UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2018
☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from ___ to ____
Commission file number: 000-27873
America Great Health
(Exact name of registrant as specified in its charter)
|
Wyoming
(State or other jurisdiction of incorporation or organization)
|
98-0178621
(I.R.S. Employer Identification No.)
|
|
1609 W Valley Blvd Unit 338A, Alhambra, CA
(Address of principal executive offices)
|
91803
(Zip Code)
|
Registrant’s telephone number, including area code:
(626) 576-1299
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par value
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 15(d) of the 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 and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted 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 and post such files).
Yes ☒ No ☐
Indicate by check mark if disclosure of delinquent filers pursuant
to item 405 of Regulation S-K (§229.405 of this chapter) is
not contained herein, and will not be contained, to the best of
registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
Yes ☐ No ☒
Indicate by check mark whether the registrant is large accelerated
filer, an accelerated filer, a non-accelerated filer, smaller
reporting company, or an emerging growth company. See definition of
“large accelerated filer,” accelerated filer” “smaller reporting
company,” and “emerging growth company” in Rule 12b-2 of the
Exchange Act:
|
Large accelerated filer ☐
|
|
Accelerated filer ☐
|
|
|
|
|
|
Non-accelerated filer ☐
|
|
Smaller Reporting Company ☒
|
|
|
|
|
|
Emerging growth company ☐
|
|
|
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 Act).
Yes ☐ No ☒
Indicate the number of shares outstanding of each of the
registrant’s classes of common stock, as of the latest practicable
date. The number of shares outstanding of the registrant’s
common stock as of November 26, 2018 was 20,236,021,800.
FORM 10-K
For the Year Ended June 30, 2018
TABLE OF CONTENTS
In this annual report the words "we," "us," "our," and the
"Company" refer to Crown Marketing and subsidiaries.
FORWARD LOOKING STATEMENTS
When used in this report, the words “may,” “will,” “expect,”
“anticipate,” “continue,” “estimate,” “project,” “intend,” and
similar expressions are intended to identify forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934
regarding events, conditions, and financial trends that may affect
the Company’s future plans of operations, business strategy,
operating results, and financial position. Persons reviewing
this report are cautioned that any forward-looking statements are
not guarantees of future performance and are subject to risks and
uncertainties and that actual results may differ materially from
those included within the forward-looking statements as a result of
various factors.
Statements made in this Form 10-K that are not historical or
current facts are "forward-looking statements" made
pursuant to the safe harbor provisions of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. We
wish to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date
made. Any forward-looking statements represent our best
judgment as to what may occur in the future. These
forward-looking statements include our plans and objectives for our
future growth, including plans and objectives related to the
consummation of acquisitions and future private and public
issuances of our equity and debt securities. The
forward-looking statements included herein are based on current
expectations that involve numerous risks and uncertainties.
Assumptions relating to the foregoing involve judgments with
respect to, among other things, future economic, competitive and
market conditions and future business decisions, all of which are
difficult or impossible to predict accurately and many of which are
beyond our control. Although we believe that the assumptions
underlying the forward-looking statements are reasonable, any of
the assumptions could be inaccurate and, therefore, there can be no
assurance that the forward-looking statements included in this Form
10-K will prove to be accurate. In light of the
significant uncertainties inherent in the forward-looking
statements included herein, you should not regard the inclusion of
such information as our representation or the representation of any
other person that we will achieve our objectives and plans.
We disclaim any obligation subsequently to revise any
forward-looking statements to reflect events or circumstances after
the date of such statement or to reflect the occurrence of
anticipated or unanticipated events.
PART I
ITEM 1. BUSINESS
Historical Development
America Great Health, formerly Crown Marketing, is a Wyoming
corporation (the "Company"). Pursuant to an Agreement and Plan of
Reorganization dated December 2, 2013, the Company acquired all the
common stock of Okra Energy, Inc., a California corporation for on
December 2, 2013 and then incorporated on December 18, 2013, for
16,155,746,000 shares of Common Stock of the Company (the "Common
Stock") at the closing of the Agreement on December 3, 2013.
Immediately prior to the closing, there were approximately
3,825,275,800 shares of Common Stock outstanding. After the
closing, the beneficial owner of Okra Energy, Inc. shareholder, Jay
Hooper, owned 98.8% of the outstanding shares of common stock of
the Company. The transaction was accounted for as a
reverse merger (recapitalization) with Okra Energy, Inc. deemed to
be the accounting acquirer and the Company deemed to be the legal
acquirer.
Concurrently with the merger, Jay Hooper was appointed as the sole
director and President of the Company.
A change of control of the Company was completed on January 19,
2017 from Jay Hooper, the former officer and director of the
Company and its former majority shareholder. Control was obtained
by the sale of 16,155,746,000 shares of Company common stock from
Mr. Hooper to an investor group led by Mike Q. Wang. In
connection with the change of control, the Company sold to its
former majority shareholder one of its subsidiaries for $100 and
another subsidiary in exchange for the cancellation of all payables
and accrued expenses.
On March 1, 2017, the Company filed with the Secretary of State of
the State of Wyoming an Articles of Amendment to change the
corporate name from Crown Marketing to America Great Health.
Following the name change, the Company applied for a change of its
stock ticker symbol from CWNM to AAGH. The application was approved
by Financial Industry Regulatory Authority (“FINRA”). Our shares
are now trading under the new ticker symbol AAGH.
On March 9, 2017, the Company formed a wholly owned subsidiary,
America Great Health, under the laws of the State of
California.
Through December 31, 2016, the Company’s primary business was the
sale of various consumer products and accessories. After December
31, 2016, the Company’s operations are determined and structured by
the new investor group. As such, the Company accounted for all of
its assets, liabilities and results of operations up to January 1,
2017 as discontinued operations.
Our Business
Prior to the change of controlling ownership of the common stock,
the Company sold consumer products. It acquired electronic products
from manufactures and then sold them directly to consumers so as to
be more competitive in price. As of December 31, 2016, the Company
ceased operations in this line of business.
The Company under the new management will focus its business in the
health related industry. The Company’s Chairman and president, Mike
Wang, is the owner of several health related businesses below with
which The Company is evaluating the possibilities of forming
several joint ventures. The Company might effectuate the joint
ventures using stock.
|
1.
|
Health & Beauty Group Inc (“H&BG”). It is a California
company in the business of research and development (“R&D”) and
sale of vitamins and nutritional supplements. It owns more than 20
formulas and engages contract manufacturers to make these products.
H&BG has built up sales records both in the US as well as in
China. On January 4, 2018, the Company entered into a Stock
Purchase Agreement with H&BG (the “Seller”) to
purchase 51% of common shares of the Seller, for $765,000, which
consisted of 63,750,000 outstanding shares of the Company’s
common stock at $0.012 per share. On April 5, 2018, the
Company entered into a Rescission Agreement (the
“Rescission Agreement” ) with the seller to rescind the
transactions set forth in the Stock Purchase Agreement prior to the
transaction closing.
|
|
2.
|
Pro Health Inc., a Tennessee company organized in 2016. It entered
into a Sales Agreement with Provision Healthcare, LLC, a Tennessee
limited liability company, in the selling of ProNova Equipment,
which is a Proton Treatment device used in the treatment of cancer.
Other than the sale of equipment, Pro Health will also provide
Total Solution Services related with the use of the Equipment.
|
|
3.
|
Sales Agreement between Mike Wang and Dr. William Fang for the
marketing and sales of Dr. Fang’s early detection system of Cardio
Vascular diseases. The device provides unique 3D imaging for the
Cardio Vascular conditions for patients and has already won
approval of US Food and Drug Administration (“FDA”). It has very
positive significance in helping preventing heart attacks, which
are the number one killer in the US as well as in the world.
|
On March 5, 2018, America Great Health, a California Corporation
(“AAGH CA”), a wholly owned subsidiary of the Company, entered into
a Sino-foreign Co-operative Joint Venture Contract (the “JV
Agreement”) with Guangzhou Bona Biotechnology Co., Ltd. (“Bona”) to
establish a JV, Pomeikang Biotechnology (Guangzhou) Co., Ltd.
(“Pomeikang”), to promote and develop sales channels for health and
cosmetics related products supplied by AAGH CA in the mainland of
the People’s Republic of China, the Hong Kong Special
Administration Region and the Macau Special Administration Region
(together, the “China Market”).
Pursuant to the JV Agreement, AAGH CA and Bona own 49% and 51%
of Pomeikang, respectively, and AAGH California has the veto right
to stop the majority shareholder’s decision. AAGH CA will
contribute the initial products in equivalent of cash amount of RMB
2.45 million ($380,000) to Pomeikang and Bona will contribute any
required operating capital, experienced sales team, promotional
effort, and customer services to ensure normal day to day operation
of Pomeikang. Bona will also be responsible for acquiring any
required government permits, sales permits, and business licenses
for Pomeikang.
On May 21, 2018, the Company, entered into an Exclusive Oversea
Distribution Agreement (the “Agreement”) with Foshan Wanshunbao
Technology Co., Ltd. (“Wanshunbao”), a mainland China based
company. According to the Agreement, Wanshunbao wishes to promote
and develop oversea sales channels for its unique “Mysteries Fruit”
tea and related products worldwide. The Company is appointed as
Wanshunbao’s exclusive distributor to market and sell the
“Mysteries Fruit” herbal tea and related products in geographic
areas covers all over the world except mainland China.
In the past 20 years, Wangshunbao has dedicated to improve its
R&D, and production of the unique “Mysteries Fruit” and related
supplemental products, currently, Wangshunbao has developed a
leading role in this industry, and is in the process of expanding
its business model worldwide to a 10 billion RMB ($1,500,000,000)
industry chain. To achieve that goal, Wangshunbao’s management team
had been actively seeking a qualified international distributor and
business partner to execute its expansion plan.
