EDGAR 10-K Filing

Company CIK: 1723059
Filing Year: 2024
Filename: 1723059_10-K_2024_0001213900-24-032898.json

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ITEM 1. BUSINESS
Item 1. Business
General Corporate History
Bio Essence Corp. (“we,” “us,” “Bio Essence,” or the “Company”) is an herbal health, diet, and nutrition company. The Company’s mission is to provide herbal health, diet, and vitamin nutritional supplements, as explained below.
The Company was incorporated in the State of California on January 1, 2000. On January 27, 2016, the Company entered into a change of control whereby our controlling shareholder, Jian Yang, purchased a controlling interest in the Company. On that same date, Jian Yang entered into a stock purchase agreement with Fusion Diet Systems, Inc. a Utah corporation dba, Fusion Naturals (“Fusion Naturals”). Fusion Naturals was originally incorporated in Utah on April 20, 2010. On January 9, 2017, the Company created a new corporation in the State of California called Bio Essence Pharmaceutical, Inc. to serve as a health supplements manufacturer (“BEP”). Then, on January 12, 2017, the Company created its third subsidiary, Bio Essence Herbal Essentials Inc. (“BEH”). The Company serves as a holding corporation for these subsidiaries. On November 13, 2021, the Company dissolved Fusion Naturals and formed a new wholly owned subsidiary, McBE Pharma, Inc. (“McBE”).
The primary focus of BEP is producing products for BEH and McBE, along with providing original equipment manufacturing and private label services to other companies. BEH targets and develops traditional Chinese medicines (“TCM”) in the form of single herbs, granules, pills, and tablets. It also offers special formulated dietary supplements and medical food. The Company intends to develop this subsidiary into one that is engaged in integrated health and to provide its customers to interact with dietitians, nutraceutical practitioners, and traditional integrative wellness doctors worldwide. McBE is in the process of implementing a new business plan that focuses on developing pharmaceuticals, supplements, and other similar products.
The Company sells its products through channels such as TCM practitioners, online websites, including its own proprietary website, and brick-and-mortar stores, such as GNC. Material sales have been made through these channels. The Company has conducted sales meetings with prospects through brokers and direct contacts to sell through other channels, including, Vitamin World, TJ Max, Home Goods, Marshalls, and grocery outlets, however as of the filing of this Registration Statement, the Company has not made any material sales through these channels.
On December 12, 2023, the Company entered into a Stock Purchase Agreement (“SPA”) with Newway, Inc., a California corporation (“Newway”) whereby the Company agreed to sell to Newway its wholly owned subsidiary, BEP, in exchange for cash consideration in the amount of Three Hundred Thousand Dollars ($300,000). The transaction closed prior to December 31, 2023. The effective date of the SPA identifies December 5, 2023 as the effective date, but a fully executed copy of the SPA was not available until December 12, 2023. The Board of Directors approved the sale pursuant to a Consent Resolution dated December 5, 2023. There was no material relationship between the Company and Newway. As a result of the transaction, the Company no longer holds any interest in BEP or the products and/or services it currently provides.
The Company is headquartered at 12 Chrysler, Unit B, Irvine, CA 92618 and the Company’s website is http://www.bioessencecorp.com. Our telephone number is (949) 706-9966. An organizational chart appearing on the next page provides an illustration of the relationship between the entities identified above.
Employees
The Company currently has 12 full-time employees.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments.
Not applicable.

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ITEM 2. PROPERTIES
Item 2. Description of Property.
The Company maintains an office at 12 Chrysler, Unit B, Irvine, CA 92618. This location serves as the Company’s main headquarters. We do not own any properties. We currently have no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings.
None.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures.
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities.
Common Stock
The Company has 100,000,000 shares of authorized common stock (CUSIP# 09090C105), of which, as of the end of our 2023 fiscal year, had 38,009,000 issued and outstanding. The Company’s stock trades on the OTC Markets, under the symbol BIOE.
