YCQH Agricultural Technology Co. Ltd - Annual Report: 2022 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For The Fiscal Year Ended December 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number 333-252500

YCQH AGRICULTURAL TECHNOLOGY CO. LTD

(Exact name of registrant issuer as specified in its charter)

No. 1104, Ren Min Nan Road No. 45,

Wuhou District, Chengdu, Sichuan Province, China 610000.

(Address of principal executive offices, including zip code)

(+86) 13981161812

(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act

Securities registered under Section 12(g) of the Exchange Act

N/A

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

Yes ☐ No ☒

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, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting 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 ☒

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

$10,280,000 as of June 30, 2022

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE

PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

N/A

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements. These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantee of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. These risks and uncertainties include the following:

This report should be read completely and with the understanding that actual future results may be materially different from what we expect. The forward-looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Use of Defined Terms

Except as otherwise indicated by the context, references in this Report to:

PART I

ITEM 1. BUSINESS

Company Overview

YCQH Agricultural Technology Co. Ltd, a Nevada corporation (“the Company”) was incorporated under the laws of the State of Nevada on October 15, 2019.

On October 15, 2019, Ms. Wang Min was appointed as President, Secretary, Treasurer, Chief Executive Officer, and Director.

On October 15, 2019, the Company issued 100,000 shares of restricted common stock, with a par value of $0.0001 per share, to Ms. Wang Min in consideration of $10. The $10 in proceeds went to the Company to be used as working capital. Ms. Wang Min serves as our Chief Executive Officer, President, Secretary, Treasurer and Director.

On November 28, 2019, the Company issued 49,900,000 shares of restricted common stock, with a par value of $0.0001 per share, to Ms. Wang Min in consideration of $4,990. The $4,990 in proceeds went to the Company to be used as working capital.

On January 1, 2020 the Company issued 40,000,000 shares of restricted common stock to a total of ten foreign shareholders, with each having purchased 4,000,000 shares of common stock at a purchase price of $0.001 per share. The $40,000 in proceeds went to the Company to be used as working capital.

In regards to all of the above transactions we claim an exemption from registration afforded by Section 4a(2) and/or Regulation S of the Securities Act of 1933, as amended (“Regulation S”) due to the fact that all sales of stock were made to non-U.S. persons (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing.

The Company primarily operates in bio-carbon-based fertilizer (“BCBF”) trading business, including wholesale and retail sale to customer mainly based in People Republic of China, sourcing directly from producers in China. The Company does not maintain and operate any production and manufacturing of BCBF facility or machine and equipment.

On December 16, 2019, the Company, acquired 100% of YCQH Holding Limited, herein referred as “YCQH Seychelles,” a company incorporated in the Republic of Seychelles, from Ms. Wang Min in consideration of $1. In the same day YCQH Seychelles acquired YCQH Agricultural Technology Co. Limited, a company incorporated in Hong Kong, herein referred as the “YCQH HK,” from Ms. Wang Min in consideration of HKD100 (equivalent to approximately $13 as of the date of this Registration Statement).

On December 10, 2019, YCQH HK incorporated YCWB Agricultural Technology Co. Limited, a wholly foreign owned enterprise, in SiChuan Province, China, herein referred as “YCWB,” with Ms. Wang Min as the legal representative.

On June 15, 2020, the Company through subsidiary YCWB acquired SCQC Agricultural Co. Limited., herein referred as “SCQC,” a company incorporated in SiChuan Province, China for a consideration of CNY 1,169,996 (approximate $165,605) with carrying value on book of CNY 1,168,554 (approximate $165,401) from a third party. The premium was accounted as expense for the year ended December 31, 2020.

The Company and all its subsidiaries share the same address and maintain physical office space at No. 1104, Ren Min Nan Road No. 45, Wuhou District, Chengdu, Sichuan Province, China 610000. SCQC entered into tenancy agreement with a third party landlord to rent the aforementioned physical office space on December 01, 2022 with an effective period of two years commencing on December 01, 2022 and extending to November 30, 2024 at CNY 24,900 per month, payable on quarterly basis.

Prior to the aforementioned tenancy agreement, the Company and all its subsidiaries shared the same address and maintained physical office space at Building B, Floor 20, Chengdu International Technology Energy Saving Mansion, No. 89 Cuihua Rd, Chengdu Hi-Tech Zone, Chengdu, Sichuan Province, China. Our office space at this location was provided to us rent free by our Chief Executive Officer, Ms. Wang Min.

Our corporate structure is as follows:

DESCRIPTION OF BUSINESS

The Company has seen a business opportunity in wholesaling and retailing high quality, sustainable, environmentally friendly bio-carbon-based fertilizer (herein referred to as “BCBF”), which is capable of not only increasing the crop yield but also at the same time preserving the environment. The Company’s BCBF is sourced from, and produced by, a third party through heating straw in a closed container with little or no available air. This method is also known as thermal decomposition of organic material under limited supply of oxygen at relatively low temperature. In accordance with requirements imposed by the PRC Ministry of Agriculture, the Company’s Supplier of BCBF has registered with Sichuan Province Provincial Department of Agriculture and Rural Affairs, which has an effective period of 5 years, from December 2019 to December 2024. The Company does not maintain or operate any production and/or manufacturing of any BCBF facility, machine and/or equipment.

The Company is currently wholesaling and retailing BCBF through its wholly owned subsidiary SCQC. Management of the Company believes that the BCBF sold by the Company is capable of maintaining soil fertility, enhancing crop yield, improving soil structure, improving water and fertilizer retention capability and improving fertilizer utilization efficiency and effectiveness. This is achieved through balancing carbon and nitrogen content, neutralizing soil pH while at the same time creating soil particle structure that is conducive to plant growth.

The BCBF sold by the Company, produced through straw thermal decomposition, replaces the function of activated carbon. The combination of soil and BCBF is capable of absorbing and reducing pollution content such as heavy metals from agricultural residual wastes. Further, the combination of water and BCBF is capable of purifying water by producing carbohydrate and glucose, which could be absorbed by, and is conducive to the growth of, plants. Additionally, BCBF possesses outstanding water storage capacity, which can store up to 10 times the water content when compared to soil without BCBF, which in turn provides farmers greater flexibility during times of hardship such as a drought.

As such, the management of the Company believes that the Company’s BCBF is not only a superior option compared to conventional fertilizer in terms of environmentally sustainability, but also from an economic perspective due to the improvement in crop yield quality and quantity. The Company’s BCBF consists of roughly 45% organic matter, 20% bio-charcoal, 10% humic acid, 5% NPK and boats an effective microorganism count of 20,000,000 per gram.

