America Great Health - Quarter Report: 2022 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended September 30, 2022

For the transition period from                        to                     

Commission File No. 000-27873

America Great Health

(Exact name of registrant as specified in its charter)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. The number of shares outstanding of the registrant’s common stock as of February 08, 2023 was 21,090,218,148.

AMERICA GREAT HEALTH AND SUBSIDIARIES

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on management’s beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider” or similar expressions are used.

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions. Our future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.

Item 1. Financial Statements

America Great Health and Subsidiaries

Condensed Consolidated Balance Sheets

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

America Great Health and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

America Great Health and Subsidiaries

Condensed Consolidated Statement of Shareholders' Deficit

For the three months ended September 30, 2022 and 2021

(Unaudited)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

America Great Health and Subsidiaries

Condensed Consolidated Statements of Cash Flows

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

AMERICA GREAT HEALTH AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 – NATURE OF BUSINESS

History and Organization

America Great Health, formerly Crown Marketing, is a Wyoming corporation (the "Company"). A change of control of the Company was completed on January 19, 2017 from Jay Hooper, the former officer and director of the Company and its former majority shareholder. Control was obtained by the sale of 16,155,746,000 shares of Company common stock from Mr. Hooper to an investor group led by Mike Q. Wang. In connection with the change of control, the Company sold to its former majority shareholder a subsidiary for $100 and another subsidiary in exchange for the cancellation of all payables and accrued expenses. After December 31, 2016, the Company’s operations are determined and structured by the new investor group. As such, the Company accounted for all of its assets, liabilities and results of operations up to January 1, 2017 as discontinued operations.

On March 1, 2017, the Company filed with the Secretary of State of the State of Wyoming an Articles of Amendment to change the corporate name from Crown Marketing to America Great Health.

On March 9, 2017, the Company formed a wholly owned subsidiary, America Great Health, under the laws of the State of California.

On June 24, 2019, the Company registered a wholly owned subsidiary in China, US-China Mega Beauty Health Industry Development Co., LTD. The subsidiary is mainly engaged in merger and acquisition, investment and financing, and marketing of medical equipment and health products in China.

On June 30, 2020, the Company and Purecell Group (“Purecell”), a leading anti-aging medical institution in Australia, entered into a Cooperation Agreement, in which the Company agreed to acquire 51% of the equity of Purecell, as consideration, the Company shall issue 510,000,000 common shares to Purecell’s nominated trustee. Upon completion of the acquisition transaction, Purecell shall remain autonomy in its day-to-day operation, including recruiting and retaining management team members. On February 10, 2021, the Company completed its financial and legal due diligence. This transaction was completed in May 2021

On December 7, 2020, the Company’s wholly-owned Californian subsidiary, America Great Health, entered into a Cooperation Agreement with Brilliant Healthcare Limited (“Brilliant”) pursuant to which the parties will establish a joint venture in China (the “JV Company”) for the purpose of promoting and developing stem cell related product’s R&D, production, sales, raw material procurement, mergers and acquisitions, and consulting services. After the formation of the JV company is completed, the Company shall invest US$4.2 million in the JV Company within the next 24 months for a 60% equity ownership in the JV Company. Brilliant shall transfer its patented technology to the JV Company as its capital contribution, to account for a 40% equity interest in the JV Company. As a condition for AAGH to obtain 60% equity in the JV company and a as the founder of Brilliant, Dr. Aihua Guo agrees to transfer its patent to the JV company as its share of contribution, and AAGH also agrees to pay Dr. Aihua Guo additional compensation, which includes: (i) AAGH transfers 300 million original shares of AAGH to Dr. Aihua Guo at no cost, valuing at $15 million; (ii) AAGH pays Dr. Aihua Guo a one-time cash compensation of $3 million with the following payment schedule: AAGH agrees to pay $500,000 to Dr. Aihua Guo six months from the date of signing of this Agreement, $1.5 million to Dr. Aihua Guo 12 months from the date of signing of this Agreement, and $1 million to Dr. Aihua Guo 24 months from the date of signing of this Agreement. In June 2021, the JV Company was established in Hainan, China as “Sijinsai (Hainan) Biological Tech Ltd.” On July 9, 2021, the Company paid its first investment of $50,000. 

On May 18, 2021, the Company and David Tsai (“Dr. Tsai”), a pioneer in anti-cancer peptide research and invention in the United States, entered into a Cooperation Agreement, in which Dr. Tsai shall provide to the Company theories, technologies, methods, sources of raw materials, processing and production techniques, quality standards, quality control methods and other information and details related to his anti-cancer protein peptides, oral insulin and activation technology. Dr. Tsai shall also be responsible for the whole process of technology and product production, application and implementation, as well as professional technical support, consultation and cooperation in the process of product verification, publicity, promotion and sales. Currently, several patents are in the application process, and several products are in the process of getting ready for production.

On September 3, 2021, the Company entered into an Assets Acquisition Agreement with Wang’s Property Investment & Management LLC to purchase 53 units in 19 real estate properties appraised at $7,626,286.37 for a purchase price of $7,000,000. The purchase price shall be paid as follows: (i) $1,000,000 on execution of the Agreement, (ii) $2,000,000 within 60 days thereof and (iii) the remainder by April 10, 2022. The Agreement is subject to customary closing conditions, including, satisfactory due diligence. On September 9, 2021, the Company entered into a Supplemental Assets Acquisition Agreement with Wang’s Property Investment & Management LLC to amend and clarify that (i) it was purchasing 19 real estate properties which includes 53 units appraised at $7,626,286.37 for a purchase price of $7,000,000 and (ii) that it will waive and not conduct due diligence in order for the transaction to proceed. The acquisition has not been consummated.

On November 4, 2021, the Company set up a 100% owned subsidiary Nutrature Health LLC.

