0001213900-20-037304.txt : 20201116 0001213900-20-037304.hdr.sgml : 20201116 20201116153152 ACCESSION NUMBER: 0001213900-20-037304 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 66 CONFORMED PERIOD OF REPORT: 20200930 FILED AS OF DATE: 20201116 DATE AS OF CHANGE: 20201116 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Joway Health Industries Group Inc CENTRAL INDEX KEY: 0001263364 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 980221494 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-108715 FILM NUMBER: 201316252 BUSINESS ADDRESS: STREET 1: NO 19 BAOWANG ROAD STREET 2: BAODI ECONOMIC DEVELOPMENT ZONE CITY: TIANJIN, PRC STATE: F4 ZIP: 300180 BUSINESS PHONE: 862258896888 MAIL ADDRESS: STREET 1: NO 19 BAOWANG ROAD STREET 2: BAODI ECONOMIC DEVELOPMENT ZONE CITY: TIANJIN, PRC STATE: F4 ZIP: 300180 FORMER COMPANY: FORMER CONFORMED NAME: G2 VENTURES INC DATE OF NAME CHANGE: 20030911 10-Q 1 f10q0920_jowayhealth.htm QUARTERLY REPORT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

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

 

For the quarterly period ended September 30, 2020

 

☐   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

For the transition period from              to             

 

Commission File No. 333-108715

 

Joway Health Industries Group Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

Nevada   98-0221494

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

   

No. 2, Baowang Road, Baodi Economic Development

Zone, Tianjin, PRC 301800

  86-22-22535999
(Address of Principal Executive Offices)   (Issuer’s Telephone Number)

 

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock par value $0.001 per share   GTVI   PINK marketplace of OTC Markets Inc.

 

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  ☐

 

(Note: The registrant is a voluntary filer of reports under Section 13 or 15(d) of the Securities Exchange Act of 1934 and has filed during the preceding 12 months all reports it would have been required to file by Section 13 or 15(d) of the Securities Exchange Act of 1934 if the registrant had been subject to one of such Sections.)

 

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

 

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 Exchange Act).  Yes  ☒  No  ☐

 

The number of shares outstanding of the Issuer’s Common Stock as of November 16, 2020 was 20,054,000 shares.

 

 

 

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION 1
   
Item 1. Financial Statements 1
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 19
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk 29
   
Item 4. Controls and Procedures 29
   
PART II - OTHER INFORMATION 30
   
Item 1. Legal Proceedings 30
   
Item 1A. Risk Factors 30
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 30
   
Item 3. Defaults Upon Senior Securities 30
   
Item 4. Mine Safety Disclosures 30
   
Item 5. Other Information 30
   
Item 6. Exhibits 31
   
SIGNATURES 31

 

i

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

In the opinion of management, the accompanying unaudited condensed consolidated financial statements included in this Form 10-Q reflect all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of operations for the periods presented. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.

 

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

(UNAUDITED)

 

  Page
   
Condensed Consolidated Balance Sheets as of September 30, 2020 (Unaudited) and December 31, 2019 2
   
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three and the Nine Months Ended September 30, 2020 and 2019 (Unaudited) 3
   
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019 (Unaudited) 4
   
Notes to Unaudited Condensed Consolidated Financial Statements 5-18

 

1

 

 

JOWAY HEALTH INDUSTRIES GROUP INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   September 30,   December 31, 
   2020   2019 
   (Unaudited)   (Audited) 
ASSETS        
         
CURRENT ASSETS:        
Cash  $86,236   $99,979 
Other receivables   34,296    28,740 
Inventories   527,406    500,269 
Advances to suppliers   50,770    56,418 
Prepaid taxes   78,140    97,381 
Total current assets   776,848    782,787 
           
PROPERTY, PLANT AND EQUIPMENT, net   3,159,863    3,377,361 
           
OTHER ASSETS:          
Intangible assets, net   448,564    448,033 
Total other assets   448,564    448,033 
           
Total assets  $4,385,275   $4,608,181 
           
LIABILITIES AND STOCKHOLDERS' EQUITY
           
CURRENT LIABILITIES:          
Accounts payable  $98,020   $92,071 
Advances from customers   5,192    21,734 
Other payables   76,947    55,792 
Due to related parties   1,915,333    1,480,515 
Total current liabilities   2,095,492    1,650,112 
           
COMMITMENTS   -    - 
           
STOCKHOLDERS' EQUITY:          
Preferred stock - par value $0.001; 1,000,000 shares authorized; no shares issued and outstanding   -    - 
Common stock - par value $0.001; 200,000,000 shares authorized; 20,054,000 shares issued and outstanding at September 30, 2020 and December 31, 2019   20,054    20,054 
Additional paid-in-capital   7,361,665    7,361,665 
Statutory reserves   354,052    354,052 
Accumulated deficit   (5,993,260)   (5,264,040)
Accumulated other comprehensive income   547,272    486,338 
Total stockholders' equity   2,289,783    2,958,069 
Total liabilities and stockholders' equity  $4,385,275   $4,608,181 

 

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

 

2

 


JOWAY HEALTH INDUSTRIES GROUP INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

 

   Three months ended
September 30,
   Nine months ended
September 30,
 
   2020   2019   2020   2019 
                 
REVENUES  $77,289   $158,516   $159,407   $468,766 
                     
COST OF REVENUES   37,517    69,709    83,268    221,872 
                     
GROSS PROFIT   39,772    88,807    76,139    246,894 
                     
Selling expenses   22,531    53,831    68,397    222,764 
General and administrative expenses   211,858    223,603    735,777    855,613 
OPERATING EXPENSES   234,389    277,434    804,174    1,078,377 
                     
LOSS FROM OPERATIONS   (194,617)   (188,627)   (728,035)   (831,483)
                     
Interest income   25    36    69    124 
Other income   80    24    81    35 
Other expenses   (182)   (71,695)   (1,335)   (72,985)
OTHER EXPENSES, NET   (77)   (71,635)   (1,185)   (72,826)
                     
LOSS BEFORE INCOME TAXES   (194,694)   (260,262)   (729,220)   (904,309)
                     
INCOME TAX   -    -    -    - 
                     
NET LOSS   (194,694)   (260,262)   (729,220)   (904,309)
                     
OTHER COMPREHENSIVE INCOME (LOSS):                    
Foreign currency translation adjustment   103,625    (105,948)   60,934    (92,278)
                     
COMPREHENSIVE LOSS  $(91,069)  $(366,210)  $(668,286)  $(996,587)
                     
NET LOSS PER COMMON SHARE, BASIC AND DILUTED  $(0.01)  $(0.01)  $(0.04)  $(0.05)
                     
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC AND DILUTED   20,054,000    20,054,000    20,054,000    20,054,000 

 

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

 

3

 

 

JOWAY HEALTH INDUSTRIES GROUP INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

   Nine months ended
September 30,
 
   2020   2019 
         
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net loss  $(729,220)  $(904,309)
Adjustments to reconcile net loss to net cash used in operating activities          
Depreciation   292,084    308,065 
Amortization   10,127    14,359 
Loss on sale of assets   -    13 
Changes in operating assets and liabilities:          
Other receivables   (6,261)   31,042 
Inventories   (29,746)   1,985 
Advances to suppliers   5,648    80,889 
Prepaid expense   -    1,309 
Accounts payable   5,949    (5,795)
Advances from customers   (16,542)   (110,659)
Other payable   27,050    29,558 
Salary and welfare payable   (5,895)   (10,941)
Taxes payable   19,241    28,140 
Net cash used in operating activities   (427,565)   (536,344)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchase of property, plant and equipment   -    (89,219)
Net cash used in investing activities   -    (89,219)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds of due to related parties   434,818    582,308 
Net cash provided by financing activities   434,818    582,308 
           
EFFECT OF EXCHANGE RATE CHANGES ON CASH   (20,996)   15,373 
           
NET DECREASE IN CASH   (13,743)   (27,882)
           
CASH, beginning of period   99,979    118,996 
           
CASH, end of period  $86,236   $91,114 
           
SUPPLEMENTAL DISCLOSURES:          
           
Income taxes paid  $-   $- 
Interest paid  $-   $- 

 

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

 

4

 

 

JOWAY HEALTH INDUSTRIES GROUP INC.

 

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 – ORGANIZATION

 

The unaudited condensed consolidated financial statements include the financial statements of Joway Health Industries Group Inc. (referred to herein as “Joway Health”), its subsidiaries, and variable interest entities (“VIEs”) where Joway Health is deemed the primary beneficiary. Joway Health, its subsidiaries and VIEs are collectively referred to herein as the “Company”, “we” and “us”.

 

Joway Health (formerly G2 Ventures, Inc.) was originally incorporated under the laws of the State of Texas on March 21, 2003. On September 21, 2010, Joway Health entered into a Share Exchange Agreement (the “Share Exchange”) with the sole stockholder of Dynamic Elite International Limited. As a result of the Share Exchange, Dynamic Elite became a wholly-owned subsidiary of Joway Health and the stockholders of Dynamic Elite acquired approximately 76.08% of the issued and outstanding stock of Joway Health. The share exchange transaction resulted in the shareholders of Dynamic Elite acquiring a majority voting interest in Joway Health. Generally accepted accounting principles in the United States of America require that the company whose shareholders retain the majority interest in the combined business be treated as the acquirer for accounting purposes. The reverse acquisition process utilizes the capital structure of Joway Health and the assets and liabilities of Dynamic Elite recorded at historical cost. On December 22, 2010, Joway Health changed its jurisdiction of incorporation from the State of Texas to the State of Nevada.

 

Dynamic Elite International Limited (referred to herein as “Dynamic Elite”) was incorporated under the laws of the British Virgin Islands on June 2, 2010 as a limited liability company (a BVI company). Dynamic Elite engages in manufacturing and distributing tourmaline products in China. Its wholly owned subsidiary, Tianjin Junhe Management Consulting Co., Ltd. was incorporated on September 15, 2010 in Tianjin, People’s Republic of China (“PRC”). Other than the equity interest in Junhe Consulting, Dynamic Elite does not own any assets or conduct any operations.

 

Tianjin Junhe Management Consulting Co., Ltd. (referred to herein as “Junhe Consulting”) conducts its business through Tianjin Joway Shengshi Group Co., Ltd. that is consolidated as a variable interest entity.

 

Tianjin Joway Shengshi Group Co., Ltd. (referred to herein as “Joway Shengshi”) was incorporated in PRC on May 17, 2007. Joway Shengshi is currently owned 99% by Jinghe Zhang, the Company’s current CEO and President and 1% by Song Baogang. Joway Shengshi engages in manufacturing and distributing tourmaline products in China. Shenyang Joway Electronic Technology Co., Ltd., Tianjin Joway Decoration Engineering Co., Ltd. and Tianjin Oriental Shengtang Trading Import & Export Trading Co., Ltd are subsidiaries of Joway Shengshi.

 

Shenyang Joway Electronic Technology Co., Ltd. (referred to herein as “Joway Technology”) was originally named Liaoning Joway Technology Engineering Co., Ltd. which was incorporated on March 28, 2007 in PRC. The name was changed on June 22, 2011. It engages in the distribution of Tourmaline Activated Water Machines and Tourmaline Wellness Houses. Prior to July 25, 2010, Joway Shengshi owned 90.91% of Joway Technology. Joway Shengshi entered into a share acquisition agreement with Jingyun Chen, another stockholder of Joway Technology on July 25, 2010 to acquire the remaining 9.09% of the share of Joway Technology. As a result of the share acquisition, Joway Technology became a wholly-owned subsidiary of Joway Shengshi.

 

Tianjin Joway Decoration Engineering Co., Ltd. (referred to herein as “Joway Decoration”) was incorporated on April 22, 2009 in PRC. It engages in the distribution of Tourmaline Activated Water Machines, Tourmaline Wellness House for family use and Tourmaline Wellness House materials. Prior to July 9, 2010, Joway Shengshi owned 90% of Joway Decoration. Joway Shengshi entered into a share acquisition agreement with Jingyun Chen, another stockholder of Joway Decoration on July 9, 2010 to acquire the remaining 10% of the shares of Joway Decoration. As a result of the share acquisition, Joway Decoration became a wholly-owned subsidiary of Joway Shengshi. Jingyun Chen is currently the General Manager of Joway Decoration.

 

5

 

 

Tianjin Oriental Shengtang Import & Export Trading Co., Ltd (referred to herein as “Shengtang Trading”) was incorporated on September 18, 2009 in the PRC. It engages in purchasing raw materials which it sells to other companies of the group. Prior to July 28, 2010, Joway Shengshi owned 95% of Shengtang Trading. Joway Shengshi entered into a share acquisition agreement with Wang Aiying, another stockholder of Shengtang Trading on July 28, 2010 to acquire the remaining 5% of the shares of Shengtang Trading. As a result of the share acquisition, Shengtang Trading became a wholly-owned subsidiary of Joway Shengshi.

 

The following table lists the Company and its subsidiaries:

 

Name   Domicile and Date of Incorporation   Paid in Capital   Percentage of Effective Ownership   Principal Activities
Joway Health Industries Group Inc.  

March 21, 2003,

Nevada

  USD 20,054  

86.8% owned by Crystal Globe Limited

13.2%owned by other institutional and individual investors

 

Investment 

Holding

Dynamic Elite International Limited  

June 2, 2010,

British Virgin Islands

  USD 10,000   100% owned by Joway Health Industries Group Inc.  

Investment

Holding

Tianjin Junhe Management Consulting Co., Ltd.   September 15, 2010, PRC   USD 20,000   100% owned by Dynamic Elite International Limited   Advisory
Tianjin Joway Shengshi Group Co., Ltd.   May 17, 2007, PRC   USD 7,216,140.72   99% owned by Jinghe Zhang, and 1% owned  by Baogang Song  

Production and

distribution of Healthcare Knit Goods and Daily Healthcare and Personal Care products

Shenyang Joway Electronic Technology Co., Ltd.   March 28, 2007, PRC   USD 142,072.97   100% owned by Tianjin Joway Shengshi Group Co., Ltd   Distribution of Tourmaline Activated Water Machine and construction of Tourmaline Wellness House
Tianjin Joway Decoration Engineering Co., Ltd.   April 22, 2009, PRC   USD 292,367.74   100% owned by Tianjin Joway Shengshi Group Co., Ltd   Distribution of Wellness House for family use and Activated Water Machine and construction of Tourmaline Wellness House
Tianjin Oriental Shengtang Import & Export Trading Co., Ltd.   September 18, 2009, PRC   USD 292,463.75   100% owned by Tianjin Joway Shengshi Group Co., Ltd   Distribution of tourmaline products

 

On September 16, 2010, prior to the share exchange, Junhe Consulting entered into a series of contractual agreements (the “Contractual Agreements”) with Joway Shengshi and Joway Shengshi’s owners. The following is a brief description of the Contractual Agreements entered into between Junhe Consulting and Joway Shengshi or Joway Shengshi’s owners:

 

6

 

 

1. Consulting Services Agreement. Pursuant to the consulting services agreement between Junhe Consulting and Joway Shengshi, Junhe Consulting has the right to advise, consult, manage and operate Joway Shengshi, and collect and own all of the net profits of the Operating Entities.

 

2. Operating Agreement. Under the operating agreement between Junhe Consulting and Joway Shengshi, Junhe Consulting has the right to recommend director candidates and appoint the senior executives of Joway Shengshi, approve any transactions that may materially affect the assets, liabilities, rights or operations of Joway Shengshi, and guarantee the contractual performance by Joway Shengshi of any agreements with third parties, in exchange for a pledge by Joway Shengshi of its accounts receivable and assets.

 

3. Voting Rights Proxy Agreement. Under the voting rights proxy agreement between Joway Shengshi’s owners and Junhe Consulting, the owners of Joway Shengshi have vested their collective voting control over Joway Shengshi to Junhe Consulting and will only transfer their respective equity interests in Joway Shengshi to Junhe Consulting or its designee.

 

4. Option Agreement. Under the option agreement between Joway Shengshi’s owners and Junhe Consulting, the owners of Joway Shengshi have granted Junhe Consulting the irrevocable right and option to acquire all of their equity interests in Joway Shengshi.

 

5. Equity Pledge Agreement. Under the equity pledge agreement between Joway Shengshi’s owners and Junhe Consulting, the owners of Joway Shengshi have pledged all of their rights, titles and interests in Joway Shengshi to Junhe Consulting to guarantee Joway Shengshi’s performance of its obligations under the Consulting Services Agreement.

 

As a result of the Contractual Agreements, Joway Shengshi is effectively a variable interest entity of Junhe Consulting. Accordingly, the Company through its wholly-owned subsidiary Junhe Consulting, consolidates Joway Shengshi’s results of operation, assets and liabilities in its financial statements.

 

In connection with the Share Exchange and as consideration for entering into the VIE Agreements, Jingshe Zhang and Baogang Song, the shareholders of Joway Shengshi (the “Grantees”), entered into a Call Option Agreement, dated July 20,2010 with Lionel Evan Liu (the “Grantor”), the sole shareholder of Crystal Globe Limited (the controlling shareholder of Dynamic Elite), a British Virgin Islands company (“CGL”) (the “Call Option Agreement”), pursuant to which the Grantees had the right to purchase up to 100% of the shares of CGL (the “Call Option”) at an exercise price of $2.00 per share (the “Exercise Price”) for a period of five years. The Call Option vested as to 34% of the shares of CGL on April 2, 2011 and as to 33% on each of April 2, 2012 and 2013 (the respective “Call Option Effective Date”). On March 28, 2015, the Grantor and Grantees amended the Call Option Agreement, to (i) reduce the Exercise Price to $0.00 per share and (ii) extend the Grantees’ rights to exercise their call option within ten years from the respective Option Effective Date.

 

On November 13, 2016, Jinghe Zhang exercised his Call Option as to 99% of the shares of CGL and Baogang Song exercised his Call Option as to 1% of the shares of CGL. As a result of exercising his Call Option, Jinghe Zhang became the controlling shareholder of CGL and in turn, the controlling shareholder of the Company. Jinghe Zhang now controls 17,233,920 shares, or 85.9%, of the issued and outstanding shares of the Company’s common stock.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). Accordingly, they do not include all of the information and the footnotes required by generally accepted accounting principles for complete financial statements. The Company’s functional currency is the Chinese Renminbi (“RMB”); however, the accompanying unaudited condensed consolidated financial statements have been translated and presented in United States Dollars (“USD”). All significant inter-company transactions and balances have been eliminated. The consolidated financial statements include all adjustments that, in the opinion of management, are necessary to make the financial statements not misleading.

 

Operating results for the nine month period ended September 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2020. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s form 10-K for the fiscal year ended December 31, 2019 which was filed on March 31, 2020.

 

7

 

 

Use of Estimates

 

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. Actual results could differ from those estimates.

 

Basis of Consolidation

 

The accompanying consolidated financial statements include the Company and its wholly owned subsidiaries and controlled VIEs. All significant inter-company accounts and transactions have been eliminated in the consolidation.

 

Pursuant to Accounting Standards Codification Topic 810 “Consolidation” (“ASC 810”), the Company is required to include in its consolidated financial statements the financial statements of its variable interest entities (“VIEs”). ASC 810 requires a VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE’s residual returns. VIEs are those entities in which a company, through contractual arrangements, bears the risk of, and enjoys the rewards normally associated with ownership of the entity, and therefore the company is the primary beneficiary of the entity.

 

Based on the various Contractual Agreements, the Company is able to exercise control over the VIEs, and to obtain the full economic benefits. The terms of the exclusive option agreement are currently exercisable and legally enforceable under PRC laws and regulations. The minimum amount of consideration permitted by the applicable PRC law to exercise the option does not represent a financial barrier or disincentive for the Company to exercise its rights under the exclusive option agreement. A simple majority vote of the Company’s board of directors is required to pass a resolution to exercise its rights under the exclusive option agreement, for which consent of the shareholder of VIEs is not required. Therefore, this gives the Company the power to direct the activities that most significantly impact VIEs’ economic performance. The Company’s ability to exercise effective control, together with the consulting service agreements and the equity pledge agreements, give the Company the rights to receive substantially all of the economic benefits from VIEs in consideration for the services provided by its wholly owned subsidiaries in China. Accordingly, as the primary beneficiary of VIEs and in accordance with U.S. GAAP, Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading, as VIEs of Junhe Consulting, has been consolidated in the Company’s financial statements. Sales from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading are included in the Company’s total sales, their incomes or losses from operations are consolidated with the Company’s, and the Company’s net income or loss includes net income or loss from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading.

 

Foreign Currency Translation

 

The accompanying consolidated financial statements are presented in USD. The functional currency of the Company is RMB. The consolidated financial statements are translated into United States dollars from RMB at period-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Equity accounts are translated at their historical exchange rates when the equity transactions occurred. The resulting transaction adjustments are recorded as a component of stockholders’ equity. Gains and losses from foreign currency transactions are included in net income.

 

  

For the nine months ended

September 30,

   For the year
ended December 31,
 
   2020   2019   2019 
Period ended RMB: USD Exchange rate   6.8101    6.86557    6.9762 
Average RMB: USD Exchange rate   6.9917    6.78392    6.8985 

 

8

 

 

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation.

 

Foreign currency translation adjustments have been reported as comprehensive income (loss) in the consolidated financial statements and totalled $103,625 and $(105,948) for the three months ended September 30, 2020 and 2019, respectively, and $60,934 and $(92,278) for the nine months ended September 30, 2020 and 2019, respectively.

 

Other Comprehensive Income

 

Other comprehensive income is defined as the change in equity during the period from transactions and other events, excluding the changes resulting from investments by owners and distributions to owners, and is not included in the computation of income tax expense or benefit. Accumulated other comprehensive income represents the accumulated balance of foreign currency translation adjustments.

 

Concentrations of Credit Risk

 

The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC's economy. The Company's operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash. Substantially all of the Company’s cash is maintained with state-owned banks within the PRC, and no deposits are covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.

 

Fair Value of Financial Instruments

 

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

 

Level 1—defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;

 

Level 2—defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

 

Level 3—defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

 

The carrying amounts reported in the balance sheets for cash, accounts receivable, other receivable, accounts payable, other payable, and amounts due from related parties generally approximate their fair market values based on the short-term maturity of these instruments. ASC 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.

 

9

 

 

Cash

 

For financial reporting purposes, the Company considers all highly liquid financial instruments with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents at any point during the period of the financial statements presented. Balances at financial institutions or state-owned banks within the PRC are not covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.

 

Accounts Receivable

 

Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. On a periodic basis, the Company reviews the composition of the accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these allowances. Accounts are written off after exhaustive efforts at collection. As of September 30, 2020 and December 31, 2019, the Company allowance $2,654 and $2,591 for doubtful accounts, respectively.

 

Inventories

 

Inventories are stated at the lower of cost, as determined by the specific identification method on contract level (for each individual contract, inventories cost flow are determined by weighted-average method), or the net realizable value, which is determined on selling prices less any further costs expected to be incurred for completion and disposal. The Company regularly evaluates the composition of its inventories to identify slow-moving and obsolete inventories to determine whether a valuation allowance is required. As of September 30, 2020 and December 31, 2019, the Company recorded $109,606 and $106,997 for inventory valuation allowance, respectively.

 

Advances to Suppliers

 

Advances to suppliers represent the cash paid in advance for inventory items or construction in progress. The advance payments are meant to ensure preferential pricing and delivery. The amounts advanced under such arrangements totalled $57,179 and $62,674 as of September 30, 2020 and December 31, 2019, respectively.

 

Property, Plant, and Equipment

 

Property, plant and equipment are stated at cost less accumulated depreciation, and include expenditures that substantially increase the useful lives of existing assets.

 

Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives are as follows:

 

Building  20 years 
Operating Equipment  10 years 
Office furniture and equipment  3 or 5 years 
Vehicles  10 years 

 

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss is included in the consolidated statements of operations. Maintenance, repairs and minor renewals are charged directly to expenses as incurred. Significant renewals and betterment to buildings and equipment are capitalized. Leasehold improvements are depreciated over the lesser of the useful life or the life of the lease.

 

10

 

 

Intangible Assets

 

Intangible assets mainly consist of land use rights. All land located in the PRC is owned by the government and cannot be sold to any individual or company. The land use rights granted to the Company are being amortized using the straight-line method over the lease term of 50 years. Other intangible assets are software programs that are amortized over their estimated useful life of 10 years.

 

Impairment of Long-lived Assets

 

Long-lived assets of the Company are reviewed annually as to whether their carrying value has become impaired, pursuant to the guidelines established in FASB ASC 360. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from the related operations. The Company also reviewed the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. The Company did not record any impairment loss for the nine months ended September 30, 2020 and 2019.

 

Revenue Recognition

 

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured.

 

With respect to sales of product to both franchisee and non-franchisee customers, the Company prepares product shipments upon the receipt of a customer’s purchase order. Sales prices are based on fixed price lists that are different depending on whether the price list is for a franchisee customer or for non-franchisee customers. The Company recognizes revenue when the product is shipped. The Company does not sell product to any customers with a right of return. Sales are presented net of value added tax (VAT).

 

For Tourmaline Wellness House sales, the Company recognizes revenue under the completed contract method. Customers contact the Company with requests to construct a Wellness House. The Company and the customer enter into a contract, at which time the customer pays a deposit of at least one-half of the sales price. A contract is considered completed when all significant costs have been incurred and the project has been accepted by the customer. The contracts have a place for the customer to sign indicating their acceptance of the completed Wellness House. At this time the customer will also pay any remaining balance on the contract. The Company recognizes the full contract revenue at this point. Contract costs consist primarily of materials and labor costs. The construction period of a Wellness House generally does not exceed five days.

 

Shipping Costs

 

Shipping costs are included in selling expenses and totalled $6,926 and $11,942 for the three months ended September 30, 2020 and 2019, respectively, and $22,004 and $40,913 for the nine months ended September 30, 2020 and 2019, respectively.

 

Income Taxes

 

The Company is governed by the Income Tax Law and associated legislations of the PRC. The Company accounts for income taxes in accordance with FASB ASC 740 “Income Taxes”, which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. ASC 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Realization of deferred tax assets is dependent upon future earnings, if any, of which the timing and amount are uncertain.

 

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According to ASC 740, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition.

