SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This periodic report contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 (the "Act") with
respect to the financial condition, results of operations, business strategies,
operating efficiencies or synergies, competitive positions, growth opportunities
for existing products, plans and objectives of management. The Act provides a
safe harbor for forward-looking statements made by or on behalf of our Company.
Statements in this periodic report that are not historical facts are hereby
identified as forward-looking statements. Our Company and our representatives
may from time to time make written or oral statements that are forward-looking,
including statements contained in this report and other filings with the
Changes in Company-wide strategies, which may result in changes in the types or
mix of businesses in which our Company is involved or chooses to invest; changes
in
This list of factors that may affect future performance and the accuracy of forward-looking statements are illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.
Business Overview
We are a health and wellness company that develops, markets, promotes and
distributes a variety of customized health and wellness care products and
services, including supplements, healthy snacks, meal replacements, skincare
products, and nutritional consultation services to consumers in
In addition to products, we are committed to providing customized science based wellness consultation and service programs to customers. Our diverse products and services target health conscious customers and differentiate based upon age and gender and seek to manage different conditions. We reach out to customers fitting certain health and lifestyle profiles through our offline and online consultation services, and track eating habits and health indicators to provide customized products such as supplements. We believe this will facilitate the ability of customers to monitor, understand and adjust their health practices and lifestyle anytime and anywhere for increased customer engagement and retention.
We conduct our business through our wholly owned subsidiary
Our Products and Services
Our health products are designed to help enhance immunity and improve general
wellbeing. We provide the following categories of healthcare products and
customized healthcare consultation services in
Product category Representative Description Products Nutrition Catering Series Jasmine Beauty Meal replacement and healthy snacks Special Health Food Series Power Centinent Products that support a healthy active lifestyle and enhance Immunity Health Supplement Series Fuli Fruit Juice Functional fruit beverages and dietary and nutritional supplements containing resveratrol, anthocyanin, superoxide enzyme Skincare Series Tightness Facial skin care and recovery
Our products are taken as healthcare supplements in accordance with the principles of traditional Chinese medicine including the principle complementary medicine and ideal ratios and combinations of ingredients.
17 Markets and Regions
The Great Health Industry refers to production, operation, service and
information dissemination, maintenance, restoration, and promotions linked to
health. It covers medical products, health supplements, nutritional foods,
medical devices, health appliances, fitness, health management, health
consulting and many other production and service areas closely related to human
health. The Great Health Industry is an emerging industry with huge market
potential, especially in
According to the "China Great Health Industry Strategic Planning and Enterprise
Strategy Consulting Report" published by
Our Strategies
We are focused on achieving long-term growth in revenues, cash flow and profit. We believe that we can achieve this by developing multiple distribution channels and strengthening our marketing and promotions, leading to better product turnover and revenue. We also expect to broaden our product range as well as product differentiation in the future. Based on the business experience accumulated over the years, we believe we can improve the efficiency of our supply chain with time-saving and cost-saving supply chain management and marketing planning for the target customer base with our one-stop service.
Our primary aims are (i) to strengthen our product saleability; (ii) to cut
logistics cost and time spent and (iii) to further expand the market share in
? Collaborate with third-party e-commerce platforms to boost product exposure,
e.g. Tmall, Jingdong mall ? Deliver healthcare knowledge and consultation service via social media and
We-media
? Build brand image and reputation through customer experience and word of
mouth
? Increase the number of downstream distributors and wholesalers ? Strengthen the relationship with manufacturers, suppliers, drug agents and
distributors
? Pursue strategic acquisitions and partnerships
We intend to develop both online and offline distribution channels to increase
sales volume and revenue. We expect to partner with third party e-commerce
platforms, social media and We-media such as Wechat,
Our current offline sales channel relies on distributors and sales agents. To enhance the visibility and marketability of our products and services and to improve brand recognition and awareness, we hope to develop store-in-shop and counter experiences. We also intend to partner with high-end gyms to form nutrition clubs and hold weight-loss training camps, health assessment and fitness training camps and other activities.
We intend to create a 'one-stop' solution for our customers by creating a multi-channel health product supply and retail system. We not only provide personalized consultation service to our customers, but also summarize and analyze our customer feedback and experiences through our consultation service and after-sales service. We intend to share this data with our manufacturers and supply chain partners to develop products and services that better meet the demands of our customers. By pooling and addressing the needs of downstream businesses and combining it with the Consumer to Manufacturer model for upstream transformation, we anticipate establishing a close relationship between manufacturers and suppliers. We believe this model can also reduce circulation costs and improve the efficiency of our supply chain.