On November 11, 2021, America Great Health (the “Company”) entered into an Advisory Committee Member Consulting Agreement with Dr. Kevin Buckman MD (“Consultant”). Pursuant to the Agreement, Consultant is to provide advisory services, as a member to the Advisory Committee to the Board of Directors of the Company, including without limitation, assisting GOF Biotechnologies Inc. in its new drug approval process for oral insulin and Amylase X. Consultant shall be compensated with a warrant to purchase 500,000 shares of the Company at $0.01 per share within 24 months and a warrant at each of the following stages: IND application, Phase I clinical trials, Phase II clinical trials, Phase III clinical trials and the sale of GOF Biotechnologies Inc. the license of oral insulin and Amylase X at Phase I or Phase II clinical trials stages. This Agreement shall be for an initial one-year term and shall renew automatically for successive one-year terms up to a maximum of three (3) years unless terminated by either party pursuant to the Agreement. The 500,000 shares were issued free in April 20, 2022.

On November 15, 2021, the Company set up a 100% owned subsidiary GOF Biotechnologies Inc. GOF is 75% majority owned (60,000,000 shares of common stock) by the Company and the remaining 25% of its issued and outstanding shares (20,000,000 shares of common stock) are held by Men Hwei, Tsai. On December 31, 2021, the Company entered into a Supplementary Agreement with Zhigong Lin to amend his prior employment agreement with the Company dated August 31, 2021. The Supplement Agreements provides, inter alia, that Zhigong Lin will be appointed Chief Executive Officer of GOF. The employment agreement and supplement agreement were both terminated by the end of July without the issuance of any GOF shares.

On February 4, 2021, the Company set up a 100% owned subsidiary, International Institute of Great Healthcare, Inc. (“IIGH”) under the laws of the State of California. IIGH will bring together doctors and professional-level experts from different countries and regions in the world to the research fields involving bio medicine, clinic medicine, health management, information technology, data analysis, software development, artificial intelligence, industrial planning, financial investment, etc.

Going Concern

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying condensed consolidated financial statements, the Company has incurred recurring net losses. For the three months ended September 30, 2022, the Company recorded a net loss of $192,754, used cash to fund operating activities of $143,244, and at September 30, 2022, had a shareholders’ deficit of $4,032,753. These factors create substantial doubt about the Company’s ability to continue as a going concern within the next twelve months from the date these financial statements are available to be issued. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

During the year ended June 30, 2017, the Company’s former majority shareholder sold his shares to an investor group. The new owners’ plans to continue as a going concern revolve around its ability to achieve profitable operations, as well as raise necessary capital to pay ongoing general and administrative expenses of the Company. The ability of the Company to continue as a going concern is dependent on securing additional sources of capital and the success of the Company’s plan. There is no assurance that the Company will be successful in raising the additional capital or in achieving profitable operations.

Our cash needs for the three months ended September 30, 2022 were primarily met by loans and advances from current majority shareholder. As of September 30, 2022, we had a cash balance of $74,572. We intend to finance operating costs over the next twelve months with existing cash on hand and advance from current majority shareholder.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying CFS were prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”).

The accompanying unaudited condensed consolidated financial statements of America Great Health, formerly Crown Marketing and Subsidiaries (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the three months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending June 30, 2023.

Basis of Consolidation

The Condensed Consolidated Financial Statements includes the accounts of the Company and its current wholly owned subsidiaries, America Great Health in California (100%), GOF Biotechnologies in California (75%), International Institute of Great Health in California (100%), Nutrature Health LLC in California (100%), Sijinsai in China (60%), and US-China Mega Beauty Health Industry Development Co., LTD, (100%). Intercompany transactions and accounts were eliminated in consolidation.

The following table depicts the identity of the Company’s subsidiaries:

Estimates

The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates include accounting for potential liabilities and the assumptions made in valuing stock instruments issued for services, debt and equity investment. Actual results could differ from those estimates.

Foreign Currency Translation

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.

In accordance with ASC 830, “Translation of Financial Statements” the subsidiary’s assets and liabilities booked and recorded at the non-US local functional currency are generally translated into USD for consolidation purposes, using the exchange rate on the balance sheet date, and revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of foreign subsidiary’s financial statements are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

The Company’s reporting currency is the United States Dollar (“USD”). The Company’s wholly owned subsidiary of US-China Mega Beauty Health Industry Development Co., LTD. maintains its books and records in its local currency. The Chinese Yuan (“RMB”), which is the functional currency as being the primary currency of the economic environment in which the subsidiary operates.

Below is a table with foreign exchange rates used for translation:

Cash

The Company considers all highly liquid debt instruments purchased with maturity periods of six months or less to be cash equivalents. The carrying amounts reported in the accompanying balance sheet for cash and cash equivalents approximate their fair value. The Company’s bank account in the United States is protected by FDIC insurance.

The Company’s bank account in the United States is protected by FDIC insurance. As of September 30, 2022 and June 30, 2022, the Company’s bank account in the United States had $15,736 and $3,194, respectively, within FDIC insurance of $250,000.

Revenues

Revenue from sale of goods under Topic 606, Revenue from Contracts with Customers, is recognized in a manner that reasonably reflects the delivery of the Company’s products and services to customers in return for expected consideration and includes the following elements:

The Company sells health related products through wholesale and retailers. Substantially all of the Company’s revenue is derived from product sales. The Company considers purchase orders to be a contract with a customer. Contracts with customers are considered to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than one year, and virtually all of the Company’s contracts are short-term. The Company recognizes revenue for the transfer of promised goods to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. The Company typically satisfies its performance obligations in contracts with customers upon shipment of the goods. The Company does not have any contract assets since the Company has an unconditional right to consideration when the Company has satisfied its performance obligation and payment from customers is not contingent on a future event. Generally, payment is due from customers within 40 to 60 days of the invoice date, and the contracts do not have significant financing components nor variable consideration. Returns and allowances are not a significant aspect of the revenue recognition process as historically they have been immaterial. All of the Company’s contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as a price per unit. All estimates are based on the Company’s historical experience; complete satisfaction of the performance obligation, and the Company’s best judgment at the time the estimate is made. Historically, sales returns have not significantly impacted the Company’s revenue.

