BIMT Bitmis Corporation (PK)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2024

or

☐ 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 333-214469

CAMBELL INTERNATIONAL HOLDING CORP.

(FORMERLY BITMIS CORP.)

(Exact name of registrant as specified in its charter)

1-17-1 Zhaojia Road

Xinglongtai District
Panjin City, Liaoning Province

People’s Republic of China

(Address of principal executive offices, Zip Code)

+86 15842767931

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

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

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

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

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

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

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

As of May 20, 2024, there were 7,250,750 common shares issued and outstanding.

CAMBELL INTERNATIONAL HOLDING CORP.

FORMERLY BITMIS CORP.

QUARTERLY REPORT ON FORM 10-Q

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CAMBELL INTERNATIONAL HOLDING

FORMERLY BITMIS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2024 AND JUNE 30, 2023

(Expressed in U.S. dollar, except for the number of shares)

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

CAMBELL INTERNATIONAL HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE INCOME (LOSS)

FOR THE NINE MONTHS ENDED MARCH 31, 2024 AND 2023

(Expressed in U.S. dollar, except for the number of shares)

(Unaudited)

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

CAMBELL INTERNATIONAL HOLDING CORP.

FORMERLY BITMIS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

FOR THE NINE MONTHS ENDED MARCH 31, 2024 AND 2023

(EXPRESSED IN U.S. DOLLAR, EXCEPT FOR THE NUMBER OF SHARES)

(Unaudited)

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

CAMBELL INTERNATIONAL HOLDING CORP.

FORMERLY BTMIS HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED MARCH 31, 2024 AND 2023

(Expressed in U.S. dollars)

(Unaudited)

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

CAMBELL INTERNATIONAL HOLDING CORP.

FORMERLY BITMIS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

(Unaudited)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Forward Looking Statement Notice

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and other financial information included in this Form 10-Q and our financial statements and notes thereto included in our annual report on Form 10-K for the fiscal year ended June 30, 2023 (the “2023 Form 10-K”).

Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “potential,” “believes,” “seeks,” “hopes,” “estimates,” “should,” “may,” “will,” “with a view to” and variations of these words or similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange rates; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission. For more information, see our discussion of risk factors located at Part I, Item 1A of our 2023 Form 10-K.

Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

Financial information contained in this Quarterly Report and in our unaudited interim financial statements is stated in United States dollars and is prepared in accordance with United States generally accepted accounting principles.

OVERVIEW

Corporate History and Structure

Cambell International Holding Corp., formerly known as Bitmis Corp.

Bitmis Corp. was incorporated in the State of Nevada on June 6, 2016. The Company originally intended to commence operations in the business of consulting in Thailand, but it was not successful. Thus, the Company became dormant in July 2020.

Custodianship. On April 12, 2022, the Eighth Judicial District Court in Clark County, Nevada Case No: A-22-849683-B appointed Custodian Ventures LLC, a Wyoming limited liability company of which Mr. David Lazar was managing member (“Custodian Ventures”), as the Company’s custodian. Upon Custodian Ventures’ appointment, all of the remaining former officers and directors of the Company resigned.

David Lazar, 31, a private investor, served as CEO and Chairman of the Company commencing December 9, 2021.

2022 Transaction. On September 22, 2022, as a result of a private transaction (the “2022 Transaction”), 10,000,000 shares of the Company’s series A preferred stock, $0.001 par value per share, were transferred from Custodian Ventures to Xiaoyan Yuan (the “Purchaser”) for a cash consideration of $430,000 constituting personal funds of the Purchaser. As a result, the Purchaser became the holder of 90% of the voting rights of the issued and outstanding share capital of the Company.

On September 22, 2022, David Lazar resigned from all of his positions with the Company. Concurrently, and effective on the date of the transfer, Xiaoyan Yuan consented to act as the Company’s Chief Executive Officer, President, Chief Financial Officer, and sole director and also assumed the positions of Secretary and Treasurer.

Share Exchange with Cambell International Holding Limited. On December 30, 2022, we entered into a share exchange agreement (“Share Exchange Agreement”) with (i) Cambell International Holding Limited (“Cambell International”), a limited liability company incorporated in the British Virgin Islands on September 23, 2020; (ii) the shareholders of Cambell International (the “Cambell Shareholders”); and (iii) Ms. Xiaoyan Yuan, the holder of all of our outstanding shares of preferred stock, to acquire all the issued and outstanding capital stock of Cambell International in exchange for the issuance to the Cambell Shareholders of an aggregate of 1,000,000 shares (the “Shares”) of our common stock and the transfer by Ms. Yuan to the Cambell Shareholders of 9,000,000 shares of our series A preferred stock owned by her (“Reverse Acquisition”). The Reverse Acquisition was closed on December 30, 2022.

