed. Accordingly,
earnings per share data is not presented. 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 that the Company’s
operations constitute a single reportable segment in accordance with ASC 280. The Company operates exclusively in one business
and industry segment: sale of health supplement products. New Accounting Pronouncements In May 2014, the FASB issued No. 2014-09,
Revenue from Contracts with Customers, which supersedes the revenue recognition requirements in Accounting Standards Codification
605 - Revenue Recognition and most industry-specific guidance throughout the Codification. The standard requires that an entity
recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration
to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB approved a one-year
deferral of the effective date of the new revenue recognition standard. Public business entities, certain not-for-profit entities,
and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December
15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual
reporting periods beginning after December 31, 2016, including interim reporting periods within that reporting period. In March
2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting
Revenue versus Net). In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606), Identifying
Performance Obligations and Licensing. In May 2016, the FASB issued ASU 2016-11, Revenue from Contracts with Customers (Topic 606)
and Derivatives and Hedging (Topic 815) - Rescission of SEC Guidance Because of ASU 2014-09 and 2014-16, and ASU 2016-12, Revenue
from Contracts with Customers (Topic 606) - Narrow Scope Improvements and Practical Expedients. These ASUs clarify the implementation
guidance on a few narrow areas and adds some practical expedients to the guidance Topic 606. The Company is evaluating the effect
that these ASUs will have on its financial statements and related disclosures. In June 2016, the FASB issued ASU No.
2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial
assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.
This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured
at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after
December 15, 2019. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal
years, beginning after December 15, 2018. The Company is currently evaluating the impact that the standard will have on its financial
statements and related disclosures. In August 2016, the FASB issued ASU
No. 2016-15, Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 clarifies the presentation and classification
of certain cash receipts and cash payments in the statement of cash flows. This ASU is effective for public business entities for
fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. The Company
is currently assessing the potential impact of ASU 2016-15 on its financial statements and related disclosures. In November 2016, the FASB issued ASU
No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The guidance requires that a statement of cash flows explain
the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted
cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included
with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement
of cash flows. The standard is effective for fiscal years beginning after December 15, 2017, and interim period within those fiscal
years. Early adoption is permitted, including adoption in an interim period. The standard should be applied using a retrospective
transition method to each period presented. The Company does not anticipate the adoption of this ASU will have a significant impact
on its financial statements. |