Product Revenue

A majority of the Company’s sales are for products sold at a point in time and shipped to customers, for which control is transferred to the customer as goods are delivered to the third-party carrier for shipment. The Company receives payment for the sale of products at the time customers place orders and payment is required prior to shipment. The Company does not recognize assets associated with costs to obtain or fulfill a contract with a customer.

Shipping and handling activities are performed upon delivery to the third-party carrier for shipment. The Company accounts for these activities as fulfillment costs. Therefore, the Company recognizes the costs of these activities when revenue for the goods is recognized. Shipping and handling costs are included in cost of sales for all periods presented.

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or net realizable value. Adjustments to reduce the cost of inventory to its net realizable value are made, if required, for estimated excess, obsolescence, or impaired balances. For the three months ended September 30, 2022 and 2021, the Company has not made provision for inventory in regards to slow moving or obsolete items. As of September 30, 2022 and June 30, 2022, inventories amounted to $121,506 and $116,060, respectively.

Equity Method Investments

We apply the equity method of accounting to investments when we have significant influence, but not controlling interest in the investee. Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. The Company’s proportionate share of the net income (loss) resulting from these investments is reported under the line item captioned “equity investment” in our Consolidated Statements of Operations. The carrying value of our equity method investments is reported in equity investment in the Consolidated Balance Sheets. The Company’s equity method investments are reported at cost and adjusted each period for the Company’s share of the investee’s income or loss and dividend paid, if any. The Company’s share of the investee’s income or loss is recorded on a one quarter lag for all equity method investments. The Company classifies distributions received from equity method investments using the cumulative earnings approach on the Consolidated Statements of Cash Flows. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. The Company recorded no other-than-temporary impairment charges related to its equity method investments during the three months ended September 30, 2022 and 2021.

Fair Value Measurements

Fair value measurements are determined using authoritative guidance issued by the FASB, with the exception of the application of the guidance to non-recurring, non-financial assets and liabilities as permitted. Fair value is defined in the authoritative guidance as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs, other than the quoted prices in active markets, are observable either directly or indirectly.

Level 3—Unobservable inputs based on the Company’s assumptions.

The Company is required to use observable market data if available without undue cost and effort.

The Company’s financial instruments include cash and accounts payable. Management has estimated that the carrying amounts approximate their fair value due to the short-term nature.

Loss per Share

Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the three months ended September 30, 2022 and 2021, as there are no potential shares outstanding that would have a dilutive effect.

Income Taxes

Income tax expense is based on pretax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. The Company did not recorded a valuation allowance against its deferred tax assets as of September 30, 2022, and June 30, 2022.

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes.

Recent Accounting Pronouncements

In July 2017, the FASB issued Accounting Standards Update 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II)”, which is the replacement of the Indefinite Deferral for Mandatory Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatory Redeemable Non-controlling Interests with a Scope Exception. The amendments in Part I of this Update that relate to the recognition, measurement, and earnings per share of certain freestanding equity-classified financial instruments that include down round features affect entities that present earnings per share in accordance with the guidance in Topic 260, Earnings Per Share. The amendments in Part II of this Update do not have an accounting effect. The amendments in Part I of the update are effective for fiscal year, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is assessing the impact to its accounting practices and financial reporting procedures as a result of the issuance of this standard.

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in accounting standards. The amendments in the ASU are effective for fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The Company is currently evaluating the effect, if any, that the ASU will have on its consolidated financial statements.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or is not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

NOTE 3 – DEPOSITS

As of September 30, 2022 and June 30, 2022, deposits amounted to $34,046 and $13,836, respectively. Deposits consists of the following:

NOTE 4 – INVENTORY

As of September 30, 2022 and June 30, 2022, inventory consisted of the following:

NOTE 5 – RELATED PARTY TRANSACTIONS

During the three months ended September 30, 2022, the Company's current majority shareholder advanced $104,706 to the Company as working capital and the Company repaid $71,938 to the shareholder. As of September 30, 2022 and June 30, 2022, the Company owed its current majority shareholder of $606,627 and $573,859, respectively. The advances are non-interest bearing and are due on demand. Imputed interest amounted $5,206 and $2,814 for the three months ended September 30, 2022 and 2021 and was recorded as paid in capital, respectively.

NOTE 6 – SHORT TERM LOAN

As of September 30, 2022 and June 30, 2022, short term loan amounted to $153,337 and $183,932  from unrelated third parties, respectively. On September 15, 2022, the Company paid interest of $3,178 on two short term loans of $50,000 due on July 10, 2022 and $10,000 due on August 1, 2022. The Company then re-entered an agreement of a new short-term loan of $60,000. The loan has an annual interest rate of 18% and the principal and interest are due on February 28, 2023. On September 15, 2022, the Company paid interest of $3,616 on two short term loans, each with $50,000 due on July 26, 2022, and August 1, 2022, and paid $20,000 of principal. The Company then re-entered an agreement of a new short-term, interest free loan of $80,000. The principal is due on February 28, 2023. The Company will issue 1,600,000 shares of the Company stocks to the party as a reward. These shares has not been issued as of the date of this 10Q released. The third loan amount is $13,337 which has 8-month short term.

NOTE 7 – LONG TERM LOAN

As of September 30, 2022 and June 30, 2022, long term loan amounted to $1,374,817 and $1,221,892, respectively. The loan has an annual interest rate of 20%, except that the received long term loan on September 9, 2022 has an annual interest rate of 16%. The principal and interest are due in five years. Interest expense incurred for the three months ended September 30, 2022 and 2021 amounted to $52,924 and $30,427, respectively.

On May 5, 2021, the Company issued 10,000,000 shares to an unrelated party as collateral for a loan of $200,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on April 27, 2021.