As of the most recent practicable date, there are 48 record holders of our common stock. The Company has not paid any cash dividends to date and may consider but no final decision has been made in paying dividends in the foreseeable future. We have no securities authorized for issuance under any Equity Compensation Plans.
Preferred Stock
We do not have a class of preferred stock.
Dividends
We have not paid any dividends on our common stock to date. The payment of dividends in the future will be contingent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment of any will be within the discretion of our then Board of Directors. It is the present intention of our Board of Directors to retain earnings, if any, for use in our business operations.
Securities Authorized for Issuance under Equity Compensation Plans
The Company does not have any current equity compensation plans or any individual compensation arrangements with respect to its common stock or preferred stock. The issuance of any of our common or preferred stock is within the discretion of our Board of Directors, which has the power to issue any or all of our authorized but unissued shares without stockholder approval.
Recent Sales of Unregistered Securities
None.
Issuer Purchases of Equity Securities
None.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. [Reserved]

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.
Business Overview
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 have been owned 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: BEP and BEH, Bio Essence transferred its manufacturing operation into BEP, and transferred its distributing operation into BEH. On March 1, 2017, the 100% shareholder of FDS transferred all her ownership in FDS into 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 research and development and manufacture of prescription medicine. As a result of the ownership restructure, BEP, BEH, and MCBE became wholly owned subsidiaries of Bio Essence, and Bio Essence serves as a holding corporation for these subsidiaries. McBE has not engaged in any operations since its inception. On December 12, 2023, the Company entered into an agreement with Newway Inc to sell the 100% equity ownership of BEP for $300,000.
The primary focus of BEP is producing products for BEH, along with providing OEM services to other companies. BEH targets healthcare practitioners with herbal products in the form of granules, capsules, pills and tablets. It also offers special formulation service to practitioners. The Company intends to develop the subsidiary into an integrated healthcare platform that provides customers direct connections with integrative healthcare practitioners such as dietitians, nutraceutical practitioners, and other practitioners in this discipline worldwide.
However, the 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.
Related Party Transactions
Loans from Officer
At December 31, 2023 and 2022, the Company had loans from one major shareholder (also the Company’s senior officer) of $1,214,046 and $2,543,155, respectively. At December 31, 2023 and 2022, 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.
On May 31, 2023, the Board of Directors of the Company, approved a debt-to-equity conversion. The Company and Ms. Yan (the Company’s Chief Executive Officer also the major shareholder) agreed to a debt conversion whereby Ms. Yan receives 5,000,000 shares of the Company’s common stock in exchange for retirement of the $2,500,000 debt. The Board of Directors of the Company executed the Consent Resolution on June 2, 2023. On June 2, 2023, the closing price of the Company’s common stocks trading on OTC Market was $0.51 per share. The Company incurred a $50,000 loss on this conversion.
Critical Accounting Policies and Estimates
Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements (“CFS”), which were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported net sales and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are more fully described in Note 2 to our CFS, we believe the following accounting policies are the most critical to assist you in fully understanding and evaluating this management discussion and analysis.
Basis of Presentation
The accompanying consolidated financial statements (“CFS”) are prepared in conformity with U.S. Generally Accepted Accounting Principles (“US GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The functional currency of Bio Essence is U.S. dollars (“$’’). 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.
Going Concern
The Company incurred net losses of $802,547 and $527,884 from the company’s continuing operations for the years ended December 31, 2023 and 2022, respectively. The Company also had an accumulated deficit of $9,140,474 from the company’s continuing operations as of December 31, 2023. These conditions raise 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 programs, 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.
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 December 31, 2023 and 2022, the bad debt allowance was $2,252 and $2,252, respectively.
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 finished 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 years ended December 31, 2023 and 2022.
Results of operations
Comparison of Continuing operations for the years ended December 31, 2023 and 2022
The following table sets forth the results of our operations for the periods indicated as a percentage of net sales. Certain columns may not add due to rounding.
