EDGAR 10-K Filing

Company CIK: 1723059
Filing Year: 2023
Filename: 1723059_10-K_2023_0001213900-23-024571.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 through three (3) operational subsidiaries, 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 BEH is producing products for BEE and McBE, along with providing original equipment manufacturing and private label services to other companies. BEE 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.
The Company is headquartered at 8 Studebaker Drive in Irvine, California 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 11 full-time employees.
Emerging Growth Company
We are an emerging growth company under the JOBS Act. We shall continue to be deemed an emerging growth company until the earliest of:
(a) the last day of the fiscal year of the issuer during which it had total annual gross revenues of $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;
(b) the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective IPO registration statement;
(c) the date on which such issuer has, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or
(d) the date on which such issuer is deemed to be a ‘large accelerated filer’, as defined in section 240.12b-2 of title 17, Code of Federal Regulations, or any successor thereto.
As an emerging growth company, we are exempt from Section 404(b) of Sarbanes Oxley. Section 404(a) requires Issuers to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures. Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting.
As an emerging growth company we are also exempt from Section 14A (a) and (b) of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes. We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the Jobs Act, that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

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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 8 Studebaker Drive in Irvine, CA 92618. This location serves as the Company’s main headquarters and as part of its production facilities. The production facility is approximately 15000 sq. ft and has the capacity to manage all of the Company’s operations. The Company estimates that 75% of its manufacturing is contracted out through third-party manufacturers, while the remaining is done in-house in its production facility and primarily consists of small batches. The Company recently relocated to this facility after its former production facility was compromised by the Company’s former landlord-specifically, the landlord permitted other business to sublease the property, and those businesses posed a risk to the Company’s ability to maintain a sterile environment.
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 2022 fiscal year, had 33,009,000 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 50 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 (“BOD”). It is the present intention of our board of directors to retain earnings, if any, for use in our business operations. However, the Board, anticipates declaring dividends in the foreseeable future.
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 BOD, 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]
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 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 were 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 any operations since its inception.
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, 2022 and 2021, the Company had loans from one major shareholder (also the Company’s senior officer) of $2,543,155 and $1,785,154, respectively. At December 31, 2022 and 2021, the Company had loan from another major shareholder for $608,631 for settling the litigation. There are no written loan agreements for these loans. These loans are unsecured, non-interest bearing and have no fixed terms of repayment, and therefore, deemed payable on demand.
Critical Accounting Policies and Estimates
Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements (“CFS”), which were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported net sales and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are more fully described in Note 2 to our CFS, we believe the following accounting policies are the most critical to assist you in fully understanding and evaluating this management discussion and analysis.
Basis of Presentation
The accompanying consolidated financial statements (“CFS”) are prepared in conformity with U.S. Generally Accepted Accounting Principles (“US GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The functional currency of Bio Essence is U.S. dollars (“$’’). 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 $809,679 and $647,564 for the years ended December 31, 2022 and 2021, respectively. The Company also had an accumulated deficit of $8,168,595 as of December 31, 2022. 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, 2022 and 2021, 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, 2022 and 2021.
Results of operations
Comparison of the years ended December 31, 2022 and 2021
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 $ 621,590 63.06 % $ 774,066 87.17 % $ (152,476 ) (19.70 )%
Manufacture service revenue 364,167 36.94 % 113,918 12.83 % 250,249 219.67 %
Total revenues 985,757 100.00 % 887,984 100.00 % 97,773 11.01 %
Cost of goods sold 289,867 29.41 % 497,905 56.07 % (208,038 ) (41.78 )%
Cost of manufacture service 310,941 31.54 % 91,755 10.33 % 219,186 238.88 %
Total cost of revenues 600,808 60.95 % 589,660 66.40 % 11,148 1.89 %
Gross profit 384,949 39.05 % 298,324 33.60 % 86,625 29.04 %
Selling expenses 87,775 8.90 % 70,193 7.90 % 17,582 25.05 %
Bad debts - - % 8,615 0.97 % (8,615 ) (100.00 )%
General and administrative expense 1,079,978 109.56 % 1,077,043 121.29 % 2,935 0.27 %
Operating expenses 1,167,753 118.46 % 1,155,851 149.32 % 11,902 1.03 %
Loss from operations (782,804 ) (79.41 )% (857,527 ) (110.78 )% 74,723 (8.71 )%
Other income (expense), net (23,575 ) (2.39 )% 213,263 24.02 % (236,838 ) (111.05 )%
Loss before income taxes (806,379 ) (81.80 )% (644,264 ) (72.55 )% (162,115 ) 25.16 %
Income tax expense 3,300 0.33 % 3,300 0.37 % - - %
Net loss $ (809,679 ) (82.14 )% $ (647,564 ) (72,93 )% $ (162,115 ) 25.03 %
Revenues
Sales for the years ended December 31, 2022 and 2021 were $985,757 and $887,984, respectively, an increase of $97,773 or 11.01%. For the years ended December 31, 2022, we had sales of goods of $621,590 and manufacture service revenue of $364,167. For the years ended December 31, 2021, we had sales of goods of $774,066 and manufacture service revenue of $113,918. The decreased sales of goods was mainly due to certain big customers reducing their purchase orders in 2022, as a remediation, we started to provide OEM service since 4th quarter of 2021, which increased significantly in 2022 as a result of our effort to promote our manufacture service.