On May 31, 2021, the Company agreed 500,000 shares to an unrelated party as collateral for loans of $50,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed $20,000 on June 3, 2021 and $30,000 on June 23, 2021 and issued 200,000 shares on June 18, 2021 and 240,000 shares on October 28, 2021 with 60,000 shares unissued.

On June 18, 2021, the Company issued an aggregate of 2,850,000 shares to 5 unrelated parties as collateral for loans of $270,000. One party with a loan of $100,000 was also awarded 100,000 bonus shares beside the 1,000,000 shares. The loans have an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on June 3, 2021.

On June 18, 2021, the Company issued 500,000 shares to an unrelated party as collateral for a loan of $50,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on June 4, 2021.

On October 28, 2021, the Company issued 80,000 shares to an unrelated party as collateral for loans of $10,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on July 12, 2021.

On October 28, 2021, the Company issued 1,540,000 shares to an unrelated party as collateral for loans of $60,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on September 1, 2021.

On October 28, 2021, the Company issued 500,000 shares to an unrelated party as collateral for loans of $50,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on September 22, 2021.

On November 22, 2021, the Company issued 500,000 shares to an unrelated party as collateral for loans of $50,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed in September 27, 2021.

On November 22, 2021, the Company issued 100,000 shares to an unrelated party as collateral for loans of $10,000. The loan has an annual interest rate of 20%. The principal and interest are due in one year. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on September 30, 2021.

On November 22, 2021, the Company issued 161,840 shares to an unrelated party as collateral for loans of $12,138. The loan has an annual interest rate of 20%. The principal and interest are due in one year. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on October 29, 2021.

On November 22, 2021, the Company issued 400,000 shares to an unrelated party as collateral for loans of $40,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on November 16, 2021.

On November 22, 2021, the Company issued 500,000 shares to an unrelated party as collateral for loans of $50,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on November 9, 2021.

On November 29, 2021, the Company issued 1,000,000 shares to an unrelated party as collateral for a loan of $100,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on November 16, 2021.

On February 2, 2022, the Company issued 500,000 shares to an unrelated party as collateral for loans of $50,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on November 19, 2021.

On February 2, 2022, the Company issued 200,000 shares to an unrelated party as collateral for loan of $20,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on November 29, 2021.

On February 2, 2022, the Company issued 100,000 shares to an unrelated party as collateral for loan of $10,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on November 30, 2021.

On September 9, 2022, the Company signed a loan agreement of $100,000 with a five-year term from an unrelated party for a freeze-dryer. The loan has an annual interest rate of 16% with the payments of $3,000 at the end of every moth starting the fourth month after the Company received the proceed and the final payment of $12,000 on September 9, 2027. The Company received the proceed on September 9, 2022.

NOTE 8 – CONVERTIBLE, REDEEMABLE PREFERRED STOCK

During the year ended June 30, 2016, the Company’s Board of Directors authorized the creation of a series of preferred stock consisting of 1,000,000 shares designated as Series A Preferred Stock (the “Series A”). The Series A is entitled to a dividend of 4%, when and as declared, and is entitled to a liquidation preference of $1 per share plus unpaid dividends. The Series A is redeemable at the option of the Company at any time, in whole or in part, at a price of $1.00 per share, plus 4% per annum thereupon from the date of issuance (the “Stated Value”). In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the Series A shall be entitled to a preferential amount equal to the Stated Value, prior to the holders of common stock receiving any distribution. Each share of Series A is automatically converted on the Conversion Date into a number of shares of common stock of the Company at the initial conversion rate (the “Conversion Rate”), which shall be the Stated Value as of the date of conversion divided by the Market Price. The Market Price for purposes of this Section 5 shall be equal to the average closing sales price of the Common Stock over the 5 previous trading days.

The Series A is also subject to adjustments to the Conversion Rate. If the common stock issuable on conversion of the Series A is changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above), the holders of the Series A shall, upon its conversion, be entitled to receive, in lieu of the common stock which the holders would have become entitled to receive but for such change, a number of shares of such other class or classes of stock that would have been subject to receipt by the holders if they had exercised their rights of conversion of the Series A immediately before that change.

In August 2016, the Company filed an amendment to its Articles of Incorporation to increase the number of authorized shares of Series A Preferred Stock from 1,000,000 to 10,000,000.

There were no preferred shares outstanding as of September 30, 2022 and June 30, 2022.

NOTE 9 – SHAREHOLDERS’ DEFICIT

At September 30, 2022 and June 30, 2022, the Company had 21,090,218,148 and 21,090,218,148 shares issued and outstanding, respectively.

1) Shares issued for equity investment

On April 6, 2021, the Company issued 70,000,000 shares to a director of Imediplus as collateral in exchange for getting trust of 2,500,000 shares that is 5% of Imediplus. The transaction has not been completed by the reporting date.

Equity Investment in Purecell Group:

On June 30, 2020, the Company and Purecell Group (“Purecell”), a leading anti-aging medical institution in Australia, entered into a Cooperation Agreement, in which the Company agreed to acquire 51% of the equity of Purecell, as consideration, the Company shall issue 510,000,000 common shares to Purecell’s nominated trustee. Because the company does not have significant control over Purecell, so this is an equity investment. Upon completion of the acquisition transaction, Purecell shall remain autonomy in its day to day operation, including recruiting and retaining management team members. On February 10, 2021, the Company completed its financial and legal due diligence. On April 6, 2021, the Company issued 510,000,000 shares to two shareholders of Purecell Group PTY Ltd ("Purecell" ) in exchange of 51% of ownership of Purecell. On April 6, 2021, the Company issued 50,000,000 shares of common stock to Purecell’s project introducer as compensation for services, at fair market value of $0.00001 per share.