Competition
We operate in a highly competitive and fragmented industry that is sensitive to
price and service. We compete with leading e-commerce companies such as
? Breadth of member base and the products and services featured.
? Close and fast pre-sales and after-sales service response.
? Ability to reduce the product turnover time and inventory cost.
? Relationship and bargaining power with supplier and manufacturer.
? Healthcare product effectiveness and acceptance from customer.
? Local presence and understanding of local business trends.
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? Ability to deliver a high volume of relevant services and information to
consumers.
? Ability to produce high purchase rates for products and services among members.
? Strength and recognition of our brand.
Although we believe we compete favorably on the factors described above, many of our current and potential competitors have longer operating histories, significantly greater financial, technical, marketing and other resources, larger product and services offerings, larger customer base and greater brand recognition. These factors may allow our competitors to benefit from their existing customer base with lower development costs or to respond more quickly than we can to new or emerging technologies and changes in customer requirements. These competitors may engage in more extensive research and development efforts, undertake more far-reaching marketing campaigns and adopt more aggressive pricing policies, which may allow them to build a larger customer base more effectively than us. Our competitors may develop products or services that are similar to our products and services or that achieve greater market acceptance than our products and services. In addition, although we do not believe that customer payment terms are a principal competitive factor in our market, they may become such a factor, and we may be unable to compete on such terms.
Government and Industry Regulations
We are subject to the general laws in
Product Liability and Consumers Protection
Product liability claims may arise if any of our healthcare products have a
harmful effect on a consumer, who may make a claim for damages or compensation
as an injured party. The General Principles of the Civil Law of the PRC, which
became effective in
The Product Quality Law of the PRC was enacted in 1993 and amended in 2000 to strengthen the quality control of products and protect consumers' rights and interests. Under this law, manufacturers and distributors who produce or sell defective products may be subject to confiscation of earnings from such sales, revocation of business licenses and imposition of fines, and in severe circumstances, may be subject to criminal liability.
The Law of the PRC on the Protection of the Rights and Interests of Consumers
was promulgated on
Critical Accounting Policies, Judgments and Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in
The Company's accounting policies are more fully described in Note 1 and 2 of
the financial statements. As discussed in Note 1 and 2, the preparation of
financial statements and related disclosures in conformity with accounting
principles generally accepted in
Deferred tax assets and liabilities are measured using enacted tax rates in
effect for the year in which the differences are expected to reverse. Deferred
tax assets will be reflected on the balance sheet when it is determined that it
is more likely than not that the asset will be realized. A valuation allowance
has currently been recorded to reduce our deferred tax asset to
Discussion and Analysis of Financial Condition and Results of Operations
RESULTS OF OPERATIONS
We have been significantly impacted by COVID-19 global pandemic. In addition to
the devastating effects on human life, the pandemic is having a negative ripple
effect on the global economy, leading to disruptions and volatility in the
global financial markets.
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COVID-19 and
The following table sets forth certain operational data for the three months and
nine months ended
Three Months Ended Three Months Ended September 30, 2021 September 30, 2020 Revenue, net $ 69,726 $ 299,426 Cost of revenue 10,462 (285,746 ) Gross profit 80,188 13,680 Total operating expenses (162,225 ) (165,515 ) Total other income 247 4,054 Loss before income tax (81,790 ) (147,781 ) Income tax expenses - - Net loss (81,790 ) (147,781 ) Nine Months Ended Nine Months Ended September 30, 2021 September 30, 2020 Revenue, net $ 504,295 $ 435,682 Cost of revenue (202,506 ) (354,705 ) Gross profit 301,789 80,977 Total operating expenses (561,413 ) (438,856 ) Total other income 7,437 7,088 Loss before income tax (252,187 ) (350,791 ) Income tax expenses - - Net loss (252,187 ) (350,791 )
Revenue. For the three and nine months ended
Cost of Revenue. For the three and nine months ended
Net Loss. For the three and nine months ended
Liquidity and Capital Resources
As of
As of
20
We believe that our current cash and other sources of liquidity discussed below are adequate to support general operations for at least the next 12 months.
Nine Months EndedSeptember 30, 2021 2020
Net cash (used in) provided by operating activities
(27,358 ) (62,865 ) Net cash provided by financing activities 43,672 3,115
For the nine months ended
For the nine months ended
We expect to continue to rely on cash generated through financing from our existing shareholders and private placements of our securities, however, to finance our operations and future acquisitions.
For the nine months ended
For the nine months ended
Net Cash Provided By Financing Activities.
For the nine months ended
For the nine months ended
Off Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements and it is not anticipated that the Company will enter into any off-balance sheet arrangements.
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