Amendments to Articles of Incorporation

Name Change to Campbell International Holding Corp. Effective as of May 25, 2023, our Board of Directors and majority consenting shareholders signed a joint written consent (the “Campbell Joint Written Consent”), approving an amendment to our articles of incorporation to change our name and trading symbol. The Campbell Joint Written Consent was approved by all members of the Board of Directors and by a majority of our shareholders holding of record an aggregate of 10,406,400 shares of our common stock.

On June 29, 2023, an amendment to the articles of incorporation was filed with the Nevada Secretary of State (the “Campbell Certificate of Amendment”) to effect the change of name from “Bitmis Corp.” to “Campbell International Holding Corp.” (the “Campbell Company Name Change”). On July 10, 2023, the Company also filed an issuer notification form with FINRA (the “Issuer Notification”) reflecting the Campbell Company Name Change and requesting a change in its trading symbol from “BITM” to “KAFC” or such other trading symbol as may be available. The Campbell Certificate of Amendment to the Corporation’s Articles of Incorporation was effective as of the date of acceptance by the Secretary of State of the State of Nevada or June 29, 2023.

The foregoing description of the Campbell Certificate of Amendment and Campbell Joint Written Consent do not purport to be complete and are qualified in their entirety by reference to the full text of the Campbell Certificate of Amendment and Campbell Joint Written Consent, which were filed as Exhibit 3.1 and Exhibit 99.1, respectively, to the Current Report on Form 8-K with the Securities and Exchange Commission on July 11, 2023.

Name Change to Cambell International Holding Corp. Effective as of July 19, 2023, our Board of Directors and majority consenting shareholders signed a joint written consent (the “Cambell Joint Written Consent”), approving an amendment to the articles of incorporation to change the name of the Company and the Company’s trading symbol. The Cambell Joint Written Consent was approved by all members of our Board of Directors and by the majority of our shareholders holding of record an aggregate of 10,406,400 shares of our common stock.

On July 25, 2023, a further amendment to our articles of incorporation was filed with the Nevada Secretary of State to effect the change of name from “Campbell International Holding Corp.” to “Cambell International Holding Corp.” (the “Cambell Certificate of Amendment”). The Cambell Certificate of Amendment to our articles of incorporation was effective as of the date of acceptance by the Secretary of State of the State of Nevada on July 25, 2023.

The foregoing description of the Cambell Certificate of Amendment and Cambell Joint Written Consent do not purport to be complete and are qualified in their entirety by reference to the full text of the Cambell Certificate of Amendment and Cambell Joint Written Consent, which were filed as Exhibit 3.1 and Exhibit 99.1 to the Current Report on Form 8-K with the Securities and Exchange Commission on August 10, 2023.

Current Corporate Structure

Following the consummation of the Reverse Acquisition, we engage in the research and development of extraction processes of natural β -carotene, the planting and harvesting of raw materials, and the production, distribution, marketing, and sale of natural β -carotene health food products. Natural β -carotene is a safe source of vitamin A which is an essential nutrient important for vision, growth, cell division, reproduction, and immunity as well as containing antioxidant properties which offer protection from diabetes, heart disease, and cancer.

The Company owns 100% of the issued and outstanding capital stock of Cambell International Holding Limited, which was incorporated on September 23, 2020 under the law of the British Virgin Islands. Cambell International Holding Limited is a holding company holding the following entities:

The following diagram illustrates our corporate structure as of the date of this Quarterly Report:

Contractual Arrangements among WFOE, Liaoning Kangbaier and Liaoning Kangbaier’s Shareholders

Liaoning Kangbaier Biotechnology Development Co., Ltd

Liaoning Kangbaier Biotechnology Development Co., Ltd. (“Liaoning Kangbaier”), the VIE, was formed under the laws of the PRC on September 22, 2015. We operate our research, development, production and marketing business of natural B-carotene based nutritional products through Liaoning Kangbaier and its wholly owned subsidiaries, Doron Kangbaier Biotechnology Co. Ltd. and Liaoning BaiJiaKang Health Technology Co. Ltd., in China.