On May 11, 2021, Aussie Produce PTY LTD (“AP”) signed agreement with Purecell to invest $2,340,000 in exchange of 6% of total outstanding shares of Purecell and 35,000,000 shares of the Company owned by Purecell. Purecell will issue 6% shares to AP in exchange for the $2,340,000 investment. In addition, Purecell will issue 68,372 shares to AP and issue 71,163 shares to the Company. The Company will also issue additional 31,212,000 shares to Purecell. Purecell will use the proceeds to acquire VERITA PHARMA, which is a medicine factory. In order to complete the change of 35,000,000 shares of the Company held by Purecell to AP within the agreed time limit, and to meet the conditions that AP investment funds are in place, the Company and Purecell agreed through consultation that in order to gain time, the Company will issue an additional 35,000,000 shares for AP. On May 26, 2021, the Company issued 35,000,000 shares to shareholder of AP, at fair market value of $0.00001 per share.

On March 31, 2022, the Company issued 1,300,000 shares of common stock to an US individual at $0.075 per share.

2) Shares issued for stock compensation

On January 22, 2021, the Company issued an aggregate of 48,220,124 shares of common stock to 28 unrelated parties as compensation for services.

The issuance of these shares was recorded at fair market value of $0.00001 per share.48,220,124 shares were issued at fair market value of $482.

On March 10, 2021, the Company issued an aggregate of 79,362,534 shares of common stock to 54 unrelated parties as compensation for services. The issuance of these shares was recorded at fair market value of $0.00001 per share. 79,362,534 shares were issued at fair market value of $794.

On April 6, 2021, the Company issued 50,000,000 shares of common stock to Purecell’s project introducer as compensation for services, at fair market value of $0.00001 per share. 50,000,000 shares were issued at fair market value of $500.

On April 7, 2021, the Company issued an aggregate of 6,621,905 shares of common stock to 12 unrelated parties as compensation for services. The issuance of these shares is recorded at fair market value of $0.00001 per share. 6,621,905 shares were issued at fair market value of $66.

On May 5, 2021, the Company issued an aggregate of 1,300,000 shares of common stock to 6 unrelated parties as compensation for services. The issuance of these shares is recorded at fair market value of $0.00001 per share. 1,300,000 shares were issued at fair market value of $13.

On May 18, 2021, the Company issued an aggregate of 7,140,000 shares of common stock to 5 unrelated parties as compensation for services. The issuance of these shares is recorded at fair market value of $0.00001 per share. 7,140,000 shares were issued at fair market value of $71.

On May 18, 2021, the Company and David Tsai (“Dr. Tsai”), a pioneer in anti-cancer peptide research and invention in the United States, entered into a Cooperation Agreement, in which Dr. Tsai shall provide to the Company of relevant theories, technologies, methods, sources of raw materials, processing and production techniques, quality standards, quality control methods and other information and details related to his anti-cancer protein peptides, oral insulin and activation technology; Dr. Tsai shall also be responsible for the whole process of technology and product production, application and implementation, as well as professional technical support, consultation and cooperation in the process of product verification, publicity, promotion and sales. As consideration, the Company agreed to grant 8 million shares of AAGH common stock to Dr. Tsai along with certain monthly compensations and sales bonus. On May 26, 2021, the Company issued 2,000,000 shares of common stock to Dr. Tsai as compensation for services. The issuance of these shares is recorded at fair market value of $0.00001 per share. 2,000,000 shares were issued at fair market value of $20.

On May 26, 2021, the Company issued an aggregate of 450,000 shares of common stock to 3 unrelated parties as compensation for services. The issuance of these shares is recorded at fair market value of $0.00001 per share. 450,000 shares were issued at fair market value of $5.

On June 18, 2021, the Company issued an aggregate of 11,300,000 shares of common stock to 22 unrelated parties as compensation for services. The issuance of these shares is recorded at fair market value of $0.00001 per share. 11,300,000 shares were issued at fair market value of $113.

On February 2, 2022, the Company issued an aggregate of 10,967,465 shares of common stock to 28 unrelated parties as compensation for services.

The issuance of these shares is recorded at fair market value of $0.1195 per share. 10,967,465 shares were issued at fair market value of $1,310,612.

On April 1, 2022, the Company issued an aggregate of 75,523 shares of common stock to 1 unrelated party as compensation for services.

The issuance of these shares is recorded at fair market value of $0.0685 per share. 75,523 shares were issued at fair market value of $5,173.

On April 12, 2022, the Company issued an aggregate of 240,000 shares of common stock to 2 unrelated parties as compensation for services.

The issuance of these shares is recorded at fair market value of $0.06495 per share. 240,000 shares were issued at fair market value of $15,588.

On April 20, 2022, the Company issued an aggregate of 500,000 shares of common stock to 1 unrelated party as compensation for services.

The issuance of these shares is recorded at fair market value of $0.0595 per share. 500,000 shares were issued at fair market value of $29,750.

On May 25, 2022, the Company issued an aggregate of 46,921 shares of common stock to 1 unrelated party as compensation for services.

The issuance of these shares is recorded at fair market value of $0.0002 per share. 46,921 shares were issued at fair market value of $9.

3) Shares issued for short term loan as original issue discount

On March 18, 2022, the Company issued 400,000 shares of restricted shares of common stock as bonus shares to the lenders with a short term loan amount $100,000, The issuance of these shares is recorded at fair market value of $0.075 per share. 400,000 shares were issued at fair market value of $30,000.

On April 12, 2022, the Company issued 240,000 shares of restricted shares of common stock as bonus shares to the lenders with a short term loan amount $60,000, The issuance of these shares is recorded at fair market value of $0.0629 per share. 240,000 shares were issued at fair market value of $15,096.

On September 9, 2022, the Company agreed 1,600,000 shares of the Company stocks to the party as a reward. The agreement of these shares is recorded at fair market value of $0.0095 per share, or $15,200 market value, although these shares has not been issued as of the date of this 10Q released.

4) Shares issued for loan as collateral

On May 5, 2021, the Company issued 10,000,000 shares to an unrelated party as collateral for a loan of $200,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on April 27, 2021.