On July 25, 2022, the Company ventures into online retailing business through e-commerce platform, retailing a series of daily use products covering from healthcare products, cosmetic products, fashion products, household products and so forth. Customer will place order through platform and make payment accordingly of which shall be collected by Company. Meanwhile Company shall place exact order towards supplier and supplier will deliver such ordered products directly to customer, settlement between Company and supplier will take place once a week. It is worth mentioning that the Company act as the intermediary role and do not keep any form of inventory throughout the transaction.

Bio-carbon-based-fertilizer, BCBF

Business Model

The Company previously sources all supply of BCBF from an independent single supplier and doesn’t have any definitive plan to continue to source from such supplier or any other alternative. The Company believes current stock level is sufficient to cover next 12 months sales demand.

The Company adopts what is commonly referred to as a virtual network business structure, as the Company only maintains internal procurement, sales and marketing, operational, accounting and finance functions. We rely entirely on an independent third party for other crucial functions, such as production and packaging, storage, courier inward and outward. It is our belief that this business structure empowers the Company with a higher degree of flexibility to exploit market opportunity, but it is also difficult to ascertain the quality of BCBF sourced and stored externally. Confidentiality of information, such as the identity of customers, is also at risk because such information is shared amongst designated warehouses, the responsibility of which is discussed below.

Procurement Order and Courier Inward

As per our practices with previous supplier, the Company, through subsidiary SCQC, has prepaid a mutually agreed upon deposit to the supplier. Upon placing an order with the supplier, they will either move to production of the requested BCBF or, if stock is readily available, they will ship the requested amount to designated warehouse operate and owned by third party (herein referred as the “Warehouser”).

Shipment costs are borne solely by SCQC, while any remaining outstanding payable balance to supplier, if not covered by the deposit to the supplier, shall be settled upon arrival of products.

The Company believes, for future procurement with alternate supplier is highly likely to follow this pattern of procurement order.

Storage, Dispatch Order and Courier Outward

Upon the arrival of BCBF, Warehouser shall examine the condition and quantity of BCBF based upon instructions provided by SCQC. If the BCBF meets quality standards, they will unload the BCBF from the supplier’s logistic vehicle and will proceed to store the BCBF. Warehouser bears responsibility to ensure that the condition of the warehouse is optimal for storage.

Upon receiving dispatch orders from SCQC, the warehouse personnel shall be responsible to deliver BCBF to customers’ location, as designated by SCQC and to subsequently collect a receipt from SCQC customers.

Sales and Marketing

The Company, through SCQC, retails and wholesales BCBF, primarily to farmers. We rely upon sales and marketing personnel at present, and it is our intention to establish product branding and a positive reputation which will allow us to grow beyond internal sales and marketing. On top of existing sales personnel, the Company also intends to capitalize on customer connections through a referral program which rewards referring customers with discounts. All such plans pertaining to the referral program remain in development, and we cannot state with any level of specificity when they will move beyond the planning stages.

Generally, retail and wholesale customers are not entitled for a credit term, the only difference is that for retail customers all payments must be settled immediately upon placing the order, at which point SCQC will issue a dispatch order to the warehouse. Whereas for wholesale customers, a deposit can be made upon placing the order and the remaining balance is to be settled upon delivery of BCBF. However, in certain cases, or from time to time at the discretion of Management, SCQC may grant customers a certain credit term if they believe it to be beneficial to the performance and business sustainability of the Company in the long term.

Employees and Function

The Company has 6 employees. All of them work on a full-time basis, including our director, Ms. Wang Min. The Company provides benefits to each employee excluding sales, marketing and after sales service department employee, in the form of $40 travelling allowance per month and a $40 telecommunication allowance per month. Additionally, the Company maintains mandatory social security for pensions, medical, unemployment, work-related injury and maternity insurance. The Company segregates individual employees in accordance to function as displayed below:

Competition

Overall, the competitive environment of China’s fertilizer industry is very tense despite its market size. The Company competes with other manufacturers, distributors, wholesalers such as China Green Agriculture, Inc. (NYSE: CGA), Sinofert Holdings Limited (HKG: 0297) and Xinyangfeng Agricultural Technology Co Ltd (SHE: 000902). These competitors possess significantly greater financial and non-financial resources, manufacturing capacity, well established business models and distribution channels and branding.

At present, the Company relies entirely on its existing relationship with customers in order to function within this competitive fertilizer industry. However, despite intensive competition our director is confident to develop and enlarge our market share in China.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 1B. UNRESOLVED STAFF COMMENTS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2. PROPERTIES

Our principal executive office is located at No. 1104, Ren Min Nan Road No. 45, Wuhou District, Chengdu, Sichuan Province, China 610000.

SCQC entered into tenancy agreement with a third-party landlord to rent the aforementioned physical office space on December 01, 2022 with an effective period of two years commencing on December 01, 2022 and extending to November 30, 2024 at CNY 24,900 per month, payable on quarterly basis.

ITEM 3. LEGAL PROCEEDINGS

As of the date hereof, we know of no material pending legal proceedings against to which we or any of our subsidiaries is a party or of which any of our property is the subject. There are no proceedings in which any of our directors, executive officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest. From time to time, we may be subject to various claims, legal actions and regulatory proceedings arising in the ordinary course of business.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

The Company sole class of common equity is currently quoted under OTC Markets Pink Sheet under symbol YCQH since December 10, 2021. The Company believes that we do not have an established public trading market and we cannot assure you that there will be any liquidity for our common stock in the future and such quotation reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

Dividend

No cash dividends were paid on our shares of common stock during the fiscal year ended December 31, 2022 and 2021. We have not paid any cash dividends since our inception on October 15, 2019 and we currently have no plans to pay such dividends. Our board of directors currently intends to retain all earnings for use in the business for the foreseeable future.

Holders

The Company has issued and outstanding common shares of 101,400,000 common shares with 66 shareholders as of March 30, 2023. There are no outstanding options or warrants or securities that are convertible into shares of common stock.

Transfer Agent and Registrar

The transfer agent for our capital stock is Transfer Online, Inc., with an address at 512 SE Salmon St., Portland, OR 97214, United States and telephone number is +1 (503) 227-2950.

Penny Stock Regulations

The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share. Our Common Stock, when and if a trading market develops, may fall within the definition of penny stock and be subject to rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000, or annual incomes exceeding $200,000 individually, or $300,000, together with their spouse).