 

Basic and Diluted Earnings per Share

 

The Company reports earnings per share in accordance with FASB ASC 260 “Earnings per share”. The Company’s basic earnings per share are computed using the weighted average number of shares outstanding for the periods presented. Diluted earnings per share are computed based on the assumption that any dilutive options or warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, the Company’s outstanding stock warrants are assumed to be exercised, and funds thus obtained were assumed to be used to purchase common stock at the average market price during the period. There were no dilutive instruments outstanding during the nine month periods ended September 30, 2020 and 2019.

 

Segment Information

 

The Company follows FASB ASC 280-Segment Reporting, which requires that companies disclose segment data based on how management makes decision about allocating resources to segments and evaluating their performance.

 

For the nine months ended September 30, 2020 and the year ended December 31, 2019, management has determined that the Company is operating in three reportable business segments, (1) Healthcare Knit Goods Series, (2) Daily Healthcare and Personal Care Series, and (3) Wellness House and Activated Water Machine Series. The Company's reportable segments are strategic business units that offer different products. They are managed separately based on the fundamental differences in their operations.

 

Recently Issued Accounting Pronouncements

 

In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance should be adopted on a prospective basis for the annual or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted the standard in 2019. Adoption of the standard did not have a significant impact on the Company’s consolidated statement of earnings in 2019.

 

In June 2018, the FASB issued ASU 2018-07, “Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 becomes effective for the Company on January 1, 2019. Early adoption is permitted. The Company adopted the standard in 2019. Adoption of the standard did not have a significant impact on the Company’s consolidated statement of earnings in 2019.

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard outlined a comprehensive lease accounting model that superseded the previous lease guidance and required lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms greater than 12 months. The guidance also changed the definition of a lease and expanded the disclosure requirements of lease arrangements. The Company adopted the standard on December 15, 2019. Adoption of the standard did not have a significant impact on the Company’s consolidated statement of earnings in 2019.

 

12

 

 

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted the standard in 2019. Adoption of the standard did not have a significant impact on the Company’s consolidated statement of earnings in 2019.

 

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

 

NOTE 3 – ACCOUNTS RECEIVABLE

 

Accounts receivable consisted of the following:

 

   September 30,   December 31, 
   2020   2019 
Accounts receivable  $2,654   $2,591 
Less: allowance for bad debt   (2,654)   (2,591)
Accounts receivable, net  $-   $- 

 

As of the periods presented, the Company allowance $2,654 and $2,591 for doubtful accounts, respectively.

 

NOTE 4 – INVENTORIES

 

Inventories consisted of the following:

 

   September 30,   December 31, 
   2020   2019 
Raw materials  $120,463   $126,563 
Finished goods   479,130    444,175 
Low value consumables   37,419    36,528 
Total   637,012    607,266 
Less: impairment loss   (109,606)   (106,997)
Inventory, net  $527,406   $500,269 

 

Low value consumables represent low priced and easily worn articles and are amortized on equal-split amortization method. Pursuant to this method, half value of the low value consumable should be amortized once used and the remaining half value should be amortized when disposed of.

 

As of September 30, 2020 and December 31, 2019, the Company recognized $109,606 and $106,997, respectively, as a reserve for impairment loss from inventory.

 

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NOTE 5 – PROPERTY, PLANT AND EQUIPMENT

 

Property, plant and equipment consisted of the following:

 

   September 30,   December 31, 
   2020   2019 
Building  $5,846,710   $5,707,503 
Operating Equipment   429,264    419,044 
Office furniture and equipment   347,419    339,147 
Vehicles   1,004,364    980,450 
Total   7,627,757    7,446,144 
Less: accumulated depreciation   (4,467,894)   (4,068,783)
Property, plant and equipment, net  $3,159,863   $3,377,361 

 

Depreciation expense for the three months ended September 30, 2020 and 2019 amounted to $95,847 and $99,916, respectively, and for the nine months ended September 30, 2020 and 2019 amounted to $292,084 and $308,065, respectively.

 

NOTE 6 – INTANGIBLE ASSETS

 

Intangible assets consisted of the following:

 

   September 30,   December 31, 
   2020   2019 
Land use rights  $606,168   $591,734 
Other intangible assets   77,556    75,710 
Total   683,724    667,444 
Less: accumulated amortization   (235,160)   (219,411)
Intangible assets, net  $448,564   $448,033 

 

Amortization expense of intangible assets for the three months ended September 30, 2020 and 2019 was $2,993 and $4,687, respectively, and for the nine months ended September 30, 2020 and 2019 amounted to $10,127 and $14,359, respectively.

 

The estimated amortization expense for the next five years is as follows:

 

Estimated amortization expense for the year ending December 31,  Amount 
2020  $19,000 
2021  $19,000 
2022  $19,000 
2023  $19,000 
2024  $19,000 
Thereafter  $353,033 

 

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NOTE 7 – RELATED PARTY TRANSACTIONS

 

Payables due to related parties consist of the following:

 

   September 30,   December 31, 
   2020   2019 
Jinghe Zhang  $1,915,333   $1,480,515 
Total  $1,915,333   $1,480,515 

 

Transactions with Shenyang Joway

 

Shenyang Joway Industrial Development Co., Ltd. (“Shenyang Joway”) was formed in 2005 in Shenyang, China by Mr. Jinghe Zhang and three other individuals. Mr. Zhang holds more than 50% of the equity in Shenyang Joway. Shenyang Joway was in the business of marketing and distributing clothing and related products to other companies. Through 2009 Shenyang Joway had ceased operations, although it still existed as a legal entity. Shenyang Joway was cancelled in 2019.

 

On May 7, 2007, the Company’s subsidiary Joway Shengshi entered into an agreement with Shenyang Joway pursuant to which Joway Shengshi and Shenyang Joway agreed to provide each other with interest-free, unsecured advances for working capital. On May 10, 2007, the Company’s subsidiary Joway Technology and Shenyang Joway entered into an agreement pursuant to which Joway Technology and Shenyang Joway agreed to provide each other with interest-free, unsecured advances for working capital.

 

Through December 31, 2008, Joway Technology advanced $58,568 to Shenyang Joway, which was paid off by Shenyang Joway to Joway Technology in 2009.

 

Through December 31, 2010, Shenyang Joway advanced an aggregate of $912,645 to Joway Shengshi and Joway Technology, which was paid off by 2019. For the nine months ended September 30, 2020 and 2019, the Company repaid $0 and $118,458 of these advances, respectively. As of September 30, 2020, the total unpaid principal balance due Shenyang Joway for advances was $0.

 

Transactions with Jinghe Zhang

 

On December 1, 2009, the Company, through its subsidiary Joway Shengshi, entered into a royalty-free license agreement with Jinghe Zhang, our President, Chief Executive Officer and director. Pursuant to the license agreement, we are authorized to use the trademark “Joway” for a term of nine years and five patents from December 1, 2009 till the expiration dates of the patents.

 

On May 10, 2007, Joway Shengshi entered into a cash advance agreement with Jinghe Zhang, the Company’s President, Chief Executive Officer and director. Pursuant to the agreement, Jinghe Zhang agreed to advance operating capital to Joway Shengshi. The advances are interest free, unsecured, and have no specified repayment terms. The agreement is valid throughout Joway Shengshi’s term of operation.

 

During the period beginning May 17, 2007 (inception of Joway Shengshi) through September 30, 2019, Joway Shengshi received cash advances in the aggregate principal amount of $6,548,144 from Jinghe Zhang of which $4,632,811 has been repaid. For the nine months ended September 30, 2020 and 2019, the Company received $434,818 and $700,766 of these advances, respectively. As of September 30, 2020, the total unpaid principal balance due Jinghe Zhang for advances was $1,915,333.

 

The amounts owed to related parties are non-interest bearing and have no specified repayment terms.

 

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NOTE 8 – INCOME TAXES

 

The Company operations in the People’s Republic of China are subject to the Income Tax Law of the People’s Republic of China. Pursuant to the PRC Income Tax Laws, the Company is subject to the Enterprise Income Tax (“EIT”) which is generally a statutory rate of 25% beginning January 2008, on income as reported in its statutory financial statements after appropriate tax adjustments.

 

The table below summarizes the differences between the PRC statutory federal rate and the Company’s effective tax rate:

 

   For the nine months ended September 30, 
   2020   2019 
Tax computed at China statutory rates   25%   25%
Effect of losses   (25%)   (25%)
Effective rate   0%   0%

 

NOTE 9 – STATUTORY RESERVES

 

Pursuant to the laws and regulations of the PRC, annual income of the Company’s subsidiaries is required to be partly allocated to the statutory reserves funds after the payment of the PRC income taxes. The allocation to the statutory reserves funds should be at least 10% of income after tax until the reserves reaches 50% of the entities’ registered capital or members’ equity. The reserve funds are not transferable to the Company in the form of cash dividends, loans or advances. Thus the reserve funds are not available for distribution except in liquidation. As of September 30, 2020, the Company had allocated $354,052 to statutory reserves.

 

NOTE 10 – SEGMENTS

 

In 2020 and 2019, the Company operated in three reportable business segments: (1) Healthcare Knit Goods Series, (2) Daily Healthcare and Personal Care Series and (3) Wellness House and Activated Water Machine Series. The Company's reportable segments are strategic business units that offer different products. They are managed separately based on the fundamental differences in their operations. Information with respect to these reportable business segments is as follows:

 

For the three months ended September 30, 2020

 

   Sales   COGS   Gross profit   Loss from operations   Depreciation and amortization   Assets 
Healthcare Knit Goods Series  $15,431   $2,897   $12,534   $(30,622)  $19,734   $114,429 
Daily Healthcare and Personal Care Series   13,373    11,461    1,912    (14,363)   17,102    211,852 
Wellness House and Activated Water Machine Series   48,485    23,159    25,326    (149,632)   62,004    198,201 
Segment Totals  $77,289   $37,517   $39,772    (194,617)  $98,840    524,482 
Other Loss, net                  (77)          
Income tax benefits                  -           
Unallocated Assets                            3,860,793 
Net Loss                 $(194,694)          
Total Assets                           $4,385,275 

 

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For the three months ended September 30, 2019

 

   Sales   COGS   Gross profit   Loss from operations   Depreciation and amortization   Assets 
Healthcare Knit Goods Series  $14,546   $4,800   $9,746   $(10,449)  $9,599   $139,577 
Daily Healthcare and Personal Care Series   74,313    29,910    44,403    (103,530)   49,038    219,620 
Wellness House and Activated Water Machine Series   69,657    34,999    34,658    (74,648)   45,966    176,048 
Segment Totals  $158,516   $69,709   $88,807    (188,627)  $104,603    535,245 
Other Loss, net                  (71,635)          
Income Tax                  -           
Unallocated Assets                            4,097,146 
Net Loss                 $(260,262)          
Total Assets                           $4,632,391 

 

For the nine months ended September 30, 2020

 

   Sales   COGS   Gross profit   Loss from operations   Depreciation and amortization   Assets 
Healthcare Knit Goods Series  $21,984   $6,010   $15,974   $(94,930)  $41,678   $114,429 
Daily Healthcare and Personal Care Series   44,035    26,925    17,110    (205,038)   83,484    211,852 
Wellness House and Activated Water Machine Series   93,388    50,333    43,055    (428,067)   177,049    198,201 
Segment Totals  $159,407   $83,268   $76,139    (728,035)  $302,211    524,482 
Other Loss, net                  (1,185)          
Income tax benefits                  -           
Unallocated Assets                            3,860,793 
Net Loss                 $(729,220)          
Total Assets                           $4,385,275 

 

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For the nine months ended September 30, 2019

 

   Sales   COGS   Gross profit   Loss from operations   Depreciation and amortization   Assets 
Healthcare Knit Goods Series  $61,733   $28,307   $33,426   $(108,588)  $42,461   $139,577 
Daily Healthcare and Personal Care Series   156,208    68,315    87,893    (271,461)   107,442    219,620 
Wellness House and Activated Water Machine Series   250,825    125,250    125,575    (451,434)   172,521    176,048 
Segment Totals  $468,766   $221,872   $246,894    (831,483)  $322,424    535,245 
Other Loss, net                  (72,826)          
Income Tax                  -           
Unallocated Assets                            4,097,146 
Net Loss                 $(904,309)          
Total Assets                           $4,632,391 

 

NOTE 11 - FRANCHISE REVENUES

 

The Company enters into franchising agreements to develop retail outlets for the Company's products. The agreements provide that franchisees will sell Company products exclusively at a predetermined retail price. In exchange the Company provides them with geographic exclusivity, discounted products, training and support. The agreements also require franchisees to adhere to certain standards of product merchandising, promotion and presentment. The agreements also prohibit franchisees from selling competitor’s products. The agreements do not require any initial franchise fees from the franchisees, nor do they require the franchisees to pay continuing royalties. The agreements do not require the franchisees to purchase any minimum levels of product, but do require that they make at least one purchase during each year. The Company does not act to manage the franchisees’ levels of product. Franchisees hold periodic conferences, assisted by the Company’s marketing department, to promote product awareness and the introduction of new products. The franchising agreements are generally for terms of three years and are renewable at the mutual agreement of both parties. The franchising agreements are cancellable at the Company’s discretion if franchisees violate the terms of the agreements.

 

The following is a breakdown of revenue between franchise and non-franchise customers:

 

   For the three months ended September 30,   For the nine months ended September 30, 
   2020   2019   2020   2019 
                 
Sales to franchise customers  $63,071   $129,211   $133,456   $354,687 
Sales to non-franchise customers   14,218    29,305    25,951    114,079 
                     
Total sales  $77,289   $158,516   $159,407   $468,766 

 

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

 

The following discussion and analysis should be read in conjunction with the consolidated financial statements and notes thereto included in Item 1 of this Quarterly Report on Form 10-Q and with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2020.

 

FORWARD-LOOKING STATEMENTS:

 

Certain statements made in this report may constitute “forward-looking statements on our current expectations and projections about future events.” These forward-looking statements involve known or unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases you can identify forward-looking statements by some words such as “may,” “should,” “potential,” “continue,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” and similar expressions. These statements are based on our current beliefs, expectations, and assumptions, and are subject to a number of risks and uncertainties. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. These forward-looking statements are made as of the date of this report, and we assume no obligation to update these forward-looking statements whether as a result of new information, future events, or otherwise, other than as required by law. In light of these assumptions, risks, and uncertainties, the forward-looking events discussed in this report might not occur and actual results and events may vary significantly from those discussed in the forward-looking statements.

 

Overview

 

General

 

We develop, manufacture, market, distribute, and sell products, including knit goods, daily healthcare and personal care products, and wellness house and activated water machine products, that are coated, embedded or filled with tourmaline. Most of our products, such as clothing, bedding, and mattresses are purchased as finished products which we then coat and/or infuse with liquid or granular tourmaline using one or more of our manufacturing techniques. We conduct all of our operations in Tianjin City, China and distribute most of our products to more than 100 franchisees in China. Our franchisees, in turn, sell the products to their customers. All of our revenues to date have been generated by sales to customers located in the PRC.

 

Beginning in 2009, we began to develop a franchise network to distribute our healthcare knit goods, daily healthcare products and personal care products. Through these franchisees, we were able to significantly increase sales of our healthcare knit goods segment and daily healthcare and personal care segment. In 2010, we began distributing our wellness house and activated water machine products through our franchise network.

 

We are a holding company with no material operations of our own. All of our operations are conducted through Joway Shengshi and its three subsidiaries, Joway Technology, Joway Decoration and Shengtang Trading. Joway Shengshi engages in the manufacture and distribution of tourmaline health-related products such as knit goods, and daily healthcare and personal care products. Joway Technology and Joway Decoration engage in the manufacture and distribution of activated water machines and wellness houses. We utilize our Shengtang Trading subsidiary to purchase raw materials, which are then sold to Joway Shengshi and Joway Decoration.

 

As a holding company, our ability to pay dividends and other cash distributions to our shareholders depends in part upon dividends and other distributions paid to us by our PRC subsidiaries. The amount of dividends paid by our PRC subsidiaries to us primarily depends on the service fees paid to our PRC subsidiaries from Joway Shengshi and its subsidiaries, and, to a lesser degree, our PRC subsidiaries’ retained earnings. Conducting our operations through contractual arrangements with Joway Shengshi and its subsidiaries has a risk that we may lose the power to direct the activities that most significantly affect the economic performance of Joway Shengshi and its subsidiaries, which may result in our being unable to consolidate their financial results with our results and may impair our access to their cash flow from operations and thereby reduce our liquidity.

 

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Description of Selected Income Statement Items

 

Revenues. We generate revenue from sales of our Healthcare Knit goods Series, Daily Healthcare and Personal Care Series and Wellness House and Activated Water Machine Series.

 

Cost of goods sold. Cost of goods sold consists of costs directly attributable to production, including the cost of raw materials, salaries for staff engaged in production activity, electricity, depreciation, packing materials, and related expenses.

 

Operating expenses. Our total operating expenses consist of sales and marketing expenses and general and administrative expenses. Sales and marketing expenses consist primarily of salaries and traveling expenses of our marketing department employees, transportation expenses, and advertising expenses. General and administrative expenses consist primarily of salaries of our administrative department employees, payroll taxes and benefits, general office expenses and depreciation.

 

Other expense. Our other expense consists primarily of interest income, investment income and bank service fee.

 

Income taxes. According to the revised Enterprise Income Tax Law effective as of January 1, 2008, the income tax rate of our PRC subsidiaries is generally 25%. Joway Health Industries Group Inc. was established under the laws of the State of Nevada and is subject to U.S. federal income tax and Nevada annual reporting requirements.

 

Results of Operations

 

The following table sets forth certain information regarding our results of operations.

 

   For the three months ended September 30,   For the nine months ended September 30, 
   2020   2019   2020   2019 
REVENUES   $77,289   $158,516   $159,407   $468,766 
COST OF REVENUES   37,517    69,709    83,268    221,872 
GROSS PROFIT   39,772    88,807    76,139    246,894 
OPERATING EXPENSES   234,389    277,434    804,174    1,078,377 
LOSS FROM OPERATIONS   (194,617)   (188,627)   (728,035)   (831,483)
OTHER INCOME (EXPENSE), NET   (77)   (71,635)   (1,185)   (72,826)
LOSS BEFORE INCOME TAXES   (194,694)   (260,262)   (729,220)   (904,309)
INCOME TAXES   -    -    -    - 
NET LOSS    $(194,694)  $(260,262)  $(729,220)  $(904,309)

 

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Business Segments

 

In 2020 and 2019, we operated in three reportable business segments: (1) Healthcare Knit Goods, (2) Daily Healthcare and Personal Care Products and (3) Wellness House and Activated Water Machine Products. The following table sets forth the contributions of each reportable business segment in dollars and as a percent of revenue:

 

For the three months ended September 30, 2020

 

   Healthcare Knit Goods Series   % of Total   Daily Healthcare and Personal Care Series   % of Total   Wellness House and Activated Water Machine Series   % of Total   Total 
REVENUES  $15,431    20.0%  $13,373    17.3%  $48,485    62.7%  $77,289 
COST OF REVENUES   2,897    7.7%   11,461    30.5%   23,159    61.7%   37,517 
GROSS PROFIT   12,534    31.5%   1,912    4.8%   25,326    63.7%   39,772 
GROSS MARGIN   81.2%        14.3%        52.2%        51.5%
OPERATING EXPENSES   43,156    18.4%   16,275    6.9%   174,958    74.6%   234,389 
LOSS FROM OPERATIONS  $(30,622)   15.7%  $(14,363)   7.4%  $(149,632)   76.9%  $(194,617)

 

For the three months ended September 30, 2019

 

   Healthcare Knit Goods Series   % of Total   Daily Healthcare and Personal Care Series   % of Total   Wellness House and Activated Water Machine Series   % of Total   Total 
REVENUES  $14,546    9.2%  $74,313    46.9%  $69,657    43.9%  $158,516 
COST OF REVENUES   4,800    6.9%   29,910    42.9%   34,999    50.2%   69,709 
GROSS PROFIT   9,746    11.0%   44,403    50.0%   34,658    39.0%   88,807 
GROSS MARGIN   67.0%        59.8%        49.8%        56.0%
OPERATING EXPENSES   20,195    7.3%   147,933    53.3%   109,306    39.4%   277,434 
LOSS FROM OPERATIONS  $(10,449)   5.5%  $(103,530)   54.9%  $(74,648)   39.6%  $(188,627)

 

For the nine months ended September 30, 2020

 

   Healthcare Knit Goods Series   % of Total   Daily Healthcare and Personal Care Series   % of Total   Wellness House and Activated Water Machine Series   % of Total   Total 
REVENUES  $21,984    13.8%  $44,035    27.6%  $93,388    58.6%  $159,407 
COST OF REVENUES   6,010    7.2%   26,925    32.3%   50,333    60.4%   83,268 
GROSS PROFIT   15,974    21.0%   17,110    22.5%   43,055    56.5%   76,139 
GROSS MARGIN   72.7%        38.9%        46.1%        47.8%
OPERATING EXPENSES   110,904    13.8%   222,148    27.6%   471,122    58.6%   804,174 
LOSS FROM OPERATIONS  $(94,930)   13.0%  $(205,038)   28.2%  $(428,067)   58.8%  $(728,035)

 

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For the nine months ended September 30, 2019

 

   Healthcare Knit Goods Series   % of Total   Daily Healthcare and Personal Care Series   % of Total   Wellness House and Activated Water Machine Series   % of Total   Total 
REVENUES  $61,733    13.2%  $156,208    33.3%  $250,825    53.5%  $468,766 
COST OF REVENUES   28,307    12.8%   68,315    30.8%   125,250    56.5%   221,872 
GROSS PROFIT   33,426    13.5%   87,893    35.6%   125,575    50.9%   246,894 
GROSS MARGIN   54.1%        56.3%        50.1%        52.7%
OPERATING EXPENSES   142,014    13.2%   359,354    33.3%   577,009    53.5%   1,078,377 
LOSS FROM OPERATIONS  $(108,588)   13.1%  $(271,461)   32.6%  $(451,434)   54.3%  $(831,483)

 

For The Three Months Ended September 30, 2020 Compared to September 30, 2019

 

Revenue. For the three months ended September 30, 2020, revenue was $77,289 compared to $158,516 for the three months ended September 30, 2019, a decrease of $81,227 or 51.2%. In 2020, the impact of COVID-19 on the Chinese economy seriously affected our business with implementation of restrictions at business operations and city lockdowns.

 

Revenue from healthcare knit goods segment increased by $885 or 6.1% to $15,431 for the three months ended September 30, 2020 from $14,546 for the three months ended September 30, 2019. This increase was mainly due to the increase in sales of our mattress products.

 

Revenue from daily healthcare and personal care products decreased by $60,940 or 82% to $13,373 for the three months ended September 30, 2020 from $74,313 for the three months ended September 30, 2019. This was primarily due to the decrease in sales of most of our daily healthcare and personal care products affected by industry downturn and almost of all cities under lockdown as COVID-19 swept China.

 

Revenue from wellness houses and activated water machines decreased by $21,172 or 30.4% to $48,485 for the three months ended September 30, 2020 from $69,657 for the three months ended September 30, 2019. This decrease was mainly due to the decrease in sales of our wellness house.

 

Cost of Goods Sold. For the three months ended September 30, 2020, cost of goods sold was $37,517 compared to $69,709 for the three months ended September 30, 2019, a decrease of $32,192 or 46.2%. This decrease was mainly due to the decrease in sales.

 

Cost of goods sold for healthcare knit goods segment decreased to $2,897 for the three months ended September 30, 2020 from $4,800 for the three months ended September 30, 2019, a decrease of $1,903 or 39.6%. This decrease was due to the decrease in cost of our mattress products.

 

Cost of goods sold for the daily healthcare and personal care segment decreased to $11,461 for the three months ended September 30, 2020 from $29,910 for the three months ended September 30, 2019, a decrease of $18,449 or 61.7%. This decrease was due to the decrease in sales.

 

Cost of goods sold for our wellness house and activated water machine segment decreased to $23,159 for the three months ended September 30, 2020 from $34,999 for the three months ended September 30, 2019, a decrease of $11,840 or 33.8%. This decrease was mainly due to the decrease in sales.

 

Gross profit. Our gross profit decreased by $49,035 or 55.2% to $39,772 for the three months ended September 30, 2020, compared to $88,807 for the three months ended September 30, 2019. This decrease was mainly due to the decrease in sales. Our gross margin slightly decreased slightly from 56% for the three months ended September 30, 2019 to 51.5% for the three months ended September 30, 2020.

 

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Gross profit for the healthcare knit goods segment increased by $2,788 or 28.6% to $12,534 for the three months ended September 30, 2020 compared to $9,746 for the three months ended September 30, 2019. The gross margins of healthcare knit goods segment increased from 67% for the three months ended September 30, 2019 to 81.2% for the three months ended September 30, 2020. This increase was mainly due to the less discounts on the healthcare knit goods to our franchisees during the third quarter of 2020.

 

Gross profit of daily healthcare and personal care segment decreased by $42,491 or 95.7% to $1,912 for the three months ended September 30, 2020, compared to $44,403 for the three months ended September 30, 2019. This decrease was mainly due to the decreased sales. The gross margin of daily healthcare and personal care segment decreased from 59.8% for the three months ended September 30, 2019 to 14.3% for the three months ended September 30, 2020. This decrease was mainly due to the more discounts on the daily healthcare and personal care products to our franchisees during the third quarter of 2020.

 

Gross profit of the wellness house and activated water machine segments decreased by $9,332 or 26.9% to $25,326 for the three months ended September 30, 2020, compared to $34,658 for the three months ended September 30, 2019. This decrease was mainly due to the decrease in gross profit from our wellness houses. The gross margin of our wellness house and activated water machine segments increased slightly from 49.8% for the three months ended September 30, 2019 to 52.2% for the three months ended September 30, 2020.

 

Operating expenses. Our total operating expenses consist of sales and marketing expenses and general and administrative expenses. Our total operating expenses decreased by $43,045 or 15.5%, from $277,434 for the three months ended September 30, 2019 to $234,389 for the three months ended September 30, 2020. This decrease was mainly due to the decrease of salary. Operating expenses for healthcare knit goods segment increased by $22,961 or 113.7% to $43,156 for the three months ended September 30, 2020 from $20,195 for the three months ended September 30, 2019. Operating expenses for daily healthcare and personal care segment decreased by $131,658 or 89% to $16,275 for the three months ended September 30, 2020 from $147,933 for the three months ended September 30, 2019. Operating expenses for our wellness house and activated water machine segment increased by $65,652 or 60.1% to $174,958 for the three months ended September 30, 2020 from $109,306 for the three months ended September 30, 2019.