% of
Sales % of
Sales Dollar
Increase
(Decrease) Percent
Increase
(Decrease)
Sales of goods $ 551,506 100.00 % $ 621,590 100.00 % $ (70,084 ) (11.27 )%
Manufacture service revenue - - - - - -
Total revenues 551,506 100.00 % 621,590 100.00 % (70,084 ) (11.27 )%
Cost of goods sold 274,060 49.69 % 293,264 47.18 % (19,204 ) (6.55 )%
Cost of manufacture service - - % - - % - - %
Total cost of revenues 274,060 49.69 % 293,264 47.18 % (19,204 ) (6.55 )%
Gross profit 277,446 50.31 % 328,326 52.82 % (50,880 ) (15.50 )%
Selling expenses 92,187 16.72 % 76,318 12.28 % 15,869 20.79 %
General and administrative expenses 974,309 176.66 % 763,146 122.77 % 211,163 27,67 %
Operating expenses 1,066,496 193.98 % 839,464 135.05 % 227,032 27.04 %
Loss from operations (789,050 ) (143.07 )% (511,138 ) (82.23 )% (277,912 ) 54.37 %
Other income (expense), net (11,097 ) (2.01 )% (14,246 ) (2.29 )% 3,149 (22.10 )%
Loss before income taxes (800,147 ) (145.08 )% (525,384 ) (84.52 )% (274,763 ) 52.30 %
Income tax expense 2,400 0.44 % 2,500 0.40 % (100 ) (4.00 )%
Net loss from continuing operations (802,547 ) (145.22 )% (527,884 ) (84.92 )% (274,663 ) 52.03 %
Loss from discontinued operations (236,783 ) (42.93 )% (281,795 ) (45.33 )% 45,012 (15.97 )%
Gain from disposal of discontinued operations 67,451 12.23 % - - 67,451 - %
Net loss $ (971,879 ) (176.22 )% $ (809,679 ) (130.26 )% $ (162,200 ) 20.03 %
Sales
Sales from the company’s continuing operations for the years ended December 31, 2023 and 2022 were $551,506 and $621,590, respectively, a decrease of $70,084 or 11.27%. The decrease was primarily attributable to (i) decrease in sales of goods due to lack of stock, and (ii) decreased shipping income resulting from us offering free shipping to attract more customers.
Costs of revenue
Costs of revenue from the company’s continuing operations for the years ended December 31, 2023 and 2022 was $274,060 and $293,264, respectively, a decrease of $19,204 or 6.55%. The decrease of COGS in 2023 was mainly due to decreased sales. The percentage of cost of goods sold to total sales of goods was 49.69% and 47.18% for the years ended December 31, 2023 and 2022, respectively, an increase of 2.51%.
Gross profit
For the factors mentioned above, the gross profit from the company’s continuing operations for the years ended December 31, 2023 and 2022 was $277,446 and $328,326, respectively, a decrease of $50,880 or 15.50%. The blended profit margin was 50.31% and 52.82% for the years ended December 31, 2023 and 2022, respectively. The decrease in gross profit margin was mainly due to decreased gross profit of $50,880 from sales of goods.
Operating expenses
Selling expenses consist mainly of advertising, show expense, products marketing, shipping expenses, and promotion expenses. Selling expense from the company’s continuing operations was $92,187 for the year ended December 31, 2023, compared to $76,318 for the year ended December 31, 2022, an increase of $15,869 or 20.79%, mainly resulting from increased show expense by $2,765, increased shipping expense by $7,342, and increased marketing expense by $16,574, which was partly offset by decreased advertising fee by $10,811.
General and administrative expenses consist mainly of employee salaries and welfare, business meeting, utilities, accounting, consulting, and legal expenses. General and administrative expenses from the company’s continuing operations were $974,309 for the year ended December 31, 2023, compared to $763,146 for the year ended December 31, 2022, an increase of $211,163 or 27.67%, the increase was mainly due to increased salaries expense by $66,746 as our average salaries increased, increased office rental expense by $85,487, increased manufacturing overhead by $65,997, offset by decreased commission fee by $11,729.