On May 31, 2021, the Company agreed 500,000 shares to an unrelated party as collateral for loans of $50,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed $20,000 on June 3, 2021 and $30,000 on June 23, 2021 and issued 200,000 shares on June 28, 2021 and 240,000 shares on October 28, 2021 with 60,000 shares unissued.

On June 18, 2021, the Company issued an aggregate of 2,850,000 shares to 5 unrelated parties as collateral for loans of $270,000. One party with a loan of $100,000 was also awarded 100,000 bonus shares beside the 1,000,000 shares. The Company recorded the 100,000 bonus shares as stock compensation which was included in above part 2 shares issued for stock compensation. The loans have an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on June 3, 2021.

On June 18, 2021, the Company issued 500,000 shares to an unrelated party as collateral for a loan of $50,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on June 4, 2021.

On October 28, 2021, the Company issued 80,000 shares to an unrelated party as collateral for loans of $10,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on July 12, 2021.

On October 28, 2021, the Company issued 1,540,000 shares to an unrelated party as collateral for loans of $60,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on September 1, 2021.

On October 28, 2021, the Company issued 500,000 shares to an unrelated party as collateral for loans of $50,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on September 22, 2021.

On November 22, 2021, the Company issued 500,000 shares to an unrelated party as collateral for loans of $50,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed in September 27, 2021.

On November 22, 2021, the Company issued 100,000 shares to an unrelated party as collateral for loans of $10,000. The loan has an annual interest rate of 20%. The principal and interest are due in one year. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on September 30, 2021.

On November 22, 2021, the Company issued 161,840 shares to an unrelated party as collateral for loans of $12,138. The loan has an annual interest rate of 20%. The principal and interest are due in one year. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on October 29, 2021.

On November 22, 2021, the Company issued 400,000 shares to an unrelated party as collateral for loans of $40,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on November 1, 2021.

On November 22, 2021, the Company issued 500,000 shares to an unrelated party as collateral for loans of $50,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on November 9, 2021.

On November 29, 2021, the Company issued 1,000,000 shares to an unrelated party as collateral for a loan of $100,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on November 16, 2021.

On February 2, 2022, the Company issued 500,000 shares to an unrelated party as collateral for loans of $50,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on November 19, 2021.

On February 2, 2022, the Company issued 200,000 shares to an unrelated party as collateral for loan of $20,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on November 29, 2021.

On February 2, 2022, the Company issued 100,000 shares to an unrelated party as collateral for loan of $10,000. The loan has an annual interest rate of 20%. The principal and interest are due in five years. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received the proceed on November 30, 2021.

5) Shares issued in exchange for payable balance

On January 28, 2022, the Company signed a company stock and payment exchange agreement with a supplier. The Company offers to pay the supplier the $295,000 for product with 15,000,000 shares of common stock. The 15,000,000 shares of common stock should be  transferred to the supplier, or any third party designated by the supplier within 60 days, and no later than March 30, 2022. However, as of February 08, 2023, the Company hasn’t issued any shares of common stock to the supplier for the purchase of products.

On January 28, 2022, the Company signed a company stock and payment exchange agreement with a supplier. The Company offers to pay the supplier the $1,100,000 for product with 35,000,000 shares of common stock. The 35,000,000 shares of common stock should be  transferred to the supplier, or any third party designated by the supplier within 60 days, and no later than March 30, 2022. However, as of February 08, 2023, the Company hasn’t issued any shares of common stock to the supplier for the purchase of products.

NOTE 10 – EQUITY INVESTMENT

On June 30, 2020, the Company and Purecell Group (“Purecell”), a leading anti-aging medical institution in Australia, entered into a Cooperation Agreement, in which the Company agreed to acquire 51% of the equity of Purecell, as consideration, the Company shall issue 510,000,000 common shares to Purecell’s nominated trustee. Becausethe company does not have significant control over Purecell, so this is an equity investment. Upon completion of the acquisition transaction, Purecell shall remain autonomy in its day to day operation, including recruiting and retaining management team members. On February 10, 2021, the Company completed its financial and legal due diligence. On April 6, 2021, the Company issued 510,000,000 shares to two shareholders of Purecell Group PTY Ltd ("Purecell" ) in exchange of 51% of ownership of Purecell. On April 6, 2021, the Company issued 50,000,000 shares of common stock to Purecell’s project introducer as compensation for services, at fair market value of $0.00001 per share.

On May 11, 2021, Aussie Produce PTY LTD (“AP”) signed agreement with Purecell to invest $2,340,000 in exchange of 6% of total outstanding shares of Purecell and 35,000,000 shares of the Company owned by Purecell. Purecell will issue 6% shares to AP in exchange for the $2,340,000 investment. In addition, Purecell will issue 68,372 shares to AP and issue 71,163 shares to the Company. The Company will also issue additional 31,212,000 shares to Purecell. Purecell will use the proceeds to acquire VERITA PHARMA, which is a medicine factory. In order to complete the change of 35,000,000 shares of the Company held by Purecell to AP within the agreed time limit, and to meet the conditions that AP investment funds are in place, the Company and Purecell agreed through consultation that in order to gain time, the Company will issue an additional 35,000,000 shares for AP. On May 26, 2021, the Company issued 35,000,000 shares to shareholder of AP, at fair market value of $0.00001 per share. 

The following table summarizes the income statement of Purecell.

The following table provides the summary of equity investment in Purecell.

NOTE 11 – INCOME TAXES

As of September 30, 2022, the Company had federal and California income tax net operating loss carryforwards of approximately $6.1 million. These net operating losses will begin to expire 20 years from the date the tax returns are filed.

Uncertain Tax Positions

Interest associated with unrecognized tax benefits are classified as income tax, and penalties are classified in selling, general and administrative expenses in the statements of operations. For the three months ended September 30, 2022 and 2021, the Company had no unrecognized tax benefits and related interest and penalties expenses. Currently, the Company is not subject to examination by major tax jurisdictions.