 

Loss from operations. As a result of the foregoing, our loss from operations was $194,617 for the three months ended September 30, 2020, compared to $188,627 for the three months ended September 30, 2019, an increase of $5,990. The increased loss was mainly due to the decrease in sales.

 

Income taxes. Our income tax expenses did not incur for the three months ended September 30, 2020 and 2019.

 

Net loss. For the three months ended September 30, 2020, our net loss was $194,694 compared to $260,262 for the three months ended September 30, 2019. The decreased loss was mainly due to decrease in other expenses.

 

For the Nine Months Ended September 30, 2020 Compared to September 30, 2018

 

Revenue. For the nine months ended September 30, 2020, revenue was $159,407 compared to $468,766 for the nine months ended September 30, 2019, a decrease of $309,359 or 66%. This decrease was mainly due to the downturn of the health care industry in China affected by COVID-19.

 

Revenue from healthcare knit goods segment decreased by $39,749, or 64.4% to $21,984 for the nine months ended September 30, 2020 from $61,733 for the nine months ended September 30, 2019. This decrease was mainly due to the decrease in sales of our mattress products. Our mattress products are our best-selling products and were most affected by market fluctuations.

 

Revenue from daily healthcare and personal care products decreased by $112,173 or 71.8% to $44,035 for the nine months ended September 30, 2020 from $156,208 for the nine months ended September 30, 2019. This was primarily due to the decrease in sales of most of our daily healthcare and personal care products affected by industry downturn affected by COVID-19.

 

Revenue from wellness houses and activated water machines decreased by $157,437 or 62.8% to $93,388 for the nine months ended September 30, 2020 from $250,825 for the nine months ended September 30, 2019. This decrease was mainly due to the decrease of our wellness houses.

 

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Cost of Goods Sold. For the nine months ended September 30, 2020, cost of goods sold was $83,268 compared to $221,872 for the nine months ended September 30, 2019, a decrease of $138,604, or 62.5%. This decrease was mainly due to the decrease in sales.

 

Cost of goods sold for healthcare knit goods segment decreased to $6,010 for the nine months ended September 30, 2020 from $28,307 for the nine months ended September 30, 2019, a decrease of $22,297 or 78.8%. This decrease was mainly due to the decrease in the cost of our mattress products, as a result of decrease in sales.

 

Cost of goods sold for the daily healthcare and personal care segment decreased to $26,925 for the nine months ended September 30, 2020 from $68,315 for the nine months ended September 30, 2019, a decrease of $41,390 or 60.6%. This decrease was mainly due to the decrease in sales.

 

Cost of goods sold for our wellness house and activated water machine segment decreased to $50,333 for the nine months ended September 30, 2020 from $125,250 for the nine months ended September 30, 2019, a decrease of $74,917 or 59.8%. This decrease was mainly due to the decrease in sales.

 

Gross profit. Our gross profit decreased by $170,755 or 69.2% to $76,139 for the nine months ended September 30, 2020, compared to $246,894 for the nine months ended September 30, 2019. This decrease was due to the decrease in sales. Our gross margin decreased slightly from 52.7% for the nine months ended September 30, 2019 to 47.8% for the nine months ended September 30, 2020.

 

Gross profit for the healthcare knit goods segment decreased by $17,452 or 52.2% to $15,974 for the nine months ended September 30, 2020 compared to $33,426 for the nine months ended September 30, 2019. This decrease was mainly due to the decrease in sales. The gross margins of healthcare knit goods segment increased from 54.1% for the nine months ended September 30, 2019 to 72.7% for the nine months ended September 30, 2020. It was mainly due to the less discounts on the healthcare knit goods to our franchisees during the third quarter of 2020.

 

Gross profit of daily healthcare and personal care segment decreased by $70,783 or 80.5% to $17,110 for the nine months ended September 30, 2020, compared to $87,893 for the nine months ended September 30, 2019. This decrease was primarily due to the decrease in sales. Our gross margin of daily healthcare and personal care segment decreased from 56.3% for the nine months ended September 30, 2019 to 38.9% for the nine months ended September 30, 2020. It was mainly due to the more discounts on the daily healthcare and personal care products to our franchisees during the third quarter of 2020.

 

Gross profit of the wellness house and activated water machine segments decreased by $82,520 or 65.7% to $43,055 for the nine months ended September 30, 2020, compared to $125,575 for the nine months ended September 30, 2019. This decrease was mainly due to the decrease in sales. The gross margin of our wellness house and activated water machine segments decreased slightly from 50.1% for the nine months ended September 30, 2019 to 46.1% for the nine months ended September 30, 2020.

 

Operating expenses. Our total operating expenses consist of sales and marketing expenses and general and administrative expenses. Our total operating expenses decreased by $274,203 or 25.4%, from $1,078,377 for the nine months ended September 30, 2019 to $804,174 for the nine months ended September 30, 2020. This decrease was mainly due to the decrease of travel expenses and salary. Operating expenses for healthcare knit goods segment decreased by $31,110 or 21.9% to $110,904 for the nine months ended September 30, 2020 from $142,014 for the nine months ended September 30, 2019. Operating expenses for daily healthcare and personal care segment decreased by $137,206 or 38.2% to $222,148 for the nine months ended September 30, 2020 from $359,354 for the nine months ended September 30, 2019. Operating expenses for our wellness house and activated water machine segment decreased by $105,887 or 18.4% to $471,122 for the nine months ended September 30, 2020 from $577,009 for the nine months ended September 30, 2019.

 

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Loss from operations. As a result of the foregoing, our loss from operations was $728,035 for the nine months ended September 30, 2020, compared to $831,483 for the nine months ended September 30, 2019, a decrease of $103,448. The decreased loss from operations was mainly due to the decrease in operating expenses.

 

Income taxes. Our income tax expenses did not incur for the nine months ended September 30, 2020 and 2019.

 

Net loss. Our net loss was $729,220 for the nine months ended September 30, 2020, compared to $904,309 for the nine months ended September 30, 2019. The decreased loss was mainly due to the decrease in operating expenses.

 

Franchising

 

We enter into franchise agreements to develop retail outlets for our products. These agreements provide that franchisees will sell our products exclusively. In exchange, we provide them with geographic exclusivity, discounted products, training, and support. The agreements also require franchisees to adhere to certain standards of product merchandising, promotion, and presentment. The agreements do not require the franchisees to purchase any minimum levels of product, but do require that they make at least one purchase during each year. The agreements are generally for terms of three years and are renewable at the mutual agreement of both parties. The Agreements are cancellable at our discretion if franchisees violate the terms of the agreements.

 

The following is a breakdown of revenue between franchise and non-franchise customers:

 

   For the three months ended September 30,   For the nine months ended September 30, 
   2020   2019   2020   2019 
                 
Sales to franchise customers  $63,071   $129,211   $133,456   $354,687 
Sales to non-franchise customers   14,218    29,305    25,951    114,079 
                     
Total sales  $77,289   $158,516   $159,407   $468,766 

 

Liquidity and Capital Resources

 

Our cash at December 31, 2019 was $99,979 and decreased to $86,236 at September 30, 2020, a decrease of $13,743. This decrease was mainly due to our deteriorated operating results. On September 30, 2020, we had negative working capital of $1,318,644, a decrease of $451,319 from $867,325 on December 31, 2019.

 

Our cash flow information summary is as follows:

 

   For the nine months ended September 30, 
   2020   2019 
Net cash provided by (used in):        
Operating activities  $(427,565)  $(536,344)
Investing activities  $-   $(89,219)
Financing activities  $434,818   $582,308 

 

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Net Cash Used in Operating Activities

 

Net cash used in operating activities was $427,565 for the nine months ended September 30, 2020, compared to $536,344 for the nine months ended September 30, 2019. This decrease was primarily due to a decrease of $175,089 in net loss.

 

For the nine months ended September 30, 2020, cash was mainly used to cover the loss of $729,220, which was primarily offset by an add-back of depreciation of $292,084 and amortization of $10,127.

 

For the nine months ended September 30, 2019, cash was mainly used to cover the loss of $904,309, which was primarily offset by an add-back of depreciation of $308,065 and amortization of $14,359.

 

Net Cash Used in Investing Activities

 

Net cash used in investing activities was $0 for the nine months ended September 30, 2020, compared to $89,219 for the nine months ended September 30, 2019.

 

For the nine months ended September 30, 2019, we expended $89,219 on purchase of an advanced production equipment and office equipment.

 

Net Cash Provided by Financing Activities

 

For the nine months ended September 30, 2020, $434,818 of cash was provided by financing activities, compared to $582,308 for the nine months ended September 30, 2019. The cash was provided by and used to repay advances from Jinghe Zhang and Shenyang Joway.

 

On May 7, 2007, our operating subsidiary, Joway Shengshi entered into an agreement with Shenyang Joway pursuant to which Joway Shengshi and Shenyang Joway agreed to provide each other with interest-free, unsecured advances for working capital. On May 10, 2007, our subsidiary, Joway Technology and Shenyang Joway entered into an agreement pursuant to which Joway Technology and Shenyang Joway agreed to provide each other with interest-free, unsecured advances for working capital. Pursuant to these agreements, Shenyang Joway advanced an aggregate of $912,645 to Joway Shengshi and Joway Technology through December 31, 2010. We repaid $0 and $118,458 of these advances for the nine months ended September 30, 2020 and 2019, respectively. As of September 30, 2020, the total unpaid principal balance due Shenyang Joway for advances was $0. Shenyang Joway was cancelled in 2019.

 

On May 10, 2007, our operating subsidiaries, Joway Shengshi entered into a cash advance agreement with Jinghe Zhang, our President, Chief Executive Officer and director. Pursuant to the agreements, Jinghe Zhang agreed to advance operating capital to Joway Shengshi. These advances are interest free, unsecured and are repayable upon demand. During the period beginning May 17, 2007 (inception of Joway Shengshi) through June 30, 2019, Joway Shengshi received cash advances in the aggregate principal amount of $6,548,144 from Jinghe Zhang of which $4,632,811 has been repaid. For the nine months ended September 30, 2020 and 2019, the Company received $434,818 and $700,766 of these advances, respectively. As of September 30, 2020, the total unpaid principal balance due Jinghe Zhang for advances was $1,915,333.

 

STATUTORY RESERVES

 

Pursuant to the laws and regulations of the PRC, the Company’s PRC subsidiaries are required to allocate a portion of their after-tax income to statutory reserves funds. The minimum statutory reserves allocation is 10% of after-tax income until the reserves reach 50% of the entities’ registered capital or members’ equity. The reserve funds are not transferable to the Company in the form of cash dividends, loans or advances. Thus, the reserve funds are not available for distribution except in liquidation. As of September 30, 2020, the Company had allocated $354,052 to statutory reserves.

 

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Off Balance Sheet Items

 

Under SEC regulations, we are required to disclose off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, such as changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. An off-balance sheet arrangement means a transaction, agreement or contractual arrangement to which any entity that is not consolidated with us is a party, under which we have:

 

any obligation under certain guarantee contracts,

 

any retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets,

 

any obligation under a contract that would be accounted for as a derivative instrument, except that it is both indexed to our stock and classified in shareholder equity in our statement of financial position, and

 

any obligation arising out of a material variable interest held by us in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us, or engages in leasing, hedging or research and development services with us.

 

We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations. In the ordinary course of business, we enter into operating lease commitments, purchase commitments and other contractual obligations. These transactions are recognized in our financial statements in accordance with generally accepted accounting principles in the United States.

 

Critical Accounting Policies

 

Management’s discussion and analysis of its financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. Our financial statements reflect the selection and application of accounting policies which require management to make significant estimates and judgments. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. We believe that the following reflect the more critical accounting policies that currently affect our financial condition and results of operations.

 

Basis of Consolidation

 

The accompanying consolidated financial statements include Joway Health and its wholly owned subsidiaries and controlled VIEs. All significant inter-company accounts and transactions have been eliminated in the consolidation.

 

Pursuant to Accounting Standards Codification Topic 810 “Consolidation” (“ASC 810”), the Company is required to include in its consolidated financial statements the financial statements of its variable interest entities (“VIEs”). ASC 810 requires a VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE’s residual returns. VIEs are those entities in which a company, through contractual arrangements, bears the risk of, and enjoys the rewards normally associated with ownership of the entity, and therefore the company is the primary beneficiary of the entity.

 

Based on the various Contractual Agreements, we believe we are able to exercise control over the VIEs, and to obtain the full economic benefits. We believe that the terms of the exclusive option agreement are currently exercisable and legally enforceable under PRC laws and regulations. We also believe that the minimum amount of consideration permitted by the applicable PRC law to exercise the option does not represent a financial barrier or disincentive for us to exercise our rights under the exclusive option agreement. A simple majority vote of our board of directors is required to pass a resolution to exercise our rights under the exclusive option agreement, for which consent of the shareholder of VIEs is not required. Therefore, we believe this gives us the power to direct the activities that most significantly impact VIEs’ economic performance. T We believe that our ability to exercise effective control, together with the consulting service agreements and the equity pledge agreements, give us the rights to receive substantially all of the economic benefits from VIEs in consideration for the services provided by its wholly owned subsidiaries in China. Accordingly, as the primary beneficiary of VIEs and in accordance with U.S. GAAP, Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading, as VIEs of Junhe Consulting, has been consolidated in the Company’s financial statements. Sales from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading are included in our total sales, their incomes or losses from operations are consolidated with ours, and our net income or loss includes net income or loss from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading.

 

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Revenue Recognition

 

We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured.

 

With respect to sales of product to both franchisee and non-franchisee customers, we prepare product shipment upon the receipt of a customer’s purchase order. Sales prices are based on fixed price lists that are different depending on whether the price list is for franchisee customers or for non-franchisee customers. We recognize revenue when the product is shipped. We do not sell product to any customers with a right of return. Sales are presented net of value added tax (VAT).

 

We recognize revenue on the sale of our wellness houses under the completed contract method. At the time when we enter into a contract with a customer to build a wellness house, the customer pays a deposit of at least one-half of the sales price. We consider the contract to be completed when all significant costs have been incurred and the customer accepts the project in writing by signing in the appropriate place on the contract. At this time the customer will also pay any remaining balance on the contract. We recognize the full contract revenue at this point. Contract costs consist primarily of materials and labor costs. The construction period of a wellness house generally does not exceed five days.

 

Accounts Receivable

 

Accounts receivable are carried at net realizable value. We provide reserves for potential credit losses on accounts receivable. Management reviews the composition of the accounts receivable and analyzes historical bad debts, customer concentrations, customers’ credit worthiness, current economic trends, and changes in customer’s payment patterns to evaluate the adequacy of these reserves.

 

Inventories

 

Inventories are stated at the lower of cost, as determined by the specific identification method on contract level (for each individual contract, inventories cost flow is determined by weighted-average method), or the net realizable value, which is determined on selling prices less any further costs expected to be incurred for completion and disposal. Management regularly evaluates the composition of its inventories to identify slow-moving and obsolete inventories to determine whether a valuation allowance is required.

 

Property, Plant, and Equipment

 

Property, plant and equipment are stated at cost less accumulated depreciation, and include expenditures that substantially increase the useful lives of existing assets.

 

Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives are as follows:

 

Building   20 years 
Operating Equipment   10 years 
Office furniture and equipment   3 or 5 years 
Vehicles   10 years 

 

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss is included in the consolidated statements of income and other comprehensive income. Maintenance, repairs and minor renewals are charged directly to expenses as incurred. Significant renewals and betterment to buildings and equipment are capitalized. Leasehold improvements are depreciated over the lesser of the useful life or the life of the lease.

 

Recent Accounting Pronouncements

 

We do not anticipate that the adoption of recently issued accounting pronouncements to have a material effect on our condensed consolidated financial statements.

 

28

 

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

 

Not applicable.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Our management, under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), has evaluated the effectiveness of our disclosure controls and procedures as defined in SEC Rules 13a-15(e) and 15d-15(e) as of the end of the period covered by this quarterly report. The purpose of this evaluation is to determine if, as of Evaluation Date, our disclosure controls and procedures were operating effectively such that the information, required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) was recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2020, our disclosure controls and procedures were not effective, based on the material weakness described below:

 

We did not have sufficient skilled accounting personnel that are either qualified as Certified Public Accountants in the U.S. or that have received education from U.S. institutions or other educational programs that would provide enough relevant education relating to U.S. GAAP. The Company’s CFO and Financial Manager have worked for U.S. listed companies but have limited experience with U.S. GAAP and are not U.S. Certified Public Accountants. Further, our operating subsidiaries are based in China, and in accordance with PRC laws and regulations, are required to comply with PRC GAAP, rather than U.S. GAAP. Thus, the accounting skills and understanding necessary to fulfill the requirements of U.S. GAAP-based reporting, including the preparation of financial statements and consolidation, are inadequate, and determined to be a material weakness.

 

Remediation Initiative

 

We have started a training program in the principles and rules of U.S. GAAP, SEC reporting requirements and the application thereof. The program is provided by an independent training institution, for our finance and accounting personnel, including our Chief Financial Officer, Financial Manager and others.

 

We are in the process of designing a program to provide ongoing company-wide training regarding the Company’s internal controls, with particular emphasis on our finance and accounting staff.

 

In 2011 we established the position of internal audit manager. From September 2011 to July 2012, we hired an internal audit manager who implemented an internal review process over financial reporting to review all recent accounting pronouncements and to verify that the accounting treatments identified in such report have been fully implemented and confirmed by our internal control department. Currently, we are still in the process of seeking for a proper candidate to perform as our internal audit manager.

 

We believe that the foregoing steps will remediate the significant deficiencies identified above, and we will continue to monitor the effectiveness of these steps and make any changes that our management deems appropriate.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting for the nine months ended September 30, 2020 that materially affected, or were reasonably likely to materially affect our internal control over financial reporting.

 

29

 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

None.

 

Item 1A. Risk Factors.

 

As of the date of this filing, there have been no material changes from the risk factors disclosed in Part I, Item 1A (Risk Factors) contained in our Annual Report on Form 10-K for the year ended December 31, 2019. We operate in a changing environment that involves numerous known and unknown risks and uncertainties that could materially affect our operations. The risks, uncertainties and other factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2019 may cause our actual results, performances and achievements to be materially different from those expressed or implied by our forward-looking statements. If any of these risks or events occurs, our business, financial condition or results of operations may be adversely affected.

 

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

 

None.

 

Item 3. Defaults upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

30

 

 

Item 6. Exhibits.

 

EXHIBIT INDEX

 

Exhibit No.

 

Description

31.1   Certification of Chief Executive Officer of Periodic Report pursuant to Rule 13a-14a and Rule 14d-14(a). *
31.2   Certification of Chief Financial Officer of Periodic Report pursuant to Rule 13a-14a and Rule 15d-14(a). *
32.1   Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350. *
32.2   Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350. *
101.INS   XBRL Instance Document*
     
101.SCH   XBRL Schema Document*
     
101.CAL   XBRL Calculation Linkbase Document*
     
101.LAB   XBRL Label Linkbase Document*
     
101.PRE   XBRL Presentation Linkbase Document*
     
101.DEF   XBRL Definition Linkbase Document*

 

 

*Filed herewith

 

31

 

 

SIGNATURES

 

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

 

Date: November 16, 2020

 

  Joway Health Industries Group Inc.
     
  By: /s/ Jinghe Zhang
    Jinghe Zhang
    President and Chief Executive Officer
     
  By: /s/ Yuan Huang
    Yuan Huang
    Chief Financial Officer

 

 

32

 

 

EX-31.1 2 f10q0920ex31-1_jowayhealth.htm CERTIFICATION

EXHIBIT 31.1

 

CERTIFICATION

 

I, Jinghe Zhang, certify that:

 

1.I have reviewed this Quarterly Report on Form 10-Q for the nine months ended September 30, 2020 of Joway Health Industries Group Inc.;

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 16, 2020

 

  /S/ Jinghe Zhang
  Jinghe Zhang
  Chief Executive Officer
  (Principal Executive Officer)

EX-31.2 3 f10q0920ex31-2_jowayhealth.htm CERTIFICATION

EXHIBIT 31.2

 

CERTIFICATION

 

I, Yuan Huang, certify that:

 

1.I have reviewed this Quarterly Report on Form 10-Q for the nine months ended September 30, 2020 of Joway Health Industries Group Inc.;

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 16, 2020

 

  /S/ Yuan Huang
  Yuan Huang
 

Chief Financial Officer

(Principal Financial and Accounting Officer)

EX-32.1 4 f10q0920ex32-1_jowayhealth.htm CERTIFICATION

EXHIBIT 32.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Jinghe Zhang, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Joway Health Industries Group Inc. for the nine months ended September 30, 2020 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Joway Health Industries Group Inc.

 

Date: November 16, 2020

 

  By: /S/ Jinghe Zhang
    Jinghe Zhang
    Chief Executive Officer

 

EX-32.2 5 f10q0920ex32-2_jowayhealth.htm CERTIFICATION

EXHIBIT 32.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Yuan Huang, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Joway Health Industries Group Inc. for the nine months ended September 30, 2020 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Joway Health Industries Group Inc.

 

Date: November 16, 2020

 

  By: /S/ Yuan Huang
    Yuan Huang
    Chief Financial Officer

 