Other expenses, net
Other expenses from the company’s continuing operations was $11,097 and $14,246 for the years ended December 31, 2023 and 2022, respectively. For the year ended December 31, 2023, other expenses mainly consisted of interest expense of $17,344, loss of $50,000 in debt to stock conversion, loss of $23,058 in disposal of fixed assets, offset by other income of $79,825. For the year ended December 31, 2022, other expenses mainly consisted of interest expense of $14,131, finance expenses of $5,095, and net other income of $4,980.
Net loss
We had a net loss of $802,547 from the company’s continuing operations for the year ended December 31, 2023, compared to $527,884 for the year ended December 31, 2022, a decrease of $274,663 or 52.03%, reflected the above-mentioned factors combined.
Liquidity and Capital Resources
As of December 31, 2023, from the company’s continuing operations, we had cash and equivalents of $114, bank overdraft of $14,866, other current assets of $1,103,462, other current liabilities (excluding bank overdraft) of $3,167,808, working capital deficit of $2,079,098, a current ratio of 0.35:1. As of December 31, 2022, we had cash and equivalents of $6,262, bank overdraft of 53,651, other current assets of $197,569, other current liabilities (excluding bank overdraft) of $3,504,179, working capital deficit of $3,353,999, a current ratio of 0.06:1.The following is a summary of cash provided by or used in each of the indicated types of activities during the years ended December 31, 2023, and 2022, respectively.
Net cash used in operating activities for continuing operations $ (848,443 ) $ (496,595 )
Net cash used in operating activities for discontinued operations (177,228 ) (206,646 )
Net cash used in operating activities (1,025,671 ) (703,241 )
Net cash used in investing activities for continuing operations (3,614 ) (3,742 )
Net cash used in investing activities for discontinued operations (87,870 ) (55,378 )
Net cash used in investing activities (91,484 ) (59,120 )
Net cash provided by financing activities for continuing operations 1,147,384 835,406
Net cash provided by financing activities for discontinued operations (36,377 ) (67,086 )
Net cash provided by financing activities $ 1,111,007 $ 768,320
Net cash used in operating activities for continuing operations
Net cash used in operating activities for continuing operations was $848,443 for the year ended December 31, 2023, compared to $496,595 in 2022. The increase of cash outflow of $351,848 from operating activities for the year ended December 31, 2023 was principally attributable to increased net loss by $207,212, increased cash outflow on security deposit by $52,545, and increased cash outflow on inventory by $44,658.
Net cash used in investing activities for continuing operations
Net cash used in investing activities for continuing operations was $3,614 and $3,742 for the years ended December 31, 2023 and 2022, respectively. For the year ended December 31, 2023 and 2022, net cash used in investing activities was mainly for the payment of fixed assets.
Net cash provided by financing activities for continuing operations
Net cash provided by financing activities for continuing operations was $1,147,384 for the year ended December 31, 2023, compared to $835,406 in 2022. The net cash provided by financing activities for year ended December 31, 2023 mainly consisted of proceeds of $1,170,891 loan from one major shareholder (also the senior officer), partly offset by bank overdraft of $16,971, and repayment of government loan of $4,211,and repayment of finance lease liability of $2,325. The net cash provided by financing activities for the year ended December 31, 2022 consisted of proceeds of $758,000 from loan from one major shareholder (also the senior officer) and increase in bank overdraft of $21,016, proceeds from government SBA loan of $58,413, partly offset by repayment of finance lease liability of $2,023.
Our current liabilities exceed current assets at December 31, 2023, and we incurred substantial losses and cash outflows from operating activities in the periods presented. We may have difficulty meeting upcoming cash requirements. As of December 31, 2023, our principal source of funds was loans from an officer (also is the Company’s major shareholder). As of December 31, 2023, we believe we will need $1.2 million cash to continue our current business for the next 12 months. In addition to our continuous effort to improve our sales and net profits, we have explored and continue to explore other options to provide additional financing to fund future operations as well as other possible courses of action. Such actions may include, but are not limited to, securing lines of credit, sales of debt or equity securities (which may result in dilution to existing shareholders), loans and cash advances from other third parties or banks, and other similar actions. There can be no assurance that we will be able to obtain additional funding (if needed), on acceptable terms or at all, through a sale of our common stock, loans from financial institutions, or other third parties, or any of the actions discussed above. If we cannot sustain profitable operations, and additional capital is unavailable, lack of liquidity could have a material adverse effect on our business viability, financial position, results of operations and cash flows.