The Company’s management team was invited to Foshan, China in early
May, 2018 to visit Wangshunbao and its production facilities, upon
extensive discussion and negotiation, the Company was granted with
exclusive distribution rights worldwide for “Mysteries Fruit” tea
and related products. The Company believes by introducing
“Mysteries Fruit” products to oversee consumers would have a huge
beneficial effect; and the management is confident about this
business opportunity, as the Company’s core team members all have
been in health and supplemental related industry for over 20 years,
and has substantial nutrient products sales experiences and
marketing channels. The Company is currently conducting preliminary
sales campaigns for “Mysteries Fruit” products.
The Company is also planning to make additional acquisitions. Mike
Wang has approached several health related companies in China and
met the management of potential acquisition targets. Rapid economic
advances in China in the last 30 years have greatly improved the
living standards in China. This in turn brings demand in healthcare
products and services. The Company feels strongly that despite the
challenges of cross border business, it might be able to acquire
some good growth companies and bring good values to our
stockholders.
As inherent with any new business development, there are risks
involved in such endeavors. For all the healthcare related
businesses afore-mentioned, the Company is evaluating what kind of
risks we are facing. The Company notices that vitamin and nutrition
supplement business is a highly competitive market and faces
multiple regulatory monitoring. The compliance challenge is
constant. Regarding proton treatment sales, the device is very
expensive and for such large ticket item, the procurement process
can be long and arduous. The sale of cardio vascular device also
has its challenges. The device is not well known and the acceptance
of the use requires major efforts in educating not only the medical
professionals but also consumers. This would demand financial as
well as other resources. Although the Company is making some
progress in the Merger and Acquisition efforts, any potential
results, if any, are still not certain.
Employees and Outside Services
The Company's only employee at the present time is its sole
executive officer and director, who devotes full time to the
affairs of the Company. Remaining administrative (non-policy
making) officers and consultants and technical personnel such as
marketing specialists are being compensated as independent
contractors. We pay these persons on a contract basis as
required.
ITEM 1A. RISK
FACTORS
This item is inapplicable because we are a “smaller
reporting company” as defined in Exchange Act Rule 12b-2.
ITEM 1B. UNRESOLVED STAFF
COMMENTS
This item is inapplicable because we are a “smaller reporting
company” as defined in Exchange Act Rule 12b-2.
ITEM 2. PROPERTIES
Through its former subsidiary, Crown Laboratory Inc., the Company
leased a warehouse in El Monte, California. The warehouse is owned
by Temple CB LLC, (“Temple CB”), a single member limited liability
company owned by the Company’s former President and majority
shareholder. In October 2016, the Company and Temple CB agreed to
terminate the lease effective as of July 1, 2016. The Company
ceased using the premises prior to July 1, 2016.
The Company currently is using a premises for free, the premises is
leased by a company owned by its current majority shareholder.
ITEM 3. LEGAL
PROCEEDINGS
No legal proceedings are threatened or pending against us or any of
our officers or directors. Further, none of our officers,
directors or affiliates are parties against us or have any material
interests in actions that are adverse to the Company’s
interests.
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
Our common stock is currently listed on the OTC Bulletin Board
under the symbol “AAGH”. There has been limited trading of
the common stock from December 2, 2013 (Inception) through June 30,
2018. The last sale price of our common stock on October 5,
2018 was $0.014 per share.
The following table sets forth the high and low transaction price
for each quarter within the fiscal years ended June 30, 2018 and
2017, as provided by the Nasdaq Stock Markets, Inc. The
information reflects prices between dealers, and does not include
retail markup, markdown, or commissions, and may not represent
actual transactions.
|
Fiscal Year Ended
|
|
|
|
Bid Prices
|
|
|
June 30,
|
|
Period
|
|
High
|
|
|
Low
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
First Quarter
|
|
$
|
0.0080
|
|
|
$
|
0.0050
|
|
| |
|
Second Quarter
|
|
$
|
0.0050
|
|
|
$
|
0.0020
|
|
|
|
|
Third Quarter
|
|
$
|
0.0300
|
|
|
$
|
0.0020
|
|
|
|
|
Fourth Quarter
|
|
$
|
0.0160
|
|
|
$
|
0.0080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
First Quarter
|
|
$
|
0.0070
|
|
|
$
|
0.0038
|
|
| |
|
Second Quarter
|
|
$
|
0.0060
|
|
|
$
|
0.0110
|
|
| |
|
Third Quarter
|
|
$
|
0.0061
|
|
|
$
|
0.0059
|
|
| |
|
Fourth Quarter
|
|
$
|
0.0060
|
|
|
$
|
0.0058
|
|
Our shares are subject to Section 15(g) and Rule 15g-9 of the
Securities and Exchange Act, commonly referred to as the “penny
stock” rule. The rule defines penny stock to be any equity
security that has a market price less than $5.00 per share, subject
to certain exceptions. The rule provides that any equity
security is considered to be a penny stock unless that security
is:
- registered and traded on a national securities exchange
meeting specified criteria set by the SEC;
- issued by a registered investment company;
- excluded from the definition on the basis of price (at least
$5.00 per share) or the issuer’s net tangible assets.
Trading in the penny stocks is subject to additional sales practice
requirements on broker-dealers who sell penny stocks to persons
other than established customers and accredited investors.
Accredited investors, in general, include certain institutional
investors and individuals with assets in excess of $1,000,000 or
annual income exceeding $200,000 or $300,000 together with their
spouse.
For transactions covered by these rules, broker-dealers must make a
special suitability determination for the purchase of our
securities and must have received the purchaser’s written consent
to the transaction prior to the purchase. Additionally, for
any transaction involving a penny stock, the rules require the
delivery, prior to the first transaction, of a risk disclosure
document relating to the penny stock. A broker-dealer also
must disclose the commissions payable to both the broker-dealer and
the registered representative, and current quotations for the
security. Finally, monthly statements must be sent to the
purchaser disclosing recent price information for the penny
stocks. Consequently, these rules may restrict the ability of
broker-dealers to trade or maintain a market in our common stock
and may affect the ability of shareholders to sell their
shares.
Holders
As of October 5, 2018, there were approximately 208
shareholders of record holding 20,236,021,800 shares of common
stock. The holders of common stock are entitled to one vote
for each share held of record on all matters submitted to a vote of
stockholders. Holders of the common stock have no preemptive rights
and no right to convert their common stock into any other
securities. There are no redemption or sinking fund
provisions applicable to the common stock.
Dividends
The Company has not paid any dividends on its common stock.
The Company current intends to retain any earnings for use in its
business, and therefore does not anticipate paying cash dividends
in the foreseeable future.
Securities Authorized Under Equity Compensation
Plans
The following table lists the securities authorized for issuance
under any equity compensation plans approved by our shareholders
and any equity compensation plans not approved by our shareholders
as of June 30, 2018. This chart also includes
individual compensation agreements.
|
EQUITY COMPENSATION PLAN INFORMATION
|
|
|
Plan category
|
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
(a)
|
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)
|
|
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
(c)
|
|
|
Equity compensation plans approved by security
holders
|
|
|
0
|
|
|
$
|
0.00
|
|
|
|
0
|
|
|
Equity compensation plans not approved by security holders
|
|
|
0
|
|
|
$
|
0.00
|
|
|
|
0
|
|
|
Total
|
|
|
0
|
|
|
$
|
0.00
|
|
|
|
0
|
|
Company repurchases of common stock during the year ended
June 30, 2018
None
Performance Graphic
This item is not required to provide a performance
graph since it is a “smaller reporting company” as defined in
Exchange Act Regulation S-K Rule 10(f).
Share issuances in 2018
All share issuances have been previously reported.
ITEM 6. SELECTED FINANCIAL
DATA
This item is inapplicable because we are a “smaller reporting
company” as defined in Exchange Act Rule 12b-2.
ITEM 7. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
Forward Looking Statement Notice
This Current Report on Form 10-K contains forward-looking
statements within the meaning of the federal securities laws. These
include statements about our expectations, beliefs, intentions or
strategies for the future, which we indicate by words or phrases
such as “anticipate,” “expect,” “intend,” “plan,” “will,” “we
believe,” “believes,” “management believes” and similar
language. Except for the historical information contained
herein, the matters discussed in this “Management’s Discussion and
Analysis of Financial Condition and Results of Operations,” and
elsewhere in this report are forward-looking statements that
involve risks and uncertainties. The factors listed in the section
captioned “Risk Factors,” as well as any cautionary language in
this report; provide examples of risks, uncertainties and events
that may cause our actual results to differ materially from those
projected. Except as may be required by law, we undertake no
obligation to update any forward-looking statement to reflect
events after the date of this Form 10-K.
History and Organization
America Great Health, formerly Crown Marketing, is a Wyoming
corporation (the "Company"). Pursuant to an Agreement and Plan of
Reorganization dated December 2, 2013, the Company acquired all of
the common stock of Okra Energy, Inc., a California corporation on
December 2, 2013 and then incorporated on December 18, 2013, for
16,155,746,000 shares of Common Stock of the Company (the "Common
Stock") at the closing of the Agreement on December 3, 2013.
Immediately prior to the closing, there were approximately
3,825,275,800 shares of Common Stock outstanding. After the
closing, the beneficial owner of Okra Energy, Inc. shareholder, Jay
Hooper, owned 98.8% of the outstanding shares of common stock of
the Company. The transaction was accounted for as a reverse merger
(recapitalization) with Okra Energy, Inc. deemed to be the
accounting acquirer and the Company deemed to be the legal
acquirer.
A change of control took place on January 19, 2017 from Jay Hooper.
Control was obtained by the sale of 16,155,746,000 shares of the
Company common stock from Mr. Hooper to an investor group led by
Mike Q. Wang. In connection with the change of control, the Company
sold to Jay Hooper, one of its subsidiaries, Italiano, Inc., for
$100 and another subsidiary, Crown Laboratory Inc., in exchange for
the cancellation of all payables and accrued expenses.