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(referred to herein as &#x201c;Joway Health&#x201d;), its subsidiaries, and variable interest entities (&#x201c;VIEs&#x201d;) where Joway Health is deemed the primary beneficiary. Joway Health, its subsidiaries and VIEs are collectively referred to herein as the &#x201c;Company&#x201d;, &#x201c;we&#x201d; and &#x201c;us&#x201d;.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Joway Health (formerly G2 Ventures, Inc.) was originally incorporated under the laws of the State of Texas on March 21, 2003. On September 21, 2010, Joway Health entered into a Share Exchange Agreement (the &#x201c;Share Exchange&#x201d;) with the sole stockholder of Dynamic Elite International Limited. As a result of the Share Exchange, Dynamic Elite became a wholly-owned subsidiary of Joway Health and the stockholders of Dynamic Elite acquired approximately 76.08% of the issued and outstanding stock of Joway Health. The share exchange transaction resulted in the shareholders of Dynamic Elite acquiring a majority voting interest in Joway Health. Generally accepted accounting principles in the United States of America require that the company whose shareholders retain the majority interest in the combined business be treated as the acquirer for accounting purposes. The reverse acquisition process utilizes the capital structure of Joway Health and the assets and liabilities of Dynamic Elite recorded at historical cost. On December 22, 2010, Joway Health changed its jurisdiction of incorporation from the State of Texas to the State of Nevada.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dynamic Elite International Limited (referred to herein as &#x201c;Dynamic Elite&#x201d;) was incorporated under the laws of the British Virgin Islands on June 2, 2010 as a limited liability company (a BVI company). Dynamic Elite engages in manufacturing and distributing tourmaline products in China. Its wholly owned subsidiary, Tianjin Junhe Management Consulting Co., Ltd. was incorporated on September 15, 2010 in Tianjin, People&#x2019;s Republic of China (&#x201c;PRC&#x201d;). Other than the equity interest in Junhe Consulting, Dynamic Elite does not own any assets or conduct any operations.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tianjin Junhe Management Consulting Co., Ltd. (referred to herein as &#x201c;Junhe Consulting&#x201d;) conducts its business through Tianjin Joway Shengshi Group Co., Ltd. that is consolidated as a variable interest entity.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tianjin Joway Shengshi Group Co., Ltd. (referred to herein as &#x201c;Joway Shengshi&#x201d;) was incorporated in PRC on May 17, 2007. Joway Shengshi is currently owned 99% by Jinghe Zhang, the Company&#x2019;s current CEO and President and 1% by Song Baogang. Joway Shengshi engages in manufacturing and distributing tourmaline products in China. Shenyang Joway Electronic Technology Co., Ltd., Tianjin Joway Decoration Engineering Co., Ltd. and Tianjin Oriental Shengtang Trading Import &amp; Export Trading Co., Ltd are subsidiaries of Joway Shengshi.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shenyang Joway Electronic Technology Co., Ltd. (referred to herein as &#x201c;Joway Technology&#x201d;) was originally named Liaoning Joway Technology Engineering Co., Ltd. which was incorporated on March 28, 2007 in PRC. The name was changed on June 22, 2011. It engages in the distribution of Tourmaline Activated Water Machines and Tourmaline Wellness Houses. Prior to July 25, 2010, Joway Shengshi owned 90.91% of Joway Technology. Joway Shengshi entered into a share acquisition agreement with Jingyun Chen, another stockholder of Joway Technology on July 25, 2010 to acquire the remaining 9.09% of the share of Joway Technology. As a result of the share acquisition, Joway Technology became a wholly-owned subsidiary of Joway Shengshi.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tianjin Joway Decoration Engineering Co., Ltd. (referred to herein as &#x201c;Joway Decoration&#x201d;) was incorporated on April 22, 2009 in PRC. It engages in the distribution of Tourmaline Activated Water Machines, Tourmaline Wellness House for family use and Tourmaline Wellness House materials. Prior to July 9, 2010, Joway Shengshi owned 90% of Joway Decoration. Joway Shengshi entered into a share acquisition agreement with Jingyun Chen, another stockholder of Joway Decoration on July 9, 2010 to acquire the remaining 10% of the shares of Joway Decoration. As a result of the share acquisition, Joway Decoration became a wholly-owned subsidiary of Joway Shengshi. Jingyun Chen is currently the General Manager of Joway Decoration.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tianjin Oriental Shengtang Import &amp; Export Trading Co., Ltd (referred to herein as &#x201c;Shengtang Trading&#x201d;) was incorporated on September 18, 2009 in the PRC. It engages in purchasing raw materials which it sells to other companies of the group. Prior to July 28, 2010, Joway Shengshi owned 95% of Shengtang Trading. Joway Shengshi entered into a share acquisition agreement with Wang Aiying, another stockholder of Shengtang Trading on July 28, 2010 to acquire the remaining 5% of the shares of Shengtang Trading. As a result of the share acquisition, Shengtang Trading became a wholly-owned subsidiary of Joway Shengshi.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The following table lists the Company and its subsidiaries:</font></p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid; width: 29%; padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Name</b></font></td> <td style="width: 1%; padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="border-bottom: black 1.5pt solid; width: 15%; padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Domicile and Date of Incorporation</b></font></td> <td style="width: 1%; padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="border-bottom: black 1.5pt solid; width: 13%; padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Paid in Capital</b></font></td> <td style="width: 1%; padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="border-bottom: black 1.5pt solid; width: 18%; padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Percentage of Effective Ownership</b></font></td> <td style="width: 1%; padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="border-bottom: black 1.5pt solid; width: 21%; padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Principal Activities</b></font></td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Joway Health Industries Group Inc.</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">March 21, 2003,</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nevada</font></p></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">USD 20,054</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">86.8% owned by Crystal Globe Limited</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">13.2%owned by other institutional and individual investors</font></p></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investment&#xa0;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Holding</font></p></td></tr> <tr> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dynamic Elite International Limited</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">June 2, 2010,</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">British Virgin Islands</font></p></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">USD 10,000</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% owned by Joway Health Industries Group Inc.</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investment</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Holding</font></p></td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tianjin Junhe Management Consulting Co., Ltd.</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">September 15, 2010, PRC</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">USD 20,000</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% owned by Dynamic Elite International Limited</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Advisory</font></td></tr> <tr> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tianjin Joway Shengshi Group Co., Ltd.</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">May 17, 2007, PRC</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">USD 7,216,140.72</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; text-align: center; padding-left: 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">99% owned by Jinghe Zhang, and 1% owned&#xa0;&#xa0;by Baogang Song</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Production and</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">distribution of Healthcare Knit Goods and Daily Healthcare and Personal Care products</font></p></td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shenyang Joway Electronic Technology Co., Ltd.</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">March 28, 2007, PRC</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">USD 142,072.97</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% owned by Tianjin Joway Shengshi Group Co., Ltd</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Distribution of Tourmaline Activated Water Machine and construction of Tourmaline Wellness House</font></td></tr> <tr> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tianjin Joway Decoration Engineering Co., Ltd.</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">April 22, 2009, PRC</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">USD 292,367.74</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% owned by Tianjin Joway Shengshi Group Co., Ltd</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Distribution of Wellness House for family use and Activated Water Machine and construction of Tourmaline Wellness House</font></td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tianjin Oriental Shengtang Import &amp; Export Trading Co., Ltd.</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">September 18, 2009, PRC</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">USD 292,463.75</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% owned by Tianjin Joway Shengshi Group Co., Ltd</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Distribution of tourmaline products</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On September 16, 2010, prior to the share exchange, Junhe Consulting entered into a series of contractual agreements (the &#x201c;Contractual Agreements&#x201d;) with Joway Shengshi and Joway Shengshi&#x2019;s owners. The following is a brief description of the Contractual Agreements entered into between Junhe Consulting and Joway Shengshi or Joway Shengshi&#x2019;s owners&#xff1a;</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1. <i>Consulting Services Agreement.</i> Pursuant to the consulting services agreement between Junhe Consulting and Joway Shengshi, Junhe Consulting has the right to advise, consult, manage and operate Joway Shengshi, and collect and own all of the net profits of the Operating Entities.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2. <i>Operating Agreement.</i> Under the operating agreement between Junhe Consulting and Joway Shengshi, Junhe Consulting has the right to recommend director candidates and appoint the senior executives of Joway Shengshi, approve any transactions that may materially affect the assets, liabilities, rights or operations of Joway Shengshi, and guarantee the contractual performance by Joway Shengshi of any agreements with third parties, in exchange for a pledge by Joway Shengshi of its accounts receivable and assets.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3. <i>Voting Rights Proxy Agreement.</i> Under the voting rights proxy agreement between Joway Shengshi&#x2019;s owners and Junhe Consulting, the owners of Joway Shengshi have vested their collective voting control over Joway Shengshi to Junhe Consulting and will only transfer their respective equity interests in Joway Shengshi to Junhe Consulting or its designee.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4. <i>Option Agreement.</i> Under the option agreement between Joway Shengshi&#x2019;s owners and Junhe Consulting, the owners of Joway Shengshi have granted Junhe Consulting the irrevocable right and option to acquire all of their equity interests in Joway Shengshi.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">5. <i>Equity Pledge Agreement.</i> Under the equity pledge agreement between Joway Shengshi&#x2019;s owners and Junhe Consulting, the owners of Joway Shengshi have pledged all of their rights, titles and interests in Joway Shengshi to Junhe Consulting to guarantee Joway Shengshi&#x2019;s performance of its obligations under the Consulting Services Agreement.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As a result of the Contractual Agreements, Joway Shengshi is effectively a variable interest entity of Junhe Consulting. Accordingly, the Company through its wholly-owned subsidiary Junhe Consulting, consolidates Joway Shengshi&#x2019;s results of operation, assets and liabilities in its financial statements.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In connection with the Share Exchange and as consideration for entering into the VIE Agreements, Jingshe Zhang and Baogang Song, the shareholders of Joway Shengshi (the &#x201c;Grantees&#x201d;), entered into a Call Option Agreement, dated July 20,2010 with Lionel Evan Liu (the &#x201c;Grantor&#x201d;), the sole shareholder of Crystal Globe Limited (the controlling shareholder of Dynamic Elite), a British Virgin Islands company (&#x201c;CGL&#x201d;) (the &#x201c;Call Option Agreement&#x201d;), pursuant to which the Grantees had the right to purchase up to 100% of the shares of CGL (the &#x201c;Call Option&#x201d;) at an exercise price of $2.00 per share (the &#x201c;Exercise Price&#x201d;) for a period of five years. The Call Option vested as to 34% of the shares of CGL on April 2, 2011 and as to 33% on each of April 2, 2012 and 2013 (the respective &#x201c;Call Option Effective Date&#x201d;). On March 28, 2015, the Grantor and Grantees amended the Call Option Agreement, to (i) reduce the Exercise Price to $0.00 per share and (ii) extend the Grantees&#x2019; rights to exercise their call option within ten years from the respective Option Effective Date.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On November 13, 2016, Jinghe Zhang exercised his Call Option as to 99% of the shares of CGL and Baogang Song exercised his Call Option as to 1% of the shares of CGL. As a result of exercising his Call Option, Jinghe Zhang became the controlling shareholder of CGL and in turn, the controlling shareholder of the Company. Jinghe Zhang now controls 17,233,920 shares, or 85.9%, of the issued and outstanding shares of the Company&#x2019;s common stock.</font></p><br/> 0.7608 0.99 0.01 0.9091 0.0909 0.90 0.10 0.95 0.05 1.00 2.00 P5Y The Call Option vested as to 34% of the shares of CGL on April 2, 2011 and as to 33% on each of April 2, 2012 and 2013 (the respective &#x201c;Call Option Effective Date&#x201d;). On March 28, 2015, the Grantor and Grantees amended the Call Option Agreement, to (i) reduce the Exercise Price to $0.00 per share and (ii) extend the Grantees&#x2019; rights to exercise their call option within ten years from the respective Option Effective Date 0.99 0.01 17233920 0.859 <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid; width: 29%; padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Name</b></font></td> <td style="width: 1%; padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="border-bottom: black 1.5pt solid; width: 15%; padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Domicile and Date of Incorporation</b></font></td> <td style="width: 1%; padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="border-bottom: black 1.5pt solid; width: 13%; padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Paid in Capital</b></font></td> <td style="width: 1%; padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="border-bottom: black 1.5pt solid; width: 18%; padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Percentage of Effective Ownership</b></font></td> <td style="width: 1%; padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="border-bottom: black 1.5pt solid; width: 21%; padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Principal Activities</b></font></td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Joway Health Industries Group Inc.</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">March 21, 2003,</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; 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padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Advisory</font></td></tr> <tr> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tianjin Joway Shengshi Group Co., Ltd.</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">May 17, 2007, PRC</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">USD 7,216,140.72</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; text-align: center; padding-left: 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">99% owned by Jinghe Zhang, and 1% owned&#xa0;&#xa0;by Baogang Song</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Production and</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">distribution of Healthcare Knit Goods and Daily Healthcare and Personal Care products</font></p></td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shenyang Joway Electronic Technology Co., Ltd.</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">March 28, 2007, PRC</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">USD 142,072.97</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% owned by Tianjin Joway Shengshi Group Co., Ltd</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Distribution of Tourmaline Activated Water Machine and construction of Tourmaline Wellness House</font></td></tr> <tr> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tianjin Joway Decoration Engineering Co., Ltd.</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">April 22, 2009, PRC</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">USD 292,367.74</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% owned by Tianjin Joway Shengshi Group Co., Ltd</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Distribution of Wellness House for family use and Activated Water Machine and construction of Tourmaline Wellness House</font></td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tianjin Oriental Shengtang Import &amp; Export Trading Co., Ltd.</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">September 18, 2009, PRC</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">USD 292,463.75</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% owned by Tianjin Joway Shengshi Group Co., Ltd</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;</font></td> <td style="padding-right: 0; padding-left: 0; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Distribution of tourmaline products</font></td></tr> </table> March 21, 2003, Nevada 20054 86.8% owned by Crystal Globe Limited 13.2%owned by other institutional and individual investors Investment Holding June 2, 2010, British Virgin Islands 10000 100% owned by Joway Health Industries Group Inc. Investment Holding September 15, 2010, PRC 20000 100% owned by Dynamic Elite International Limited Advisory May 17, 2007, PRC 7216140.72 99% owned by Jinghe Zhang, and 1% owned by Baogang Song Production and distribution of Healthcare Knit Goods and Daily Healthcare and Personal Care products March 28, 2007, PRC 142072.97 100% owned by Tianjin Joway Shengshi Group Co., Ltd Distribution of Tourmaline Activated Water Machine and construction of Tourmaline Wellness House April 22, 2009, PRC 292367.74 100% owned by Tianjin Joway Shengshi Group Co., Ltd Distribution of Wellness House for family use and Activated Water Machine and construction of Tourmaline Wellness House September 18, 2009, PRC 292463.75 100% owned by Tianjin Joway Shengshi Group Co., Ltd Distribution of tourmaline products <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 2 &#x2013; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Basis of Presentation</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (&#x201c;US GAAP&#x201d;). Accordingly, they do not include all of the information and the footnotes required by generally accepted accounting principles for complete financial statements. The Company&#x2019;s functional currency is the Chinese Renminbi (&#x201c;RMB&#x201d;); however, the accompanying unaudited condensed consolidated financial statements have been translated and presented in United States Dollars (&#x201c;USD&#x201d;). All significant inter-company transactions and balances have been eliminated. The consolidated financial statements include all adjustments that, in the opinion of management, are necessary to make the financial statements not misleading.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operating results for the nine month period ended September 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2020. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company&#x2019;s form 10-K for the fiscal year ended December 31, 2019 which was filed on March 31, 2020.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Use of Estimates</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. Actual results could differ from those estimates.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Basis of Consolidation</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying consolidated financial statements include the Company and its wholly owned subsidiaries and controlled VIEs. All significant inter-company accounts and transactions have been eliminated in the consolidation.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant to Accounting Standards Codification Topic 810 &#x201c;Consolidation&#x201d; (&#x201c;ASC 810&#x201d;), the Company is required to include in its consolidated financial statements the financial statements of its variable interest entities (&#x201c;VIEs&#x201d;). ASC 810 requires a VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE&#x2019;s residual returns. VIEs are those entities in which a company, through contractual arrangements, bears the risk of, and enjoys the rewards normally associated with ownership of the entity, and therefore the company is the primary beneficiary of the entity.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Based on the various Contractual Agreements, the Company is able to exercise control over the VIEs, and to obtain the full economic benefits. The terms of the exclusive option agreement are currently exercisable and legally enforceable under PRC laws and regulations. The minimum amount of consideration permitted by the applicable PRC law to exercise the option does not represent a financial barrier or disincentive for the Company to exercise its rights under the exclusive option agreement. A simple majority vote of the Company&#x2019;s board of directors is required to pass a resolution to exercise its rights under the exclusive option agreement, for which consent of the shareholder of VIEs is not required. Therefore, this gives the Company the power to direct the activities that most significantly impact VIEs&#x2019; economic performance. The Company&#x2019;s ability to exercise effective control, together with the consulting service agreements and the equity pledge agreements, give the Company the rights to receive substantially all of the economic benefits from VIEs in consideration for the services provided by its wholly owned subsidiaries in China. Accordingly, as the primary beneficiary of VIEs and in accordance with U.S. GAAP, Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading, as VIEs of Junhe Consulting, has been consolidated in the Company&#x2019;s financial statements. Sales from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading are included in the Company&#x2019;s total sales, their incomes or losses from operations are consolidated with the Company&#x2019;s, and the Company&#x2019;s net income or loss includes net income or loss from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Foreign Currency Translation</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying consolidated financial statements are presented in USD. The functional currency of the Company is RMB. The consolidated financial statements are translated into United States dollars from RMB at period-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Equity accounts are translated at their historical exchange rates when the equity transactions occurred. The resulting transaction adjustments are recorded as a component of stockholders&#x2019; equity. Gains and losses from foreign currency transactions are included in net income.</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="padding: 0; text-align: justify; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="6" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0"><p style="margin-top: 0; margin-bottom: 0">For the nine months&#xa0;ended</p> <p style="margin-top: 0; margin-bottom: 0">September 30,</p></td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">For the year<br/> ended December&#xa0;31,</td><td style="padding: 0; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="padding: 0 0 1.5pt; text-align: justify; text-indent: 0">&#xa0;</td><td style="padding: 0 0 1.5pt; text-indent: 0">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; padding-top: 0; padding-right: 0; padding-left: 0; text-align: center; text-indent: 0">2020</td><td style="padding: 0 0 1.5pt; text-indent: 0">&#xa0;</td><td style="padding: 0 0 1.5pt; text-indent: 0">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; padding-top: 0; padding-right: 0; padding-left: 0; text-align: center; text-indent: 0">2019</td><td style="padding: 0 0 1.5pt; text-indent: 0">&#xa0;</td><td style="padding: 0 0 1.5pt; text-indent: 0">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; padding-top: 0; padding-right: 0; padding-left: 0; text-align: center; text-indent: 0">2019</td><td style="padding: 0 0 1.5pt; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; width: 64%; text-align: justify; text-indent: 0">Period ended RMB: USD Exchange rate</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="border-bottom: Black 0 solid; padding-top: 0; padding-right: 0; padding-left: 0; width: 9%; text-align: right; text-indent: 0">6.8101</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">6.86557</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">6.9762</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: justify; text-indent: 0">Average RMB: USD Exchange rate</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">6.9917</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">6.78392</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">6.8985</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign currency translation adjustments have been reported as comprehensive income (loss) in the consolidated financial statements and totalled $103,625 and $(105,948) for the three months ended September 30, 2020 and 2019, respectively, and $60,934 and $(92,278) for the nine months ended September 30, 2020 and 2019, respectively.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Other Comprehensive Income</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other comprehensive income is defined as the change in equity during the period from transactions and other events, excluding the changes resulting from investments by owners and distributions to owners, and is not included in the computation of income tax expense or benefit. Accumulated other comprehensive income represents the accumulated balance of foreign currency translation adjustments.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Concentrations of Credit Risk</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC's economy. The Company's operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash. Substantially all of the Company&#x2019;s cash is maintained with state-owned banks within the PRC, and no deposits are covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Fair Value of Financial Instruments</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial Accounting Standards Board (&#x201c;FASB&#x201d;) Accounting Standards Codification (&#x201c;ASC&#x201d;) 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:</font></p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">&#x25cf;</td><td style="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 1&#x2014;defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;</font></td> </tr></table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">&#x25cf;</td><td style="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 2&#x2014;defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and</font></td> </tr></table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">&#x25cf;</td><td style="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 3&#x2014;defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.</font></td> </tr></table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The carrying amounts reported in the balance sheets for cash, accounts receivable, other receivable, accounts payable, other payable, and amounts due from related parties generally approximate their fair market values based on the short-term maturity of these instruments. ASC 825-10 &#x201c;Financial Instruments&#x201d; allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Cash</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For financial reporting purposes, the Company considers all highly liquid financial instruments with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents at any point during the period of the financial statements presented. Balances at financial institutions or state-owned banks within the PRC are not covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Accounts Receivable</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. On a periodic basis, the Company reviews the composition of the accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these allowances. Accounts are written off after exhaustive efforts at collection. As of September 30, 2020 and December 31, 2019, the Company allowance $2,654 and $2,591 for doubtful accounts, respectively.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Inventories</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inventories are stated at the lower of cost, as determined by the specific identification method on contract level (for each individual contract, inventories cost flow are determined by weighted-average method), or the net realizable value, which is determined on selling prices less any further costs expected to be incurred for completion and disposal. The Company regularly evaluates the composition of its inventories to identify slow-moving and obsolete inventories to determine whether a valuation allowance is required. As of September 30, 2020 and December 31, 2019, the Company recorded $109,606 and $106,997 for inventory valuation allowance, respectively.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Advances to Suppliers</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Advances to suppliers represent the cash paid in advance for inventory items or construction in progress. The advance payments are meant to ensure preferential pricing and delivery. The amounts advanced under such arrangements totalled $57,179 and $62,674 as of September 30, 2020 and December 31, 2019, respectively.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Property, Plant, and Equipment</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property, plant and equipment are stated at cost less accumulated depreciation, and include expenditures that substantially increase the useful lives of existing assets.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives are as follows:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; width: 87%; text-align: justify; text-indent: 0">Building</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 11%; text-align: center; text-indent: 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">20 years</font></td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: justify; text-indent: 0">Operating Equipment</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: center; text-indent: 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10 years</font></td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; text-align: justify; text-indent: 0">Office furniture and equipment</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: center; text-indent: 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3&#xa0;or&#xa0;5&#xa0;years</font></td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: justify; text-indent: 0">Vehicles</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: center; text-indent: 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10 years</font></td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss is included in the consolidated statements of operations. Maintenance, repairs and minor renewals are charged directly to expenses as incurred. Significant renewals and betterment to buildings and equipment are capitalized. Leasehold improvements are depreciated over the lesser of the useful life or the life of the lease.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Intangible Assets</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Intangible assets mainly consist of land use rights. All land located in the PRC is owned by the government and cannot be sold to any individual or company. The land use rights granted to the Company are being amortized using the straight-line method over the lease term of 50 years. Other intangible assets are software programs that are amortized over their estimated useful life of 10 years.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Impairment of Long-lived Assets</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Long-lived assets of the Company are reviewed annually as to whether their carrying value has become impaired, pursuant to the guidelines established in FASB ASC 360. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from the related operations. The Company also reviewed the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. The Company did not record any impairment loss for the nine months ended September 30, 2020 and 2019.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Revenue Recognition</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">With respect to sales of product to both franchisee and non-franchisee customers, the Company prepares product shipments upon the receipt of a customer&#x2019;s purchase order. Sales prices are based on fixed price lists that are different depending on whether the price list is for a franchisee customer or for non-franchisee customers. The Company recognizes revenue when the product is shipped. The Company does not sell product to any customers with a right of return. Sales are presented net of value added tax (VAT).</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For Tourmaline Wellness House sales, the Company recognizes revenue under the completed contract method. Customers contact the Company with requests to construct a Wellness House. The Company and the customer enter into a contract, at which time the customer pays a deposit of at least one-half of the sales price. A contract is considered completed when all significant costs have been incurred and the project has been accepted by the customer. The contracts have a place for the customer to sign indicating their acceptance of the completed Wellness House. At this time the customer will also pay any remaining balance on the contract. The Company recognizes the full contract revenue at this point. Contract costs consist primarily of materials and labor costs. The construction period of a Wellness House generally does not exceed five days.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Shipping Costs</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Shipping costs are included in selling expenses and totalled $6,926 and $11,942 for the three months ended September 30, 2020 and 2019, respectively, and $22,004 and $40,913 for the nine months ended September 30, 2020 and 2019, respectively.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Income Taxes</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company is governed by the Income Tax Law and associated legislations of the PRC. The Company accounts for income taxes in accordance with FASB ASC 740 &#x201c;Income Taxes&#x201d;, which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. ASC 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Realization of deferred tax assets is dependent upon future earnings, if any, of which the timing and amount are uncertain.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">According to ASC 740, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Basic and Diluted Earnings per Share</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company reports earnings per share in accordance with FASB ASC 260 &#x201c;Earnings per share&#x201d;. The Company&#x2019;s basic earnings per share are computed using the weighted average number of shares outstanding for the periods presented. Diluted earnings per share are computed based on the assumption that any dilutive options or warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, the Company&#x2019;s outstanding stock warrants are assumed to be exercised, and funds thus obtained were assumed to be used to purchase common stock at the average market price during the period. There were no dilutive instruments outstanding during the nine month periods ended September 30, 2020 and 2019.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Segment Information</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company follows FASB ASC 280-Segment Reporting, which requires that companies disclose segment data based on how management makes decision about allocating resources to segments and evaluating their performance.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For the nine months ended September 30, 2020 and the year ended December 31, 2019, management has determined that the Company is operating in three reportable business segments, (1) Healthcare Knit Goods Series, (2) Daily Healthcare and Personal Care Series, and (3) Wellness House and Activated Water Machine Series. The Company's reportable segments are strategic business units that offer different products. They are managed separately based on the fundamental differences in their operations.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Recently Issued Accounting Pronouncements</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit&#x2019;s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance should be adopted on a prospective basis for the annual or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted the standard in 2019. Adoption of the standard did not have a significant impact on the Company&#x2019;s consolidated statement of earnings in 2019.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In June 2018, the FASB issued ASU 2018-07, &#x201c;Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,&#x201d; which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 becomes effective for the Company on January 1, 2019. Early adoption is permitted. The Company adopted the standard in 2019. Adoption of the standard did not have a significant impact on the Company&#x2019;s consolidated statement of earnings in 2019.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard outlined a comprehensive lease accounting model that superseded the previous lease guidance and required lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms greater than 12 months. The guidance also changed the definition of a lease and expanded the disclosure requirements of lease arrangements. The Company adopted the standard on December 15, 2019. Adoption of the standard did not have a significant impact on the Company&#x2019;s consolidated statement of earnings in 2019.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted the standard in 2019. Adoption of the standard did not have a significant impact on the Company&#x2019;s consolidated statement of earnings in 2019.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company&#x2019;s present or future consolidated financial statements.</font></p><br/> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Basis of Presentation</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (&#x201c;US GAAP&#x201d;). Accordingly, they do not include all of the information and the footnotes required by generally accepted accounting principles for complete financial statements. The Company&#x2019;s functional currency is the Chinese Renminbi (&#x201c;RMB&#x201d;); however, the accompanying unaudited condensed consolidated financial statements have been translated and presented in United States Dollars (&#x201c;USD&#x201d;). All significant inter-company transactions and balances have been eliminated. The consolidated financial statements include all adjustments that, in the opinion of management, are necessary to make the financial statements not misleading.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operating results for the nine month period ended September 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2020. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company&#x2019;s form 10-K for the fiscal year ended December 31, 2019 which was filed on March 31, 2020.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Use of Estimates</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. Actual results could differ from those estimates.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Basis of Consolidation</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying consolidated financial statements include the Company and its wholly owned subsidiaries and controlled VIEs. All significant inter-company accounts and transactions have been eliminated in the consolidation.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant to Accounting Standards Codification Topic 810 &#x201c;Consolidation&#x201d; (&#x201c;ASC 810&#x201d;), the Company is required to include in its consolidated financial statements the financial statements of its variable interest entities (&#x201c;VIEs&#x201d;). ASC 810 requires a VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE&#x2019;s residual returns. VIEs are those entities in which a company, through contractual arrangements, bears the risk of, and enjoys the rewards normally associated with ownership of the entity, and therefore the company is the primary beneficiary of the entity.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Based on the various Contractual Agreements, the Company is able to exercise control over the VIEs, and to obtain the full economic benefits. The terms of the exclusive option agreement are currently exercisable and legally enforceable under PRC laws and regulations. The minimum amount of consideration permitted by the applicable PRC law to exercise the option does not represent a financial barrier or disincentive for the Company to exercise its rights under the exclusive option agreement. A simple majority vote of the Company&#x2019;s board of directors is required to pass a resolution to exercise its rights under the exclusive option agreement, for which consent of the shareholder of VIEs is not required. Therefore, this gives the Company the power to direct the activities that most significantly impact VIEs&#x2019; economic performance. The Company&#x2019;s ability to exercise effective control, together with the consulting service agreements and the equity pledge agreements, give the Company the rights to receive substantially all of the economic benefits from VIEs in consideration for the services provided by its wholly owned subsidiaries in China. Accordingly, as the primary beneficiary of VIEs and in accordance with U.S. GAAP, Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading, as VIEs of Junhe Consulting, has been consolidated in the Company&#x2019;s financial statements. Sales from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading are included in the Company&#x2019;s total sales, their incomes or losses from operations are consolidated with the Company&#x2019;s, and the Company&#x2019;s net income or loss includes net income or loss from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Foreign Currency Translation</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying consolidated financial statements are presented in USD. The functional currency of the Company is RMB. The consolidated financial statements are translated into United States dollars from RMB at period-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Equity accounts are translated at their historical exchange rates when the equity transactions occurred. The resulting transaction adjustments are recorded as a component of stockholders&#x2019; equity. Gains and losses from foreign currency transactions are included in net income.</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="padding: 0; text-align: justify; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="6" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0"><p style="margin-top: 0; margin-bottom: 0">For the nine months&#xa0;ended</p> <p style="margin-top: 0; margin-bottom: 0">September 30,</p></td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">For the year<br/> ended December&#xa0;31,</td><td style="padding: 0; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="padding: 0 0 1.5pt; text-align: justify; text-indent: 0">&#xa0;</td><td style="padding: 0 0 1.5pt; text-indent: 0">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; padding-top: 0; padding-right: 0; padding-left: 0; text-align: center; text-indent: 0">2020</td><td style="padding: 0 0 1.5pt; text-indent: 0">&#xa0;</td><td style="padding: 0 0 1.5pt; text-indent: 0">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; padding-top: 0; padding-right: 0; padding-left: 0; text-align: center; text-indent: 0">2019</td><td style="padding: 0 0 1.5pt; text-indent: 0">&#xa0;</td><td style="padding: 0 0 1.5pt; text-indent: 0">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; padding-top: 0; padding-right: 0; padding-left: 0; text-align: center; text-indent: 0">2019</td><td style="padding: 0 0 1.5pt; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; width: 64%; text-align: justify; text-indent: 0">Period ended RMB: USD Exchange rate</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="border-bottom: Black 0 solid; padding-top: 0; padding-right: 0; padding-left: 0; width: 9%; text-align: right; text-indent: 0">6.8101</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">6.86557</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">6.9762</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: justify; text-indent: 0">Average RMB: USD Exchange rate</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">6.9917</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">6.78392</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">6.8985</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign currency translation adjustments have been reported as comprehensive income (loss) in the consolidated financial statements and totalled $103,625 and $(105,948) for the three months ended September 30, 2020 and 2019, respectively, and $60,934 and $(92,278) for the nine months ended September 30, 2020 and 2019, respectively.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Other Comprehensive Income</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other comprehensive income is defined as the change in equity during the period from transactions and other events, excluding the changes resulting from investments by owners and distributions to owners, and is not included in the computation of income tax expense or benefit. Accumulated other comprehensive income represents the accumulated balance of foreign currency translation adjustments.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Concentrations of Credit Risk</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC's economy. The Company's operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash. Substantially all of the Company&#x2019;s cash is maintained with state-owned banks within the PRC, and no deposits are covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Fair Value of Financial Instruments</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial Accounting Standards Board (&#x201c;FASB&#x201d;) Accounting Standards Codification (&#x201c;ASC&#x201d;) 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:</font></p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">&#x25cf;</td><td style="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 1&#x2014;defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;</font></td> </tr></table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">&#x25cf;</td><td style="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 2&#x2014;defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and</font></td> </tr></table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">&#x25cf;</td><td style="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 3&#x2014;defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.</font></td> </tr></table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The carrying amounts reported in the balance sheets for cash, accounts receivable, other receivable, accounts payable, other payable, and amounts due from related parties generally approximate their fair market values based on the short-term maturity of these instruments. ASC 825-10 &#x201c;Financial Instruments&#x201d; allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Cash</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For financial reporting purposes, the Company considers all highly liquid financial instruments with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents at any point during the period of the financial statements presented. Balances at financial institutions or state-owned banks within the PRC are not covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Accounts Receivable</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. On a periodic basis, the Company reviews the composition of the accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these allowances. Accounts are written off after exhaustive efforts at collection. As of September 30, 2020 and December 31, 2019, the Company allowance $2,654 and $2,591 for doubtful accounts, respectively.</font></p> 2654 2591 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Inventories</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inventories are stated at the lower of cost, as determined by the specific identification method on contract level (for each individual contract, inventories cost flow are determined by weighted-average method), or the net realizable value, which is determined on selling prices less any further costs expected to be incurred for completion and disposal. The Company regularly evaluates the composition of its inventories to identify slow-moving and obsolete inventories to determine whether a valuation allowance is required. As of September 30, 2020 and December 31, 2019, the Company recorded $109,606 and $106,997 for inventory valuation allowance, respectively.</font></p> 109606 106997 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Advances to Suppliers</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Advances to suppliers represent the cash paid in advance for inventory items or construction in progress. The advance payments are meant to ensure preferential pricing and delivery. The amounts advanced under such arrangements totalled $57,179 and $62,674 as of September 30, 2020 and December 31, 2019, respectively.</p> 57179 62674 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Property, Plant, and Equipment</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property, plant and equipment are stated at cost less accumulated depreciation, and include expenditures that substantially increase the useful lives of existing assets.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives are as follows:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; width: 87%; text-align: justify; text-indent: 0">Building</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 11%; text-align: center; text-indent: 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">20 years</font></td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: justify; text-indent: 0">Operating Equipment</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: center; text-indent: 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10 years</font></td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; text-align: justify; text-indent: 0">Office furniture and equipment</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: center; text-indent: 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3&#xa0;or&#xa0;5&#xa0;years</font></td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: justify; text-indent: 0">Vehicles</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: center; text-indent: 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10 years</font></td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss is included in the consolidated statements of operations. Maintenance, repairs and minor renewals are charged directly to expenses as incurred. Significant renewals and betterment to buildings and equipment are capitalized. Leasehold improvements are depreciated over the lesser of the useful life or the life of the lease.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Intangible Assets</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Intangible assets mainly consist of land use rights. All land located in the PRC is owned by the government and cannot be sold to any individual or company. The land use rights granted to the Company are being amortized using the straight-line method over the lease term of 50 years. Other intangible assets are software programs that are amortized over their estimated useful life of 10 years.</font></p> P50Y P10Y <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Impairment of Long-lived Assets</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Long-lived assets of the Company are reviewed annually as to whether their carrying value has become impaired, pursuant to the guidelines established in FASB ASC 360. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from the related operations. The Company also reviewed the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. The Company did not record any impairment loss for the nine months ended September 30, 2020 and 2019.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Revenue Recognition</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">With respect to sales of product to both franchisee and non-franchisee customers, the Company prepares product shipments upon the receipt of a customer&#x2019;s purchase order. Sales prices are based on fixed price lists that are different depending on whether the price list is for a franchisee customer or for non-franchisee customers. The Company recognizes revenue when the product is shipped. The Company does not sell product to any customers with a right of return. Sales are presented net of value added tax (VAT).</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For Tourmaline Wellness House sales, the Company recognizes revenue under the completed contract method. Customers contact the Company with requests to construct a Wellness House. The Company and the customer enter into a contract, at which time the customer pays a deposit of at least one-half of the sales price. A contract is considered completed when all significant costs have been incurred and the project has been accepted by the customer. The contracts have a place for the customer to sign indicating their acceptance of the completed Wellness House. At this time the customer will also pay any remaining balance on the contract. The Company recognizes the full contract revenue at this point. Contract costs consist primarily of materials and labor costs. The construction period of a Wellness House generally does not exceed five days.</font></p> P5D <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Shipping Costs</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Shipping costs are included in selling expenses and totalled $6,926 and $11,942 for the three months ended September 30, 2020 and 2019, respectively, and $22,004 and $40,913 for the nine months ended September 30, 2020 and 2019, respectively.</p> 6926 11942 22004 40913 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Income Taxes</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company is governed by the Income Tax Law and associated legislations of the PRC. The Company accounts for income taxes in accordance with FASB ASC 740 &#x201c;Income Taxes&#x201d;, which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. ASC 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Realization of deferred tax assets is dependent upon future earnings, if any, of which the timing and amount are uncertain.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">According to ASC 740, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Basic and Diluted Earnings per Share</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company reports earnings per share in accordance with FASB ASC 260 &#x201c;Earnings per share&#x201d;. The Company&#x2019;s basic earnings per share are computed using the weighted average number of shares outstanding for the periods presented. Diluted earnings per share are computed based on the assumption that any dilutive options or warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, the Company&#x2019;s outstanding stock warrants are assumed to be exercised, and funds thus obtained were assumed to be used to purchase common stock at the average market price during the period. There were no dilutive instruments outstanding during the nine month periods ended September 30, 2020 and 2019.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Segment Information</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company follows FASB ASC 280-Segment Reporting, which requires that companies disclose segment data based on how management makes decision about allocating resources to segments and evaluating their performance.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For the nine months ended September 30, 2020 and the year ended December 31, 2019, management has determined that the Company is operating in three reportable business segments, (1) Healthcare Knit Goods Series, (2) Daily Healthcare and Personal Care Series, and (3) Wellness House and Activated Water Machine Series. The Company's reportable segments are strategic business units that offer different products. They are managed separately based on the fundamental differences in their operations.</font></p> 3 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Recently Issued Accounting Pronouncements</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit&#x2019;s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance should be adopted on a prospective basis for the annual or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted the standard in 2019. Adoption of the standard did not have a significant impact on the Company&#x2019;s consolidated statement of earnings in 2019.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In June 2018, the FASB issued ASU 2018-07, &#x201c;Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,&#x201d; which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 becomes effective for the Company on January 1, 2019. Early adoption is permitted. The Company adopted the standard in 2019. Adoption of the standard did not have a significant impact on the Company&#x2019;s consolidated statement of earnings in 2019.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard outlined a comprehensive lease accounting model that superseded the previous lease guidance and required lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms greater than 12 months. The guidance also changed the definition of a lease and expanded the disclosure requirements of lease arrangements. The Company adopted the standard on December 15, 2019. Adoption of the standard did not have a significant impact on the Company&#x2019;s consolidated statement of earnings in 2019.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted the standard in 2019. Adoption of the standard did not have a significant impact on the Company&#x2019;s consolidated statement of earnings in 2019.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company&#x2019;s present or future consolidated financial statements.</font></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="padding: 0; text-align: justify; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="6" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0"><p style="margin-top: 0; margin-bottom: 0">For the nine months&#xa0;ended</p> <p style="margin-top: 0; margin-bottom: 0">September 30,</p></td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">For the year<br/> ended December&#xa0;31,</td><td style="padding: 0; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="padding: 0 0 1.5pt; text-align: justify; text-indent: 0">&#xa0;</td><td style="padding: 0 0 1.5pt; text-indent: 0">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; padding-top: 0; padding-right: 0; padding-left: 0; text-align: center; text-indent: 0">2020</td><td style="padding: 0 0 1.5pt; text-indent: 0">&#xa0;</td><td style="padding: 0 0 1.5pt; text-indent: 0">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; padding-top: 0; padding-right: 0; padding-left: 0; text-align: center; text-indent: 0">2019</td><td style="padding: 0 0 1.5pt; text-indent: 0">&#xa0;</td><td style="padding: 0 0 1.5pt; text-indent: 0">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; padding-top: 0; padding-right: 0; padding-left: 0; text-align: center; text-indent: 0">2019</td><td style="padding: 0 0 1.5pt; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; width: 64%; text-align: justify; text-indent: 0">Period ended RMB: USD Exchange rate</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="border-bottom: Black 0 solid; padding-top: 0; padding-right: 0; padding-left: 0; width: 9%; text-align: right; text-indent: 0">6.8101</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">6.86557</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">6.9762</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: justify; text-indent: 0">Average RMB: USD Exchange rate</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">6.9917</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">6.78392</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">6.8985</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> </table> 6.8101 6.86557 6.9762 6.9917 6.78392 6.8985 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; width: 87%; text-align: justify; text-indent: 0">Building</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 11%; text-align: center; text-indent: 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">20 years</font></td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: justify; text-indent: 0">Operating Equipment</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: center; text-indent: 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10 years</font></td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; text-align: justify; text-indent: 0">Office furniture and equipment</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: center; text-indent: 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3&#xa0;or&#xa0;5&#xa0;years</font></td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: justify; text-indent: 0">Vehicles</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: center; text-indent: 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10 years</font></td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> </table> P20Y P10Y P3Y P5Y P10Y <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 3 &#x2013; ACCOUNTS RECEIVABLE</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts receivable consisted of the following:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">September&#xa0;30,</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">December&#xa0;31,</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Accounts receivable</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,654</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,591</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Less: allowance for bad debt</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(2,654</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(2,591</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Accounts receivable, net</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As of the periods presented, the Company allowance $2,654 and $2,591 for doubtful accounts, respectively.