Contractual Obligations
Lease Commitment
Operating Lease
On May 18, 2023, the Company entered a 36 months lease for a facility including warehouse and office in the City of Irvine, California, with a security deposit of $50,000, effective on September 1, 2023. The monthly rent is approximately $47,100 with a 3% increase each year.
The following is a schedule, by years, of maturities of warehouse and office lease liabilities from the company’s continuing operations as of December 31, 2023:
For the 12 months ending Operating
Leases
(unaudited)
December 31, 2024 $ 570,852
December 31, 2025 587,978
December 31, 2026 399,747
Thereafter -
Total undiscounted cash flows 1,558,577
Less: imputed interest (124,951 )
Present value of lease liabilities $ 1,433,626
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 following is a schedule, by years, of maturities of finance lease liabilities from the company’s continuing operations as of December 31, 2023:
For the 12 months ending Finance
Leases
(unaudited)
December 31, 2024 $ 2,802
December 31, 2025 1,401
December 31, 2026
December 31, 2027
Total undiscounted cash flows 4,203
Less: imputed interest (162 )
Present value of finance lease liabilities $ 4,041
Long-Term Debts
Government loans
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. The SBA extended the deferment period to allow small businesses and not-for-profits that received EIDL funds do not have to begin payments on the loan until 30 months after the date of the note. Accordingly, the company began to make installment payments in the fourth quarter 2022.
As of December 31, 2023, the future minimum EIDL loan payments from the company’s continuing operations to be paid by year are as follows:
Year Ending Amount
(unaudited)
December 31, 2024 $ 4,624
December 31, 2025 4,800
December 31, 2026 4,983
December 31, 2027 5,173
December 31, 2028 5,371
Thereafter 179,252
Total $ 204,203
Off-Balance Sheet Arrangements
We have not entered into any financial guarantees or other commitments to guarantee the obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data.
Please see the financial statements beginning on page located in this annual report on Form 10-K and incorporated herein by reference.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
There are not and have not been any changes in or disagreements between the Company and its accountants on any matter of accounting principles, practices, or financial statement disclosure.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures.
The Company’s Chief Executive, Yin Yan, is responsible for establishing and maintaining disclosure controls and procedures for the Company.
Evaluation of Disclosure Controls and Procedures
For purposes of this Item 9A, the term disclosure controls and procedures means controls and other procedures of the Company (i) that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (15 U.S.C. 78a et seq. and hereinafter the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, and (ii) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
On December 31, 2023, Ms. Yan reviewed the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report and has concluded that the Company’s disclosure controls and procedures are effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC.
Report of Management on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15. Our internal control over financial reporting is designed to provide reasonable assurance to our management and BOD regarding the preparation and fair presentation of published financial statements. Management conducted an assessment of our internal control over financial reporting based on the framework and criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). Based on the assessment, management concluded that, as of December 31, 2023, our internal controls over financial reporting were effective at the reasonable assurance level based on those criteria.
Our independent public accountant has not conducted an audit of our controls and procedures regarding internal control over financial reporting and therefore expresses no opinion with regards to the effectiveness or implementation of our controls and procedures with regards to internal control over financial reporting.
Changes in Internal Controls over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with our evaluation of these controls as of the end of the fiscal year, December 31, 2023, as covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
The Company’s management does not expect that its disclosure controls or its internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information.
Not applicable.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance
Pursuant to Item 401 of Regulation S-K, the names and ages of the directors and executive officers and directors of the Company, and their positions with the Company, are detailed in the table below.