For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser’s prior written consent to the transaction. Additionally, for any transaction, other than exempt transactions, involving a penny stock, the rules require the delivery, prior to the transaction, of a risk disclosure document mandated by the Securities and Exchange Commission relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Consequently, the “penny stock” rules may restrict the ability of broker-dealers to sell our Common Stock and may affect the ability of investors to sell their Common Stock in the secondary market.

In addition to the “penny stock” rules promulgated by the Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit the investors’ ability to buy and sell our stock.

Securities Authorized for Issuance under Equity Compensation Plans

We do not have in effect any compensation plans under which our equity securities are authorized for issuance.

Recent Sales of Unregistered Securities

On October 15, 2019, the Company issued 100,000 shares of restricted common stock, with a par value of $0.0001 per share, to Ms. Wang Min in consideration of $10. The $10 in proceeds went to the Company to be used as working capital.

On November 28, 2019, the Company issued 49,900,000 shares of restricted common stock, with a par value of $0.0001 per share, to Ms. Wang Min in consideration of $4,990. The $4,990 in proceeds went to the Company to be used as working capital.

On January 1, 2020 the Company issued 40,000,000 shares of restricted common stock to a total of ten foreign shareholders, with each having purchased 4,000,000 shares of common stock at a purchase price of $0.001 per share. The $40,000 in proceeds went to the Company to be used as working capital.

In regards to all of the above transactions we claim an exemption from registration afforded by Section 4a(2) and/or Regulation S of the Securities Act of 1933, as amended (“Regulation S”) due to the fact that all sales of stock were made to non-U.S. persons (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing.

Use of Proceeds from Registered Securities

The Company initial registration statement filed under Securities Act 1933 were declared effective on June 25, 2021 (herein referred as “registration statement”) with commission file number 333-252500 assigned to such registration statement with a maximum offering of 20,000,000 shares at $0.01 per share for a maximum proceed of $200,000, excluding selling shareholders. The Company completed initial public offering on August 31, 2021, issuing 11,400,000 shares of common stock at $0.01 per share for a total and net proceed from offering of $114,000. Breakdown of offering for issuer and selling shareholders as following:

The offering was conducted on self-underwritten best effort basis by our Director, Ms. Wang Min, no underwriting discounts and commissions, finders’ fee and any other similar expenses have been incurred pertaining to such offering. The proceed from offering has been fully utilized as following:

Aforementioned actual of net offering proceeds are intended to serve for 12 months expenditure from the effectiveness of Registration Statement but was fully utilized after 6 months, up to December 31, 2021. Due to inexperience in managing public company, the Company relied on external professional parties to prepare report in compliance with Securities Exchange Act 1934, as such compliance and reporting expenses is close to 12 months use of proceeds budget despite 6 months down. while offering expenses is fairly close to use of proceed disclosed in Registration Statement.

Actual general and administrative expenses has substantially exceeded use of proceed disclosed in Registration Statement as the Company has allocated a substantial portion of use of proceed for the payment of consulting fee to unrelated third party for the provision of corporate management consultancy including corporate management, corporate development strategy, organization management, human resources management, and corporate culture development, for the fiscal year 2021. In absence of such consulting fee, general and administrative expenses should be fairly close to use of proceed disclosed in Registration Statement.

The Company rely on internal generate funds from revenue and advances from director for the payment of salary and social insurance expenses, as all use of proceeds from public offering was fully utilized. All of aforementioned expenses were direct payment to non-related third-party service provider.

Purchases of Equity Securities by the Registrant and Affiliated Purchasers

We have not repurchased any shares of our common stock during the fiscal year ended December 31, 2022.

Other Stockholder Matters

None.

ITEM 6. SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations for the fiscal year ended December 31, 2022 should be read in conjunction with our Financial Statements and corresponding notes to those financial statements that are included in this Annual Report on Form 10-K. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations, and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors and Special Note Regarding Forward-Looking Statements in this report. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” “target”, “forecast” and similar expressions to identify forward-looking statements.

Company Overview

The Company has seen a business opportunity in wholesaling and retailing high quality, sustainable, environmentally friendly bio-carbon-based fertilizer (herein referred to as “BCBF”), which is capable of not only increasing the crop yield but also at the same time preserving the environment. The Company’s BCBF is sourced from, and produced by, a third party through heating straw in a closed container with little or no available air. This method is also known as thermal decomposition of organic material under limited supply of oxygen at relatively low temperature. In accordance with requirements imposed by the PRC Ministry of Agriculture, the Company’s Supplier of BCBF has registered with Sichuan Province Provincial Department of Agriculture and Rural Affairs, which has an effective period of 5 years, from December 2019 to December 2024. The Company does not maintain or operate any production and/or manufacturing of any BCBF facility, machine and/or equipment.

The Company is currently wholesaling and retailing BCBF through its wholly owned subsidiary SCQC. Management of the Company believes that the BCBF sold by the Company is capable of maintaining soil fertility, enhancing crop yield, improving soil structure, improving water and fertilizer retention capability and improving fertilizer utilization efficiency and effectiveness. This is achieved through balancing carbon and nitrogen content, neutralizing soil pH while at the same time creating soil particle structure that is conducive to plant growth.

The BCBF sold by the Company, produced through straw thermal decomposition, replaces the function of activated carbon. The combination of soil and BCBF is capable of absorbing and reducing pollution content such as heavy metals from agricultural residual wastes. Further, the combination of water and BCBF is capable of purifying water by producing carbohydrate and glucose, which could be absorbed by, and is conducive to the growth of, plants. Additionally, BCBF possesses outstanding water storage capacity, which can store up to 10 times the water content when compared to soil without BCBF, which in turn provides farmers greater flexibility during times of hardship such as a drought.

As such, the management of the Company believes that the Company’s BCBF is not only a superior option compared to conventional fertilizer in terms of environmentally sustainability, but also from an economic perspective due to the improvement in crop yield quality and quantity. The Company’s BCBF consists of roughly 45% organic matter, 20% bio-charcoal, 10% humic acid, 5% NPK and boats an effective microorganism count of 20,000,000 per gram.

On July 25, 2022, the Company ventures into online retailing business through e-commerce platform, retailing a series of daily use products covering from healthcare products, cosmetic products, fashion products, household products and so forth. Customer will place order through platform and make payment accordingly of which shall be collected by Company. Meanwhile Company shall place exact order towards supplier and supplier will deliver such ordered products directly to customer, settlement between Company and supplier will take place once a week. It is worth mentioning that the Company act as the intermediary role and do not keep any form of inventory throughout the transaction.