Pursuant to PRC law, each entity formed under PRC law must have a business scope as submitted to the Administration for Market Regulation or its local counterpart. Depending on the particular business scopes, approval by the relevant competent regulatory agencies may be required prior to commencement of business operations. Since the sole business of our WFOE is to provide Liaoning Kangbaier with technical support, consulting services and other management services relating to its day-to-day business operations and management in exchange for a service fee approximately equal to all pre-tax profits of Liaoning Kangbaier and its subsidiaries (minus any accumulated losses (if any) of Liaoning Kangbaier and its subsidiaries in the previous fiscal year, and the amount required for operating funds, expenditures, taxes and other statutory contributions in any particular fiscal year), such business scope is appropriate under PRC law. Liaoning Kangbaier, on the other hand, is also able to, pursuant to its business scope, conduct the business of manufacturing nutritional products. Liaoning Kangbaier is approved by the Market Regulation Bureau of Panjin to engage in its business.

We control Liaoning Kangbaier through a series of contractual arrangements, or “VIE Agreements,” which are described below. The VIE Agreements are designed so that the operations of the VIE are solely for the benefit of the WFOE and ultimately, the Company. As such, under U.S. GAAP, the Company is deemed to have a controlling financial interest in, and be the primary beneficiary of, the VIE for accounting purposes only and must consolidate the VIE.

While we do not have any equity interest in our consolidated affiliated entities, we have been and are expected to continue to be dependent on them to operate our business as long as there is limitation or prohibition in the interpretation and application by local governments of regulations concerning foreign investments in companies such as our consolidated affiliated entities. We rely on our consolidated affiliated entities to maintain or renew their respective qualifications, licenses or permits necessary for our business in China. We believe that under the VIE Agreements, we have substantial control over our consolidated affiliated entities and their respective shareholders to renew, revise or enter into new contractual arrangements prior to the expiration of the current arrangements on terms that would enable us to continue to operate our business in China after the expiration of the current arrangements, or pursuant to certain amendments and changes of the current applicable PRC laws, regulations and rules on terms that would enable us to continue to operate our business in China legally. While we currently do not anticipate any changes to PRC laws in the near future that may impact our ability to carry out our business in China, no assurances can be made in this regard. For a detailed description of the risks associated with our corporate structure and the contractual arrangements that support our corporate structure, see “Item 1A. Risk Factors - Risks Relating to our Commercial Relationship with our VIE” in our 2023 Annual Report filed with the SEC on October 20, 2023.

The following is a summary of the VIE Agreements among the WFOE, Liaoning Kangbaier and Liaoning Kangbaier’s Shareholders.

On November 27, 2022, Baijiakang Consulting, Liaoning Kangbaier and Liaoning Kangbaier’s Shareholders entered into a series of contractual agreements for Liaoning Kangbaier to qualify as a variable interest entity or VIE (the “VIE Agreements”). The VIE Agreements consist of the following:

Consulting Service Agreement. Pursuant to the terms of the Exclusive Consulting and Service Agreement dated November 27, 2022, between Baijiakang Consulting and Liaoning Kangbaier (the “Consulting Service Agreement”), Baijiakang Consulting is the exclusive consulting and service provider to Liaoning Kangbaier to provide business-related software research and development services; design, installation, and testing services; network equipment support, upgrade, maintenance, monitor, and problem-solving services; employees training services; technology development and sublicensing services; public relations services; market investigation, research, and consultation services; short to medium term marketing plan-making services; compliance consultation services; marketing events and membership related activities planning and organizing services; intellectual property permits; equipment and rental services; and business-related management consulting services. Pursuant to the Consulting Service Agreement, the service fee is the remaining amount after Liaoning Kangbaier’s profit before tax in the corresponding year deducts Liaoning Kangbaier’s losses, if any, in the previous year, the necessary costs, expenses, taxes, and fees incurred in the corresponding year, and the withdraws of the statutory provident fund. Liaoning Kangbaier agreed not to transfer its rights and obligations under the Consulting Service Agreement to any third party without prior written consent from Baijiakang Consulting. In addition, Baijiakang Consulting may transfer its rights and obligations under the Consulting Service Agreement to Baijiakang Consulting’s affiliates without Liaoning Kangbaier’s consent, but Baijiakang Consulting shall notify Liaoning Kangbaier of such transfer. This Agreement is valid for a term of 10 years subject to any extension requested by Baijiakang Consulting unless terminated by Baijiakang Consulting unilaterally prior to the expiration.