On March 1, 2017, the Company filed with the Secretary of State of
Wyoming an Articles of Amendment to change the corporate name from
Crown Marketing to America Great Health.
On March 9, 2017, the Company formed a wholly owned subsidiary,
America Great Health, under the laws of the State of
California.
Overview of Business
Through December 31, 2016, the Company’s primary business was the
sale of various consumer products and accessories. After December
31, 2016, the Company’s operations are determined and structured by
the new investor group. As such, the Company accounted for all of
its assets, liabilities and results of operations up to January 1,
2017 as discontinued operations.
The Company under the new management will focus its business in the
health related industry. The Company’s Chairman and president, Mike
Wang, is the owner of several health related businesses below with
which The Company is evaluating the possibilities of forming
several JVs. The Company might effectuate the JVs using stocks.
|
1.
|
H&BG. It is a California company in the business of R &D
and sale of vitamins and nutritional supplements. It owns more than
20 formulas and engages contract manufacturers to make these
products. The company has built up sales records both in the US as
well as in China. On January 4, 2018, the Company entered into a
Stock Purchase Agreement with H&BG (the “Seller”) to
purchase 51% of common shares of the Seller, for $765,000, which
consisted of 63,750,000 outstanding shares of the Company’s
common stock at $0.012 per share. On April 5, 2018, the
Company entered into a Rescission Agreement (the
“Rescission Agreement” ) with the seller to rescind the
transactions set forth in the Stock Purchase Agreement prior to the
transaction closing.
|
|
2.
|
Pro Health Inc., a Tennessee company organized in 2016. It entered
into a Sales Agreement with Provision Healthcare , LLC, a Tennessee
limited liability company, in the selling of ProNova Equipment,
which is a Proton Treatment device used in the treatment of cancer.
Other than the sale of equipment, Pro Health will also provide
Total Solution Services related with the use of the Equipment.
|
|
3.
|
Sales Agreement between Mike Wang and Dr. William Fang for the
marketing and sales of Dr. Fang’s early detection system of Cardio
Vascular diseases. The device provides unique 3D imaging for the
Cardio Vascular conditions for patients and has already won
approval of US FDA. It has very positive significance in helping
preventing heart attacks, which are the number one killer in the US
as well as in the world.
|
On March 5, 2018, America Great Health, a California Corporation
(“AAGH CA”), a wholly owned subsidiary of the Company, entered into
a Sino-foreign Co-operative Joint Venture Contract (the “JV
Agreement”) with Guangzhou Bona Biotechnology Co., Ltd. (“Bona”) to
establish a JV,Pomeikang Biotechnology (Guangzhou) Co., Ltd.
(“Pomeikang”), to promote and develop sales channels for health and
cosmetics related products supplied by AAGH CA in the mainland of
the People’s Republic of China, the Hong Kong Special
Administration Region and the Macau Special Administration Region
(together, the “China Market”).
Pursuant to the JV Agreement, AAGH CA and Bona each own 49% and 51%
of Pomeikang, respectively, and AAGH California has the veto right
to stop the majority shareholder’s decision. AAGH CA will
contribute the initial products supply in equivalent of cash amount
of RMB 2.45 million ($368,000) to Pomeikang and Bona will
contribute any required operating capital, experienced sales team,
promotional effort, and customer services to ensure normal day to
day operation of Pomeikang. Bona will also be responsible for
acquiring any required government permits, sales permits, and
business licenses for Pomeikang.
On May 21, 2018, the Company, entered into an Exclusive Oversea
Distribution Agreement (the “Agreement”) with Foshan Wanshunbao
Technology Co., Ltd. (“Wanshunbao”), a mainland China based
company. According to the Agreement, Wanshunbao wishes to promote
and develop overseas sales channels for its unique “Mysteries
Fruit” tea and related products worldwide. The Company is appointed
as Wanshunbao’s exclusive distributor to market and sell the
“Mysteries Fruit” herbal tea and related products in geographic
areas covers all over the world except mainland China.
In the past 20 years, Wangshunbao has dedicated to improve its
R&D, and production of the unique “Mysteries Fruit” and related
supplemental products, currently, Wangshunbao has developed a
leading role in this industry, and is in the process of expanding
its business model worldwide to a 10 billion RMB ($1.5 billion)
industry chain. To achieve that goal, Wangshunbao’s management team
had been actively seeking a qualified international distributor and
business partner to execute its expansion plan.
The Company’s management team was invited to Foshan, China in early
May, 2018 to visit Wangshunbao and its production facilities, upon
extensive discussion and negotiation, the Company was granted with
exclusive distribution rights worldwide for “Mysteries Fruit” tea
and related products. The Company believes by introducing
“Mysteries Fruit” products to oversee consumers would have a huge
beneficial effect; and the management is confident about this
business opportunity, as the Company’s core team members all have
been in health and supplemental related industry for over 20 years,
and has substantial nutrient products sales experiences and
marketing channels. The Company is currently conducting preliminary
sales campaigns for “Mysteries Fruit” products.
The Company is also planning to conduct additional acquisitions.
Mike Wang has approached several health related companies in China
and met the management of potential acquisition targets. Rapid
economic advances in China in the last 30 years have greatly
improved the living standards in China. This in turn brings demand
in healthcare products and services. The Company feels strongly
that despite the challenges of cross border business, it might be
able to acquire some good growth companies and bring good values to
our stockholders.
As inherent with any new business development, there are risks
involved in such endeavor. For all the healthcare related
businesses afore-mentioned, the Company is evaluating what kind of
risks we are facing. The Company notices that vitamin and nutrition
supplement business is a highly competitive market and faces
multiple regulatory monitoring. The compliance challenge is
constant. Regarding proton treatment sales, the device is very
expensive and for such large ticket item, the procurement process
can be long and arduous. The sale of cardio vascular device also
has its challenges. The device is not well known and the acceptance
of the use requires major efforts in educating not only the medical
professionals but also consumers. This would demand financial as
well as other resources. Although the Company is making some
progress in its Merger and Acquisition efforts, any results, are
still not certain.
Critical Accounting Policies and Estimates
Revenues
The Company’s operations through December 31, 2016 became
discontinued operations (see Note 3).
For the discontinued operations, the Company recognizes revenue
when the following fundamental criteria are met: (i) persuasive
evidence of an arrangement exists; (ii) delivery has occurred;
(iii) the price is fixed or determinable; and (iv) collectability
is reasonably assured. Revenue is recognized for hardware product
sales upon transfer of title and risk of loss to the customer. We
record reductions to revenue for estimated product returns and
pricing adjustments in the same period that the related revenue is
recorded. These estimates are based on contractual return rights,
historical sales returns, analysis of credit memo data and other
factors known at the time. If actual future returns and pricing
adjustments differ from past experience and our estimates,
adjustments to revenue reserves may be required.
For the year ended June 30, 2018, there were no revenue generating
activities.
Estimates
The preparation of these consolidated financial statements (“CFS”)
in accordance with accounting principles generally accepted in the
United States of America (“GAAP”) requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and
liabilities at the dates of the consolidated financial statements
and the reported amounts of net sales and expenses during the
reported periods. Actual results may differ from those
estimates and such differences may be material to the financial
statements. The more significant estimates and assumptions by
management include among others, the fair value of shares of common
stock issued for services. The current economic environment has
increased the degree of uncertainty inherent in these estimates and
assumptions.
Recent Accounting Pronouncements
In May 2014, the FASB issued an accounting standard update (“ASU”)
related to revenue from contracts with customers, which, along with
amendments issued in 2015 and 2016, will supersede nearly all
current U.S. GAAP guidance on this topic and eliminate
industry-specific guidance. The underlying principle is to
recognize revenue when promised goods or services are transferred
to customers in an amount that reflects the consideration expected
to be received for those goods or services. This accounting
standard update, as amended, will be effective for the Company
beginning in the first quarter of fiscal 2019. The new revenue
standard may be applied retrospectively to each prior period
presented or retrospectively with the cumulative effect recognized
in retained earnings as of the date of adoption (“modified
retrospective basis”). Early adoption is permitted, but no earlier
than fiscal 2018. The Company expects to adopt this ASU on a
modified retrospective basis in the first quarter of fiscal 2019,
and it is currently evaluating the impact of this accounting
standard update on its CFS.
In February 2016, the FASB issued ASU No. 2016-02, Leases. ASU
2016-02 requires a lessee to record a right of use asset and a
corresponding lease liability on the balance sheet for all leases
with terms longer than 12 months. ASU 2016-02 is effective for all
interim and annual reporting periods beginning after December 15,
2018. Early adoption is permitted. A modified retrospective
transition approach is required for lessees for capital and
operating leases existing at, or entered into after, the beginning
of the earliest comparative period presented in the financial
statements, with certain practical expedients available. The
Company is in the process of evaluating the impact of ASU 2016-02
on the Company’s CFS.
In October 2016, the FASB issued ASUASU 2016-16, Income Taxes:
Intra-Entity Transfer of Assets Other Than Inventory, which
improves the accounting for the income tax consequences of
intra-entity transfers of assets other than inventory. ASU 2016-16
will be effective for fiscal years, and interim periods within
those years, beginning the first quarter of 2018. The Company is
assessing the impact to its accounting practices and financial
reporting procedures as a result of the issuance of this
standard.