Results of operations

Year ended December 31, 2022

For the years ended December 31, 2022 and 2021, the Company has generated a revenue of $118,396 and $105,317, respectively. Breakdown of revenue as following:

For the year ended December 31, 2022, the Company has experience significant improvement in total revenue due to the establishment of new business segment, which is the online retailing business through e-commerce platform. For the year ended December 31, 2022, the revenue of BCBF trading business has been reduced because the sales of BCBF have decreased. For the year ended December 31, 2022, the BCBF trading business segment and the online retailing business segment contributed 29% and 71% of the total revenue respectively.

Years ended December 31, 2022 and 2021

The Company generated revenue in the amount of $118,396 for the year ended December 31, 2022 while the cost of revenue was $19,475, which resulted in gross profit of $98,921 and a gross margin of 84%. For the year ended December 31, 2022, the Company generated revenue from BCBF trading business in the amount of $33,972 while the cost of revenue for was $19,475, which resulted in gross profit of $14,497 and a gross margin of 43%. For the year ended December 31, 2022, the Company generated revenue from online business in the amount of $84,424 while the cost of revenue for was none, which resulted in gross profit of $84,424 and a gross margin of 100%.

The Company generated revenue in the amount of $105,317 for the year ended December 31, 2021 while the cost of revenue was $57,178, which resulted in gross profit of $48,139 and a gross margin of 46%.

The Company has improved the revenue due to the establishment of new business segment, which is the online retailing business through e-commerce platform. Fluctuation in gross profit margin of BCBF trading business which caused by fluctuation in unit selling price, may vary amongst customers, depending on number of factors including customer historical purchase quantity and payment terms. The gross profit margin of online business may vary amongst customers due to the types of products required by the customers based on their consumption behaviors.

The general and administrative expenses for the year ended December 31, 2022 and 2021 were $173,471 and $270,307 respectively, primarily related to salary and social contribution, storage and logistic expenses, lease expenses, audit fees and consultancy fees. The general and administrative expenses have been reduced because the consultancy fee has decreased significantly as the business consultancy fee is being charged one-time off only.

As result, the Company incurred an operating loss of $74,550 for the year ended December 31, 2022 and incurred an operating loss of $222,168 for the year ended December 31, 2021.

Liquidity and Capital Resources

Years ended December 31, 2022 and 2021

Cash Used In Operating Activities

For the year ended December 31, 2022, the Company realized cash provided by operating activity in the amount of $120,469, of which primarily consist of net loss, offsetting by decreased in inventories, increased in prepayment and increased in other payables.

For the year ended December 31, 2021, the Company used $161,812 in operating cash flow, of which primarily consist of net loss and increased in inventories, offsetting by decreased in prepayment and increased in other payables.

Cash Used In Investing Activities

For the year ended December 31, 2022, the Company does not have any investing activities affecting cash position.

For the year ended December 31, 2021, the Company does not have any investing activities affecting cash position.

Cash Provided by Financing Activities

For the year ended December 31, 2022, the Company realized cash provided by financing activity in the amount of $84,561, of which consist of advance from director.

For the year ended December 31, 2021, the Company realized cash provided by financing activity in the amount of $109,891, of which consist of proceed from issuance of share offsetting by repayment to director.

Foreign Currency

Most of our revenues and operating expenses are denominated in Renminbi. The Renminbi is currently freely convertible under the “current account,” which includes dividends, trade and service-related foreign exchange transactions, but not under the “capital account,” which includes foreign direct investment and loans. Under our current corporate structure, our company in the United States may rely on dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have.

Under existing PRC foreign exchange regulations, payments of current account items, including payment of dividends, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval of the State Administration of Foreign Exchange, or SAFE, by complying with certain procedural requirements. Our PRC subsidiaries may also retain foreign exchange in its current account, subject to a ceiling approved by SAFE, to satisfy foreign exchange liabilities or to pay dividends. However, we cannot assure you that the relevant PRC governmental authorities will not limit or eliminate our ability to purchase and retain foreign currencies in the future.

Since a significant amount of our future revenues will be denominated in Renminbi, the existing and any future restrictions on currency exchange may limit our ability to utilize revenues generated in Renminbi to fund our business activities outside China, if any, or expenditures denominated in foreign currencies.

Foreign exchange transactions under the capital account are subject to limitations and require registration with or approval by the relevant PRC governmental authorities. In particular, any transfer of funds from us to any of our PRC subsidiaries, either as a shareholder loan or as an increase in registered capital, is subject to certain statutory limit requirements and registration or approval of the relevant PRC governmental authorities, including the relevant administration of foreign exchange and/or the relevant examining and approval authority. Our ability to use the U.S. dollar proceeds of the sale of our equity or debt to finance our business activities conducted through our PRC subsidiaries will depend on our ability to obtain these governmental registrations or approvals. In addition, because of the regulatory issues related to foreign currency loans to, and foreign investment in, domestic PRC enterprises, we may not be able to finance the operations of our PRC subsidiaries by loans or capital contributions. We cannot assure you that we can obtain these governmental registrations or approvals on a timely basis, if at all.

The amount of cash denominated in RMB is approximately CNY1,573,043 (Equivalent to USD227,680) as of December 31, 2022.

Off-balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as of December 31, 2022.

Contractual Obligations

As a smaller reporting company, we are not required to provide the aforementioned information.

Critical Accounting Policies

Recent accounting pronouncements

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326). ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted.

The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company’s consolidated financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable to smaller reporting companies.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

TABLE OF CONTENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of YCQH Agricultural Technology Co. Ltd:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of YCQH Agricultural Technology Co. Ltd together with its subsidiaries (“the Company”) as of December 31, 2022, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

Going concern uncertainty

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company incurred loss of $74,450 for the year ended December 31, 2022 resulting in accumulated deficit of $389,987 and a working capital deficit of $263,641 that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 4. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Emphasis of Matter

The Company has significant transactions with a director, which are described in Note 8 to the financial statements. Transactions involving related party cannot be presumed to be carried out on an arm’s length basis, as the requisite conditions of competitive, free market dealings may not exist.

/s/ Onestop Assurance PAC

We have served as the Company’s auditor since 2021.

Singapore

March 30, 2023

YCQH AGRICULTURAL TECHNOLOGY CO. LTD

AUDITED CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares or otherwise stated)

See accompanying notes to consolidated financial statements.

YCQH AGRICULTURAL TECHNOLOGY CO. LTD

AUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR YEARS ENDED DECEMBER 31, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares or otherwise stated)

See accompanying notes to consolidated financial statements.