</font></p><br/> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">September&#xa0;30,</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">December&#xa0;31,</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Accounts receivable</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,654</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,591</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Less: allowance for bad debt</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(2,654</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(2,591</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Accounts receivable, net</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 2654 2591 2654 2591 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 4 &#x2013; INVENTORIES </b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inventories consisted of the following:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">September&#xa0;30,</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">December&#xa0;31,</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Raw materials</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">120,463</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">126,563</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Finished goods</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">479,130</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">444,175</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Low value consumables</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">37,419</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">36,528</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>Total</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">637,012</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">607,266</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Less: impairment loss</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(109,606</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(106,997</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 4pt">Inventory, net</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">527,406</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">500,269</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Low value consumables represent low priced and easily worn articles and are amortized on equal-split amortization method. Pursuant to this method, half value of the low value consumable should be amortized once used and the remaining half value should be amortized when disposed of.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As of September 30, 2020 and December 31, 2019, the Company recognized $109,606 and $106,997, respectively, as a reserve for impairment loss from inventory.</font></p><br/> 109606 106997 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">September&#xa0;30,</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">December&#xa0;31,</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Raw materials</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">120,463</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">126,563</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Finished goods</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">479,130</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">444,175</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Low value consumables</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">37,419</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">36,528</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>Total</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">637,012</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">607,266</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Less: impairment loss</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(109,606</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(106,997</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 4pt">Inventory, net</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">527,406</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">500,269</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 120463 126563 479130 444175 37419 36528 637012 607266 -109606 -106997 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 5 &#x2013; PROPERTY, PLANT AND EQUIPMENT</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property, plant and equipment consisted of the following:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">September&#xa0;30,</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">December&#xa0;31,</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Building</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">5,846,710</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">5,707,503</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Operating Equipment</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">429,264</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">419,044</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Office furniture and equipment</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">347,419</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">339,147</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Vehicles</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,004,364</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">980,450</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Total</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">7,627,757</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">7,446,144</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Less: accumulated depreciation</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(4,467,894</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(4,068,783</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Property, plant and equipment, net</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">3,159,863</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">3,377,361</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depreciation expense for the three months ended September 30, 2020 and 2019 amounted to $95,847 and $99,916, respectively, and for the nine months ended September 30, 2020 and 2019 amounted to $292,084 and $308,065, respectively.</font></p><br/> 95847 99916 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">September&#xa0;30,</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">December&#xa0;31,</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Building</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">5,846,710</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">5,707,503</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Operating Equipment</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">429,264</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">419,044</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Office furniture and equipment</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">347,419</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">339,147</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Vehicles</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,004,364</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">980,450</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Total</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">7,627,757</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">7,446,144</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Less: accumulated depreciation</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(4,467,894</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(4,068,783</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Property, plant and equipment, net</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">3,159,863</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">3,377,361</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 5846710 5707503 429264 419044 347419 339147 1004364 980450 7627757 7446144 4467894 4068783 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 6 &#x2013; INTANGIBLE ASSETS</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Intangible assets consisted of the following:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; text-indent: 0">September&#xa0;30,</td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; text-indent: 0">December&#xa0;31,</td><td style="padding: 0; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">2020</td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">2019</td><td style="padding: 0; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; width: 76%; text-align: left; text-indent: 0">Land use rights</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">$</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">606,168</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">$</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">591,734</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: left; text-indent: 0">Other intangible assets</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">77,556</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">75,710</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; text-align: justify; text-indent: 0">Total</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">683,724</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">667,444</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: left; text-indent: 0">Less: accumulated amortization</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">(235,160</td><td style="padding: 0; text-align: left; text-indent: 0">)</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">(219,411</td><td style="padding: 0; text-align: left; text-indent: 0">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; text-align: left; text-indent: 0">Intangible assets, net</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">$</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">448,564</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">$</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">448,033</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amortization expense of intangible assets for the three months ended September 30, 2020 and 2019 was $2,993 and $4,687, respectively, and for the nine months ended September 30, 2020 and 2019 amounted to $10,127 and $14,359, respectively.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The estimated amortization expense for the next five years is as follows:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; text-align: left">Estimated amortization expense for the year ending December 31,</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Amount</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; width: 88%; text-align: left">2020</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">19,000</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-left: 0.125in; text-align: left">2021</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">19,000</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">2022</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">19,000</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-left: 0.125in; text-align: left">2023</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">19,000</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">2024</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">19,000</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-left: 0.25in; text-align: left">Thereafter</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">353,033</td><td style="text-align: left">&#xa0;</td></tr> </table><br/> 2993 4687 10127 14359 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; text-indent: 0">September&#xa0;30,</td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; text-indent: 0">December&#xa0;31,</td><td style="padding: 0; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">2020</td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">2019</td><td style="padding: 0; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; width: 76%; text-align: left; text-indent: 0">Land use rights</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">$</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">606,168</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">$</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">591,734</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: left; text-indent: 0">Other intangible assets</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">77,556</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">75,710</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; text-align: justify; text-indent: 0">Total</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">683,724</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">667,444</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: left; text-indent: 0">Less: accumulated amortization</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">(235,160</td><td style="padding: 0; text-align: left; text-indent: 0">)</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">(219,411</td><td style="padding: 0; text-align: left; text-indent: 0">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; text-align: left; text-indent: 0">Intangible assets, net</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">$</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">448,564</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">$</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">448,033</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> </table> 606168 591734 77556 75710 683724 667444 -235160 -219411 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; text-align: left">Estimated amortization expense for the year ending December 31,</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Amount</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; width: 88%; text-align: left">2020</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">19,000</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-left: 0.125in; text-align: left">2021</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">19,000</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">2022</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">19,000</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-left: 0.125in; text-align: left">2023</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">19,000</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">2024</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">19,000</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-left: 0.25in; text-align: left">Thereafter</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">353,033</td><td style="text-align: left">&#xa0;</td></tr> </table> 19000 19000 19000 19000 19000 353033 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 7 &#x2013; RELATED PARTY TRANSACTIONS</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Payables due to related parties consist of the following:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">September&#xa0;30,</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">December&#xa0;31,</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left; padding-bottom: 1.5pt">Jinghe Zhang</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">1,915,333</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">1,480,515</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,915,333</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,480,515</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Transactions with Shenyang Joway</b></font></p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#x25cf;</b></font></td><td style="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shenyang Joway Industrial Development Co., Ltd. (&#x201c;Shenyang Joway&#x201d;) was formed in 2005 in Shenyang, China by Mr. Jinghe Zhang and three other individuals. Mr. Zhang holds more than 50% of the equity in Shenyang Joway. Shenyang Joway was in the business of marketing and distributing clothing and related products to other companies. Through 2009 Shenyang Joway had ceased operations, although it still existed as a legal entity. Shenyang Joway was cancelled in 2019.</font></td> </tr></table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#x25cf;</b></font></td><td style="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On May 7, 2007, the Company&#x2019;s subsidiary Joway Shengshi entered into an agreement with Shenyang Joway pursuant to which Joway Shengshi and Shenyang Joway agreed to provide each other with interest-free, unsecured advances for working capital. On May 10, 2007, the Company&#x2019;s subsidiary Joway Technology and Shenyang Joway entered into an agreement pursuant to which Joway Technology and Shenyang Joway agreed to provide each other with interest-free, unsecured advances for working capital.</font></td> </tr></table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#x25cf;</b></font></td><td style="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Through December 31, 2008, Joway Technology advanced $58,568 to Shenyang Joway, which was paid off by Shenyang Joway to Joway Technology in 2009.</font></td> </tr></table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#x25cf;</b></font></td><td style="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Through December 31, 2010, Shenyang Joway advanced an aggregate of $912,645 to Joway Shengshi and Joway Technology, which was paid off by 2019. For the nine months ended September 30, 2020 and 2019, the Company repaid $0 and $118,458 of these advances, respectively. As of September 30, 2020, the total unpaid principal balance due Shenyang Joway for advances was $0.</font></td> </tr></table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Transactions with Jinghe Zhang</b></font></p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#x25cf;</b></font></td><td style="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On December 1, 2009, the Company, through its subsidiary Joway Shengshi, entered into a royalty-free license agreement with Jinghe Zhang, our President, Chief Executive Officer and director. Pursuant to the license agreement, we are authorized to use the trademark &#x201c;Joway&#x201d; for a term of nine years and five patents from December 1, 2009 till the expiration dates of the patents.</font></td> </tr></table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#x25cf;</b></font></td><td style="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On May 10, 2007, Joway Shengshi entered into a cash advance agreement with Jinghe Zhang, the Company&#x2019;s President, Chief Executive Officer and director. Pursuant to the agreement, Jinghe Zhang agreed to advance operating capital to Joway Shengshi. The advances are interest free, unsecured, and have no specified repayment terms. The agreement is valid throughout Joway Shengshi&#x2019;s term of operation.</font></td> </tr></table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#x25cf;</b></font></td><td style="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During the period beginning May 17, 2007 (inception of Joway Shengshi) through September 30, 2019, Joway Shengshi received cash advances in the aggregate principal amount of $6,548,144 from Jinghe Zhang of which $4,632,811 has been repaid. For the nine months ended September 30, 2020 and 2019, the Company received $434,818 and $700,766 of these advances, respectively. As of September 30, 2020, the total unpaid principal balance due Jinghe Zhang for advances was $1,915,333.</font></td> </tr></table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The amounts owed to related parties are non-interest bearing and have no specified repayment terms.</font></p><br/> more than 50% of the equity 58568 912645 0 118458 0 6548144 4632811 434818 700766 1915333 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">September&#xa0;30,</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">December&#xa0;31,</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left; padding-bottom: 1.5pt">Jinghe Zhang</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">1,915,333</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">1,480,515</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,915,333</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,480,515</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 1915333 1480515 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 8 &#x2013; INCOME TAXES</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company operations in the People&#x2019;s Republic of China are subject to the Income Tax Law of the People&#x2019;s Republic of China. Pursuant to the PRC Income Tax Laws, the Company is subject to the Enterprise Income Tax (&#x201c;EIT&#x201d;) which is generally a statutory rate of 25% beginning January 2008, on income as reported in its statutory financial statements after appropriate tax adjustments.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The table below summarizes the differences between the PRC statutory federal rate and the Company&#x2019;s effective tax rate:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="6" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">For the nine months ended September 30,</td><td style="padding: 0; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">2020</td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">2019</td><td style="padding: 0; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; width: 76%; text-align: left; text-indent: 0">Tax computed at China statutory rates</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">25</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">%</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">25</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">%</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-indent: 0">Effect of losses</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">(25</td><td style="padding: 0; text-align: left; text-indent: 0">%)</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">(25</td><td style="padding: 0; text-align: left; text-indent: 0">%)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; text-align: left; text-indent: 0">Effective rate</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">0</td><td style="padding: 0; text-align: left; text-indent: 0">%</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">0</td><td style="padding: 0; text-align: left; text-indent: 0">%</td></tr> </table><br/> 0.25 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="6" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">For the nine months ended September 30,</td><td style="padding: 0; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">2020</td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">2019</td><td style="padding: 0; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; width: 76%; text-align: left; text-indent: 0">Tax computed at China statutory rates</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">25</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">%</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">25</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">%</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-indent: 0">Effect of losses</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">(25</td><td style="padding: 0; text-align: left; text-indent: 0">%)</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">(25</td><td style="padding: 0; text-align: left; text-indent: 0">%)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; text-align: left; text-indent: 0">Effective rate</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">0</td><td style="padding: 0; text-align: left; text-indent: 0">%</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">0</td><td style="padding: 0; text-align: left; text-indent: 0">%</td></tr> </table> 0.25 0.25 -0.25 -0.25 0.00 0.00 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 9 &#x2013; STATUTORY RESERVES</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant to the laws and regulations of the PRC, annual income of the Company&#x2019;s subsidiaries is required to be partly allocated to the statutory reserves funds after the payment of the PRC income taxes. The allocation to the statutory reserves funds should be at least 10% of income after tax until the reserves reaches 50% of the entities&#x2019; registered capital or members&#x2019; equity. The reserve funds are not transferable to the Company in the form of cash dividends, loans or advances. Thus the reserve funds are not available for distribution except in liquidation. As of September 30, 2020, the Company had allocated $354,052 to statutory reserves.</font></p><br/> 0.10 0.50 354052 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 10 &#x2013; SEGMENTS</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In 2020 and 2019, the Company operated in three reportable business segments: (1) Healthcare Knit Goods Series, (2) Daily Healthcare and Personal Care Series and (3) Wellness House and Activated Water Machine Series. The Company's reportable segments are strategic business units that offer different products. They are managed separately based on the fundamental differences in their operations. Information with respect to these reportable business segments is as follows:</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For the three months ended September 30, 2020</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: center">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Sales</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">COGS</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Gross profit</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Loss from operations</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Depreciation and amortization</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Assets</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 28%; text-align: center">Healthcare Knit Goods Series</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">15,431</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,897</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">12,534</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(30,622</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">19,734</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">114,429</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-left: 0.125in; text-align: center">Daily Healthcare and Personal Care Series</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">13,373</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">11,461</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,912</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(14,363</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">17,102</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">211,852</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: center; padding-bottom: 1.5pt">Wellness House and Activated Water Machine Series</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">48,485</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">23,159</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">25,326</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(149,632</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">62,004</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">198,201</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center; padding-bottom: 4pt">Segment Totals</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">77,289</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">37,517</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">39,772</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">(194,617</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">98,840</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">524,482</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center">Other Loss, net</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(77</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center; padding-bottom: 1.5pt">Income tax benefits</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center; padding-bottom: 1.5pt">Unallocated Assets</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">3,860,793</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center; padding-bottom: 4pt">Net Loss</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(194,694</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center; padding-bottom: 4pt">Total Assets</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,385,275</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For the three months ended September 30, 2019</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="padding: 0; text-align: center">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">Sales</td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">COGS</td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">Gross profit</td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">Loss from operations</td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">Depreciation and amortization</td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">Assets</td><td style="padding: 0; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; width: 28%; text-align: center">Healthcare Knit Goods Series</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">$</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">14,546</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">$</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">4,800</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">$</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">9,746</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">$</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">(10,449</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">)</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">$</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">9,599</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">$</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">139,577</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: center">Daily Healthcare and Personal Care Series</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">74,313</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">29,910</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">44,403</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">(103,530</td><td style="padding: 0; text-align: left; text-indent: 0">)</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">49,038</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">219,620</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; text-align: center">Wellness House and Activated Water Machine Series</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">69,657</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">34,999</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">34,658</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">(74,648</td><td style="padding: 0; text-align: left; text-indent: 0">)</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">45,966</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">176,048</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: center">Segment Totals</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">$</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">158,516</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">$</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">69,709</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">$</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">88,807</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">(188,627</td><td style="padding: 0; text-align: left; text-indent: 0">)</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">$</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">104,603</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">535,245</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; text-align: center">Other Loss, net</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">(71,635</td><td style="padding: 0; text-align: left; text-indent: 0">)</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: center">Income Tax</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">-</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; text-align: center">Unallocated Assets</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">4,097,146</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: center">Net Loss</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">$</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">(260,262</td><td style="padding: 0; text-align: left; text-indent: 0">)</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; text-align: center">Total Assets</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">$</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">4,632,391</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For the nine months ended September 30, 2020</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: center">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Sales</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">COGS</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Gross profit</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Loss from operations</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Depreciation and amortization</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Assets</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 28%; text-align: center">Healthcare Knit Goods Series</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">21,984</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">6,010</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">15,974</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(94,930</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">41,678</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">114,429</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center">Daily Healthcare and Personal Care Series</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">44,035</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">26,925</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">17,110</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(205,038</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">83,484</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">211,852</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center; padding-bottom: 1.5pt">Wellness House and Activated Water Machine Series</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">93,388</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">50,333</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">43,055</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(428,067</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">177,049</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">198,201</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center; padding-bottom: 4pt">Segment Totals</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">159,407</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">83,268</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">76,139</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">(728,035</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">302,211</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">524,482</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center">Other Loss, net</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(1,185</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center; padding-bottom: 1.5pt">Income tax benefits</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center; padding-bottom: 1.5pt">Unallocated Assets</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">3,860,793</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center; padding-bottom: 4pt">Net Loss</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(729,220</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center; padding-bottom: 4pt">Total Assets</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,385,275</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For the nine months ended September 30, 2019</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Sales</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">COGS</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Gross profit</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Loss from operations</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Depreciation and amortization</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Assets</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 28%; text-align: center">Healthcare Knit Goods Series</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">61,733</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">28,307</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">33,426</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(108,588</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">42,461</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">139,577</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center">Daily Healthcare and Personal Care Series</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">156,208</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">68,315</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">87,893</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(271,461</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">107,442</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">219,620</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center; padding-bottom: 1.5pt">Wellness House and Activated Water Machine Series</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">250,825</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">125,250</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">125,575</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(451,434</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">172,521</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">176,048</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center; padding-bottom: 4pt">Segment Totals</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">468,766</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">221,872</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">246,894</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">(831,483</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">322,424</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">535,245</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center">Other Loss, net</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(72,826</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center; padding-bottom: 1.5pt">Income Tax</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center; padding-bottom: 1.5pt">Unallocated Assets</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">4,097,146</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center; padding-bottom: 4pt">Net Loss</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(904,309</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center; padding-bottom: 4pt">Total Assets</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,632,391</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: center">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Sales</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">COGS</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Gross profit</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Loss from operations</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Depreciation and amortization</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Assets</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 28%; text-align: center">Healthcare Knit Goods Series</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">15,431</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,897</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">12,534</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(30,622</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">19,734</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">114,429</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-left: 0.125in; text-align: center">Daily Healthcare and Personal Care Series</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">13,373</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">11,461</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,912</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(14,363</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">17,102</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">211,852</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: center; padding-bottom: 1.5pt">Wellness House and Activated Water Machine Series</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">48,485</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">23,159</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">25,326</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(149,632</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">62,004</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">198,201</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center; padding-bottom: 4pt">Segment Totals</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">77,289</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">37,517</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">39,772</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">(194,617</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">98,840</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">524,482</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center">Other Loss, net</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(77</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center; padding-bottom: 1.5pt">Income tax benefits</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center; padding-bottom: 1.5pt">Unallocated Assets</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">3,860,793</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center; padding-bottom: 4pt">Net Loss</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(194,694</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center; padding-bottom: 4pt">Total Assets</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,385,275</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="padding: 0; text-align: center">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">Sales</td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">COGS</td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">Gross profit</td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">Loss from operations</td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">Depreciation and amortization</td><td style="padding: 0; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td colspan="2" style="padding: 0; text-align: center; border-bottom: Black 1.5pt solid; text-indent: 0">Assets</td><td style="padding: 0; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; width: 28%; text-align: center">Healthcare Knit Goods Series</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">$</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">14,546</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">$</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">4,800</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">$</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">9,746</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">$</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">(10,449</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">)</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">$</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">9,599</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; width: 1%; text-indent: 0">&#xa0;</td> <td style="padding: 0; width: 1%; text-align: left; text-indent: 0">$</td><td style="padding: 0; width: 9%; text-align: right; text-indent: 0">139,577</td><td style="padding: 0; width: 1%; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: center">Daily Healthcare and Personal Care Series</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">74,313</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">29,910</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">44,403</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">(103,530</td><td style="padding: 0; text-align: left; text-indent: 0">)</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">49,038</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">219,620</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; text-align: center">Wellness House and Activated Water Machine Series</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">69,657</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">34,999</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">34,658</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">(74,648</td><td style="padding: 0; text-align: left; text-indent: 0">)</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">45,966</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">176,048</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: center">Segment Totals</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">$</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">158,516</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">$</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">69,709</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">$</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">88,807</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">(188,627</td><td style="padding: 0; text-align: left; text-indent: 0">)</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">$</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">104,603</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">535,245</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; text-align: center">Other Loss, net</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">(71,635</td><td style="padding: 0; text-align: left; text-indent: 0">)</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: center">Income Tax</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">-</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; text-align: center">Unallocated Assets</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; border-bottom: Black 1.5pt solid; text-align: right; text-indent: 0">4,097,146</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding: 0; text-align: center">Net Loss</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">$</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">(260,262</td><td style="padding: 0; text-align: left; text-indent: 0">)</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding: 0; text-align: center">Total Assets</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: right; text-indent: 0">&#xa0;</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td><td style="padding: 0; text-indent: 0">&#xa0;</td> <td style="padding: 0; border-bottom: Black 4pt double; text-align: left; text-indent: 0">$</td><td style="padding: 0; border-bottom: Black 4pt double; text-align: right; text-indent: 0">4,632,391</td><td style="padding: 0; text-align: left; text-indent: 0">&#xa0;</td></tr> </table><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: center">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Sales</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">COGS</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Gross profit</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Loss from operations</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Depreciation and amortization</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Assets</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 28%; text-align: center">Healthcare Knit Goods Series</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">21,984</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">6,010</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">15,974</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(94,930</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">41,678</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">114,429</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center">Daily Healthcare and Personal Care Series</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">44,035</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">26,925</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">17,110</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(205,038</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">83,484</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">211,852</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center; padding-bottom: 1.5pt">Wellness House and Activated Water Machine Series</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">93,388</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">50,333</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">43,055</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(428,067</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">177,049</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">198,201</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center; padding-bottom: 4pt">Segment Totals</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">159,407</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">83,268</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">76,139</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">(728,035</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">302,211</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">524,482</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center">Other Loss, net</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(1,185</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center; padding-bottom: 1.5pt">Income tax benefits</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center; padding-bottom: 1.5pt">Unallocated Assets</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">3,860,793</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center; padding-bottom: 4pt">Net Loss</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(729,220</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center; padding-bottom: 4pt">Total Assets</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,385,275</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Sales</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">COGS</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Gross profit</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Loss from operations</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Depreciation and amortization</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Assets</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 28%; text-align: center">Healthcare Knit Goods Series</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">61,733</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">28,307</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">33,426</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(108,588</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">42,461</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">139,577</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center">Daily Healthcare and Personal Care Series</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">156,208</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">68,315</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">87,893</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(271,461</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">107,442</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">219,620</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center; padding-bottom: 1.5pt">Wellness House and Activated Water Machine Series</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">250,825</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">125,250</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">125,575</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(451,434</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">172,521</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">176,048</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center; padding-bottom: 4pt">Segment Totals</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">468,766</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">221,872</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">246,894</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">(831,483</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">322,424</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">535,245</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center">Other Loss, net</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(72,826</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center; padding-bottom: 1.5pt">Income Tax</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center; padding-bottom: 1.5pt">Unallocated Assets</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">4,097,146</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: center; padding-bottom: 4pt">Net Loss</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(904,309</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: center; padding-bottom: 4pt">Total Assets</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,632,391</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 15431 2897 12534 -30622 19734 114429 13373 11461 1912 -14363 17102 211852 48485 23159 25326 -149632 62004 198201 98840 524482 3860793 14546 4800 9746 -10449 9599 139577 74313 29910 44403 -103530 49038 219620 69657 34999 34658 -74648 45966 176048 104603 535245 4097146 4632391 21984 6010 15974 -94930 41678 44035 26925 17110 -205038 83484 93388 50333 43055 -428067 177049 302211 61733 28307 33426 -108588 42461 156208 68315 87893 -271461 107442 250825 125250 125575 -451434 172521 322424 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 11 - FRANCHISE REVENUES</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company enters into franchising agreements to develop retail outlets for the Company's products. The agreements provide that franchisees will sell Company products exclusively at a predetermined retail price. In exchange the Company provides them with geographic exclusivity, discounted products, training and support. The agreements also require franchisees to adhere to certain standards of product merchandising, promotion and presentment. The agreements also prohibit franchisees from selling competitor&#x2019;s products. The agreements do not require any initial franchise fees from the franchisees, nor do they require the franchisees to pay continuing royalties. The agreements do not require the franchisees to purchase any minimum levels of product, but do require that they make at least one purchase during each year. The Company does not act to manage the franchisees&#x2019; levels of product. Franchisees hold periodic conferences, assisted by the Company&#x2019;s marketing department, to promote product awareness and the introduction of new products. The franchising agreements are generally for terms of three years and are renewable at the mutual agreement of both parties. The franchising agreements are cancellable at the Company&#x2019;s discretion if franchisees violate the terms of the agreements.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The following is a breakdown of revenue between franchise and non-franchise customers:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="text-align: center; border-bottom: Black 1.5pt solid">For the three months ended September 30,</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="text-align: center; border-bottom: Black 1.5pt solid">For the nine months ended September 30,</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left">Sales to franchise customers</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">63,071</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">129,211</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">133,456</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">354,687</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Sales to non-franchise customers</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">14,218</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">29,305</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">25,951</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">114,079</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 4pt">Total sales</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">77,289</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">158,516</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">159,407</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">468,766</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/> P3Y The franchising agreements are generally for terms of three years and are 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Document And Entity Information - shares
9 Months Ended
Sep. 30, 2020
Nov. 16, 2020
Document Information Line Items    
Entity Registrant Name Joway Health Industries Group Inc  
Document Type 10-Q  
Current Fiscal Year End Date --12-31  
Entity Common Stock, Shares Outstanding   20,054,000
Amendment Flag false  
Entity Central Index Key 0001263364  
Entity Current Reporting Status Yes  
Entity Filer Category Non-accelerated Filer  
Document Period End Date Sep. 30, 2020  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q3  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company true  
Entity File Number 333-108715  
Entity Incorporation, State or Country Code NV  
Entity Interactive Data Current Yes  
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Condensed Consolidated Balance Sheets - USD ($)
Sep. 30, 2020
Dec. 31, 2019
CURRENT ASSETS:    
Cash $ 86,236 $ 99,979
Other receivables 34,296 28,740
Inventories 527,406 500,269
Advances to suppliers 50,770 56,418
Prepaid taxes 78,140 97,381
Total current assets 776,848 782,787
PROPERTY, PLANT AND EQUIPMENT, net 3,159,863 3,377,361
OTHER ASSETS:    
Intangible assets, net 448,564 448,033
Total other assets 448,564 448,033
Total assets 4,385,275 4,608,181
CURRENT LIABILITIES:    
Accounts payable 98,020 92,071
Advances from customers 5,192 21,734
Other payables 76,947 55,792
Due to related parties 1,915,333 1,480,515
Total current liabilities 2,095,492 1,650,112
COMMITMENTS
STOCKHOLDERS' EQUITY:    
Preferred stock - par value $0.001; 1,000,000 shares authorized; no shares issued and outstanding  
Common stock - par value $0.001; 200,000,000 shares authorized; 20,054,000 shares issued and outstanding at September 30, 2020 and December 31, 2019 20,054 20,054
Additional paid-in-capital 7,361,665 7,361,665
Statutory reserves 354,052 354,052
Accumulated deficit (5,993,260) (5,264,040)
Accumulated other comprehensive income 547,272 486,338
Total stockholders' equity 2,289,783 2,958,069
Total liabilities and stockholders' equity $ 4,385,275 $ 4,608,181
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Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares
Sep. 30, 2020
Dec. 31, 2019
Statement of Financial Position [Abstract]    
Preferred stock, par value (in Dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value (in Dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized 200,000,000 200,000,000
Common stock, shares issued 20,054,000 20,054,000
Common stock, shares outstanding 20,054,000 20,054,000
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Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Income Statement [Abstract]        
REVENUES $ 77,289 $ 158,516 $ 159,407 $ 468,766
COST OF REVENUES 37,517 69,709 83,268 221,872
GROSS PROFIT 39,772 88,807 76,139 246,894
Selling expenses 22,531 53,831 68,397 222,764
General and administrative expenses 211,858 223,603 735,777 855,613
OPERATING EXPENSES 234,389 277,434 804,174 1,078,377
LOSS FROM OPERATIONS (194,617) (188,627) (728,035) (831,483)
Interest income 25 36 69 124
Other income 80 24 81 35
Other expenses (182) (71,695) (1,335) (72,985)
OTHER EXPENSES, NET (77) (71,635) (1,185) (72,826)
LOSS BEFORE INCOME TAXES (194,694) (260,262) (729,220) (904,309)
INCOME TAX
NET LOSS (194,694) (260,262) (729,220) (904,309)
OTHER COMPREHENSIVE INCOME (LOSS):        
Foreign currency translation adjustment 103,625 (105,948) 60,934 (92,278)
COMPREHENSIVE LOSS $ (91,069) $ (366,210) $ (668,286) $ (996,587)
NET LOSS PER COMMON SHARE, BASIC AND DILUTED (in Dollars per share) $ (0.01) $ (0.01) $ (0.04) $ (0.05)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC AND DILUTED (in Shares) 20,054,000 20,054,000 20,054,000 20,054,000
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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (729,220) $ (904,309)
Adjustments to reconcile net loss to net cash used in operating activities    
Depreciation 292,084 308,065
Amortization 10,127 14,359
Loss on sale of assets   13
Changes in operating assets and liabilities:    
Other receivables (6,261) 31,042
Inventories (29,746) 1,985
Advances to suppliers 5,648 80,889
Prepaid expense   1,309
Accounts payable 5,949 (5,795)
Advances from customers (16,542) (110,659)
Other payable 27,050 29,558
Salary and welfare payable (5,895) (10,941)
Taxes payable 19,241 28,140
Net cash used in operating activities (427,565) (536,344)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchase of property, plant and equipment   (89,219)
Net cash used in investing activities   (89,219)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds of due to related parties 434,818 582,308
Net cash provided by financing activities 434,818 582,308
EFFECT OF EXCHANGE RATE CHANGES ON CASH (20,996) 15,373
NET DECREASE IN CASH (13,743) (27,882)
CASH, beginning of period 99,979 118,996
CASH, end of period 86,236 91,114
SUPPLEMENTAL DISCLOSURES:    
Income taxes paid
Interest paid
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Organization
9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]  
ORGANIZATION