In May 2017, the FASB issued ASU 2017-09, “Compensation—Stock
Compensation (Topic 718)”, Scope of Modification Accounting. The
Board is issuing this Update to provide clarity and reduce both (1)
diversity in practice and (2) cost and complexity when applying the
guidance in Topic 718, Compensation—Stock Compensation, to a change
to the terms or conditions of a share-based payment award. The
amendments in this Update are effective for all entities for annual
periods, and interim periods within those annual periods, beginning
after December 15, 2017. Early adoption is permitted, including
adoption in any interim period, for (1) public business entities
for reporting periods for which financial statements have not yet
been issued and (2) all other entities for reporting periods for
which financial statements have not yet been made available for
issuance. The adoption of this standard is not expected to have any
material impact on the Company’s CFS.
In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share
(Topic 260); Distinguishing Liabilities from Equity (Topic 480);
Derivatives and Hedging (Topic 815): (Part I) Accounting for
Certain Financial Instruments with Down Round Features, (Part II)”,
which is the replacement of the Indefinite Deferral for Mandatorily
Redeemable Financial Instruments of Certain Nonpublic Entities and
Certain Mandatorily Redeemable Noncontrolling Interests with a
Scope Exception. The amendments in Part I of this Update that
relate to the recognition, measurement, and earnings per share of
certain freestanding equity-classified financial instruments that
include down round features affect entities that present earnings
per share in accordance with the guidance in Topic 260, Earnings
Per Share. The amendments in Part II of this Update do not have an
accounting effect. The amendments in Part I of the update are
effective for fiscal year, and interim periods within those fiscal
years, beginning after December 15, 2018. The Company is assessing
the impact to its accounting practices and financial reporting
procedures as a result of the issuance of this standard.
Other recent accounting pronouncements issued by the FASB,
including its Emerging Issues Task Force, the American Institute of
Certified Public Accountants, and the Securities and Exchange
Commission did not or is not believed by management to have a
material impact on the Company’s present or future CFS.
Results of Operations
Results of Operations for the year ended June 30,
2018 compared to the year ended June
30, 2017 .
There was no revenue and cost of sales from continuing operations
for the year ended June 30, 2018. Operating expenses from
continuing operations for the year ended June 30, 2018 was $58,149.
Our net loss from discontinued operations for the year ended June
30, 2017 was $918,666. The Company no longer has activities from
discontinued operations for year ended June 30, 2018.
Liquidity and Capital Resources
Liquidity is the ability of a company to generate funds to support
its current and future operations, satisfy its obligations, and
otherwise operate on an ongoing basis. Significant factors in the
management of liquidity are funds generated by operations, levels
of accounts receivable and accounts payable and capital
expenditures.
The accompanying CFS were prepared on a going concern basis, which
contemplates the realization of assets and the settlement of
liabilities and commitments in the normal course of business. As
reflected in the accompanying CFS, the Company has incurred
recurring net losses. For the year ended June 30, 2018, the Company
recorded a net loss of $59,386, used cash to fund operating
activities from continuing operations of $46,830, and at June 30,
2018, had a shareholders’ deficit of $107,453. For the year
ended June 30, 2017, the Company recorded a net loss of $967,032 of
which $918,666 was from discontinued operations, used cash to fund
operating activities from continuing operations of $40,563. These
factors create substantial doubt about the Company’s ability to
continue as a going concern. The financial statements do not
include any adjustments that might be necessary if the Company is
unable to continue as a going concern.
During the year ended June 30, 2017, the Company’s former majority
shareholder sold the majority of his shares to an investor group.
The new management’s plans to continue as a going concern revolve
around its ability to achieve profitable operations, as well as
raise necessary capital to pay ongoing general and administrative
expenses of the Company. The ability of the Company to
continue as a going concern is dependent on securing additional
sources of capital and the success of the Company’s plan.
There is no assurance that the Company will be successful in
raising the additional capital or in achieving profitable
operations.
Our cash needs for the year ended June 30, 2018 were primarily met
by loans and advances from current majority shareholder. As
of June 30, 2018, we had cash of $15. Our new majority
shareholders will need to provide all of our working capitals going
forward.
Primarily as a result of our recurring losses and our lack of
liquidity, we received a report from our independent registered
public accounting firm for our financial statements for the year
ended June 30, 2017 that includes an explanatory paragraph
describing the uncertainty as to our ability to continue as a going
concern.
Financial Position
As of June 30, 2018, we had $15 in cash, negative working capital
of $120,431 and an accumulated deficit of $3,169,683.
In connection with the change in control, all of the Company’s
payables and accrued expenses as of January 1, 2017 were
cancelled.
Contractual Obligations and Off-Balance Sheet
Arrangements
We do not have any contractual obligations or off balance sheet
arrangements.
ITEM 7A. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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 8. FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA
Our financial statements appear beginning on page F-1in this Form
10-K.
ITEM 9. CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
On September 12, 2018, we engaged MJF & Associates, LLP (“MJF”)
as our independent registered public accounting firm to audit the
Company’s CFS as of June 30, 2018, and for the year then ended. MJF
will be performing reviews of the unaudited consolidated quarterly
financial statements to be included in the Company’s quarterly
reports on Form 10-Q for the year ended June 30, 2019.
ITEM 9A. CONTROLS AND
PROCEDURES
Evaluation of Disclosure Controls and Procedures
Based upon an evaluation of the effectiveness of our disclosure
controls and procedures performed by our Chief Executive Officer as
of the end of the period covered by this report, our Chief
Executive Officer concluded that our disclosure controls and
procedures have not been effective as a result of a weakness in the
design of internal control over financial reporting identified
below.
As used herein, “disclosure controls and procedures” mean controls
and other procedures of our company that are designed to ensure
that information required to be disclosed by us in the reports that
we file or submit under the Securities Exchange Act is recorded,
processed, summarized and reported, within the time periods
specified in the Commission’s rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by us
in the reports that we file or submit under the Securities Exchange
Act 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.
Management’s Annual Report on Internal Control over Financial
Reporting
Management is responsible for establishing and maintaining adequate
internal control over financial reporting (“ICFR”), as such term is
defined in Exchange Act Rule 13a-15(f) under the Securities
Exchange Act of 1934. Our Chief Executive Officer/Chief Accounting
Officer conducted an evaluation of the effectiveness of our ICFR
based on the framework in Internal Control-Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO 2013”). Based on management’s evaluation under
the framework, management has concluded that our ICFR was not
effective as of June 30, 2018.
We identified material weaknesses in our ICFR primarily
attributable to (i) lack of segregation of incompatible duties; and
(ii) insufficient Board of Directors representation. These
weaknesses are due to our inadequate staffing during the period
covered by this report and our lack of working capital to hire
additional staff. Management has retained an outside, independent
financial consultant to record and review all financial data, as
well as prepare our financial reports, in order to mitigate this
weakness. Although management will periodically re-evaluate this
situation, at this point it considers that the risk associated with
such lack of segregation of duties and the potential benefits of
adding employees to segregate such duties are not cost justified.
We intend to hire additional accounting personnel to assist with
financial reporting as soon as our finances will allow.
This annual report does not include an attestation report of our
registered public accounting firm regarding ICFR. Management’s
report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit us to provide only management’s
report in this annual report.
ITEM 9B. OTHER
INFORMATION
None.
PART III
ITEM 10. DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
The members of the Board of Directors (“BOD”) of the Company serve
until the next annual meeting of stockholders, or until their
successors have been elected. The officers serve at the
pleasure of the BOD. The following are the directors,
executive officers and key employees of the Company.
Our management team is headed by experienced Chief Executive
Officer Mike Wang, who was elected on March 1, 2017.
Mike Wang, age 62, has been working in the health supplements
business for about 19 years. He is the President of America
Great Health. And he is also the vice-president of the American
Nutrion and Health Association in Los Angeles, California.
Code of Ethics
The Company has not adopted a code of ethics which applies to the
chief executive officer, or principal financial and accounting
officer, because of our current low level of operations as a public
entity. The Company intends to adopt a code of ethics in near
future.
Audit Committee Financial Expert
The Company does not have either an Audit Committee or a financial
expert on the BOD. The BOD believes that obtaining the
services of an audit committee financial expert is not economically
rational at this time in light of the costs associated
with identifying and retaining an individual who
would qualify as an audit committee
financial expert, the limited scope of our operations
and the relative simplicity of our financial
statements and accounting procedures.
Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a) of the Exchange
Act requires the Company's officers, directors
and persons who own more than 10 percent of a
registered class of our equity securities to file reports
of ownership and changes in ownership with the
SEC. Officers, directors and ten percent stockholders are
required by regulation to furnish the Company with copies of all
Section 16(a) forms they file. During the year ended June 30,
2018, the Company believes that all such persons failed to file the
reports required by Section 16(a) of the Exchange Act, including
Forms 3, 4 and 5. Based on representations submitted by such
people, the Company does not believe that such individuals
purchased or sold any Common Stock of the Company through public
exchange during the year ended June 30, 2018.
ITEM 11. EXECUTIVE
COMPENSATION
Executive Officers and Directors
The following tables set forth certain information about
compensation paid, earned or accrued for services by (i) the
Company’s Chief Executive Officer in the years ended June 30, 2018
and 2017 (“Named Executive Officers”):
|
Name and
Principal
Position
|
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
|
Nonqualified
Deferred
Compensation
($)
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
|
Mike Wang
Chief Executive/Chief Financial Officer
|
|
2018
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mike Wang
Chief Executive/Chief Financial Officer *
|
|
2017
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Herric Chan *
|
|
2017
|
|
|
5,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jay Hooper
Chief Executive/Chief Financial Officer *
|
|
2016
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
* On February 26, 2017, Mr. Jay Hooper resigned from his position
as President, Vice President, Chief Executive Officer and
Secretary, as well as a member of the board of directors of the
Company. Also on February 26, 2017, the Company appointed Mr. Mike
Wang, as interim President, Vice President, Chief Executive Officer
and Secretary of the Company. On March 1, 2017, the Company held a
special meeting of shareholders electing Mr. Mike Wang as the sole
member of the Board. On June 22, 2017, the Board approved the
appointment of Herric Chan as the Company's CEO replacing Mike Q.