YCQH AGRICULTURAL TECHNOLOGY CO. LTD

AUDITED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

FOR YEARS ENDED DECEMBER 31, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares or otherwise stated)

See accompanying notes to consolidated financial statements

YCQH AGRICULTURAL TECHNOLOGY CO. LTD

AUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR YEARS ENDED DECEMBER 31, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares or otherwise stated)

See accompanying notes to consolidated financial statements.

YCQH AGRICULTURAL TECHNOLOGY CO. LTD

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR YEARS ENDED DECEMBER 31, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares or otherwise stated)

1. ORGANIZATION AND BUSINESS BACKGROUND

YCQH Agricultural Technology Co. Ltd., was incorporated on October 15, 2019 under the laws of the State of Nevada of which Ms. Wang Min was appointed the President, Secretary, Treasurer and sole director of our board.

The Company primarily operates in bio-carbon-based fertilizer (“BCBF”) trading business, including wholesaling and retailing to customer mainly based in People Republic of China, sourcing directly from producers in China. The Company does not maintain and operate any production and manufacturing of BCBF facility or machine and equipment. The Company ventures into online retailing business through e-commerce platform, retailing a series of daily use products covering from healthcare products, cosmetic products, fashion products, household products and so forth. The Company acts as the intermediary role and do not keep any form of inventory throughout the transaction.

On December 16, 2019, the Company acquire YCQH Holding Limited, a company incorporated in Republic of Seychelles. In the same day YCQH Seychelles acquire YCQH Agricultural Technology Co. Limited, a company incorporated in Hong Kong.

On December 10, 2019, the YCQH HK incorporate YCWB Agricultural Technology Co. Limited, a wholly foreign owned enterprise, in SiChuan Province, China, with Ms. Wang Min as the legal representative.

On June 15, 2020, the Company through subsidiary YCWB Agricultural Technology Co. Limited acquired SCQC Agriculture Co. Limited, a company incorporated in SiChuan Province, China for a consideration of CNY 1,169,996 (approximate $165,605) with carrying value on book of CNY 1,168,554 (approximate $165,401) from third party. The premium was accounted as expense for the year ended December 31, 2020.

The Company’s executive office is located at No. 1104, Ren Min Nan Road No. 45, Wuhou District, Chengdu, Sichuan Province, China 610000.

2. BASIS OF PRESENTATION

The accompanying consolidated financial statements of the Company are prepared pursuant to the rules and regulations of the U.S. Securities and Exchanges Commission (“SEC”) and in conformity with generally accepted accounting principles in the U.S. (“US GAAP”). All material inter-company accounts and transactions have been eliminated in consolidation. The Company has adopted December 31 as its fiscal year end.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of estimates

The preparation of the consolidated 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 assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. Under the PRC Foreign Exchange Control Regulations and Administration of Settlement, Sales and Payment of Foreign Exchange Regulations, the Company is permitted to exchange Chinese Renminbi for foreign currencies through banks that are authorized to conduct foreign exchange business.

Accounts Receivable

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable. The Company extends credit to its customers in the normal course of business and generally does not require collateral. The Company’s credit terms are dependent upon the segment, and the customer. The Company assesses the probability of collection from each customer at the outset of the arrangement based on a number of factors, including the customer’s payment history and its current creditworthiness. If in management’s judgment collection is not probable, the Company does not record revenue until the uncertainty is removed.

Management performs ongoing credit evaluations, and the Company maintains an allowance for potential credit losses based upon its loss history and its aging analysis. The allowance for doubtful accounts is the Company’s best estimate of the amount of credit losses in existing accounts receivable. Management reviews the allowance for doubtful accounts each reporting period based on a detailed analysis of trade receivables. In the analysis, management primarily considers the age of the customer’s receivable, and also considers the creditworthiness of the customer, the economic conditions of the customer’s industry, general economic conditions and trends, and the business relationship and history with its customers, among other factors. If any of these factors change, the Company may also change its original estimates, which could impact the level of the Company’s future allowance for doubtful accounts. If judgments regarding the collectability of receivables were incorrect, adjustments to the allowance may be required, which would reduce profitability.

Accounts Receivable are recognized and carried at the original invoice amount less an allowance for any uncollectible amounts. An estimate for doubtful accounts receivable is made when collection of the full amount is no longer probable. Bad debts are written off as identified. No allowance for doubtful accounts was made for both years ended December 31, 2022 and 2021.

Lease

The Company adopted the ASU No. 2016-02, on October 15, 2019 (date of inception). The Company leases office space for fixed periods pre-emptive extension options. The Company recognizes lease payments for its short-term lease on a straight-line basis over the lease term.

As of December 31, 2022, the Company have one operating lease of which lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease.

In determining the present value of the unpaid lease payments, ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As most of the Company leases do not provide an implicit rate, the Company uses its incremental borrowing rate as the discount rate for the lease. The Company incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments.

Revenue Recognition

Revenue is generated through sale of goods, primarily Bio-Carbon-Based-Fertilizer (“BCBF”). Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods and services. The Company applies the following five-step model in order to determine this amount:

The Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under Topic 606, the Company records revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable. The Company records revenue from the sale of product upon shipment or delivery of the products to the customer.

The second stream of revenue is generated through online retailing business, adopting ASU 2016-08, Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations. Under this policy, the Company should determine whether it is a principal or an agent when there is third party involved in providing goods and services to a customer. In our online retailing business, the Company was identified as an agent as the Company do not retain any form of inventory nor provides any form of after sales service and logistic but merely rely on supplier to fulfill such purposes. As such, revenue is being recognized on net basis, i.e. gross revenue received from customer deduct the cost of purchase to supplier. The Company recognized the revenue generated through online retailing business at the point of products delivery and hence some of the revenue received shall be classified as deferred revenue when the products have not been shipped out by the suppliers. As of December 31, 2022, the Company reported deferred revenue of $118,868, reflecting advance payments from customers for orders received, with the products not yet delivered and the related revenue recognition criteria unmet.

Shipping, Storage and Handling costs

Costs for shipping, storage and handling activities, including those activities that occur subsequent to transfer of control to the customer, are recorded as general and administrative expense and are expensed as incurred. The Company accrues costs for shipping, storage and handling activities that occur after control of the promised good has transferred to the customer.