NOTE 12 – LEASE

The Company has entered into a operating leases agreement with GKT, Alhambra, LP. The lease term of the office space is from December 1, 2020 to November 30, 2023. The current monthly rent including monthly management fee is $4,655.64. The operating lease is listed as separate line item on the Company’s condensed consolidated financial statements and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligation to make lease payments are also listed as a separate line item on the Company’s condensed consolidated financial statements.

The Company has entered an operating lease agreement with SoCal Industrial LLC, Irwindale. The lease term of the office space is from June 15, 2021 to May 31, 2023. The current monthly rent including monthly management fee is $1,643.16. The operating lease is listed as separate line item on the Company’s condensed consolidated financial statements and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligation to make lease payments are also listed as a separate line item on the Company’s condensed consolidated financial statements.

Operating lease right-of-use assets and liabilities commencing after December 1, 2020 are recognized at commencement date based on the present value of lease payments over the lease term. For the three months ended September 30, 2022, the Company recognized approximately $18,896 in total lease costs.

Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments.

Information related to the Company’s operating ROU assets and related lease liabilities are as follows:

The following table presents the amortization of the Company’s lease liabilities under ASC 842 for each of the following years ending September 30:

NOTE 13 – CONCENTRATION

Major vendors

For the three months ended September 30, 2022, one vendor accounted for 10% or more of the Company’s purchases and its outstanding accounts payable balances as at quarter-end dates, are presented as follows:

NOTE 14 – SUBSEQUENT EVENTS

On October 13, 2022, the Company signed a loan agreement of $21,000 with Lian Chen who is an unrelated party. The loan has an annual interest rate of 20%. Total principal and interest of $42,000 are due in five years. The unrelated party would receive 2,625,000 shares from a shareholder designated by the Company. The shares issued are restricted and will be returned to the Company after the principal and interest are paid in full. During the investment period, if the stock can be normally traded in the stock market, and the market value of this part of AAGH stock exceeds the principal and interest of loan for 30 consecutive trading days. The remaining principal and interest of loan will be forgiven. The Company received $21,000 loan on October 13, 2022. On October 21, 2022, the Company's current majority shareholder Mike Q. Wang transferred 2,625,000 shares to Lian Chen. If after five years, Lian Chen chooses to use stocks to offset the loan, then the Company will issue 2,625,000 shares of common stock to Mike Wang.

On November 25,2022, the Company signed a supplementary agreement with Men Hwei, Tsai who is an unrelated party. The Company A agrees that if the patent is sold or transferred, Men Hwei, Tsai or Men Hwei, Tsai's successor may receive a 25% gain on the transfer or sale of the interest. The Company agrees to give Men Hwei, Tsai an additional 20 million AAGH shares. The Company allows Men Hwei, Tsai to use three years (from November 26, 2022 to November 25, 2025) find investors each with more than US$10 million investment. In case that no investor is found within three years, Men Hwei, Tsai agrees to return the patent to the Company, and both parties will continue to cooperate in accordance with the original contract on May 18, 2021. If Men Hwei, Tsai finds an investor with an investment of at least US$10 million within three years, and the process for Men Hwei, Tsai and its investors to apply for a new drug may last for several years, then Men Hwei, Tsai agrees that the Company will use the patented technology to develop dietary supplement that are helpful to Alzheimer’s disease. The Company will be responsible for marketing the dietary supplement. Men Hwei, Tsai is entitled to commission equaling to 8% of sales price.

On November 26, 2022, the Company signed a supplementary agreement with Men Hwei, Tsai who is an unrelated party and transferred pending anti-dementia patent to Men Hwei, Tsai for $34,978.48.

On January 11, 2023, the Company signed a loan agreement of $150,000 with Yajing Sun who is an unrelated party. The loan has an annual interest rate of 20% and one-year term. The Company received the loan on January 12, 2023.

On January 12, 2023, the Company’s wholly-owned subsidiary Zhonghemei (Shanghai) Health Technology Development Co., LTD(formerly US-China Mega Beauty Health Industry Development Co., LTD) signed a cooperation agreement with unrelated parties. The total investment of the project is $7,032,464(RMB 50 million) which has not been received as of the report date.

On January 13, 2023, the Company signed a loan cancellation agreement and canceled the agreement signed on September 9, 2022 with Fan Gu who is an unrelated party. On January 13, 2023, the Company paid Fan Gu total principal and interest of $104,175.34.

On January 19, 2023, the Company signed a loan agreement of $300,000 with Yunwen Gao who is an unrelated party. The loan has an annual interest rate of 12% and is due one year. The Company received the loan on January 24, 2023.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward Looking Statement Notice

Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Crown Marketing, (“we”, “us”, “our” or the “Company”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Quarterly Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

Overview of Business

Our mission is to invest in innovative technologies intergrated with business development in the healthcare ecosystem.

We are focused on protein and peptide small molecular drugs research and development, diagnostic and medical devices with AI cloud computing, cell therapy and regenerational medicine and supplements manufacturing and sales.

On September 3, 2021, the Company entered into an Assets Acquisition Agreement with Wang’s Property Investment & Management LLC to purchase 53 units in 19 real estate properties appraised at $7,626, 286.37 for a purchase price of $7,000,000, The purchase price shall be paid as follows: (i) $1,000,000 on execution of the Agreement, (ii) $2,000,000 within 60 days thereof and (iii) the remainder by April 10, 2022. The Agreement is subject to customary closing conditions, including, satisfactory due diligence. On September 9, 2021, the Company entered into a Supplemental Assets Acquisition Agreement with Wang’s Property Investment & Management LLC to amend and clarify that (i) it was purchasing 19 real estate properties which includes 53 units appraised at $7,626,286.37 for a purchase price of $7,000,000 and (ii) that it will waive and not conduct due diligence in order for the transaction to proceed. The acquisition has not been consummated. With the asset acquisition from Wang’s Property Investment & Management LLC, the Company will diversify its business into property investment and management. By the end of May 2022, the Company ceased the acquisition of Wang’s Property Investment & Management LLC.