Business Operation Agreement. Pursuant to the terms of the Business Operation Agreement dated November 27, 2022, among Baijiakang Consulting, Liaoning Kangbaier, and the shareholders of Liaoning Kangbaier (the “Business Operation Agreement”), Liaoning Kangbaier has agreed to subject the operations and management of its business to the control of Baijiakang Consulting. According to the Business Operation Agreement, Liaoning Kangbaier is not allowed to conduct any transactions that has substantial impact upon its operations, assets, rights, obligations, and personnel without the Baijiakang Consulting’s written approval. The shareholders of Liaoning Kangbaier and Liaoning Kangbaier will take Baijiakang Consulting’s advice on appointment or dismissal of directors, employment of Liaoning Kangbaier’s employees, regular operation, and financial management of Liaoning Kangbaier. The shareholders of Liaoning Kangbaier have agreed to transfer any dividends, distributions, or any other profits that they receive as the shareholders of Liaoning Kangbaier to Baijiakang Consulting without consideration. The Business Operation Agreement is valid for a term of 10 years or longer upon the request of Baijiakang Consulting prior to the expiration thereof. The Business Operation Agreement may be terminated earlier by Baijiakang Consulting with a 30-day written notice.

Proxy Agreement. Pursuant to the terms of the Proxy Agreements dated November 27, 2022, among Baijiakang Consulting, and the shareholders of Liaoning Kangbaier (each, the “Proxy Agreement”, collectively, the “Proxy Agreements”), each shareholder of Liaoning Kangbaier has irrevocably entrusted his/her shareholder rights as Liaoning Kangbaier’s shareholder to Baijiakang Consulting, including but not limited to, proposing the shareholder meeting, accepting any notices with regard to the convening of shareholder meeting and any other procedures, conducting voting rights, and selling or transferring the shares held by such shareholder, for 10 years or earlier if the Business Operation Agreement was terminated for any reasons.

Equity Disposal Agreement. Pursuant to the terms of the Equity Disposal Agreement dated November 27, 2022, among Baijiakang Consulting, Liaoning Kangbaier, and the shareholders of Liaoning Kangbaier (the “Equity Disposal Agreement”), the shareholders of Liaoning Kangbaier granted Baijiakang Consulting or its designees an irrevocable and exclusive purchase option (the “Option”) to purchase Liaoning Kangbaier’s all or partial equity interests and/or assets at the lowest purchase price permitted by PRC laws and regulations. The option is exercisable at any time at Baijiakang Consulting’s discretion in full or in part, to the extent permitted by PRC law. The shareholders of Liaoning Kangbaier agreed to give Liaoning Kangbaier the total amount of the exercise price as a gift, or in other methods upon Baijiakang Consulting’s written consent to transfer the exercise price to Liaoning Kangbaier. The Equity Disposal Agreement is valid for a term of 10 years or longer upon the request of Baijiakang Consulting.

Equity Pledge Agreement. Pursuant to the terms of the Equity Pledge Agreement dated November 27, 2022, among Baijiakang Consulting and the shareholders of Liaoning Kangbaier (the “Pledge Agreement”), the shareholders of Liaoning Kangbaier pledged all of their equity interests in Liaoning Kangbaier to Baijiakang Consulting, including the proceeds thereof, to guarantee Liaoning Kangbaier’s performance of its obligations under the Business Operation Agreement, the Consulting Service Agreement and the Equity Disposal Agreement (each, an “Agreement”, collectively, the “Agreements”). If Liaoning Kangbaier or its shareholders breach its respective contractual obligations under any Agreements, or cause to occur one of the events regards as an event of default under any Agreements, Baijiakang Consulting, as pledgee, will be entitled to certain rights, including the right to dispose of the pledged equity interest in Liaoning Kangbaier. During the term of the Pledge Agreement, the pledged equity interests cannot be transferred without Baijiakang Consulting’s prior written consent. The Pledge Agreement is valid until all the obligations due under the Agreements have been fulfilled.

The foregoing summaries of the VIE Agreements do not purport to be complete and are subject to, and qualified in their entirety by, the respective VIE Agreement, which are filed as Exhibits 10.2 through 10.6 to the Current Report on Form 8-K/A filed with the Securities and Exchange Commission on January 11, 2023.