Earnings Per Share

The Company reports earnings per share in accordance with ASC 260 “Earnings Per Share”, which requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock. Further, if the number of common shares outstanding increases as a result of a stock dividend or stock split or decreases as a result of a reverse stock split, the computations of a basic and diluted earnings per share shall be adjusted retroactively for all periods presented to reflect that change in capital structure.

The Company’s basic earnings per share is computed by dividing the net income available to holders by the weighted average number of the Company’s ordinary shares outstanding. Diluted earnings per share reflects the amount of net income available to each ordinary share outstanding during the period plus the number of additional shares that would have been outstanding if potentially dilutive securities had been issued.

Inventories

Inventories consist of finished goods and are stated at the lower of cost or net realizable value using the first-in first-out method. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. The Company reviews its inventories regularly for possible obsolete goods and establishes reserves when determined necessary.

Related parties

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

Income Taxes

The Company accounts for income taxes using the asset and liability method prescribed by ASC 740 “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the years in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.

New U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “U.S. Tax Reform”), was signed into law on December 22, 2017. The U.S. Tax Reform modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transaction tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. Taxpayers may elect to pay the one-time transition tax over eight years, or in a single lump-sum payment.

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 statements of operations.

The reporting currency of the Company is United States Dollars (“US$”). The Company’s subsidiary in Seychelles, Hong Kong and PRC which functional currencies are United States Dollars (“US$”), Hong Kong Dollars (“HK$”) and Chinese Renminbi (“CNY¥”) respectively.

In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods:

 SCHEDULE OF FOREIGN CURRENCIES TRANSLATION

Fair Value Measurement

Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures”, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The statement clarifies that the exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability in the market in which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset or liability. It also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and that market participant assumptions include assumptions about risk and effect of a restriction on the sale or use of an asset.

This ASC establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

Recently issued accounting pronouncements

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326). ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted.

The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company’s consolidated financial statements.

Economic and political risks

Substantially all the Company’s services are conducted in the People’s Republic of China (“PRC”), of which operations in the PRC are subject to special considerations and significant risks not typically associated with companies in rest of the world. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.

COVID-19 Uncertainty

An outbreak of respiratory illness caused by the novel coronavirus, commonly referred as “COVID-19” emerged in late 2019 and has spread globally. The COVID-19 is considered to be highly contagious and poses a serious public health threat. The World Health Organization labeled the COVID-19 outbreak as a pandemic on March 11, 2020, given its threat beyond a public health emergency of international concern the organization had declared on January 30, 2020.

The epidemic has resulted in social-distancing restrictions, travel restrictions, and the temporary closure of stores and facilities. The negative impacts of the COVID-19 outbreak on our business may include, but not strictly be limited to:

We are unable to accurately predict the impact that the COVID-19 will have due to various uncertainties, including the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak globally, and effectiveness of the actions that may be taken by governmental authorities. Additionally, it is possible that we may face similar difficulties from future events, such as this, should there be at any point another global pandemic. As of the current date, we do not believe that we have been directly impacted by Covid-19. However, economies throughout the world have been impacted significantly in a vast number of ways, and we cannot state with any level of certainty to what extent we may have been indirectly impacted by market conditions as a result of the pandemic and/or if the pandemic has forestalled, in any capacity, our growth to date.

4. GOING CONCERN UNCERTAINTIES

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company incurred a loss of $74,450 for the year ended December 31, 2022 resulting in accumulated deficit of $389,987 and a working capital deficit of $263,641.

The Company’s cash position may not be significant enough to support the Company’s daily operations. While the Company believes in the viability of its strategy and in its ability to raise additional funds, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon its ability to improve profitability and the ability to acquire funding through public offering. If funding from public offering is insufficient, then the Company shall rely on the financial support from its controlling shareholder.

These and other factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that financial statements are issued. These financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not being able to continue as a going concern.

5. INVENTORIES

As of December 31, 2022 and 2021, the Company’s inventories consist of following:

 SCHEDULE OF INVENTORIES

No inventories allowance has been provided for years ended December 31, 2022 and 2021.

6. PREPAYMENT, DEPOSITS AND OTHER RECEIVABLES

As of December 31, 2022 and 2021, the Company’s prepayment, deposits and other receivables consist of following:

SCHEDULE OF PREPAYMENT, DEPOSITS AND OTHER RECEIVABLES

7. OTHER PAYABLES AND ACCRUED LIABILITIES

As of December 31, 2022 and 2021, the Company’s other payables and accrued liabilities consist of following:

SCHEDULE OF OTHER PAYABLES AND ACCRUED LIABILITIES

8. AMOUNT DUE TO A DIRECTOR

SCHEDULE OF RELATED PARTY TRANSACTION

As of December 31, 2022, the Company has an outstanding payable of $321,933 to our director, Ms. Wang Min, which is unsecured and non-interest bearing with no fixed terms of repayment. During the year ended December 31, 2022, the Company recorded an amount due to our director, Ms. Wang Min of $84,561.

9. SHAREHOLDERS’ EQUITY

As of December 31, 2022 and 2021, the Company has 101,400,000 shares and 101,400,000 shares of common stock issued and outstanding, respectively.

During the year ended December 31, 2022, the Company has not issued any shares.

During the year ended December 31, 2021, the Company issued an aggregated of 11,400,000 shares of its common stock at $0.01 per share for aggregate gross proceeds of $114,000.

The Company has 800,000,000 shares of common stock and 200,000,000 shares of preference stock authorized, no share of preference stock issued and outstanding.

10. LEASE RIGHT-OF-USE ASSET AND LEASE LIABILITIES

On November 11, 2020, the management of the Company through indirect wholly owned subsidiary SCQC Agriculture Co. Limited enter into a tenancy agreement to rent an office with an area of approximate 133 square meter for monthly rental of CNY9,200 (approximate $1,429) for a period of two years.

On December 01, 2022, the management of the Company through indirect wholly owned subsidiary SCQC Agriculture Co. Limited enter into a tenancy agreement to rent an office with an area of approximate 232 square meter for monthly rental of CNY24,900 (approximate $3,604) for a period of two years.

The initial recognition of operating lease right and lease liability as follows:

SCHEDULE OF OPERATING LEASE RIGHT AND LEASE LIABILITY

As of December 31, 2022, operating lease right-of-use assets as follows:

As of December 31, 2022, operating lease liability as follows:

Other information:

SCHEDULE OF COMPONENTS OF LEASE EXPENSE

11. CONCENTRATION OF RISK

Customer Concentration

For the year ended December 31, 2022, the Company generated total revenue of $118,396, of which one customer accounted for more than 10% of the Company’s total revenue.