Results of Operations

Results of Operations for the three months ended September 30, 2022 compared to the three months ended September 30, 2021.

Sales amounted $51,938 and $0 for the three months ended September 30, 2022 and 2021, respectively.

Cost of goods sold amounted $27,500 and $0 for the three months ended September 30, 2022 and 2021, respectively.

Gross profit amounted $24,428 and $0 for the three months ended September 30, 2022 and 2021, respectively.

Operating expenses incurred for the three months ended September 30, 2022 and 2021 was $152,659 and $298,066, respectively. The decrease was mainly due to decreased payroll expenses and professional expenses.

Our net loss for the three months ended September 30, 2022 and 2021 was $192,754 and $331,272, respectively. The decrease in net loss was mainly due to increase in sales and decrease in payroll expenses and professional expenses.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, the Company has incurred recurring net losses. For the three months ended September 30, 2022, the Company recorded a net loss of $192,754, used cash to fund operating activities of $143,244 and at September 30, 2022, had a shareholders’ deficit of $4,032,753. For the three months ended September 30, 2021 the Company recorded a net loss of $331,272, used cash to fund operating activities of $459,157 and at June 30, 2022, had a shareholders’ deficit of $3,860,481. These factors create substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Company is raising the additional capital to achieve profitable operations.

Our cash needs for the three months ended September 30, 2022 were primarily met by loans and advances from current majority shareholder. As of September 30, 2022, we had a cash balance of $74,572. Our new majority shareholders will need to provide all of our working capitals going forward.

Primarily as a result of our recurring losses and our lack of liquidity, we received a report from our independent registered public accounting firm for our financial statements for the three months ended September 30, 2022 that includes an explanatory paragraph describing the uncertainty as to our ability to continue as a going concern.

Liquidity and Capital Resources for the three months ended September 30, 2022 compared to the three months ended September 30, 2021

Operating Activities

Net cash used in operating activities was $143,244 for the three months ended September 30, 2022, a decrease of $315,913 compared to cash used in operating activities of $459,157 for the three months ended September 30, 2021. The decrease in net cash used in operating activities was mainly due to a decrease in net loss, prepaid investment, other receivables, other payable, other liabilities and taxes and account payable, offset by an increase in other long term asset for the three months ended September 30, 2022 compared to the same period in 2021.

Investing Activities

Net cash used in investing activities $0 and $12,790 the three months ended September 30, 2022 and 2021, respectively for purchases of equipment in connection with our business activities. 

Financing Activities

Net cash provided by financing activities was $155,097 for the three months ended September 30, 2022, compared to $228,149 net cash provided by financing activities for the three months ended September 30, 2021. The decrease in net cash provided by financing activities for the three months ended September 30, 2022 was primarily attributable to a decrease in amount short term loan and long term loan.

Financial Position

As of September 30, 2022, we had $74,572 in cash, negative working capital of $2,567,723 and an accumulated deficit of $4,032,753. As of June 30, 2022, we had $62,643 in cash, negative working capital of $2,560,837 and an accumulated deficit of $3,860,481.

Critical Accounting Policies and Estimates

Estimates

The preparation of these consolidated financial statements (“CFS”) in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of net sales and expenses during the reported periods. Actual results may differ from those estimates and such differences may be material to the financial statements. The more significant estimates and assumptions by management include among others, the fair value of shares of common stock issued for services. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.

Revenues

Revenue from sale of goods under Topic 606, Revenue from Contracts with Customers, is recognized in a manner that reasonably reflects the delivery of the Company’s products and services to customers in return for expected consideration and includes the following elements:

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or net realizable value. Adjustments to reduce the cost of inventory to its net realizable value are made, if required, for estimated excess, obsolescence, or impaired balances. For the three months ended September 30, 2022 and 2021, the Company has not made provision for inventory in regards to slow moving or obsolete items. As of September 30, 2022 and June 30, 2022, inventories amounted to $121,506 and $116,060, respectively.

Fair Value Measurements

Fair value measurements are determined using authoritative guidance issued by the FASB, with the exception of the application of the guidance to non-recurring, non-financial assets and liabilities as permitted. Fair value is defined in the authoritative guidance as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs, other than the quoted prices in active markets, are observable either directly or indirectly.

Level 3—Unobservable inputs based on the Company’s assumptions.

The Company is required to use observable market data if available without undue cost and effort.

The Company’s financial instruments include cash and accounts payable. Management has estimated that the carrying amounts approximate their fair value due to the short-term nature.

Loss per Share

Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the three months ended September 30, 2022 and 2021, as there are no potential shares outstanding that would have a dilutive effect.

Income Taxes

Income tax expense is based on pretax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. The Company recorded a valuation allowance against its deferred tax assets as of September 30, 2022 and June 30, 2022.

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes.

Recent Accounting Pronouncements

See Footnote 2 of the financial statements for a discussion of recently issued accounting standards.

Contractual Obligations and Off-Balance Sheet Arrangements

We do not have any contractual obligations or off-balance sheet arrangements.

Item 3. 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 information required by this Item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of September 30, 2022. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that our disclosure and controls are not designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) a lack of accounting staff and resources with appropriate knowledge of generally accepted accounting principles in the United States (“U.S. GAAP”) and SEC reporting and compliance requirements; (3) a lack of independent directors and (4) a lack of an effective review process by the accounting manager and management.

Management believes that the material weaknesses set forth in above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors’ results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

Changes in Internal Controls

There have been no changes in our internal controls over financial reporting during the period ended September 30, 2022 that have materially affected or are reasonably likely to materially affect our internal controls.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

We are not a party to or otherwise involved in any legal proceedings.

In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, other than as set forth herein, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.

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 information required by this Item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Not applicable.

Item 3. Defaults Upon Senior Securities.

There have been no events which are required to be reported under this Item.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits and Financial Statement Schedules

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.