Cost of revenues
Cost of revenues for the years ended December 31, 2022 and 2021 was $600,808 and $589,660, respectively, an increase of $11,148 or 1.89%. The increase of cost of revenue in 2022 was primarily attributed to the increased cost of manufacturing service. During the years ended December 31, 2022, we received quite a few big orders for the OEM, which required additional labor and manufacture equipment to complete the orders.
Gross profit
The gross profit for the years ended December 31, 2022 and 2021 was $384,949 and $298,324, respectively, an increase of $86,625 or 29.04%. The profit margin was 39.05% for 2022 compared to 33.60% for 2021, the increase in profit margin was mainly due to increased profit margin from sale of goods, which was 53.37% for the year ended December 31, 2022 compared to 35.68% for the year ended December 31, 2021. We lost a few big customers due to strong competition and our pricing disadvantage, however the corresponding high cost was also decreased.
Operating expenses
Selling expenses consisted mainly of advertising, show expense, product marketing, shipping expenses, and promotion expenses. Selling expense was $87,775 for the year ended December 31, 2022, compared to $70,193 for the year ended December 31, 2021, an increase of $17,582 or 25.05%, mainly resulting from increased trade show expense by $11,740, increased advertising expense by $4,140, and increased marketing expense by $3,410, which was partly offset by decreased shipping expenses by $1,720.
Bad debt expense was $0 for the year ended December 31, 2022, compared to $8,615 for the year ended December 31, 2021, an decrease of $8,615 or 100%, primarily attributed to written off FDS’s receivables in 2021, as FDS was dissolved.
General and administrative expenses consisted mainly of employee salaries and welfare, business meeting, utilities, audit, and legal expenses. General and administrative expenses were $1,079,978 for the year ended December 31, 2022, compared to $1,077,043 for the year ended December 31, 2021, a slight increase of $2,935 or 0.27%. The increase was mainly due to increased salary expenses by $32,801, increased rental expense by $7,820; offset by decreased consultant fees of $33,717.
Other income (expense), net
Other expense was $23,575 for the year ended December 31, 2022, compare to other income $213,263 for the year ended December 31, 2021. For the year ended December 31, 2022, other expenses mainly consisted of interest expense of $23,042, financial expense of $5,332, and net other income of $4,799. For the year ended December 31, 2021, other income mainly consists of PPP Loan forgiveness of $242,985, which was partly offset by interest expense of $38,558 and financial expense of $9,699.
Net loss
We had a net loss of $809,679 for the year ended December 31, 2022, compared to $647,564 for the year ended December 31, 2021, an increase of $162,115 or 25.03% reflected the above-mentioned factors combined.
Liquidity and Capital Resources
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. As of December 31, 2021, we had cash and equivalents of $303, bank overdraft of $19,032, other current assets of $261,659, other current liabilities (excluding bank overdraft) of $2,736,932, working capital deficit of $2,494,002, a current ratio of 0.10:1. 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, 2022, and 2021, respectively.
Net cash used in operating activities $ (706,824 ) $ (1,294,118 )
Net cash used in investing activities $ (59,120 ) $ (116,796 )
Net cash provided by financing activities $ 771,903 $ 1,405,892
Net cash used in operating activities
Net cash used in operating activities was $706,824 for the year ended December 31, 2022, compared to $1,294,118 in 2021. The decrease of cash outflow of $587,294 from operating activities for the year ended December 31, 2022 was principally due to decreased cash outflow on prepaid expenses by $52,661, and decreased cash outflow on accrued liability and other payable by $503,307.