NOTE 1 – ORGANIZATION


The unaudited condensed consolidated financial statements include the financial statements of Joway Health Industries Group Inc. (referred to herein as “Joway Health”), its subsidiaries, and variable interest entities (“VIEs”) where Joway Health is deemed the primary beneficiary. Joway Health, its subsidiaries and VIEs are collectively referred to herein as the “Company”, “we” and “us”.


Joway Health (formerly G2 Ventures, Inc.) was originally incorporated under the laws of the State of Texas on March 21, 2003. On September 21, 2010, Joway Health entered into a Share Exchange Agreement (the “Share Exchange”) with the sole stockholder of Dynamic Elite International Limited. As a result of the Share Exchange, Dynamic Elite became a wholly-owned subsidiary of Joway Health and the stockholders of Dynamic Elite acquired approximately 76.08% of the issued and outstanding stock of Joway Health. The share exchange transaction resulted in the shareholders of Dynamic Elite acquiring a majority voting interest in Joway Health. Generally accepted accounting principles in the United States of America require that the company whose shareholders retain the majority interest in the combined business be treated as the acquirer for accounting purposes. The reverse acquisition process utilizes the capital structure of Joway Health and the assets and liabilities of Dynamic Elite recorded at historical cost. On December 22, 2010, Joway Health changed its jurisdiction of incorporation from the State of Texas to the State of Nevada.


Dynamic Elite International Limited (referred to herein as “Dynamic Elite”) was incorporated under the laws of the British Virgin Islands on June 2, 2010 as a limited liability company (a BVI company). Dynamic Elite engages in manufacturing and distributing tourmaline products in China. Its wholly owned subsidiary, Tianjin Junhe Management Consulting Co., Ltd. was incorporated on September 15, 2010 in Tianjin, People’s Republic of China (“PRC”). Other than the equity interest in Junhe Consulting, Dynamic Elite does not own any assets or conduct any operations.


Tianjin Junhe Management Consulting Co., Ltd. (referred to herein as “Junhe Consulting”) conducts its business through Tianjin Joway Shengshi Group Co., Ltd. that is consolidated as a variable interest entity.


Tianjin Joway Shengshi Group Co., Ltd. (referred to herein as “Joway Shengshi”) was incorporated in PRC on May 17, 2007. Joway Shengshi is currently owned 99% by Jinghe Zhang, the Company’s current CEO and President and 1% by Song Baogang. Joway Shengshi engages in manufacturing and distributing tourmaline products in China. Shenyang Joway Electronic Technology Co., Ltd., Tianjin Joway Decoration Engineering Co., Ltd. and Tianjin Oriental Shengtang Trading Import & Export Trading Co., Ltd are subsidiaries of Joway Shengshi.


Shenyang Joway Electronic Technology Co., Ltd. (referred to herein as “Joway Technology”) was originally named Liaoning Joway Technology Engineering Co., Ltd. which was incorporated on March 28, 2007 in PRC. The name was changed on June 22, 2011. It engages in the distribution of Tourmaline Activated Water Machines and Tourmaline Wellness Houses. Prior to July 25, 2010, Joway Shengshi owned 90.91% of Joway Technology. Joway Shengshi entered into a share acquisition agreement with Jingyun Chen, another stockholder of Joway Technology on July 25, 2010 to acquire the remaining 9.09% of the share of Joway Technology. As a result of the share acquisition, Joway Technology became a wholly-owned subsidiary of Joway Shengshi.


Tianjin Joway Decoration Engineering Co., Ltd. (referred to herein as “Joway Decoration”) was incorporated on April 22, 2009 in PRC. It engages in the distribution of Tourmaline Activated Water Machines, Tourmaline Wellness House for family use and Tourmaline Wellness House materials. Prior to July 9, 2010, Joway Shengshi owned 90% of Joway Decoration. Joway Shengshi entered into a share acquisition agreement with Jingyun Chen, another stockholder of Joway Decoration on July 9, 2010 to acquire the remaining 10% of the shares of Joway Decoration. As a result of the share acquisition, Joway Decoration became a wholly-owned subsidiary of Joway Shengshi. Jingyun Chen is currently the General Manager of Joway Decoration.


Tianjin Oriental Shengtang Import & Export Trading Co., Ltd (referred to herein as “Shengtang Trading”) was incorporated on September 18, 2009 in the PRC. It engages in purchasing raw materials which it sells to other companies of the group. Prior to July 28, 2010, Joway Shengshi owned 95% of Shengtang Trading. Joway Shengshi entered into a share acquisition agreement with Wang Aiying, another stockholder of Shengtang Trading on July 28, 2010 to acquire the remaining 5% of the shares of Shengtang Trading. As a result of the share acquisition, Shengtang Trading became a wholly-owned subsidiary of Joway Shengshi.


The following table lists the Company and its subsidiaries:


Name   Domicile and Date of Incorporation   Paid in Capital   Percentage of Effective Ownership   Principal Activities
Joway Health Industries Group Inc.  

March 21, 2003,

Nevada

  USD 20,054  

86.8% owned by Crystal Globe Limited

13.2%owned by other institutional and individual investors

 

Investment 

Holding

Dynamic Elite International Limited  

June 2, 2010,

British Virgin Islands

  USD 10,000   100% owned by Joway Health Industries Group Inc.  

Investment

Holding

Tianjin Junhe Management Consulting Co., Ltd.   September 15, 2010, PRC   USD 20,000   100% owned by Dynamic Elite International Limited   Advisory
Tianjin Joway Shengshi Group Co., Ltd.   May 17, 2007, PRC   USD 7,216,140.72   99% owned by Jinghe Zhang, and 1% owned  by Baogang Song  

Production and

distribution of Healthcare Knit Goods and Daily Healthcare and Personal Care products

Shenyang Joway Electronic Technology Co., Ltd.   March 28, 2007, PRC   USD 142,072.97   100% owned by Tianjin Joway Shengshi Group Co., Ltd   Distribution of Tourmaline Activated Water Machine and construction of Tourmaline Wellness House
Tianjin Joway Decoration Engineering Co., Ltd.   April 22, 2009, PRC   USD 292,367.74   100% owned by Tianjin Joway Shengshi Group Co., Ltd   Distribution of Wellness House for family use and Activated Water Machine and construction of Tourmaline Wellness House
Tianjin Oriental Shengtang Import & Export Trading Co., Ltd.   September 18, 2009, PRC   USD 292,463.75   100% owned by Tianjin Joway Shengshi Group Co., Ltd   Distribution of tourmaline products

On September 16, 2010, prior to the share exchange, Junhe Consulting entered into a series of contractual agreements (the “Contractual Agreements”) with Joway Shengshi and Joway Shengshi’s owners. The following is a brief description of the Contractual Agreements entered into between Junhe Consulting and Joway Shengshi or Joway Shengshi’s owners:


1. Consulting Services Agreement. Pursuant to the consulting services agreement between Junhe Consulting and Joway Shengshi, Junhe Consulting has the right to advise, consult, manage and operate Joway Shengshi, and collect and own all of the net profits of the Operating Entities.


2. Operating Agreement. Under the operating agreement between Junhe Consulting and Joway Shengshi, Junhe Consulting has the right to recommend director candidates and appoint the senior executives of Joway Shengshi, approve any transactions that may materially affect the assets, liabilities, rights or operations of Joway Shengshi, and guarantee the contractual performance by Joway Shengshi of any agreements with third parties, in exchange for a pledge by Joway Shengshi of its accounts receivable and assets.


3. Voting Rights Proxy Agreement. Under the voting rights proxy agreement between Joway Shengshi’s owners and Junhe Consulting, the owners of Joway Shengshi have vested their collective voting control over Joway Shengshi to Junhe Consulting and will only transfer their respective equity interests in Joway Shengshi to Junhe Consulting or its designee.


4. Option Agreement. Under the option agreement between Joway Shengshi’s owners and Junhe Consulting, the owners of Joway Shengshi have granted Junhe Consulting the irrevocable right and option to acquire all of their equity interests in Joway Shengshi.


5. Equity Pledge Agreement. Under the equity pledge agreement between Joway Shengshi’s owners and Junhe Consulting, the owners of Joway Shengshi have pledged all of their rights, titles and interests in Joway Shengshi to Junhe Consulting to guarantee Joway Shengshi’s performance of its obligations under the Consulting Services Agreement.


As a result of the Contractual Agreements, Joway Shengshi is effectively a variable interest entity of Junhe Consulting. Accordingly, the Company through its wholly-owned subsidiary Junhe Consulting, consolidates Joway Shengshi’s results of operation, assets and liabilities in its financial statements.


In connection with the Share Exchange and as consideration for entering into the VIE Agreements, Jingshe Zhang and Baogang Song, the shareholders of Joway Shengshi (the “Grantees”), entered into a Call Option Agreement, dated July 20,2010 with Lionel Evan Liu (the “Grantor”), the sole shareholder of Crystal Globe Limited (the controlling shareholder of Dynamic Elite), a British Virgin Islands company (“CGL”) (the “Call Option Agreement”), pursuant to which the Grantees had the right to purchase up to 100% of the shares of CGL (the “Call Option”) at an exercise price of $2.00 per share (the “Exercise Price”) for a period of five years. The Call Option vested as to 34% of the shares of CGL on April 2, 2011 and as to 33% on each of April 2, 2012 and 2013 (the respective “Call Option Effective Date”). On March 28, 2015, the Grantor and Grantees amended the Call Option Agreement, to (i) reduce the Exercise Price to $0.00 per share and (ii) extend the Grantees’ rights to exercise their call option within ten years from the respective Option Effective Date.


On November 13, 2016, Jinghe Zhang exercised his Call Option as to 99% of the shares of CGL and Baogang Song exercised his Call Option as to 1% of the shares of CGL. As a result of exercising his Call Option, Jinghe Zhang became the controlling shareholder of CGL and in turn, the controlling shareholder of the Company. Jinghe Zhang now controls 17,233,920 shares, or 85.9%, of the issued and outstanding shares of the Company’s common stock.


XML 18 R7.htm IDEA: XBRL DOCUMENT v3.20.2
Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Basis of Presentation


The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). Accordingly, they do not include all of the information and the footnotes required by generally accepted accounting principles for complete financial statements. The Company’s functional currency is the Chinese Renminbi (“RMB”); however, the accompanying unaudited condensed consolidated financial statements have been translated and presented in United States Dollars (“USD”). All significant inter-company transactions and balances have been eliminated. The consolidated financial statements include all adjustments that, in the opinion of management, are necessary to make the financial statements not misleading.


Operating results for the nine month period ended September 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2020. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s form 10-K for the fiscal year ended December 31, 2019 which was filed on March 31, 2020.


Use of Estimates


The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. Actual results could differ from those estimates.


Basis of Consolidation


The accompanying consolidated financial statements include the Company and its wholly owned subsidiaries and controlled VIEs. All significant inter-company accounts and transactions have been eliminated in the consolidation.


Pursuant to Accounting Standards Codification Topic 810 “Consolidation” (“ASC 810”), the Company is required to include in its consolidated financial statements the financial statements of its variable interest entities (“VIEs”). ASC 810 requires a VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE’s residual returns. VIEs are those entities in which a company, through contractual arrangements, bears the risk of, and enjoys the rewards normally associated with ownership of the entity, and therefore the company is the primary beneficiary of the entity.


Based on the various Contractual Agreements, the Company is able to exercise control over the VIEs, and to obtain the full economic benefits. The terms of the exclusive option agreement are currently exercisable and legally enforceable under PRC laws and regulations. The minimum amount of consideration permitted by the applicable PRC law to exercise the option does not represent a financial barrier or disincentive for the Company to exercise its rights under the exclusive option agreement. A simple majority vote of the Company’s board of directors is required to pass a resolution to exercise its rights under the exclusive option agreement, for which consent of the shareholder of VIEs is not required. Therefore, this gives the Company the power to direct the activities that most significantly impact VIEs’ economic performance. The Company’s ability to exercise effective control, together with the consulting service agreements and the equity pledge agreements, give the Company the rights to receive substantially all of the economic benefits from VIEs in consideration for the services provided by its wholly owned subsidiaries in China. Accordingly, as the primary beneficiary of VIEs and in accordance with U.S. GAAP, Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading, as VIEs of Junhe Consulting, has been consolidated in the Company’s financial statements. Sales from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading are included in the Company’s total sales, their incomes or losses from operations are consolidated with the Company’s, and the Company’s net income or loss includes net income or loss from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading.


Foreign Currency Translation


The accompanying consolidated financial statements are presented in USD. The functional currency of the Company is RMB. The consolidated financial statements are translated into United States dollars from RMB at period-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Equity accounts are translated at their historical exchange rates when the equity transactions occurred. The resulting transaction adjustments are recorded as a component of stockholders’ equity. Gains and losses from foreign currency transactions are included in net income.