Name Age Position Familial
Relationships
Yin Yan Chief Executive Officer, Chief Financial Officer, and Chairman of the Board of Directors None
Dr. Siyavqwh Fooladian Director None
Simon Shavanson Director None
Yangyang Huang Director None
Tuan Tran Vice President of Operations None
Yin Yan, Chief Executive Officer, Chief Financial Officer, and Chairman of the Board of Directors
Ms. Yan serves as the Company’s Chief Executive Officer, Chief Financial Officer, and Chairman of the Board of Directors. She began her career in 2002 at Intel Corp., a semiconductor designer and manufacturing company as automation project manager. From 2002 to 2004, Ms. Yan managed manufacturing automation and software as well as database development in computer infrastructure applications. From 2004 to present, she has been president of H&Y International, LLC, a real estate investment and brokerage company. Ms. Yan spends 20 hours per week on the affairs of H&Y International, LLC.
Dr. Siyavash Fooladian, Director
Siyavash Fooladian, MD, MPH is a board-certified Cardiac Anesthesiologist, Ironman triathlete, and a passionate advocate for a holistic, integrative approach to health and wellness. With over ten years of clinical experience caring for patients with an array of medical ailments, Dr. Fooladian understands the need for an integrative approach to health. He believes that optimal health can be achieved and maintained by holistic understanding of a patient’s mind, body, and spirit and thereby, merging the best of Eastern and Western modalities to treat the root cause of disease.
Dr. Fooladian has seen firsthand how opioid addiction and the opioid crisis have affected the well-being of his patients. He has also witnessed complications, in both young and elderly patients, such as reversible and irreversible kidney failure, gastrointestinal bleeding, and liver dysfunction from pharmaceutical alternatives to opioids-NSAIDS (ibuprofen, Motrin, Alleve, etc.) and Tylenol. An expert in alleviating his patients’ pain during and after surgery, Dr. Sia leveraged his medical knowledge and passion for creating impact to support integrative wellness. Dr. Fooladian maintains a daily practice of meditation and mindfulness, alongside nutraceutical supplementation and cold therapy in order to promote peak performance in his active lifestyle.
Dr. Fooladian holds a BA in history and education from UCLA. He received his MD and MPH in health management from The George Washington University School of Medicine and Health Sciences. He completed his residency and fellowship training at UCLA Medical Center, where he served as Chief Resident. He currently resides and practices in Orange County, California, and has done so for the past 10 years. The Company believes Dr. Fooladian’s experience in the medical field will greatly benefit the Company as it expands is business model.
Simon Shavanson, Director
Mr. Shavanson is the founder and CEO at Shavanson Enterprises Corp and its affiliated companies since June 2011. With over 25 years of experience in the CPG and Retail industry, Mr. Shavanson has led the development of a shared services platform that would take brands and products from “Concept to Consumer.” As a visionary and a passionate, relationship driven executive, he has created the platform with affiliated owned and partner companies to support brands as a turnkey solution for various needs including packaging components, R&D and formulation, fill-in & manufacturing, retail placement and staffing support for at-shelf demo and social & digital activation.
Mr. Shavanson started his career with his family business, First Quality back in February of 1994 and during his 18 years’ tenure at the company, he held various roles in business development, Sales Management & Marketing where he was an integral part of the culture and growth of the businesses from under $20 million when he joined First Quality to over $3 billion in annual revenue when he decided to venture out in 2012. His passion for people and his relationships and integrity are his most important assets. Simon is a great creative visionary that has always strive to offer solutions to make his industry partners differentiate while offering solutions to elevate their position in the marketplace.
For the past 9 years, Mr. Shavanson has been working as a managing director and chief relationship officer for NuVu Group, managing and helping brands in retail placement, distribution and marketing. The Company believes Mr. Shavansan’s vast experience will assist the Company in numerous ways, including sales and research and development matters.
Yangyang Huang, Director
Ms. Huang has served as a director of the Company since November 2017. She has served as the Chief Executive Officer and Chairman of Panjin Futian Petrochemical Industry Development Co., Ltd., since 2016. She has been previously employed by the People’s Bank of China from 2007 to 2016 as a principal staff member responsible for approval of international payments made by commercial banks and monitoring of foreign exchange transactions. Prior to her position at People’s Bank of China, Ms. Yang was employed by Industrial and Commercial Bank of China from 2005 to 2007 as a staff member. Ms. Yang holds a Ph.D. in finance from Dongbei University of Finance and Economics, a Masters in Management from the University of Leeds, and a B.A. in English and International Trade from Dalian University. The Company believes Ms. Yang’s experiences will greatly assist the Company as it expands and implements is business plan.