See “Item 1. Financial Statements.”

CURRENT BUSINESS OPERATIONS

Our Products and Markets

We, through our China-based VIE, Liaoning Kangbaier and its subsidiaries, produce, market, and sell natural β -carotene-based health products. Natural β -carotene is a safe source of vitamin A and has high nutritional and medicinal value. A substantial amount of scientific research data, obtained through clinical trials at home and abroad have verified that natural β -carotene plays a significant role in supplementing vitamin A, acts as an antioxidant, maintains cell vitality, assists in cancer prevention, vision protection, blood glucose regulation, body immunity improvement, intestinal microecological protection, cardiovascular and cerebrovascular disease prevention, may delay the effects of aging, and provides other physical benefits.

Natural β -carotene is widely used in the health food, health products, dietary supplements, cosmetics and feed industries, and the global market application scale is steadily growing. According to Technavio data, the global β -carotene market size reached $370 million in 2015 and reached $460 million in 2020, with a compound annual growth rate of 4.5%. The market size is expected to reach $650 million by 2026.

We have developed a natural β -carotene series of health products, including natural β -carrot juice, natural β -carrot powder, and natural β -carotene noodles. In the future, we plan to develop a variety of other forms of carotene products, such as carotene milk, carotene biscuits, carotene jelly, carotene enzyme, and others, so that carotene products will become a staple of the Chinese diet.

As of March 31, 2024, we owned 25,000 mu of carrot planting base, with an annual output of 125,000 tons of carrots. For the nine month ended March 31, 2024 and March 31, 2023, our gross revenue is $1,324,622 and $340,920, respectively. The market repeat purchase rate is 80%. According to the consumer satisfaction survey in recent years, the satisfaction index of carotene series products is relatively high. According to consumer feedback, the product is excellent in improving vision, digestion, and immunity and in reducing the pain of chemoradiotherapy. Our products are mainly sold in the form of solids and liquid drinks.

Our β -Carotene Products

The following are some of our products:

Our main products are β-carotene series products. In order to introduce our products to the public quickly and widely, we have developed and designed various forms of products, such as liquid, powder, and pasta, taking into account the convenience of product transportation, appearance, and portability and catering to the different preferences of consumers. The amount of carotene in these different forms of products is slightly different. Our Natural Beta carotene drink contains 4mg of beta carotene per 100ml; the powdered beta-carotene content was ≥24.5mg per 100g.

While we strictly control the quality of our products, we will also continue to enrich the product categories. We will target the mass consumer market, covering different groups such as infants, young and middle-aged, and the elderly. In the next step, through the establishment of cooperation with China Polypeptide Industry Group, based on the cooperation of clear protein polypeptide powder, we are committed to the development of peptide products and other new products with carrot-based raw materials. In the future, through international product certification, we intend to enter the global market.

The Baijiakang Healthy Lifestyle Supermarket Concept

The Baijiakang Healthy Lifestyle Supermarket, offered as a franchise, is intended to serve the middle-aged and elderly residents in the community by providing a comprehensive platform for one-stop shopping, physiotherapy, integrated health evaluation and consultation, health therapy, health education, and related health services. The goal is to meet the basic needs of the residents for a healthy life including natural β -carotene series products. Each store is equipped with professional health testing instruments, so that customers can participate in health evaluations and consultations. A personal profile is created for each member, recording their personal health data in detail, which, together with an analysis of the results by health testing instruments, can provide health-related disease prevention recommendations and suggest health-related products.

BaiJiaKang APP (www.baijiakang.wx.chinakbegf.com), provides technical support for offline stores and enables customers to register free as “members” through the mobile link, purchase goods, and enjoy other benefits. The mobile link also connects supply chains, distributors, franchisees, allied merchants, and other users with sales volume, customers, distributors, revenue, channels, and valuable customers, Win&win, a sense of community, and an inter-connected system.

We will provide pre-sales and after-sales tracking, maintenance, feedback, and emergency response services for store members. A consumer satisfaction evaluation system is employed to continuously improve our customers’ shopping experience, strengthen customer retention and increase customers’ repurchase rate.

RESULTS OF OPERATIONS

Nine months ended March 31, 2024 compared to nine months ended March 31, 2023

The following table sets forth key components of our results of operations during the nine months ended March 31, 2024 and 2023, both in dollars and as a percentage of our revenue.