For the year ended December 31, 2021, the Company generated total revenue of $105,317, of which three customers accounted for more than 10% of the Company’s total revenue.

SCHEDULE OF CUSTOMER CONCENTRATION RISK

Vendor Concentration

For the year ended December 31, 2022, the Company incurred cost of revenue of $19,475 solely accounted by single vendor.

For the year ended December 31, 2021, the Company incurred cost of revenue of $57,178 solely accounted by single vendor.

SCHEDULE OF VENDOR CONCENTRATION RISK

12. INCOME TAXES

The Company being a United States entity is subjected to the United States federal income tax at 21%. No provision for income taxes in the United States has been made as the Company had no United States taxable income for years ended December 31, 2022 and 2021.

YCQH Holding Limited was incorporated in the Republic of Seychelles and, under the laws of Seychelles, is not subject to income taxes.

YCQH Agricultural Technology Co. Limited was incorporated in Hong Kong and is subject to Hong Kong income tax at a tax rate of 16.5%. (the first HK$ 2 million (equivalent US$ 258,000) of profits earned by the company will be taxed at half the current tax rate (i.e., 8.25%) whilst the remaining profits will continue to be taxed at the existing 16.5% tax rate.)

YCWB Agricultural Technology Co. Limited and SCQC Agriculture Co. Limited were incorporated in the PRC and with the company income tax rate of 25%. On top of company tax, PRC domestic sales are subjected to Value Added Tax (“VAT”) typically at 3% for being a Small-Scale Taxpayer with PRC revenue less than CNY 5,000,000, which is levied on the invoiced value of sales and is payable by the purchaser for agricultural related product. YCWB Agricultural Technology Co. Limited enjoyed preferential VAT rate of 1%. The Company is required to remit the VAT it collects to the tax authority. A credit is available whereby VAT paid on purchases can be used to offset the VAT due on sales.

Effective and Statutory Rate Reconciliation

The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates.

The following table summarizes a reconciliation of the Company’s income taxes expenses:

SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION

The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of December 31, 2022 and 2021:

SCHEDULE OF DEFERRED TAX ASSETS

Management believes that it is more likely than not that the deferred tax assets will not be fully realizable in the future. Accordingly, the Company provided for a full valuation allowance against its deferred tax assets of $84,047 as of December 31, 2022.

13. SEGMENT REPORTING

ASC 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and major customers in financial statements. The Company has two reportable segments based on business unit, bio-carbon-based fertilizer (“BCBF”) trading business and online retailing business and single reportable segment based on country, China.

In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes.

SCHEDULE OF SEGMENT REPORTING

14. SUBSEQUENT EVENTS

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after December 31, 2022 up through the date the Company issued the financial statements. No subsequent events have occurred that would require recognition or disclosure in the financial statements.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in the reports that 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 such information is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer, of the effectiveness of our disclosure controls and procedures as of December 31, 2022. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting, our chief executive officer concluded that our disclosure controls and procedures were not effective. 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 due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties and effective risk assessment; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines; and (4) lack of internal audit function due to the fact that the Company lacks qualified resources to perform the internal audit functions properly and that the scope and effectiveness of the internal audit function are yet to be developed. The aforementioned material weaknesses were identified by our chief executive officer in connection with the review of our financial statements as of December 31, 2022.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The internal controls for the Company are provided by executive management’s review and approval of all transactions. Our internal control over financial reporting also includes those policies and procedures that:

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of these controls.

As of December 31, 2022, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in 2013 and SEC guidance on conducting such assessments. Based on such evaluation, the Company’s management concluded that, during the period covered by this Report, our internal control over financial reporting were not effective due to the presence of material weaknesses.

Management’s Remediation Initiatives

Since 2021, we engaged Dude Business Consultants Limited as an external consultant to assist with the identification and address of complex and proper accounting issues.

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we also plan to initiate the following series of measures to further strengthen the Company’s internal controls going forward:

We anticipate that these initiatives will be at least partially, if not fully, implemented by the end of fiscal year 2022.

Changes in Internal Controls over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the year ended December 31, 2022, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.

None.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

Not applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Directors and Executive Officers

The name, address, age and titles of our executive officers and directors are as follows:

Wang Min – Chief Executive Officer, President, Secretary, Treasurer, Director

Ms. Wang Min received a degree in music from SiChuan Conservatory of Music, China in June 2007.

Ms. Wang is our founder and serves as our Chief Executive Officer, President, Secretary, Treasurer and Director since October 2019. Ms. Wang is primarily responsible for directing the growth, business expansion, financial, and operation affairs of the Company. Ms. Wang has more than 10 years of experience in the senior management roles in various relevant industries.

From October 2007 to September 2013, Ms. Wang worked for China Mobile Limited (HKG: 0941), a Chinese state-owned company that provides mobile voice and multimedia services through its nationwide mobile telecommunications network across mainland China and Hong Kong, as a Sales and Marketing Manager specializing in distribution channel management. From June 2014 to April 2017, Ms. Wang worked for Xinmandi Real Estate Co., Ltd, a property development and management company, as the assistant to Chairman. From November 2017 to December 2018, Ms. Wang worked for Chengdu Yichuang Xinrong Enterprise Management Co., Ltd, a corporate management advisory company, as the Deputy General Manager.

In January 2019, Ms. Wang founded, and to this date remains as a Chairperson with, Sichuan Yaocheng Qinghui Agrotech Co., Ltd, an agriculture technology company.

In October 2019, Ms. Wang founded YCQH Agricultural Technology Co. Ltd, and serves as our Chief Executive Officer, President, Secretary, Treasurer and Director.

Family Relationships

There are no family relationships between any director or executive officer of the Company.

Involvement in Certain Legal Proceedings

Our Director and our Executive Officer have not been involved in any of the following events during the past ten years:

Independence of Directors

We are not required to have independent members on our Board of Directors, and do not anticipate having independent Directors until such time as we are required to do so.

Code of Ethics

We have not adopted a formal Code of Ethics. The Board of Directors evaluated the business of the Company and the number of employees and determined that since the business is operated by a small number of persons, general rules of fiduciary duty and federal and state criminal, business conduct and securities laws are adequate ethical guidelines. In the event our operations, employees and/or Directors expand in the future, we may take actions to adopt a formal Code of Ethics.

Corporate Governance

The Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with the Securities and Exchange Commission (the “SEC”) and in other public communications made by the Company; and strives to be compliant with applicable governmental laws, rules and regulations. The Company has not formally adopted a written code of business conduct and ethics that governs the Company’s employees, officers and Directors as the Company is not required to do so.