  

For the nine months ended

September 30,

   For the year
ended December 31,
 
   2020   2019   2019 
Period ended RMB: USD Exchange rate   6.8101    6.86557    6.9762 
Average RMB: USD Exchange rate   6.9917    6.78392    6.8985 

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation.


Foreign currency translation adjustments have been reported as comprehensive income (loss) in the consolidated financial statements and totalled $103,625 and $(105,948) for the three months ended September 30, 2020 and 2019, respectively, and $60,934 and $(92,278) for the nine months ended September 30, 2020 and 2019, respectively.


Other Comprehensive Income


Other comprehensive income is defined as the change in equity during the period from transactions and other events, excluding the changes resulting from investments by owners and distributions to owners, and is not included in the computation of income tax expense or benefit. Accumulated other comprehensive income represents the accumulated balance of foreign currency translation adjustments.


Concentrations of Credit Risk


The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC's economy. The Company's operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash. Substantially all of the Company’s cash is maintained with state-owned banks within the PRC, and no deposits are covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.


Fair Value of Financial Instruments


Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:


Level 1—defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;

Level 2—defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3—defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The carrying amounts reported in the balance sheets for cash, accounts receivable, other receivable, accounts payable, other payable, and amounts due from related parties generally approximate their fair market values based on the short-term maturity of these instruments. ASC 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.


Cash


For financial reporting purposes, the Company considers all highly liquid financial instruments with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents at any point during the period of the financial statements presented. Balances at financial institutions or state-owned banks within the PRC are not covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.


Accounts Receivable


Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. On a periodic basis, the Company reviews the composition of the accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these allowances. Accounts are written off after exhaustive efforts at collection. As of September 30, 2020 and December 31, 2019, the Company allowance $2,654 and $2,591 for doubtful accounts, respectively.


Inventories


Inventories are stated at the lower of cost, as determined by the specific identification method on contract level (for each individual contract, inventories cost flow are determined by weighted-average method), or the net realizable value, which is determined on selling prices less any further costs expected to be incurred for completion and disposal. The Company regularly evaluates the composition of its inventories to identify slow-moving and obsolete inventories to determine whether a valuation allowance is required. As of September 30, 2020 and December 31, 2019, the Company recorded $109,606 and $106,997 for inventory valuation allowance, respectively.


Advances to Suppliers


Advances to suppliers represent the cash paid in advance for inventory items or construction in progress. The advance payments are meant to ensure preferential pricing and delivery. The amounts advanced under such arrangements totalled $57,179 and $62,674 as of September 30, 2020 and December 31, 2019, respectively.


Property, Plant, and Equipment


Property, plant and equipment are stated at cost less accumulated depreciation, and include expenditures that substantially increase the useful lives of existing assets.


Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives are as follows:


Building  20 years 
Operating Equipment  10 years 
Office furniture and equipment  3 or 5 years 
Vehicles  10 years 

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss is included in the consolidated statements of operations. Maintenance, repairs and minor renewals are charged directly to expenses as incurred. Significant renewals and betterment to buildings and equipment are capitalized. Leasehold improvements are depreciated over the lesser of the useful life or the life of the lease.


Intangible Assets


Intangible assets mainly consist of land use rights. All land located in the PRC is owned by the government and cannot be sold to any individual or company. The land use rights granted to the Company are being amortized using the straight-line method over the lease term of 50 years. Other intangible assets are software programs that are amortized over their estimated useful life of 10 years.


Impairment of Long-lived Assets


Long-lived assets of the Company are reviewed annually as to whether their carrying value has become impaired, pursuant to the guidelines established in FASB ASC 360. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from the related operations. The Company also reviewed the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. The Company did not record any impairment loss for the nine months ended September 30, 2020 and 2019.


Revenue Recognition


The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured.


With respect to sales of product to both franchisee and non-franchisee customers, the Company prepares product shipments upon the receipt of a customer’s purchase order. Sales prices are based on fixed price lists that are different depending on whether the price list is for a franchisee customer or for non-franchisee customers. The Company recognizes revenue when the product is shipped. The Company does not sell product to any customers with a right of return. Sales are presented net of value added tax (VAT).


For Tourmaline Wellness House sales, the Company recognizes revenue under the completed contract method. Customers contact the Company with requests to construct a Wellness House. The Company and the customer enter into a contract, at which time the customer pays a deposit of at least one-half of the sales price. A contract is considered completed when all significant costs have been incurred and the project has been accepted by the customer. The contracts have a place for the customer to sign indicating their acceptance of the completed Wellness House. At this time the customer will also pay any remaining balance on the contract. The Company recognizes the full contract revenue at this point. Contract costs consist primarily of materials and labor costs. The construction period of a Wellness House generally does not exceed five days.


Shipping Costs


Shipping costs are included in selling expenses and totalled $6,926 and $11,942 for the three months ended September 30, 2020 and 2019, respectively, and $22,004 and $40,913 for the nine months ended September 30, 2020 and 2019, respectively.


Income Taxes


The Company is governed by the Income Tax Law and associated legislations of the PRC. The Company accounts for income taxes in accordance with FASB ASC 740 “Income Taxes”, which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. ASC 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Realization of deferred tax assets is dependent upon future earnings, if any, of which the timing and amount are uncertain.


According to ASC 740, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition.


Basic and Diluted Earnings per Share


The Company reports earnings per share in accordance with FASB ASC 260 “Earnings per share”. The Company’s basic earnings per share are computed using the weighted average number of shares outstanding for the periods presented. Diluted earnings per share are computed based on the assumption that any dilutive options or warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, the Company’s outstanding stock warrants are assumed to be exercised, and funds thus obtained were assumed to be used to purchase common stock at the average market price during the period. There were no dilutive instruments outstanding during the nine month periods ended September 30, 2020 and 2019.


Segment Information


The Company follows FASB ASC 280-Segment Reporting, which requires that companies disclose segment data based on how management makes decision about allocating resources to segments and evaluating their performance.


For the nine months ended September 30, 2020 and the year ended December 31, 2019, management has determined that the Company is operating in three reportable business segments, (1) Healthcare Knit Goods Series, (2) Daily Healthcare and Personal Care Series, and (3) Wellness House and Activated Water Machine Series. The Company's reportable segments are strategic business units that offer different products. They are managed separately based on the fundamental differences in their operations.


Recently Issued Accounting Pronouncements


In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance should be adopted on a prospective basis for the annual or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted the standard in 2019. Adoption of the standard did not have a significant impact on the Company’s consolidated statement of earnings in 2019.


In June 2018, the FASB issued ASU 2018-07, “Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 becomes effective for the Company on January 1, 2019. Early adoption is permitted. The Company adopted the standard in 2019. Adoption of the standard did not have a significant impact on the Company’s consolidated statement of earnings in 2019.


In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard outlined a comprehensive lease accounting model that superseded the previous lease guidance and required lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms greater than 12 months. The guidance also changed the definition of a lease and expanded the disclosure requirements of lease arrangements. The Company adopted the standard on December 15, 2019. Adoption of the standard did not have a significant impact on the Company’s consolidated statement of earnings in 2019.


In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted the standard in 2019. Adoption of the standard did not have a significant impact on the Company’s consolidated statement of earnings in 2019.


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


XML 19 R8.htm IDEA: XBRL DOCUMENT v3.20.2
Accounts Receivable
9 Months Ended
Sep. 30, 2020
Receivables [Abstract]  
ACCOUNTS RECEIVABLE

NOTE 3 – ACCOUNTS RECEIVABLE


Accounts receivable consisted of the following:


   September 30,   December 31, 
   2020   2019 
Accounts receivable  $2,654   $2,591 
Less: allowance for bad debt   (2,654)   (2,591)
Accounts receivable, net  $-   $- 

As of the periods presented, the Company allowance $2,654 and $2,591 for doubtful accounts, respectively.


XML 20 R9.htm IDEA: XBRL DOCUMENT v3.20.2
Inventories
9 Months Ended
Sep. 30, 2020
Inventory Disclosure [Abstract]  
INVENTORIES

NOTE 4 – INVENTORIES


Inventories consisted of the following:


   September 30,   December 31, 
   2020   2019 
Raw materials  $120,463   $126,563 
Finished goods   479,130    444,175 
Low value consumables   37,419    36,528 
Total   637,012    607,266 
Less: impairment loss   (109,606)   (106,997)
Inventory, net  $527,406   $500,269 

Low value consumables represent low priced and easily worn articles and are amortized on equal-split amortization method. Pursuant to this method, half value of the low value consumable should be amortized once used and the remaining half value should be amortized when disposed of.


As of September 30, 2020 and December 31, 2019, the Company recognized $109,606 and $106,997, respectively, as a reserve for impairment loss from inventory.


XML 21 R10.htm IDEA: XBRL DOCUMENT v3.20.2
Property, Plant and Equipment
9 Months Ended
Sep. 30, 2020
Property, Plant and Equipment [Abstract]  
PROPERTY, PLANT AND EQUIPMENT

NOTE 5 – PROPERTY, PLANT AND EQUIPMENT


Property, plant and equipment consisted of the following:


   September 30,   December 31, 
   2020   2019 
Building  $5,846,710   $5,707,503 
Operating Equipment   429,264    419,044 
Office furniture and equipment   347,419    339,147 
Vehicles   1,004,364    980,450 
Total   7,627,757    7,446,144 
Less: accumulated depreciation   (4,467,894)   (4,068,783)
Property, plant and equipment, net  $3,159,863   $3,377,361 

Depreciation expense for the three months ended September 30, 2020 and 2019 amounted to $95,847 and $99,916, respectively, and for the nine months ended September 30, 2020 and 2019 amounted to $292,084 and $308,065, respectively.


XML 22 R11.htm IDEA: XBRL DOCUMENT v3.20.2
Intangible Assets
9 Months Ended
Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
INTANGIBLE ASSETS

NOTE 6 – INTANGIBLE ASSETS


Intangible assets consisted of the following:


   September 30,   December 31, 
   2020   2019 
Land use rights  $606,168   $591,734 
Other intangible assets   77,556    75,710 
Total   683,724    667,444 
Less: accumulated amortization   (235,160)   (219,411)
Intangible assets, net  $448,564   $448,033 

Amortization expense of intangible assets for the three months ended September 30, 2020 and 2019 was $2,993 and $4,687, respectively, and for the nine months ended September 30, 2020 and 2019 amounted to $10,127 and $14,359, respectively.


The estimated amortization expense for the next five years is as follows:


Estimated amortization expense for the year ending December 31,  Amount 
2020  $19,000 
2021  $19,000 
2022  $19,000 
2023  $19,000 
2024  $19,000 
Thereafter  $353,033 

XML 23 R12.htm IDEA: XBRL DOCUMENT v3.20.2
Related Party Transactions
9 Months Ended
Sep. 30, 2020
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 7 – RELATED PARTY TRANSACTIONS


Payables due to related parties consist of the following:


   September 30,   December 31, 
   2020   2019 
Jinghe Zhang  $1,915,333   $1,480,515 
Total  $1,915,333   $1,480,515 

Transactions with Shenyang Joway


Shenyang Joway Industrial Development Co., Ltd. (“Shenyang Joway”) was formed in 2005 in Shenyang, China by Mr. Jinghe Zhang and three other individuals. Mr. Zhang holds more than 50% of the equity in Shenyang Joway. Shenyang Joway was in the business of marketing and distributing clothing and related products to other companies. Through 2009 Shenyang Joway had ceased operations, although it still existed as a legal entity. Shenyang Joway was cancelled in 2019.

On May 7, 2007, the Company’s subsidiary Joway Shengshi entered into an agreement with Shenyang Joway pursuant to which Joway Shengshi and Shenyang Joway agreed to provide each other with interest-free, unsecured advances for working capital. On May 10, 2007, the Company’s subsidiary Joway Technology and Shenyang Joway entered into an agreement pursuant to which Joway Technology and Shenyang Joway agreed to provide each other with interest-free, unsecured advances for working capital.

Through December 31, 2008, Joway Technology advanced $58,568 to Shenyang Joway, which was paid off by Shenyang Joway to Joway Technology in 2009.

Through December 31, 2010, Shenyang Joway advanced an aggregate of $912,645 to Joway Shengshi and Joway Technology, which was paid off by 2019. For the nine months ended September 30, 2020 and 2019, the Company repaid $0 and $118,458 of these advances, respectively. As of September 30, 2020, the total unpaid principal balance due Shenyang Joway for advances was $0.

Transactions with Jinghe Zhang


On December 1, 2009, the Company, through its subsidiary Joway Shengshi, entered into a royalty-free license agreement with Jinghe Zhang, our President, Chief Executive Officer and director. Pursuant to the license agreement, we are authorized to use the trademark “Joway” for a term of nine years and five patents from December 1, 2009 till the expiration dates of the patents.

On May 10, 2007, Joway Shengshi entered into a cash advance agreement with Jinghe Zhang, the Company’s President, Chief Executive Officer and director. Pursuant to the agreement, Jinghe Zhang agreed to advance operating capital to Joway Shengshi. The advances are interest free, unsecured, and have no specified repayment terms. The agreement is valid throughout Joway Shengshi’s term of operation.

During the period beginning May 17, 2007 (inception of Joway Shengshi) through September 30, 2019, Joway Shengshi received cash advances in the aggregate principal amount of $6,548,144 from Jinghe Zhang of which $4,632,811 has been repaid. For the nine months ended September 30, 2020 and 2019, the Company received $434,818 and $700,766 of these advances, respectively. As of September 30, 2020, the total unpaid principal balance due Jinghe Zhang for advances was $1,915,333.

The amounts owed to related parties are non-interest bearing and have no specified repayment terms.


XML 24 R13.htm IDEA: XBRL DOCUMENT v3.20.2
Income Taxes
9 Months Ended
Sep. 30, 2020
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 8 – INCOME TAXES


The Company operations in the People’s Republic of China are subject to the Income Tax Law of the People’s Republic of China. Pursuant to the PRC Income Tax Laws, the Company is subject to the Enterprise Income Tax (“EIT”) which is generally a statutory rate of 25% beginning January 2008, on income as reported in its statutory financial statements after appropriate tax adjustments.


The table below summarizes the differences between the PRC statutory federal rate and the Company’s effective tax rate:


   For the nine months ended September 30, 
   2020   2019 
Tax computed at China statutory rates   25%   25%
Effect of losses   (25%)   (25%)
Effective rate   0%   0%

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.20.2
Statutory Reserves
9 Months Ended
Sep. 30, 2020
Statutory Reserves Disclosure [Abstract]  
STATUTORY RESERVES

NOTE 9 – STATUTORY RESERVES


Pursuant to the laws and regulations of the PRC, annual income of the Company’s subsidiaries is required to be partly allocated to the statutory reserves funds after the payment of the PRC income taxes. The allocation to the statutory reserves funds should be at least 10% of income after tax until the reserves reaches 50% of the entities’ registered capital or members’ equity. The reserve funds are not transferable to the Company in the form of cash dividends, loans or advances. Thus the reserve funds are not available for distribution except in liquidation. As of September 30, 2020, the Company had allocated $354,052 to statutory reserves.


XML 26 R15.htm IDEA: XBRL DOCUMENT v3.20.2
Segments
9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
SEGMENTS

NOTE 10 – SEGMENTS


In 2020 and 2019, the Company operated in three reportable business segments: (1) Healthcare Knit Goods Series, (2) Daily Healthcare and Personal Care Series and (3) Wellness House and Activated Water Machine Series. The Company's reportable segments are strategic business units that offer different products. They are managed separately based on the fundamental differences in their operations. Information with respect to these reportable business segments is as follows:


For the three months ended September 30, 2020


   Sales   COGS   Gross profit   Loss from operations   Depreciation and amortization   Assets 
Healthcare Knit Goods Series  $15,431   $2,897   $12,534   $(30,622)  $19,734   $114,429 
Daily Healthcare and Personal Care Series   13,373    11,461    1,912    (14,363)   17,102    211,852 
Wellness House and Activated Water Machine Series   48,485    23,159    25,326    (149,632)   62,004    198,201 
Segment Totals  $77,289   $37,517   $39,772    (194,617)  $98,840    524,482 
Other Loss, net                  (77)          
Income tax benefits                  -           
Unallocated Assets                            3,860,793 
Net Loss                 $(194,694)          
Total Assets                           $4,385,275 

For the three months ended September 30, 2019


   Sales   COGS   Gross profit   Loss from operations   Depreciation and amortization   Assets 
Healthcare Knit Goods Series  $14,546   $4,800   $9,746   $(10,449)  $9,599   $139,577 
Daily Healthcare and Personal Care Series   74,313    29,910    44,403    (103,530)   49,038    219,620 
Wellness House and Activated Water Machine Series   69,657    34,999    34,658    (74,648)   45,966    176,048 
Segment Totals  $158,516   $69,709   $88,807    (188,627)  $104,603    535,245 
Other Loss, net                  (71,635)          
Income Tax                  -           
Unallocated Assets                            4,097,146 
Net Loss                 $(260,262)          
Total Assets                           $4,632,391 

For the nine months ended September 30, 2020


   Sales   COGS   Gross profit   Loss from operations   Depreciation and amortization   Assets 
Healthcare Knit Goods Series  $21,984   $6,010   $15,974   $(94,930)  $41,678   $114,429 
Daily Healthcare and Personal Care Series   44,035    26,925    17,110    (205,038)   83,484    211,852 
Wellness House and Activated Water Machine Series   93,388    50,333    43,055    (428,067)   177,049    198,201 
Segment Totals  $159,407   $83,268   $76,139    (728,035)  $302,211    524,482 
Other Loss, net                  (1,185)          
Income tax benefits                  -           
Unallocated Assets                            3,860,793 
Net Loss                 $(729,220)          
Total Assets                           $4,385,275 

For the nine months ended September 30, 2019


   Sales   COGS   Gross profit   Loss from operations   Depreciation and amortization   Assets 
Healthcare Knit Goods Series  $61,733   $28,307   $33,426   $(108,588)  $42,461   $139,577 
Daily Healthcare and Personal Care Series   156,208    68,315    87,893    (271,461)   107,442    219,620 
Wellness House and Activated Water Machine Series   250,825    125,250    125,575    (451,434)   172,521    176,048 
Segment Totals  $468,766   $221,872   $246,894    (831,483)  $322,424    535,245 
Other Loss, net                  (72,826)          
Income Tax                  -           
Unallocated Assets                            4,097,146 
Net Loss                 $(904,309)          
Total Assets                           $4,632,391 

XML 27 R16.htm IDEA: XBRL DOCUMENT v3.20.2
Franchise Revenues
9 Months Ended
Sep. 30, 2020
Franchise Revenues Disclosure [Abstract]  
FRANCHISE REVENUES

NOTE 11 - FRANCHISE REVENUES


The Company enters into franchising agreements to develop retail outlets for the Company's products. The agreements provide that franchisees will sell Company products exclusively at a predetermined retail price. In exchange the Company provides them with geographic exclusivity, discounted products, training and support. The agreements also require franchisees to adhere to certain standards of product merchandising, promotion and presentment. The agreements also prohibit franchisees from selling competitor’s products. The agreements do not require any initial franchise fees from the franchisees, nor do they require the franchisees to pay continuing royalties. The agreements do not require the franchisees to purchase any minimum levels of product, but do require that they make at least one purchase during each year. The Company does not act to manage the franchisees’ levels of product. Franchisees hold periodic conferences, assisted by the Company’s marketing department, to promote product awareness and the introduction of new products. The franchising agreements are generally for terms of three years and are renewable at the mutual agreement of both parties. The franchising agreements are cancellable at the Company’s discretion if franchisees violate the terms of the agreements.


The following is a breakdown of revenue between franchise and non-franchise customers:


   For the three months ended September 30,   For the nine months ended September 30, 
   2020   2019   2020   2019 
                 
Sales to franchise customers  $63,071   $129,211   $133,456   $354,687 
Sales to non-franchise customers   14,218    29,305    25,951    114,079 
                     
Total sales  $77,289   $158,516   $159,407   $468,766 

XML 28 R17.htm IDEA: XBRL DOCUMENT v3.20.2
Accounting Policies, by Policy (Policies)
9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation


The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). Accordingly, they do not include all of the information and the footnotes required by generally accepted accounting principles for complete financial statements. The Company’s functional currency is the Chinese Renminbi (“RMB”); however, the accompanying unaudited condensed consolidated financial statements have been translated and presented in United States Dollars (“USD”). All significant inter-company transactions and balances have been eliminated. The consolidated financial statements include all adjustments that, in the opinion of management, are necessary to make the financial statements not misleading.


Operating results for the nine month period ended September 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2020. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s form 10-K for the fiscal year ended December 31, 2019 which was filed on March 31, 2020.

Use of Estimates

Use of Estimates


The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. Actual results could differ from those estimates.

Basis of Consolidation

Basis of Consolidation


The accompanying consolidated financial statements include the Company and its wholly owned subsidiaries and controlled VIEs. All significant inter-company accounts and transactions have been eliminated in the consolidation.


Pursuant to Accounting Standards Codification Topic 810 “Consolidation” (“ASC 810”), the Company is required to include in its consolidated financial statements the financial statements of its variable interest entities (“VIEs”). ASC 810 requires a VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE’s residual returns. VIEs are those entities in which a company, through contractual arrangements, bears the risk of, and enjoys the rewards normally associated with ownership of the entity, and therefore the company is the primary beneficiary of the entity.


Based on the various Contractual Agreements, the Company is able to exercise control over the VIEs, and to obtain the full economic benefits. The terms of the exclusive option agreement are currently exercisable and legally enforceable under PRC laws and regulations. The minimum amount of consideration permitted by the applicable PRC law to exercise the option does not represent a financial barrier or disincentive for the Company to exercise its rights under the exclusive option agreement. A simple majority vote of the Company’s board of directors is required to pass a resolution to exercise its rights under the exclusive option agreement, for which consent of the shareholder of VIEs is not required. Therefore, this gives the Company the power to direct the activities that most significantly impact VIEs’ economic performance. The Company’s ability to exercise effective control, together with the consulting service agreements and the equity pledge agreements, give the Company the rights to receive substantially all of the economic benefits from VIEs in consideration for the services provided by its wholly owned subsidiaries in China. Accordingly, as the primary beneficiary of VIEs and in accordance with U.S. GAAP, Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading, as VIEs of Junhe Consulting, has been consolidated in the Company’s financial statements. Sales from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading are included in the Company’s total sales, their incomes or losses from operations are consolidated with the Company’s, and the Company’s net income or loss includes net income or loss from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading.

Foreign Currency Translation

Foreign Currency Translation


The accompanying consolidated financial statements are presented in USD. The functional currency of the Company is RMB. The consolidated financial statements are translated into United States dollars from RMB at period-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Equity accounts are translated at their historical exchange rates when the equity transactions occurred. The resulting transaction adjustments are recorded as a component of stockholders’ equity. Gains and losses from foreign currency transactions are included in net income.


  

For the nine months ended

September 30,

   For the year
ended December 31,
 
   2020   2019   2019 
Period ended RMB: USD Exchange rate   6.8101    6.86557    6.9762 
Average RMB: USD Exchange rate   6.9917    6.78392    6.8985 

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation.


Foreign currency translation adjustments have been reported as comprehensive income (loss) in the consolidated financial statements and totalled $103,625 and $(105,948) for the three months ended September 30, 2020 and 2019, respectively, and $60,934 and $(92,278) for the nine months ended September 30, 2020 and 2019, respectively.

Other Comprehensive Income

Other Comprehensive Income


Other comprehensive income is defined as the change in equity during the period from transactions and other events, excluding the changes resulting from investments by owners and distributions to owners, and is not included in the computation of income tax expense or benefit. Accumulated other comprehensive income represents the accumulated balance of foreign currency translation adjustments.

Concentrations of Credit Risk

Concentrations of Credit Risk


The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC's economy. The Company's operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash. Substantially all of the Company’s cash is maintained with state-owned banks within the PRC, and no deposits are covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.

Fair Value of Financial Instruments

Fair Value of Financial Instruments


Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:


Level 1—defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;

Level 2—defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3—defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The carrying amounts reported in the balance sheets for cash, accounts receivable, other receivable, accounts payable, other payable, and amounts due from related parties generally approximate their fair market values based on the short-term maturity of these instruments. ASC 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.

Cash

Cash


For financial reporting purposes, the Company considers all highly liquid financial instruments with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents at any point during the period of the financial statements presented. Balances at financial institutions or state-owned banks within the PRC are not covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.

Accounts Receivable

Accounts Receivable


Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. On a periodic basis, the Company reviews the composition of the accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these allowances. Accounts are written off after exhaustive efforts at collection. As of September 30, 2020 and December 31, 2019, the Company allowance $2,654 and $2,591 for doubtful accounts, respectively.

Inventories

Inventories


Inventories are stated at the lower of cost, as determined by the specific identification method on contract level (for each individual contract, inventories cost flow are determined by weighted-average method), or the net realizable value, which is determined on selling prices less any further costs expected to be incurred for completion and disposal. The Company regularly evaluates the composition of its inventories to identify slow-moving and obsolete inventories to determine whether a valuation allowance is required. As of September 30, 2020 and December 31, 2019, the Company recorded $109,606 and $106,997 for inventory valuation allowance, respectively.

Advances to Suppliers

Advances to Suppliers


Advances to suppliers represent the cash paid in advance for inventory items or construction in progress. The advance payments are meant to ensure preferential pricing and delivery. The amounts advanced under such arrangements totalled $57,179 and $62,674 as of September 30, 2020 and December 31, 2019, respectively.

Property, Plant, and Equipment

Property, Plant, and Equipment


Property, plant and equipment are stated at cost less accumulated depreciation, and include expenditures that substantially increase the useful lives of existing assets.


Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives are as follows:


Building  20 years 
Operating Equipment  10 years 
Office furniture and equipment  3 or 5 years 
Vehicles  10 years 

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss is included in the consolidated statements of operations. Maintenance, repairs and minor renewals are charged directly to expenses as incurred. Significant renewals and betterment to buildings and equipment are capitalized. Leasehold improvements are depreciated over the lesser of the useful life or the life of the lease.

Intangible Assets

Intangible Assets


Intangible assets mainly consist of land use rights. All land located in the PRC is owned by the government and cannot be sold to any individual or company. The land use rights granted to the Company are being amortized using the straight-line method over the lease term of 50 years. Other intangible assets are software programs that are amortized over their estimated useful life of 10 years.