Wang. On October 11, 2017, Herric Chan resigned from his position
as CEO due to personal reasons and Mike Wang was reappointed as the
Company’s CEO.
Employment Contracts
We currently do not have any written employment agreements with our
executive officers.
Director Compensation
Our directors currently serve without compensation.
ITEM 12. SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
Beneficial Ownership
The following table sets forth, as of the date of this Report the
outstanding common stock of the Company owned of record or
beneficially by each person who owned of record, or was known by
the Company to own beneficially, more than 5% of the Company’s
20,236,021,800 shares of common stock issued and outstanding, and
the name and shareholdings of each director and all of the
executive officers and directors as a group:
|
CERTAIN BENEFICIAL OWNERS
|
|
|
Name
|
|
Office
|
|
Amount and nature of
beneficial owner (1)
|
|
|
Percent
of class
|
|
|
|
|
|
|
|
|
|
|
|
|
Mike Wang (2)
|
|
CEO, CFO, Director
|
|
|
16,155,746,000
|
|
|
|
80.55
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All officer and directors as a group (1 person)
|
|
N/A
|
|
|
16,155,746,000
|
|
|
|
80.60
|
%
|
|
(1)
|
Except as otherwise noted, shares are owned beneficially and of
record, and such record shareholder has sole voting, investment and
dispositive power.
|
|
(2)
|
A change of control took place on January 19, 2017 from Jay Hooper.
Control was obtained by the sale of 16,155,746,000 shares of the
Company common stock from Mr. Hooper to an investor group led by
Mike Q. Wang
|
ITEM 13. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
As of June 30, 2018, $100,525 was due to the Company’s current
officer and majority shareholder, Mr. Mike Wang, for paying various
expenses for the Company.
As of June 30, 2017, $44,092 was due to the Company’s current
officer and majority shareholder, Mr. Mike Wang, for paying various
expenses for the Company after the change in control.
As of June 30, 2017, as result of the change in control, all
payable to former President and majority shareholder, Mr. Jay
Hooper, were cancelled in exchange for selling one of the Company’s
subsidiaries to Mr. Hooper.
Through its former subsidiary, Crown Laboratory Inc., the Company
leased a warehouse in El Monte, California. The warehouse is owned
by Temple CB LLC, (“Temple CB”), a single member limited liability
company owned by the Company’s former President and majority
shareholder. In October 2016, the Company and Temple CB agreed to
terminate the lease effective as of July 1, 2016. The Company
ceased using the premises prior to July 1, 2016.
The Company currently is using a premises for free, the premises is
leased by a company owned by its current majority shareholder.
Director Independence
Currently, the Company does not have any independent directors.
Since the Company’s Common Stock is not currently listed on a
national securities exchange, we have used the definition of
“independence” of The NASDAQ Stock Market to make this
determination.
Under NASDAQ Listing Rule 5605(a)(2), an "independent director" is
a "person other than an officer or employee of the company or any
other individual having a relationship which, in the opinion of the
company's board of directors, would interfere with the exercise of
independent judgment in carrying out the responsibilities of a
director."
We do not currently have a separately designated audit, nominating
or compensation committee. However, we do intend to comply
with the independent director and committee composition
requirements in the future.
ITEM 14. PRINCIPAL
ACCOUNTING FEES AND SERVICES
The following table sets forth the fees paid by the Company
for professional services rendered for the audits of the annual
financial statements and fees billed for other services rendered by
its principal accountants:
|
Type of Services Rendered
|
|
2018
|
|
|
2017
|
|
| |
|
|
|
|
|
|
|
|
|
Audit Fees
|
|
$ |
14,083 |
|
|
$ |
33,500 |
|
|
Audit-Related Fees
|
|
$ |
- |
|
|
$ |
- |
|
|
Tax Fees
|
|
$ |
- |
|
|
$ |
- |
|
|
All Other Fees
|
|
$ |
- |
|
|
$ |
- |
|
Pre-approval Policies
We do not have a standing audit committee currently serving and as
a result our BOD performs the duties of an audit committee.
Our BOD evaluates and approves, in advance, the scope and cost of
the engagement of an accounting firm before the accounting firm
renders audit and non-audit services. We do not rely on
pre-approval policies and procedures.
PART IV
ITEM 15. EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES
1.
(a) Financial Statements.
Report of Independent
Registered Public Accounting Firm
To the Board of Directors and Stockholders
America Great Health
Alhambra, California
We have audited the consolidated balance sheet of America Great
Health and Subsidiaries (the “Company”) as of June 30, 2018,
and the related consolidated statements of operations,
stockholders’ deficit and cash flows for the year ended June
30, 2018. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is
to express an opinion on these consolidated financial statements
based on our audit.
We conducted our audit in accordance with standards of the Public
Company Accounting Oversight Board (United
States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material
misstatement. The Company is not required to have, nor
were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, 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. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of America Great Health and its Subsidiaries as of June
30, 2018, and the results of their operations and their cash flows
for the year ended June 30, 2018, in conformity with accounting
principles generally accepted in the United States of America.
The accompanying consolidated financial statements were prepared
assuming the Company will continue as a going concern. As discussed
in Note 1 to the consolidated financial statements, the Company has
suffered recurring losses and negative cash flows from operating
activities, which have resulted in a negative working capital and a
stockholders' deficit. These factors raise substantial doubt about
the Company's ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 1. The
consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ MJF & Associates
MJF & Associates
Los Angeles, California
November 8, 2018
To the Board of Directors and Stockholders
America Great Health
Alhambra, California
We have audited the consolidated balance sheets of America Great
Health and Subsidiaries (the “Company”) as of June 30, 2017
and 2016, and the related consolidated statements of operations,
stockholders’ deficit and cash flows for the years ended June
30, 2017 and 2016. These consolidated financial statements are the
responsibility of the Company’s management. Our responsibility is
to express an opinion on these consolidated financial statements
based on our audit.
We conducted our audits in accordance with standards of the Public
Company Accounting Oversight Board (United
States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material
misstatement. The Company is not required to have, nor
were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, 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. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of America Great Health and its Subsidiaries as of June
30, 2017 and 2016, and the results of their operations and their
cash flows for the years ended June 30, 2017 and 2016, in
conformity with accounting principles generally accepted in the
United States of America.
The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going
concern. As discussed in Note 1 to the consolidated financial
statements, the Company has suffered recurring losses and negative
cash flows from operating activities, which have resulted in a
negative working capital and a stockholders’ deficit. These factors
raise substantial doubt about the Company’s ability to continue as
a going concern. Management’s plans in regard to these matters are
also described in Note 1. The consolidated financial statements do
not include any adjustments that might result from the outcome of
this uncertainty.
/s/ TAAD, LLP
Diamond Bar, California
October 13, 2017
|
America Great Health and Subsidiaries (fka “ Crown
Marketing”)
|
|
|
Consolidated Balance Sheets
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
| |
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$ |
15 |
|
|
$ |
3,827 |
|
|
Other receivable
|
|
|
100 |
|
|
|
100 |
|
| |
|
|
|
|
|
|
|
|
|
TOTAL CURRENT ASSETS
|
|
|
115 |
|
|
|
3,927 |
|
| |
|
|
|
|
|
|
|
|
|
Long term investment
|
|
|
12,978 |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$ |
13,093 |
|
|
$ |
3,927 |
|
| |
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$ |
20,021 |
|
|
$ |
7,902 |
|
|
Due to related party
|
|
|
100,525 |
|
|
|
44,092 |
|
| |
|
|
|
|
|
|
|
|
|
TOTAL CURRENT LIABILITIES
|
|
|
120,546 |
|
|
|
51,994 |
|
| |
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
Redeemable, convertible preferred stock, 10,000,000 shares
authorized;
Series A voting preferred stock, zero shares issued and
outstanding
|
|
|
- |
|
|
|
- |
|
|
Common stock, no par value, unlimited shares authorized;
20,236,021,800 shares issued and outstanding
|
|
|
- |
|
|
|
- |
|
|
Additional paid-in capital
|
|
|
3,062,230 |
|
|
|
3,062,230 |
|
|
Accumulated deficit
|
|
|
(3,169,683 |
) |
|
|
(3,110,297 |
) |
|
TOTAL SHAREHOLDERS' DEFICIT
|
|
|
(107,453 |
) |
|
|
(48,067 |
) |
|
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT
|
|
$ |
13,093 |
|
|
$ |
3,927 |
|
The accompanying notes are an integral part of these consolidated
financial statements.
|
America Great Health and Subsidiaries (fka “ Crown
Marketing”)
|
|
|
Consolidated Statements of Operations
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Year Ended June 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Sales
|
|
$ |
- |
|
|
$ |
- |
|
| |
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
|
|
|
|
|
|
Professional fees
|
|
|
45,028 |
|
|
|
36,837 |
|
|
Other
|
|
|
13,121 |
|
|
|
11,529 |
|
|
|
|
|
58,149 |
|
|
|
48,366 |
|
| |
|
|
|
|
|
|
|
|
|
Loss from continuing operations before income taxes and other
income (expense)
|
|
|
(58,149 |
) |
|
|
(48,366 |
) |
| |
|
|
|
|
|
|
|
|
|
Other income (expenses)
|
|
|
|
|
|
|
|
|
|
Equity in loss of equity method investee
|
|
|
(437 |
) |
|
|
- |
|
|
|
|
|
(437 |
) |
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
Loss from continuing operations before income taxes
|
|
|
(58,586 |
) |
|
|
(48,366 |
) |
| |
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
|
800 |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
|
|
(59,386 |
) |
|
|
(48,366 |
) |
| |
|
|
|
|
|
|
|
|
|
DISCONTINUED OPERATIONS:
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations
|
|
|
- |
|
|
|
(918,666 |
) |
| |
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
$ |
(59,386 |
) |
|
$ |
(967,032 |
) |
| |
|
|
|
|
|
|
|
|
|
BASIC LOSS PER SHARE
|
|
|
|
|
|
|
|
|
|
FROM CONTINUING OPERATIONS
|
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
FROM DISCONTINUED OPERATIONS
|
|
$ |
- |
|
|
$ |
(0.00 |
) |
| |
|
|
|
|
|
|
|
|
|
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
|
|
|
|
|
|
|
|
|
|
BASIC
|
|
|
20,236,021,800 |
|
|
|
20,182,268,375 |
|
The accompanying notes are an integral part of these consolidated
financial statements.