In lieu of an Audit Committee, the Company’s Board of Directors, is responsible for reviewing and making recommendations concerning the selection of outside auditors, reviewing the scope, results and effectiveness of the annual audit of the Company’s financial statements and other services provided by the Company’s independent public accountants. The Board of Directors, the Chief Executive Officer and the Chief Financial Officer of the Company review the Company’s internal accounting controls, practices and policies.

Committees of the Board

Our Company currently does not have nominating, compensation, or audit committees or committees performing similar functions nor does our Company have a written nominating, compensation or audit committee charter. Our Director(s) believe that it is not necessary to have such committees, at this time, because the Director(s) can adequately perform the functions of such committees.

Audit Committee Financial Expert

Our Board of Directors has determined that we do not have a board member that qualifies as an “audit committee financial expert” as defined in Item 407(D)(5) of Regulation S-K, nor do we have a Board member that qualifies as “independent” as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(14) of the FINRA Rules.

We believe that our Director(s) are capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. The Director(s) of our Company does not believe that it is necessary to have an audit committee because management believes that the Board of Directors can adequately perform the functions of an audit committee. In addition, we believe that retaining an independent Director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the stage of our development and the fact that we have not generated any positive cash flows from operations to date.

Shareholder Proposals

Our Company does not have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for Directors. The Board of Directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our Company does not currently have any specific or minimum criteria for the election of nominees to the Board of Directors and we do not have any specific process or procedure for evaluating such nominees. The Board of Directors will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.

A shareholder who wishes to communicate with our Board of Directors may do so by directing a written request addressed to our President, at the address appearing on the first page of this Information Statement.

ITEM 11. EXECUTIVE COMPENSATION

The following tables set forth certain information about compensation paid, earned or accrued for services by our Executive Officer for the fiscal years ended December 31, 2022 and 2021:

Summary Compensation Table

Stock Option Grants

We have not granted any stock options to our executive officer since our incorporation.

Employment Agreements

We do not have an employment or consulting agreement with our Officer or Director.

Executive Compensation Philosophy

Our Board of Directors determines the compensation given to our executive officers in their sole determination. Our Board of Directors reserves the right to pay our executives or any future executives a salary, and/or issue them shares of common stock issued in consideration for services rendered and/or to award incentive bonuses which are linked to our performance, as well as to the individual executive officer’s performance. This package may also include long-term stock-based compensation to certain executives, which is intended to align the performance of our executives with our long-term business strategies. Additionally, while our Board of Directors has not granted any performance base stock options to date, the Board of Directors reserves the right to grant such options in the future, if the Board in its sole determination believes such grants would be in the best interests of the Company.

Incentive Bonus

The Board of Directors may grant incentive bonuses to our executive officer and/or future executive officers in its sole discretion, if the Board of Directors believes such bonuses are in the Company’s best interest, after analyzing our current business objectives and growth, if any, and the amount of revenue we are able to generate each month, which revenue is a direct result of the actions and ability of such executives.

Long-term, Stock Based Compensation

In order to attract, retain and motivate executive talent necessary to support the Company’s long-term business strategy we may award our executives and any future executives with long-term, stock-based compensation in the future, at the sole discretion of our Board of Directors, which we do not currently have any immediate plans to award.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELAED STOCKHOLDER MATTERS.

As of December 31, 2022 the Company has 101,400,000 shares of common stock issued and outstanding, which number of issued and outstanding shares of common stock have been used throughout this report.

Percentage values below are rounded to the nearest hundredths place.

Beneficial ownership in the table above has been determined in accordance with Rule 13d-3 under the Exchange Act. Under this rule, certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire shares (for example, upon exercise of an option or warrant) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares is deemed to include the amount of shares beneficially owned by such person by reason of such acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the following table does not necessarily reflect the person’s actual voting power at any particular date.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

On October 15, 2019, the Company issued 100,000 shares of restricted common stock, with a par value of $0.0001 per share, to Ms. Wang Min in consideration of $10. The $10 in proceeds went to the Company to be used as working capital. Ms. Wang serves as our Chief Executive Officer, President, Secretary, Treasurer and Director.

On November 28, 2019, the Company issued 49,900,000 shares of restricted common stock, with a par value of $0.0001 per share, to Ms. Wang Min in consideration of $4,990. The $4,990 in proceeds went to the Company to be used as working capital.

In regards to all of the above transactions we claim an exemption from registration afforded by Section 4a(2) and/or Regulation S of the Securities Act of 1933, as amended (“Regulation S”) due to the fact that all sales of stock were made to non-U.S. persons (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing.

For the year ended December 31, 2019, our director, Ms. Wang Min, has advanced $8,801 to the Company for working capital purpose. For the year ended December 31, 2020, Ms. Wang Min has further advanced $231,224 to the Company, of which breakdown as following:

As of June 15, 2020, cash consideration of CNY1,169,996 (approximate $165,605) was paid for the acquisition of SCQC by YCWB. Before that, our director, Ms. Wang Min, advanced CNY1,169,996 (approximate $165,605) for paid in capital of YCWB, and YCWB paid out to previous owner of SCQC as consideration.

After the acquisition of SCQC, Ms. Wang Min further advanced CNY330,004 (approximate $47,282) for paid in capital of YCWB, of which CNY10,004 (approximate $1,473) retained as working capital of YCWB, and CNY320,000 (approximate $45,809) were paid to SCQC as paid in capital of SCQC.

For the year ended December 31, 2020, our director, Ms. Wang Min, has further advanced, paid in capital and expenses on behalf of the Company for a total of $231,224.

As of December 31, 2020, the company has an outstanding payable to director of $240,025, which is unsecured and non-interest bearing with no fixed terms of repayment.

For the year ended December 31, 2021, our director, Ms. Wang Min, has further advanced expenses on behalf of the Company for a total of $26,964 while receiving a repayment by SCQC on behalf of the Company amounted CNY200,000 (approximate $31,472).

As of December 31, 2021, the Company has an outstanding payable to director of $235,517, which is unsecured and non-interest bearing with no fixed terms of repayment.

For the year ended December 31, 2022, our director, Ms. Wang Min, has further advanced expenses on behalf of the Company for a total of $89,227 while receiving a repayment by SCQC on behalf of the Company amounted CNY20,000 (approximate $2,811).

As of December 31, 2022, the Company has an outstanding payable to director of $321,933, which is unsecured and non-interest bearing with no fixed terms of repayment.