Tuan Tran, VP of Operations
Mr. Tuan Tran has over 20 years of experience in quality and operations working in the Nutrition, Dietary Supplements and OTC industries. Mr. Tran current responsibilities includes but are not limited Production, Warehouse & Distribution, Quality, Customer Service, R&D, Procurement, Human Resources, and Safety.
Mr. Tran has extensive knowledge in FDA regulations, GMPs, food safety, auditing, quality system, HACCP, Process Analytical Technology, CAPA, and Lean Manufacturing. Mr. Tran also specializes in crisis management, regulatory compliance, quality systems implementation, and supplier qualification.
Mr. Tran received his Bachelors of Science Degree in Public Health from Southern Connecticut State University. He holds certifications in Pharmaceutical Engineering, Six Sigma Green Belt, Food Safety, Technical Writing and HACCP. Mr. Tran is a senior member with the American Society for Quality.
B. Significant Employees.
None
C. Family Relationships.
None.
D. Involvement in Certain Legal Proceedings.
Except as otherwise disclosed, no officer, director, or persons nominated for such positions, promoter or significant employee has been involved in the last ten years in any of the following:
● Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
● Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
● Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and
● Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
Audit Committee
The Company has no separate audit committees. The Company has no qualified financial expert at this time because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such an expert. The Company intends to continue to search for a qualified individual for hire.
Code of Ethics
We do not currently have a code of ethics. The company is in the early stages of development and its chief executive officer, Ms. Yan, has not yet developed a code of ethics. The Company intends on developing one as the Company’s business expands.
Nominating Committee
We have not adopted any procedures by which security holders may recommend nominees to our Board of Directors.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation.
The Company does not have employment contracts with its officers or directors. All employees of the Company are at-will employees. The Company’s principal executive and financial officer, Yin Yan, does not have a written employment agreement and does not earn a salary. Compensation for Ms. Yan and the Company’s two highest paid employees are detailed in the Summary Compensation table below. Ji Ping Rong the Company’s operation manager, earns $72,000 annually, while Yuling Huang earns $60,000 for his role as the Company’s accounting manager.
Summary Compensation Table
Name and Principal Position Year Salary Bonus Stock
Awards Option
Awards Nonequity
Incentive Plan
Compensation Change in
pension
value and
nonqualified
deferred
compensation
earnings All Other
Compensation Total
Yin Yan (PEO) $ - $ - $ - $ - $ - $ - $ - $ -
Ji Ping Rong $ 72,000.00 $ - $ - $ - $ - $ - $ - $ 72,000.00
Yuling Huang $ 60,000.00 $ - $ - $ - $ - $ - $ - $ 60,000.00
Outstanding Equity Awards at Fiscal Year-End
Option awards
Stock awards
Name
Number of
securities
underlying
unexercised
options
(#)
exercisable
Number of
securities
underlying
unexercised
options
(#)
unexercisable
Equity
incentive
plan
awards:
Number of
securities
underlying
unexercised
unearned
options
(#)
Option
exercise
price
($)
Option
expiration
date
Number of
shares or
units of
stock that
have not
vested
(#)
Market
value of
shares of
units of
stock that
have not
vested
($)
Equity
incentive
plan
awards:
Number of
unearned
shares,
units or
other
rights that
have not
vested
(#)
Equity
incentive
plan
awards:
Market or
payout
value of
unearned
shares,
units or
other
rights that
have not
vested
($)
-
-
-
-
-
-
-
-
-
-
The Company does not have any outstanding equity awards for its employees.
Director Compensation
The following table provides information regarding the compensation of our named directors for the fiscal year ending on December 31, 2023.