|
America Great Health and Subsidiaries (fka “ Crown
Marketing”)
Consolidated Statement of
Shareholders' Deficit
|
|
|
|
|
Preferred Stock
|
|
|
Common Stock
|
|
|
Additional
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Paid-in Capital
|
|
|
Deficit
|
|
|
Total
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2016
|
|
|
500,000 |
|
|
$ |
500,000 |
|
|
|
20,056,021,800 |
|
|
$ |
- |
|
|
$ |
550,000 |
|
|
$ |
(2,143,265 |
)
|
|
$ |
(1,093,265 |
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on termination of deferred lease obligation - related
party
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
636,154 |
|
|
|
- |
|
|
|
636,154 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock upon conversion of preferred stock
|
|
|
(500,000 |
)
|
|
|
(500,000 |
)
|
|
|
80,000,000 |
|
|
|
- |
|
|
|
500,000 |
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of common stock issued to acquire trademarks
|
|
|
- |
|
|
|
- |
|
|
|
100,000,000 |
|
|
|
- |
|
|
|
670,000 |
|
|
|
- |
|
|
|
670,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on divestiture of subsidiaries
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
706,076 |
|
|
|
|
|
|
|
706,076 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(967,032 |
)
|
|
|
(967,032 |
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2017
|
|
|
- |
|
|
|
- |
|
|
|
20,236,021,800 |
|
|
|
- |
|
|
|
3,062,230 |
|
|
|
(3,110,297 |
)
|
|
|
(48,067 |
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(59,386 |
)
|
|
|
(59,386 |
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2018
|
|
|
- |
|
|
$ |
- |
|
|
|
20,236,021,800 |
|
|
$ |
- |
|
|
$ |
3,062,230 |
|
|
$ |
(3,169,683 |
)
|
|
$ |
(107,453 |
)
|
The accompanying notes are an integral part of these consolidated
financial statements.
|
America Great Health and Subsidiaries (fka “ Crown
Marketing”)
|
|
|
Consolidated Statements of Cash Flows
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Year Ended June 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
| |
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Net loss
|
|
$ |
(59,386 |
) |
|
$ |
(967,032 |
) |
|
Loss from discontinued operations
|
|
|
- |
|
|
|
918,666 |
|
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
Loss on equity method investment
|
|
|
437 |
|
|
|
- |
|
|
Changes in operating Assets and Liabilities:
|
|
|
|
|
|
|
|
|
|
Other receivable
|
|
|
- |
|
|
|
(100 |
) |
|
Accounts payable and accrued expenses
|
|
|
12,119 |
|
|
|
7,903 |
|
|
Net cash used in operating activities from continuing
operations
|
|
|
(46,830 |
) |
|
|
(40,563 |
) |
|
Net cash used in operating activities from discontinued
operations
|
|
|
- |
|
|
|
(10,612 |
) |
| |
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
(46,830 |
) |
|
|
(51,175 |
) |
| |
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Long-term investment
|
|
|
(13,415 |
) |
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(13,415 |
) |
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Advances from related party
|
|
|
82,153 |
|
|
|
44,091 |
|
|
Repayment to related party
|
|
|
(25,720 |
) |
|
|
- |
|
|
Net cash provided by financing activities from discontinued
operations
|
|
|
- |
|
|
|
6,242 |
|
| |
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
56,433 |
|
|
|
50,333 |
|
| |
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
|
(3,812 |
) |
|
|
(842 |
) |
| |
|
|
|
|
|
|
|
|
|
Cash beginning of year
|
|
|
3,827 |
|
|
|
4,669 |
|
|
Cash end of year
|
|
$ |
15 |
|
|
$ |
3,827 |
|
| |
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$ |
- |
|
|
$ |
- |
|
|
Taxes paid
|
|
$ |
800 |
|
|
$ |
- |
|
| |
|
|
|
|
|
|
|
|
|
Non-cash transactions
|
|
|
|
|
|
|
|
|
|
Gain on termination of deferred lease obligation - related
party
recorded as a contribution to additional paid-in capital
|
|
$ |
- |
|
|
$ |
636,154 |
|
|
Issuance of common stock to acquire trademarks
|
|
$ |
- |
|
|
$ |
670,000 |
|
|
Conversion of preferred stock to common stock
|
|
$ |
- |
|
|
$ |
500,000 |
|
|
Gain on divestiture of subsidiaries
|
|
$ |
- |
|
|
$ |
706,076 |
|
The accompanying notes are an integral part of these consolidated
financial statements.
AMERICA GREAT HEALTH AND SUBSIDIARIES
(FORMERLY KNOWN AS CROWN MARKETING)
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
JUNE 30, 2018 AND 2017
NOTE 1 – NATURE OF BUSINESS
History and Organization
America Great Health, formerly Crown Marketing, is a Wyoming
corporation (the "Company"). A change of control of the Company was
completed on January 19, 2017 from Jay Hooper, the former officer
and director of the Company and its former majority shareholder.
Control was obtained by the sale of 16,155,746,000 shares of
Company common stock from Mr. Hooper to an investor group led by
Mike Q. Wang. In connection with the change of control, the
Company sold to its former majority shareholder a subsidiary for
$100 and another subsidiary in exchange for the cancellation of all
payables and accrued expenses. After December 31, 2016, the
Company’s operations are determined and structured by the new
investor group. As such, the Company accounted for all of its
assets, liabilities and results of operations up to January 1, 2017
as discontinued operations.
On March 1, 2017, the Company filed with the Secretary of State of
the State of Wyoming an Articles of Amendment to change the
corporate name from Crown Marketing to America Great Health.
On March 9, 2017, the Company formed a wholly owned subsidiary,
America Great Health, under the laws of the State of
California.
Through December 31, 2016, the Company’s primary business activity
was the sale of various consumer products and accessories.
Going Concern
The accompanying consolidated financial statements (“CFS”) were
prepared on a going concern basis, which contemplates the
realization of assets and the settlement of liabilities and
commitments in the normal course of business. As reflected in the
accompanying CFS, the Company has incurred recurring net losses.
For the year ended June 30, 2018, the Company recorded a net loss
of $59,386, and at June 30, 2018, had a shareholders’ deficit
of $107,453. These factors create substantial doubt about the
Company's ability to continue as a going concern. These
financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going
concern.
During the year ended June 30, 2017, the Company’s former majority
shareholder sold his shares to an investor group. The new owners’
plans to continue as a going concern revolve around its ability to
achieve profitable operations, as well as raise necessary capital
to pay ongoing general and administrative expenses of the
Company. The ability of the Company to continue as a going
concern is dependent on securing additional sources of capital and
the success of the Company’s plan. There is no assurance that
the Company will be successful in raising the additional capital or
in achieving profitable operations.
Our cash needs for the 12 months ended June 30, 2018 were primarily
met by loans and advances from current majority shareholder.
As of June 30, 2018, we had a cash balance of $15. We intend
to finance operating costs over the next twelve months with
existing cash on hand and advance from current majority
shareholder.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying CFS were prepared in conformity with accounting
principles generally accepted in the United States of America (“US
GAAP”).
Basis of Consolidation
The CFS includes the accounts of the Company and its current wholly
owned subsidiary, America Great Health in California. Intercompany
transactions and accounts were eliminated in consolidation.
Reclassifications
Prior period numbers have been reclassified to conform to the
current period presentation.
Estimates
The preparation of the financial statements in conformity with US
GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, and
disclosure of contingent liabilities at the date of the financial
statements and the reported amounts of expenses during the
reporting period. Significant estimates include accounting for
potential liabilities and the assumptions made in valuing stock
instruments issued for services. Actual results could differ from
those estimates.
Revenues
The Company’s operations through December 31, 2016 became
discontinued (see Note 3).
For the discontinued operations, the Company recognizes revenue
when the following fundamental criteria are met: (i) persuasive
evidence of an arrangement exists; (ii) delivery has occurred;
(iii) the price is fixed or determinable; and (iv) collectability
is reasonably assured. Revenue is recognized for hardware product
sales upon transfer of title and risk of loss to the customer. We
record reductions to revenue for estimated product returns and
pricing adjustments in the same period that the related revenue is
recorded. These estimates are based on contractual return rights,
historical sales returns, analysis of credit memo data and other
factors known at the time. If actual future returns and pricing
adjustments differ from past experience and our estimates,
adjustments to revenue reserves may be required.
For the year ended June 30, 2018, we had no revenue generating
activities.
Inventories
Inventories are stated at the lower of cost (first-in, first-out)
or net realizable value. Adjustments to reduce the cost of
inventory to its net realizable value are made, if required, for
estimated excess, obsolescence, or impaired balances.
Fair Value Measurements
Fair value measurements are determined using authoritative guidance
issued by the FASB, with the exception of the application of the
guidance to non-recurring, non-financial assets and liabilities as
permitted. Fair value is defined in the authoritative guidance as
the price that would be received to sell an asset or paid to
transfer a liability in the principal or most advantageous market
for the asset or liability in an orderly transaction between market
participants at the measurement date. A fair value hierarchy was
established, which prioritizes the inputs used in measuring fair
value into three broad levels as follows:
Level 1—Quoted prices in active markets for identical assets or
liabilities.