Net cash used in investing activities
Net cash used in investing activities was $59,120 for the year ended December 31, 2022, compared to $116,796 in 2021. For the year ended December 31, 2022, we purchased fixed assets of $59,120. For the year ended December 31, 2021, we purchased fixed assets of $119,496 and sold fixed assets for $2,700.
Net cash provided by financing activities
Net cash provided by financing activities was $771,903 for the year ended December 31, 2022, compared to $1,405,892 in 2021. The net cash provided by financing activities for the year ended December 31, 2022 consisted of proceeds of $758,000 from loans from one major shareholder (also the senior officer) and increase in bank overdraft of $34,619, partly offset by repayment of loan payable of $12,218, repayment of government loan of $698, and payment of finance lease liability of $7,800. The net cash provided by financing activities in 2021 consisted of proceeds of $1,285,777 from loans from two major shareholders (one of which is the Company’s senior officer), proceeds of $53,767 from loans payable, and proceeds of $115,245 from government loans, partly offset by decrease in bank overdraft of $44,863 and repayment of loan payable of 4,034.
Our current liabilities exceed current assets at December 31, 2022, and we incurred substantial losses and cash outflows from operating activities in the periods presented. We may have difficulty to meet upcoming cash requirements. As of December 31, 2022, our principal source of funds was loans from an officer (also is the Company’s major shareholder). As of December 31, 2022, 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
The Company’s contractual obligations as of December 31, 2022 are as follows:
1 year or More than
Contractual Obligation less 1 year Total
Operating lease liabilities $ 156,560 $ 952,756 $ 1,109,316
Finance lease liabilities 12,603 39,687 52,290
Loan payables 11,954 25,561 37,515
SBA loan payables including accrued interest of $16,867 4,596 210,306 214,902
Total $ 185,713 $ 1,228,310 $ 1,414,023
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, 2022, 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, 2022, 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, 2022, 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. Sia Fooladian Director None
Sharon Mair Director None
Simon Shavanson Director None
Yang Yang 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. Sia Fooladian, Director
Sia 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. Sia 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.
Sharon Mair, Director
Sharon Mair is a seasoned Medical and Pharmaceutical Senior Manager. Sharon has worked in various positions including Sales, Business Development, Marketing, Reimbursement and Operations. Sharon has over 18 years’ experience in the Pharmaceutical supportive care space and was a part of the successful launch of several blockbuster products as well as a patient support division. She is currently employed by Otsuka Pharmaceutical Companies as a Senior Manager Field Operations where she has been working for 9 years.
Ms. Mair received her B.A. in Biology from the University of Southern California and a M.B.A. from Drexel University. The Company believes that Ms. Mair’s experience in pharmaceutical sales and business development will greatly help the Company in expanding its business plan.
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.
Yang Yang Huang, Director
Ms. Yang 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. Tuan Tran, the Company’s Vice President of Operations, earns $100,000 annually, while Yuling Huang earns $52,000 for her 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) $ - $ - $ - $ - $ - $ - $ - $ -
Tuan Tran $ 100,000 $ - $ - $ - $ - $ - $ - $ 100,000
Yuling Huang $ 52,000 $ - $ - $ - $ - $ - $ - $ 52,000
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, 2022.
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) $ - $ - $ - $ - $ - $ - $ - $ -
Yang Yang Huang (Director) $ - $ - $ - $ - $ - $ - $ - $ -
Dr. Sia Fooladian, MD* $ - $ - $ - $ - $ - $ - $ - $ -
Sharon Mair* $ - $ - $ - $ - $ - $ - $ - $ -
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, 2022. 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 9,000,000 shares-directly owned 27.3 %
Common Stock Jian Yang(2) - 2012
Paseo Del Mar, Palos Verdes
Estates, CA 90274 21,000,000 shares-directly owned 63.6 %
(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, 2022.
Audit Fees
The fees for the audit services billed and to be billed by Keith K. Zhen, CPA for the year ended December 31, 2022 amounted to $17,000.
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 2022.
All Other Fees
There were no fees billed by Keith K. Zhen, CPA for other products and services for 2022.
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.