Name and Principal Position Salary Bonus Stock
Awards Option
Awards Non-Equity
Incentive
Plan
Compensation Nonqualified
Deferred
Compensation
Earnings All Other
Compensation Total
Yin Yan
(Chief Executive Officer, Chief Financial Officer, and Director) $ - $ - $ - $ - $ - $ - $ - $ -
Yangyang Huang (Director) $ - $ - $ - $ - $ - $ - $ - $ -
Dr. Siyavash Fooladian $ - $ - $ - $ - $ - $ - $ - $ -
Simon Shavanson $ - $ - $ - $ - $ - $ - $ - $ -
The Company’s directors serve in unpaid positions and do not receive an annual salary, bonus, or other compensation for their role as board members.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth the ownership of our common stock by each person known by us to be the beneficial owner of more than 5% of our outstanding common stock as a group as of December 31, 2023. There are no pending arrangements that may cause a change in control. The information presented below has been presented in accordance with the rules of the SEC and is not necessarily indicative of ownership for any other purpose.
A person is deemed to be a “beneficial owner” of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60 days. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner.
Title of Class Name and Address of
Beneficial Owner Amount and Nature of
Beneficial Ownership Percent of Class
Common Stock Yin Yan(1) - 31921
Apuesto Way, Trabuco
Canyon CA, 92679 14,000,000 shares-
directly owned 36.8 %
Common Stock Jian Yang(2) - 2012
Paseo Del Mar, Palos
Verdes
Estates, CA 90274 21,000,000 shares-
directly owned 55.3 %
(1) Yin Yan is the Company’s Chief Executive Officer, Chief Financial Officer, and Chairman of the Board of Directors
(2) Jain Yang is the Company’s controlling shareholder and former director
This table is based upon information derived from our stock records. We believe that each of the shareholders named in this table has sole or shared voting and investment power with respect to the shares indicated as beneficially owned.
Securities Authorized for Issuance Under Equity Compensation Plans
The following chart is provided pursuant to Item 201(d) of Regulation S-K:
Plan Category
Number of
securities
to be
issued upon
exercise of
outstanding
options,
warrants,
and rights
Weighted-
average
exercise
price of
outstanding
options,
warrants
and rights
Number of
securities
remaining
available
for future
issuance
under equity
compensation
plans
(excluding
securities
reflected in
column (a))
Equity compensation plans approved by security holders
N/A
N/A
N/A
Equity compensation plans not approved by security holders
N/A
N/A
N/A
TOTAL

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions.
Except as otherwise indicated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-K.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accounting Fees and Services.
Keith K. Zhen, CPA is the Company’s independent registered public accounting firm. Below are aggregate fees billed by Keith K. Zhen, CPA for professional services rendered for the year ended December 31, 2023.
Audit Fees
The fees for the audit services billed and to be billed by Keith K. Zhen, CPA for the year ended December 31, 2023 amounted to $32,000.
Audit-Related Fees
None.
Tax Fees
There were no fees billed by Keith K. Zhen, CPA for professional services for tax compliance, tax advice, and tax planning for 2023.
All Other Fees
There were no fees billed by Keith K. Zhen, CPA for other products and services for 2023.
Audit Committee’s Pre-Approval Process
The Board of Directors acts as the audit committee of the Company, and accordingly, all services are approved by all the members of the Board of Directors.

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits, Financial Statement Schedules.
(a) Exhibits:
Exhibit
Exhibit Description
Filed herewith
Form
Period ending
Exhibit
Filing date
3.1
Certificate of Incorporation
S-1
3.1
7/26/19
3.2
By-Laws
S-1
3.2
7/26/19
3.3
Certificate of Amendment
S-1
3.3
7/26/19
4.1
Specimen Stock Certificate
S-1
4.1
7/26/19
4.2
Description of Securities
X
31.1
Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2
Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32.1
Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
32.2
Certification pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
101.INS
Inline XBRL Instance Document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document.
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
(b) The following documents are filed as part of the report:
1. Financial Statements: Balance Sheet, Statement of Operations, Statement of Stockholder’s Equity, Statement of Cash Flows, and Notes to Financial Statements.