Level 2—Inputs, other than the quoted prices in active markets, are
observable either directly or indirectly.
Level 3—Unobservable inputs based on the Company’s assumptions.
The Company is required to use observable market data if available
without undue cost and effort.
The Company’s financial instruments include cash and accounts
payable. Management has estimated that the carrying amounts
approximate their fair value due to the short-term nature.
Loss per Share
Basic earnings (loss) per share are computed by dividing income
available to common shareholders by the weighted-average number of
common shares available. Diluted earnings (loss) per share is
computed similar to basic earnings per share except that the
denominator is increased to include the number of additional common
shares that would have been outstanding if the potential common
shares had been issued and if the additional common shares were
dilutive. The Company’s diluted loss per share is the same as the
basic loss per share for the years ended June 30, 2018 and 2017, as
there are no potential shares outstanding that would have a
dilutive effect.
Income Taxes
Income tax expense is based on pretax financial accounting income.
Deferred tax assets and liabilities are recognized for the expected
tax consequences of temporary differences between the tax bases of
assets and liabilities and their reported amounts. Valuation
allowances are recorded to reduce deferred tax assets to the amount
that will more likely than not be realized. The Company recorded a
valuation allowance against its deferred tax assets as of June 30,
2018 and 2017.
The Company accounts for uncertainty in income taxes using a
two-step approach to recognizing and measuring uncertain tax
positions. The first step is to evaluate the tax position for
recognition by determining if the weight of available evidence
indicates that it is more likely than not that the position will be
sustained on audit, including resolution of related appeals or
litigation processes, if any. The second step is to measure the tax
benefit as the largest amount that is more than 50% likely of being
realized upon settlement. The Company classifies the liability for
unrecognized tax benefits as current to the extent that the Company
anticipates payment (or receipt) of cash within one year. Interest
and penalties related to uncertain tax positions are
recognized in the provision for income taxes.
Stock-Based Compensation
The Company periodically grants stock options and warrants to
employees and non-employees in non-capital raising transactions as
compensation for services rendered. The Company accounts for stock
option and stock warrant grants to employees based on the
authoritative guidance provided by the Financial Accounting
Standards Board (“FASB”) where the value of the award is measured
on the date of grant and recognized over the vesting period. The
Company accounts for stock option and stock warrant grants to
non-employees in accordance with the authoritative guidance of the
FASB where the value of the stock compensation is determined based
upon the measurement date at either a) the date at which a
performance commitment is reached, or b) at the date at which the
necessary performance to earn the equity instruments is complete.
Non-employee stock-based compensation charges generally are
amortized over the vesting period on a straight-line basis. In
certain circumstances where there are no future performance
requirements by the non-employee, option or warrant grants are
immediately vested and the total stock-based compensation charge is
recorded in the period of the measurement date.
Segment Information
Effective January 1, 2017, all operations of the Company became
discontinued operations (see Note 3).
At December 31, 2016, the Company had one reportable operating
segment from the discontinued operations.
For the year ended June 30, 2018, the Company had no sales. For the
year ended June 30, 2017, no single customer accounted for 10% or
more of sales and the Company had no foreign sales.
Recent Accounting Pronouncements
In May 2014, the FASB issued an accounting standard update (“ASU”)
related to revenue from contracts with customers, which, along with
amendments issued in 2015 and 2016, will supersede nearly all
current U.S. GAAP guidance on this topic and eliminate
industry-specific guidance. The underlying principle is to
recognize revenue when promised goods or services are transferred
to customers in an amount that reflects the consideration that is
expected to be received for those goods or services. This
accounting standard update, as amended, will be effective for the
Company beginning in the first quarter of fiscal 2019. The new
revenue standard may be applied retrospectively to each prior
period presented or retrospectively with the cumulative effect
recognized in retained earnings as of the date of adoption
(“modified retrospective basis”). Early adoption is permitted, but
no earlier than fiscal 2018. The Company expects to adopt this ASU
on a modified retrospective basis in the first quarter of fiscal
2019, and it is currently evaluating the impact of this
accounting standard update on its CFS.
In February 2016, the FASB issued ASU No. 2016-02, Leases. ASU
2016-02 requires a lessee to record a right of use asset and a
corresponding lease liability on the balance sheet for all leases
with terms longer than 12 months. ASU 2016-02 is effective for all
interim and annual reporting periods beginning after December 15,
2018. Early adoption is permitted. A modified retrospective
transition approach is required for lessees for capital and
operating leases existing at, or entered into after, the beginning
of the earliest comparative period presented in the financial
statements, with certain practical expedients available. The
Company is in the process of evaluating the impact of ASU 2016-02
on the Company’s CFS.
In October 2016, the FASB issued ASU 2016-16, Income Taxes:
Intra-Entity Transfer of Assets Other Than Inventory, which
improves the accounting for the income tax consequences of
intra-entity transfers of assets other than inventory. ASU 2016-16
will be effective for fiscal years, and interim periods within
those years, beginning the first quarter of 2018. The Company is
assessing the impact to its accounting practices and financial
reporting procedures as a result of the issuance of this
standard.
In May 2017, the FASB issued ASU 2017-09, “Compensation—Stock
Compensation (Topic 718)”, Scope of Modification Accounting. The
Board is issuing this Update to provide clarity and reduce both (1)
diversity in practice and (2) cost and complexity when applying the
guidance in Topic 718, Compensation—Stock Compensation, to a change
to the terms or conditions of a share-based payment award. The
amendments in this Update are effective for all entities for annual
periods, and interim periods within those annual periods, beginning
after December 15, 2017. Early adoption is permitted, including
adoption in any interim period, for (1) public business entities
for reporting periods for which financial statements have not yet
been issued and (2) all other entities for reporting periods for
which financial statements have not yet been made available for
issuance. The adoption of this standard is not expected to have any
material impact on the Company’s CFS.
In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share
(Topic 260); Distinguishing Liabilities from Equity (Topic 480);
Derivatives and Hedging (Topic 815): (Part I) Accounting for
Certain Financial Instruments with Down Round Features, (Part II)”,
which is the replacement of the Indefinite Deferral for Mandatorily
Redeemable Financial Instruments of Certain Nonpublic Entities and
Certain Mandatorily Redeemable Noncontrolling Interests with a
Scope Exception. The amendments in Part I of this Update that
relate to the recognition, measurement, and earnings per share of
certain freestanding equity-classified financial instruments that
include down round features affect entities that present earnings
per share in accordance with the guidance in Topic 260, Earnings
Per Share. The amendments in Part II of this Update do not have an
accounting effect. The amendments in Part I of the update are
effective for fiscal year, and interim periods within those fiscal
years, beginning after December 15, 2018. The Company is assessing
the impact to its accounting practices and financial reporting
procedures as a result of the issuance of this standard.
Other recent accounting pronouncements issued by the FASB,
including its Emerging Issues Task Force, the American Institute of
Certified Public Accountants, and the Securities and Exchange
Commission did not or is not believed by management to have a
material impact on the Company’s present or future CFS.
NOTE 3 – DISCONTINUED OPERATIONS
Through December 31, 2016, the Company’s primary business was the
sale of various consumer products and accessories. As of January 1,
2017, the Company ceased operations. On January 19, 2017, a change
in control completed as the Company’s former majority shareholder
sold his 16,155,746,000 shares to an investor group. In connection
with the change in control, the Company sold to its former majority
shareholder one of its subsidiary for $100 and another subsidiary
for the cancellation of all payables and accrued expenses. As a
result, in the year ended June 30, 2017, the Company recorded a
gain on divestiture of subsidiaries of $706,076, as the
subsidiaries were sold to a related party, the Company recorded the
gain as a contribution to Additional Paid-in Capital. After the
change in control, the Company’s operations are determined by the
new investor group. As such, the Company accounted for all of its
assets, liabilities and results of operations up to January 1, 2017
as discontinued operations.
The Company has reclassified its previously issued financial
statements to segregate the discontinued operations as of the
earliest period reported.
Revenue and expenses of the discontinued operations were as
follows:
|
|
|
Year Ended
June 30,
|
|
|
|
|
2017
|
|
| |
|
|
|
|
|
Selling, general and administrative expenses:
|
|
|
|
|
|
Rent expense
|
|
$ |
27,786 |
|
|
Selling, general and administrative expenses
|
|
|
859,683 |
|
|
Total selling, general and administrative expenses
|
|
|
887,469 |
|
| |
|
|
|
|
|
Loss from operations
|
|
|
(887,469 |
)
|
| |
|
|
|
|
|
Other expenses
|
|
|
|
|
|
Interest expense, related party
|
|
|
(31,197 |
)
|
|
|
|
|
(31,197 |
)
|
| |
|
|
|
|
|
NET LOSS
|
|
$ |
(918,666 |
)
|
| |
|
|
|
|
|
BASIC LOSS PER SHARE
FROM DISCONTINUED OPERATIONS
|
|
$ |
(0.00 |
)
|
| |
|
|
|
|
|
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
BASIC
|
|
|
20,182,268,375 |
|
NOTE 4 – RELATED PARTY TRANSACTIONS
During the year ended June 30, 2018, the Company's current majority
shareholder advanced $82,153 to the Company as working capital and
the Company repaid $25,720 to the shareholder. As of June 30, 2018
and June 30, 2017, the Company owed its current majority
shareholder of $100,525 and $44,092 respectively. The advances are
non-interest bearing and are due on demand.
Through its former subsidiary, Crown Laboratory Inc., the Company
leased a warehouse in El Monte, California. The warehouse is owned
by Temple CB LLC, (“Temple CB”), a single member limited liability
company owned by the Company’s former President and majority
shareholder. In October 2016, the Company and Temple CB agreed to
terminate the lease effective as of July 1, 2016. The Company
ceased using the premises prior to July 1, 2016.