Revenues. Our revenues were $1,324,622 for the nine months ended March 31, 2024, representing an increase of $983,702 or 288.54% from $340,920 for the nine months ended March 31, 2023. There are two revenue streams within the Company’s operations: (1) normal product sales of carotene which constitutes the majority of the revenues, and (2) franchise fees, recognized averagely over the contract period. The increase in revenues between the nine months ended March 31, 2023 and the nine months ended March 31, 2024 was mainly due to expansion of sales channels and retail stores that sell the Company’s products. Consequently, the sales volumes increased rapidly during the nine months ended March 31, 2024, compared to the corresponding period in the prior year. In addition, the Company started recognizing franchise fees during the nine months ended March 31, 2024.

The following table summarizes our revenues by revenue stream for the nine months ended March 31, 2024 and 2023:

Cost of revenues. Our cost of revenues was $539,689 for the nine months ended March 31, 2024 compared to $272,641 for the same period last year. Cost of revenues refers to the costs of material and labor, direct material, and overhead costs. The increase was in line with the increase in revenue.

Gross profit and gross margin. Our gross profit was $784,933 for the nine months ended March 31, 2024, compared with a gross profit of $68,279 for the same period last year. The gross margin increased from 20.03% during 2023 to 59.26% during 2024. The increase was in line with the business rise.

Selling expenses. As shown below, our selling expenses consist primarily of compensation and benefits to our sales department and other expenses incurred in connection with general operations. Our selling expenses increased by $8,737 to $19,351 for the nine months ended March 31, 2024, from $10,614 for the same period in 2023. The increase was primarily due to a $5,745 increase in advertising fees for the nine months ended March 31, 2024, which is in line with the rise in revenues.

General and administrative expenses. As shown below, our general and administrative expenses consist primarily of compensation and benefits to our general management, finance and administrative staff, professional fees and other expenses incurred in connection with general operations. Our general and administrative expenses decreased by $205,268 to $206,979 for the nine months ended March 31, 2024, from $412,247 for the same period in 2023. The decrease was mainly due to a $127,561 reduction in professional fees, as the Company engaged many third party consultants for its listing activities during the nine months ended March 31, 2023 that were not needed during the nine months ended March 31, 2024, and a $54,552 reduction in salary and social insurance, resulting from a reduction in staff by 11 employees.

Income tax expense. Our income tax expense was nil for the nine months ended March 31, 2024 and 2023.

Net income or loss. As a result of the cumulative effect of the factors described above, our net income was $598,572 for the nine months ended March 31, 2024 compared to a net loss of $333,528 for the nine months ended March 31, 2023.

Three months ended March 31, 2024 compared to three months ended March 31, 2023

The following table summarizes our revenues by revenue streams for the three months ended March 31, 2024 and 2023:

Revenues. Our revenues were $456,177 for the three months ended March 31, 2024 representing an increase of $401,530 or 734.77% from $54,647 for the three months ended March 31, 2023. There are two revenue streams within the Company’s operations: (1) normal product sales of carotene which constitutes the majority of the revenues, and (2) franchise fees, recognized averagely over the contract period. The increase in revenues for the three months ended March 31, 2024 was mainly due to expansion of sales channels and an increase in the number of retail stores that sell the Company’s products. Consequently, the sales volumes increased rapidly during the three months ended March 31, 2024, compared to the corresponding period in the prior year. In addition, the Company recognized franchise fees for the three months ended March 31, 2024, but not for the three months ended March 31, 2023.

The following table summarizes our revenues by revenue stream for the three months ended March 31, 2024 and 2023:

Cost of revenues. Our cost of revenues was $140,498 for the three months ended March 31, 2024 compared to $39,994 for the same period last year. Cost of revenues refers to the costs of material and labor, direct material and overhead costs. The increase was in line with the increase in revenues.

Gross profit and gross margin. Our gross profit was $ 315,679 for the three months ended March 31, 2024 compared with a gross profit of $14,653 for the same period last year. The gross profit margin increased from 26.81% during 2023 to 69.20% during 2024. The increase was in line with the business rise.

Selling expenses. As shown below, our selling expenses consist primarily of compensation and benefits to our sales department and other expenses incurred in connection with general operations. Our selling expenses decreased by $2,716 to $6,667 for the three months ended March 31, 2024 from $9,383 for the same period in 2023, resulting from fewer promotional activities during 2024.