Currently the Company is using a premises for free, the premises is
leased by a company owned by its current majority shareholder.
NOTE 5 – CONVERTIBLE, REDEEMABLE PREFERRED STOCK
During the year ended June 30, 2016, the Company’s Board of
Directors authorized the creation of a series of preferred stock
consisting of 1,000,000 shares designated as Series A Preferred
Stock (the “Series A”). The Series A is entitled to a dividend of
4%, when and as declared, and is entitled to a liquidation
preference of $1 per share plus unpaid dividends. The Series A is
redeemable at the option of the Company at any time, in whole or in
part, at a price of $1.00 per share, plus 4% per annum thereupon
from the date of issuance (the “Stated Value”). In the event of any
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the Series A shall be entitled to a
preferential amount equal to the Stated Value, prior to the holders
of common stock receiving any distribution. Each share of Series A
is automatically converted on the Conversion Date into a number of
shares of common stock of the Company at the initial conversion
rate (the “Conversion Rate”), which shall be the Stated Value as of
the date of conversion divided by the Market Price. The Market
Price for purposes of this Section 5 shall be equal to the average
closing sales price of the Common Stock over the 5 previous trading
days.
The Series A is also subject to adjustments to the Conversion Rate.
If the common stock issuable on conversion of the Series A is
changed into the same or a different number of shares of any other
class or classes of stock, whether by capital reorganization,
reclassification, or otherwise (other than a subdivision or
combination of shares provided for above), the holders of the
Series A shall, upon its conversion, be entitled to receive, in
lieu of the common stock which the holders would have become
entitled to receive but for such change, a number of shares of such
other class or classes of stock that would have been subject to
receipt by the holders if they had exercised their rights of
conversion of the Series A immediately before that change.
In August 2016, the Company filed an amendment to its Articles of
Incorporation to increase the number of authorized shares of Series
A Preferred Stock from 1,000,000 to 10,000,000.
In October 2016, the holder of the Company’s 500,000 shares of
outstanding Series A preferred stock, Temple CB, presented a Notice
of Conversion to the Company, which obligated the Company to issue
80,000,000 shares of its common stock to Temple CB in exchange for
the 500,000 shares of the preferred stock. The conversion rate was
the stated value of $1.00 per share, plus 4% per annum, divided by
the closing sales price on the five trading days prior to the date
of the notice.
There were no preferred shares outstanding as of June 30, 2018 and
June 30, 2017.
NOTE 6 – SHAREHOLDERS’ DEFICIT
A change of control took place on January 19, 2017 from Jay Hooper.
Control was obtained by the sale of 16,155,746,000 shares of the
Company common stock from Mr. Hooper to an investor group led by
Mike Q. Wang, the change of control had no impact on the Company’s
stockholder’s equity. In connection with the change in controlling
ownership, the Company sold to its former majority shareholder one
of its subsidiary for $100 and another subsidiary in exchange for
the cancellation of all payables and accrued expenses. As a result,
in the year ended June 30, 2017, the Company recorded a gain on
divestiture of subsidiaries of $706,076, as the subsidiaries were
sold to a related party, the Company recorded the gain as a
contribution to Additional Paid-in Capital.
Effective July 1, 2016, the Company agreed to terminate its lease
agreement with Temple CB. During the year ended June 30, 2017,
relating to the termination of the lease agreement, the Company
recorded a gain on the termination of the deferred lease obligation
of $636,154. As the deferred lease obligation was to a related
party (Temple CB), the Company recorded the gain as a contribution
to Additional Paid-in Capital.
NOTE 7 – JOINT VENTURE
On March 5th, 2018, America Great Health, a California Corporation
(“AAGH California”), a wholly owned subsidiary of the Company,
entered into a Sino-foreign Co-operative Joint Venture Contract
(the “JV Agreement”) with Guangzhou Bona Biotechnology Co., Ltd.
(“Bona”) pursuant to which the parties established a JV, Pomeikang
Biotechnology (Guangzhou) Co., Ltd. (“Pomeikang”) to promote and
develop sales channels for health and cosmetics related products
supplied by AAGH California in the mainland of the People’s
Republic of China, the Hong Kong Special Administration Region and
the Macau Special Administration Region (together, the “China
Market”).
Pursuant to the JV Agreement, AAGH California and Bona own 49% and
51% of the Pomeikang, respectively, and AAGH California has the
veto right to the majority shareholder’s decision. AAGH California
will contribute the initial products supply in equivalent of cash
amount of RMB 2.45 million ($380,000) to Pomeikang and Bona will
contribute any required operating capitals, experienced sales team,
promotional effort, and customer services to ensure normal day to
day operation of Pomeikang. Bona will also be responsible for
acquiring any required government permits, sales permits, and
business licenses for Pomeikang.
The following table summarizes the income statement of
Pomeikang.
|
|
|
From date of equity investment to 6/30/2018
|
|
| |
|
|
|
|
|
Sales
|
|
$ |
12,063 |
|
|
Gross profit
|
|
|
7,946 |
|
|
Net loss
|
|
|
(891 |
) |
|
49% share
|
|
|
(437 |
) |
The following table provides the summary of balance sheet
information for Pomeikang.
|
|
|
As of June 30, 2018
|
|
| |
|
|
|
|
|
Total assets
|
|
$ |
23,544 |
|
|
Net assets
|
|
|
23,544 |
|
|
49% ownership
|
|
|
11,536 |
|
|
Ending balance of investment account
|
|
|
12,978 |
|
|
Difference
|
|
|
(1,442 |
) |
The difference of $1,442 was mainly due to the effect of exchange
rate.
NOTE 8 – INCOME TAXES
Deferred taxes represent the net tax effects of the temporary
differences between the carrying amounts of assets and liabilities
for financial reporting purposes. Temporary differences result
primarily from the recording of tax benefits of net operating loss
carry forwards.
As of June 30, 2018, the Company has an insufficient history
to support the likelihood of ultimate realization of the benefit
associated with the deferred tax asset. Accordingly, a valuation
allowance has been established for the full amount of the net
deferred tax asset.
The Company’s effective income tax rate differs from the amount
computed by applying the federal statutory income tax rate to loss
before income taxes for the years ended June 30, 2018 and 2017 as
follows:
|
|
|
Year Ended June 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
| |
|
|
|
|
|
|
|
|
|
Income tax benefit at federal statutory rate
|
|
|
34 |
%
|
|
|
34 |
%
|
|
State tax, net of fed effect
|
|
|
6 |
%
|
|
|
6 |
%
|
|
Change in valuation allowance
|
|
|
-40 |
%
|
|
|
-40 |
%
|
|
|
|
|
- |
%
|
|
|
- |
%
|
The components of deferred taxes consist of the following at June
30, 2018 and 2017:
|
|
|
June 30, 2018
|
|
|
June 30, 2017
|
|
| |
|
|
|
|
|
|
|
|
|
Net operating loss carryforwards
|
|
$ |
1,267,873 |
|
|
$ |
1,244,119 |
|
|
Less: valuation allowance
|
|
|
(1,267,873 |
)
|
|
|
(1,244,119 |
)
|
|
Net deferred tax assets
|
|
$ |
- |
|
|
$ |
- |
|
As of June 30, 2018, the Company had federal and
California income tax net operating loss carryforwards of
approximately $3.2 million. These net operating losses will
begin to expire 20 years from the date the tax returns are
filed.
(b) Exhibits. The following exhibits of the
Company are included herein.
2. Agreement and Plan of Reorganization
2.1 Agreement and Plan of Reorganization
between the Company and Okra Energy, Inc. dated December 2,
2013.(4)
3. Certificate of Incorporation and Bylaws
3.1. Articles of Incorporation
(1)*
3.2 Articles of Merger (2)
3.3 Bylaws(1)
3.4 Amended and Restated Articles of
Incorporation, as filed June 24, 2016(5)
3.5 Amendment to Articles of
Incorporation increasing authorized Series A Preferred, August 20,
2016(5)
10. Material Contracts
10.1 Promissory Note to Strategic Global
Resources, Ltd. (3)
10.2 Promissory Note to Farrington
Pharmaceuticals, LLC (3)
10.3 Lease Agreement between Okra
Energy, Inc. and Temple CB, LLC (4)
21. Subsidiaries of the registrant – Okra Energy, a
California corporation and Crown Laboratory, Inc. Crown Mobile is a
California corporation which is 50% owned by the Company. No
trade names are employed.
31.1. Certification by the Principal Executive
Officer and Principal Accounting and Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
32.1. Certifications by the Principal Executive
Officer and Principal Financial Officer Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
* The Company had filed an amendment to its Articles of
Incorporation to change the name to “Okra, Inc.’ but this
amendment was reversed in an additional amendment filed with the
Secretary of State. The name of the Company continues to
be “Crown Marketing.”
All other Exhibits called for by Rule 601 of Regulation S-K are not
applicable to this filing.
(1) Filed
with original registration statement.
(2) Filed
with amendment no. 1.
(3) Filed
with the Annual Report on Form 10-K for the year ended June 30,
2013.
(4) Filed
with Current Report on Form 8-K dated December 2, 2013.
(5) Filed
with the Annual Report on Form 10-K for the year ended June 30,
2016.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
Date: November 30, 2018
|
|
/s/ Mike Wang
|
|
|
|
|
Mike Wang, Chief Executive Officer,
Chief Financial Officer, Secretary and Director
|
|
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
|
Date: November 30, 2018
|
|
/s/ Mike Wang
|
|
|
|
|
Mike Wang, Chief Executive Officer,
Chief Financial Officer, Secretary and Director
|
|
America Great Health (PK) (USOTC:AAGH)
Historical Stock Chart
From Dec 2020 to Jan 2021
America Great Health (PK) (USOTC:AAGH)
Historical Stock Chart
From Jan 2020 to Jan 2021