Impairment of Long-lived Assets

Impairment of Long-lived Assets


Long-lived assets of the Company are reviewed annually as to whether their carrying value has become impaired, pursuant to the guidelines established in FASB ASC 360. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from the related operations. The Company also reviewed the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. The Company did not record any impairment loss for the nine months ended September 30, 2020 and 2019.

Revenue Recognition

Revenue Recognition


The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured.


With respect to sales of product to both franchisee and non-franchisee customers, the Company prepares product shipments upon the receipt of a customer’s purchase order. Sales prices are based on fixed price lists that are different depending on whether the price list is for a franchisee customer or for non-franchisee customers. The Company recognizes revenue when the product is shipped. The Company does not sell product to any customers with a right of return. Sales are presented net of value added tax (VAT).


For Tourmaline Wellness House sales, the Company recognizes revenue under the completed contract method. Customers contact the Company with requests to construct a Wellness House. The Company and the customer enter into a contract, at which time the customer pays a deposit of at least one-half of the sales price. A contract is considered completed when all significant costs have been incurred and the project has been accepted by the customer. The contracts have a place for the customer to sign indicating their acceptance of the completed Wellness House. At this time the customer will also pay any remaining balance on the contract. The Company recognizes the full contract revenue at this point. Contract costs consist primarily of materials and labor costs. The construction period of a Wellness House generally does not exceed five days.

Shipping Costs

Shipping Costs


Shipping costs are included in selling expenses and totalled $6,926 and $11,942 for the three months ended September 30, 2020 and 2019, respectively, and $22,004 and $40,913 for the nine months ended September 30, 2020 and 2019, respectively.

Income Taxes

Income Taxes


The Company is governed by the Income Tax Law and associated legislations of the PRC. The Company accounts for income taxes in accordance with FASB ASC 740 “Income Taxes”, which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. ASC 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Realization of deferred tax assets is dependent upon future earnings, if any, of which the timing and amount are uncertain.


According to ASC 740, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition.

Basic and Diluted Earnings per Share

Basic and Diluted Earnings per Share


The Company reports earnings per share in accordance with FASB ASC 260 “Earnings per share”. The Company’s basic earnings per share are computed using the weighted average number of shares outstanding for the periods presented. Diluted earnings per share are computed based on the assumption that any dilutive options or warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, the Company’s outstanding stock warrants are assumed to be exercised, and funds thus obtained were assumed to be used to purchase common stock at the average market price during the period. There were no dilutive instruments outstanding during the nine month periods ended September 30, 2020 and 2019.

Segment Information

Segment Information


The Company follows FASB ASC 280-Segment Reporting, which requires that companies disclose segment data based on how management makes decision about allocating resources to segments and evaluating their performance.


For the nine months ended September 30, 2020 and the year ended December 31, 2019, management has determined that the Company is operating in three reportable business segments, (1) Healthcare Knit Goods Series, (2) Daily Healthcare and Personal Care Series, and (3) Wellness House and Activated Water Machine Series. The Company's reportable segments are strategic business units that offer different products. They are managed separately based on the fundamental differences in their operations.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements


In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance should be adopted on a prospective basis for the annual or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted the standard in 2019. Adoption of the standard did not have a significant impact on the Company’s consolidated statement of earnings in 2019.


In June 2018, the FASB issued ASU 2018-07, “Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 becomes effective for the Company on January 1, 2019. Early adoption is permitted. The Company adopted the standard in 2019. Adoption of the standard did not have a significant impact on the Company’s consolidated statement of earnings in 2019.


In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard outlined a comprehensive lease accounting model that superseded the previous lease guidance and required lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms greater than 12 months. The guidance also changed the definition of a lease and expanded the disclosure requirements of lease arrangements. The Company adopted the standard on December 15, 2019. Adoption of the standard did not have a significant impact on the Company’s consolidated statement of earnings in 2019.


In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted the standard in 2019. Adoption of the standard did not have a significant impact on the Company’s consolidated statement of earnings in 2019.


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

XML 29 R18.htm IDEA: XBRL DOCUMENT v3.20.2
Organization (Tables)
9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]  
Schedule of following table lists the Company and its subsidiaries
Name   Domicile and Date of Incorporation   Paid in Capital   Percentage of Effective Ownership   Principal Activities
Joway Health Industries Group Inc.  

March 21, 2003,

Nevada

  USD 20,054  

86.8% owned by Crystal Globe Limited

13.2%owned by other institutional and individual investors

 

Investment 

Holding

Dynamic Elite International Limited  

June 2, 2010,

British Virgin Islands

  USD 10,000   100% owned by Joway Health Industries Group Inc.  

Investment

Holding

Tianjin Junhe Management Consulting Co., Ltd.   September 15, 2010, PRC   USD 20,000   100% owned by Dynamic Elite International Limited   Advisory
Tianjin Joway Shengshi Group Co., Ltd.   May 17, 2007, PRC   USD 7,216,140.72   99% owned by Jinghe Zhang, and 1% owned  by Baogang Song  

Production and

distribution of Healthcare Knit Goods and Daily Healthcare and Personal Care products

Shenyang Joway Electronic Technology Co., Ltd.   March 28, 2007, PRC   USD 142,072.97   100% owned by Tianjin Joway Shengshi Group Co., Ltd   Distribution of Tourmaline Activated Water Machine and construction of Tourmaline Wellness House
Tianjin Joway Decoration Engineering Co., Ltd.   April 22, 2009, PRC   USD 292,367.74   100% owned by Tianjin Joway Shengshi Group Co., Ltd   Distribution of Wellness House for family use and Activated Water Machine and construction of Tourmaline Wellness House
Tianjin Oriental Shengtang Import & Export Trading Co., Ltd.   September 18, 2009, PRC   USD 292,463.75   100% owned by Tianjin Joway Shengshi Group Co., Ltd   Distribution of tourmaline products
XML 30 R19.htm IDEA: XBRL DOCUMENT v3.20.2
Summary of Significant Accounting Policies (Tables)
9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]  
Schedule of gains and losses from foreign currency transactions
  

For the nine months ended

September 30,

   For the year
ended December 31,
 
   2020   2019   2019 
Period ended RMB: USD Exchange rate   6.8101    6.86557    6.9762 
Average RMB: USD Exchange rate   6.9917    6.78392    6.8985 
Schedule of estimated useful lives of assets
Building  20 years 
Operating Equipment  10 years 
Office furniture and equipment  3 or 5 years 
Vehicles  10 years 
XML 31 R20.htm IDEA: XBRL DOCUMENT v3.20.2
Accounts Receivable (Tables)
9 Months Ended
Sep. 30, 2020
Receivables [Abstract]  
Schedule of accounts receivable
   September 30,   December 31, 
   2020   2019 
Accounts receivable  $2,654   $2,591 
Less: allowance for bad debt   (2,654)   (2,591)
Accounts receivable, net  $-   $- 
XML 32 R21.htm IDEA: XBRL DOCUMENT v3.20.2
Inventories (Tables)
9 Months Ended
Sep. 30, 2020
Inventory Disclosure [Abstract]  
Schedule of inventories
   September 30,   December 31, 
   2020   2019 
Raw materials  $120,463   $126,563 
Finished goods   479,130    444,175 
Low value consumables   37,419    36,528 
Total   637,012    607,266 
Less: impairment loss   (109,606)   (106,997)
Inventory, net  $527,406   $500,269 
XML 33 R22.htm IDEA: XBRL DOCUMENT v3.20.2
Property, Plant and Equipment (Tables)
9 Months Ended
Sep. 30, 2020
Property, Plant and Equipment [Abstract]  
Schedule of property, plant and equipment
   September 30,   December 31, 
   2020   2019 
Building  $5,846,710   $5,707,503 
Operating Equipment   429,264    419,044 
Office furniture and equipment   347,419    339,147 
Vehicles   1,004,364    980,450 
Total   7,627,757    7,446,144 
Less: accumulated depreciation   (4,467,894)   (4,068,783)
Property, plant and equipment, net  $3,159,863   $3,377,361 
XML 34 R23.htm IDEA: XBRL DOCUMENT v3.20.2
Intangible Assets (Tables)
9 Months Ended
Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of intangible assets
   September 30,   December 31, 
   2020   2019 
Land use rights  $606,168   $591,734 
Other intangible assets   77,556    75,710 
Total   683,724    667,444 
Less: accumulated amortization   (235,160)   (219,411)
Intangible assets, net  $448,564   $448,033 
Schedule of estimated amortization expense
Estimated amortization expense for the year ending December 31,  Amount 
2020  $19,000 
2021  $19,000 
2022  $19,000 
2023  $19,000 
2024  $19,000 
Thereafter  $353,033 
XML 35 R24.htm IDEA: XBRL DOCUMENT v3.20.2
Related Party Transactions (Tables)
9 Months Ended
Sep. 30, 2020
Related Party Transactions [Abstract]  
Schedule of payables due to related parties
   September 30,   December 31, 
   2020   2019 
Jinghe Zhang  $1,915,333   $1,480,515 
Total  $1,915,333   $1,480,515 
XML 36 R25.htm IDEA: XBRL DOCUMENT v3.20.2
Income Taxes (Tables)
9 Months Ended
Sep. 30, 2020
Income Tax Disclosure [Abstract]  
Schedule of differences between the PRC statutory federal rate and effective tax rate
   For the nine months ended September 30, 
   2020   2019 
Tax computed at China statutory rates   25%   25%
Effect of losses   (25%)   (25%)
Effective rate   0%   0%
XML 37 R26.htm IDEA: XBRL DOCUMENT v3.20.2
Segments (Tables)
9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
Schedule of segment reporting
   Sales   COGS   Gross profit   Loss from operations   Depreciation and amortization   Assets 
Healthcare Knit Goods Series  $15,431   $2,897   $12,534   $(30,622)  $19,734   $114,429 
Daily Healthcare and Personal Care Series   13,373    11,461    1,912    (14,363)   17,102    211,852 
Wellness House and Activated Water Machine Series   48,485    23,159    25,326    (149,632)   62,004    198,201 
Segment Totals  $77,289   $37,517   $39,772    (194,617)  $98,840    524,482 
Other Loss, net                  (77)          
Income tax benefits                  -           
Unallocated Assets                            3,860,793 
Net Loss                 $(194,694)          
Total Assets                           $4,385,275 
   Sales   COGS   Gross profit   Loss from operations   Depreciation and amortization   Assets 
Healthcare Knit Goods Series  $14,546   $4,800   $9,746   $(10,449)  $9,599   $139,577 
Daily Healthcare and Personal Care Series   74,313    29,910    44,403    (103,530)   49,038    219,620 
Wellness House and Activated Water Machine Series   69,657    34,999    34,658    (74,648)   45,966    176,048 
Segment Totals  $158,516   $69,709   $88,807    (188,627)  $104,603    535,245 
Other Loss, net                  (71,635)          
Income Tax                  -           
Unallocated Assets                            4,097,146 
Net Loss                 $(260,262)          
Total Assets                           $4,632,391 
   Sales   COGS   Gross profit   Loss from operations   Depreciation and amortization   Assets 
Healthcare Knit Goods Series  $21,984   $6,010   $15,974   $(94,930)  $41,678   $114,429 
Daily Healthcare and Personal Care Series   44,035    26,925    17,110    (205,038)   83,484    211,852 
Wellness House and Activated Water Machine Series   93,388    50,333    43,055    (428,067)   177,049    198,201 
Segment Totals  $159,407   $83,268   $76,139    (728,035)  $302,211    524,482 
Other Loss, net                  (1,185)          
Income tax benefits                  -           
Unallocated Assets                            3,860,793 
Net Loss                 $(729,220)          
Total Assets                           $4,385,275 
   Sales   COGS   Gross profit   Loss from operations   Depreciation and amortization   Assets 
Healthcare Knit Goods Series  $61,733   $28,307   $33,426   $(108,588)  $42,461   $139,577 
Daily Healthcare and Personal Care Series   156,208    68,315    87,893    (271,461)   107,442    219,620 
Wellness House and Activated Water Machine Series   250,825    125,250    125,575    (451,434)   172,521    176,048 
Segment Totals  $468,766   $221,872   $246,894    (831,483)  $322,424    535,245 
Other Loss, net                  (72,826)          
Income Tax                  -           
Unallocated Assets                            4,097,146 
Net Loss                 $(904,309)          
Total Assets                           $4,632,391 
XML 38 R27.htm IDEA: XBRL DOCUMENT v3.20.2
Franchise Revenues (Tables)
9 Months Ended
Sep. 30, 2020
Franchise Revenues Disclosure [Abstract]  
Schedule of revenue between franchise and non-franchise customers
   For the three months ended September 30,   For the nine months ended September 30, 
   2020   2019   2020   2019 
                 
Sales to franchise customers  $63,071   $129,211   $133,456   $354,687 
Sales to non-franchise customers   14,218    29,305    25,951    114,079 
                     
Total sales  $77,289   $158,516   $159,407   $468,766 
XML 39 R28.htm IDEA: XBRL DOCUMENT v3.20.2
Organization (Details) - $ / shares
1 Months Ended 9 Months Ended
Nov. 13, 2016
Jul. 20, 2010
Sep. 30, 2020
Sep. 21, 2010
Jul. 28, 2010
Jul. 25, 2010
Jul. 09, 2010
May 17, 2007
Organization (Details) [Line Items]                
Percentage of shares acquired by Dynamic Elite International Limited from Joway Health       76.08%        
Call option exercise price per share (in Dollars per share)     $ 2.00          
Tianjin Joway Shengshi Group Co., Ltd. [Member]                
Organization (Details) [Line Items]                
Ownership percentage               99.00%
Business acquisition percentage of remaining voting interests acquired               1.00%
Joway Shengshi owned of Joway Technology [Member]                
Organization (Details) [Line Items]                
Ownership percentage           90.91%    
Business acquisition percentage of remaining voting interests acquired           9.09%    
Joway Shengshi owned of Joway Decoration [Member]                
Organization (Details) [Line Items]                
Ownership percentage             90.00%  
Business acquisition percentage of remaining voting interests acquired             10.00%  
Joway Shengshi To Shengtang Trading [Member]                
Organization (Details) [Line Items]                
Ownership percentage         95.00%      
Business acquisition percentage of remaining voting interests acquired         5.00%      
Crystal Globe [Member]                
Organization (Details) [Line Items]                
Right to purchase call option percentage     100.00%          
Call option, description     The Call Option vested as to 34% of the shares of CGL on April 2, 2011 and as to 33% on each of April 2, 2012 and 2013 (the respective “Call Option Effective Date”). On March 28, 2015, the Grantor and Grantees amended the Call Option Agreement, to (i) reduce the Exercise Price to $0.00 per share and (ii) extend the Grantees’ rights to exercise their call option within ten years from the respective Option Effective Date          
Joway Shengshi to Crystal Globe [Member]                
Organization (Details) [Line Items]                
Call Option expiration term under VIE Agreements   5 years            
Jinghe Zhang [Member]                
Organization (Details) [Line Items]                
Ownership percentage 85.90%              
Common stock shares (in Shares) 17,233,920              
Jinghe Zhang [Member] | CGL [Member]                
Organization (Details) [Line Items]                
Percentage of right to purchase of shares 99.00%              
Percentage of shares transferred 1.00%              
XML 40 R29.htm IDEA: XBRL DOCUMENT v3.20.2
Organization (Details) - Schedule of following table lists the Company and its subsidiaries
9 Months Ended
Sep. 30, 2020
USD ($)
Joway Health Industries Group Inc. [Member]  
Organization (Details) - Schedule of following table lists the Company and its subsidiaries [Line Items]  
Domicile and Date of Incorporation March 21, 2003, Nevada
Paid in Capital $ 20,054
Percentage of Effective Ownership 86.8% owned by Crystal Globe Limited 13.2%owned by other institutional and individual investors
Principal Activities Investment Holding
Dynamic Elite International Limited [Member]  
Organization (Details) - Schedule of following table lists the Company and its subsidiaries [Line Items]  
Domicile and Date of Incorporation June 2, 2010, British Virgin Islands
Paid in Capital $ 10,000
Percentage of Effective Ownership 100% owned by Joway Health Industries Group Inc.
Principal Activities Investment Holding
Tianjin Junhe Management Consulting Co., Ltd. [Member]  
Organization (Details) - Schedule of following table lists the Company and its subsidiaries [Line Items]  
Domicile and Date of Incorporation September 15, 2010, PRC
Paid in Capital $ 20,000
Percentage of Effective Ownership 100% owned by Dynamic Elite International Limited
Principal Activities Advisory
Tianjin Joway Shengshi Group Co., Ltd. [Member]  
Organization (Details) - Schedule of following table lists the Company and its subsidiaries [Line Items]  
Domicile and Date of Incorporation May 17, 2007, PRC
Paid in Capital $ 7,216,140.72
Percentage of Effective Ownership 99% owned by Jinghe Zhang, and 1% owned by Baogang Song
Principal Activities Production and distribution of Healthcare Knit Goods and Daily Healthcare and Personal Care products
Shenyang Joway Electronic Technology Co., Ltd. [Member]  
Organization (Details) - Schedule of following table lists the Company and its subsidiaries [Line Items]  
Domicile and Date of Incorporation March 28, 2007, PRC
Paid in Capital $ 142,072.97
Percentage of Effective Ownership 100% owned by Tianjin Joway Shengshi Group Co., Ltd
Principal Activities Distribution of Tourmaline Activated Water Machine and construction of Tourmaline Wellness House
Tianjin Joway Decoration Engineering Co., Ltd. [Member]  
Organization (Details) - Schedule of following table lists the Company and its subsidiaries [Line Items]  
Domicile and Date of Incorporation April 22, 2009, PRC
Paid in Capital $ 292,367.74
Percentage of Effective Ownership 100% owned by Tianjin Joway Shengshi Group Co., Ltd
Principal Activities Distribution of Wellness House for family use and Activated Water Machine and construction of Tourmaline Wellness House
Tianjin Oriental Shengtang Import & Export Trading Co., Ltd. [Member]  
Organization (Details) - Schedule of following table lists the Company and its subsidiaries [Line Items]  
Domicile and Date of Incorporation September 18, 2009, PRC
Paid in Capital $ 292,463.75
Percentage of Effective Ownership 100% owned by Tianjin Joway Shengshi Group Co., Ltd
Principal Activities Distribution of tourmaline products
XML 41 R30.htm IDEA: XBRL DOCUMENT v3.20.2
Summary of Significant Accounting Policies (Details)
3 Months Ended 9 Months Ended
Sep. 30, 2020
USD ($)
Sep. 30, 2019
USD ($)
Sep. 30, 2020
USD ($)
Sep. 30, 2019
USD ($)
Dec. 31, 2019
USD ($)
Accounting Policies [Abstract]          
Foreign currency translation adjustments $ 103,625 $ (105,948) $ 60,934 $ (92,278)  
Allowance for doubtful accounts 2,654   2,654   $ 2,591
Valuation allowance for inventories 109,606   109,606   106,997
Advances to suppliers 57,179   $ 57,179   $ 62,674
Land use rights granted to amortized using the straight-line method over     50 years    
Other intangible assets are software programs that are amortized over estimated useful life     10 years    
Wellness House construction period     5 days    
Shipping costs included in selling expenses $ 6,926 $ 11,942 $ 22,004 $ 40,913  
Number of reportable business segments     3    
XML 42 R31.htm IDEA: XBRL DOCUMENT v3.20.2
Summary of Significant Accounting Policies (Details) - Schedule of gains and losses from foreign currency transactions
Sep. 30, 2020
Dec. 31, 2019
Sep. 30, 2019
Period ended RMB: USD Exchange rate      
Summary of Significant Accounting Policies (Details) - Schedule of gains and losses from foreign currency transactions [Line Items]      
Gains and losses from foreign currency transactions 6.8101 6.9762 6.86557
Average RMB: USD Exchange rate      
Summary of Significant Accounting Policies (Details) - Schedule of gains and losses from foreign currency transactions [Line Items]      
Gains and losses from foreign currency transactions 6.9917 6.8985 6.78392
XML 43 R32.htm IDEA: XBRL DOCUMENT v3.20.2
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of assets
12 Months Ended
Dec. 31, 2019
Building [Member]  
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of assets [Line Items]  
Estimated useful lives 20 years
Operating Equipment [Member]  
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of assets [Line Items]  
Estimated useful lives 10 years
Office furniture and equipment [Member] | Minimum [Member]  
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of assets [Line Items]  
Estimated useful lives 3 years
Office furniture and equipment [Member] | Maximum [Member]  
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of assets [Line Items]  
Estimated useful lives 5 years
Vehicles [Member]  
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of assets [Line Items]  
Estimated useful lives 10 years
XML 44 R33.htm IDEA: XBRL DOCUMENT v3.20.2
Accounts Receivable (Details) - USD ($)
Sep. 30, 2020
Dec. 31, 2019
Receivables [Abstract]    
Allowance for doubtful accounts $ 2,654 $ 2,591
XML 45 R34.htm IDEA: XBRL DOCUMENT v3.20.2
Accounts Receivable (Details) - Schedule of accounts receivable - USD ($)
Sep. 30, 2020
Dec. 31, 2019
Schedule of accounts receivable [Abstract]    
Accounts receivable $ 2,654 $ 2,591
Less: allowance for bad debt (2,654) (2,591)
Accounts receivable, net
XML 46 R35.htm IDEA: XBRL DOCUMENT v3.20.2
Inventories (Details) - USD ($)
9 Months Ended 12 Months Ended
Sep. 30, 2020
Dec. 30, 2019
Inventory Disclosure [Abstract]    
Impairment loss from inventory $ 109,606 $ 106,997
XML 47 R36.htm IDEA: XBRL DOCUMENT v3.20.2
Inventories (Details) - Schedule of inventories - USD ($)
Sep. 30, 2020
Dec. 31, 2019
Schedule of inventories [Abstract]    
Raw materials $ 120,463 $ 126,563
Finished goods 479,130 444,175
Low value consumables 37,419 36,528
Total 637,012 607,266
Less: impairment loss (109,606) (106,997)
Inventory, net $ 527,406 $ 500,269
XML 48 R37.htm IDEA: XBRL DOCUMENT v3.20.2
Property, Plant and Equipment (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Property, Plant and Equipment [Abstract]        
Depreciation expense $ 95,847 $ 99,916 $ 292,084 $ 308,065
XML 49 R38.htm IDEA: XBRL DOCUMENT v3.20.2
Property, Plant and Equipment (Details) - Schedule of property, plant and equipment - USD ($)
Sep. 30, 2020
Dec. 31, 2019
Property, Plant and Equipment [Line Items]    
Total $ 7,627,757 $ 7,446,144
Less: accumulated depreciation (4,467,894) (4,068,783)
Property, plant and equipment, net 3,159,863 3,377,361
Building [Member]    
Property, Plant and Equipment [Line Items]    
Total 5,846,710 5,707,503
Operating Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Total 429,264 419,044
Office furniture and equipment [Member]    
Property, Plant and Equipment [Line Items]    
Total 347,419 339,147
Vehicles [Member]    
Property, Plant and Equipment [Line Items]    
Total $ 1,004,364 $ 980,450
XML 50 R39.htm IDEA: XBRL DOCUMENT v3.20.2
Intangible Assets (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]        
Amortization of Intangible Assets $ 2,993 $ 4,687 $ 10,127 $ 14,359
XML 51 R40.htm IDEA: XBRL DOCUMENT v3.20.2
Intangible Assets (Details) - Schedule of intangible assets - USD ($)
Sep. 30, 2020
Dec. 31, 2019
Schedule of intangible assets [Abstract]    
Land use rights $ 606,168 $ 591,734
Other intangible assets 77,556 75,710
Total 683,724 667,444
Less: accumulated amortization (235,160) (219,411)
Intangible assets, net $ 448,564 $ 448,033
XML 52 R41.htm IDEA: XBRL DOCUMENT v3.20.2
Intangible Assets (Details) - Schedule of estimated amortization expense
Dec. 31, 2019
USD ($)
Schedule of estimated amortization expense [Abstract]  
2020 $ 19,000
2021 19,000
2022 19,000
2023 19,000
2024 19,000
Thereafter $ 353,033
XML 53 R42.htm IDEA: XBRL DOCUMENT v3.20.2
Related Party Transactions (Details) - USD ($)
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2010
Dec. 31, 2008
Shenyang Joway [Member]        
Related Party Transactions (Details) [Line Items]        
Ownership percentage, description more than 50% of the equity      
Interest-free, unsecured advances for working capital     $ 912,645  
Repaid advances $ 0 $ 118,458    
Total unpaid principal balance 0      
Shenyang Joway Industrial Development Co., Ltd. [Member]        
Related Party Transactions (Details) [Line Items]        
Interest-free, unsecured advances for working capital       $ 58,568
Joway Shengshi [Member]        
Related Party Transactions (Details) [Line Items]        
Received cash advances in the aggregate principal amount   6,548,144    
Jinghe Zhang [Member]        
Related Party Transactions (Details) [Line Items]        
Total unpaid principal balance 1,915,333      
Received cash advances in the aggregate principal amount   4,632,811    
Received amount of related parties $ 434,818 $ 700,766    
XML 54 R43.htm IDEA: XBRL DOCUMENT v3.20.2
Related Party Transactions (Details) - Schedule of payables due to related parties - USD ($)
Sep. 30, 2020
Dec. 31, 2019
Related Party Transaction [Line Items]    
Total $ 1,915,333 $ 1,480,515
Jinghe Zhang [Member]    
Related Party Transaction [Line Items]    
Total $ 1,915,333 $ 1,480,515
XML 55 R44.htm IDEA: XBRL DOCUMENT v3.20.2
Income Taxes (Details)
Jan. 31, 2008
Enterprise Income Tax [Member]  
Income Taxes (Details) [Line Items]  
Statutory rate 25.00%
XML 56 R45.htm IDEA: XBRL DOCUMENT v3.20.2
Income Taxes (Details) - Schedule of differences between the PRC statutory federal rate and effective tax rate
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Schedule of differences between the PRC statutory federal rate and effective tax rate [Abstract]    
Tax computed at China statutory rates 25.00% 25.00%
Effect of losses (25.00%) (25.00%)
Effective rate 0.00% 0.00%
XML 57 R46.htm IDEA: XBRL DOCUMENT v3.20.2
Statutory Reserves (Details)
9 Months Ended
Sep. 30, 2020
USD ($)
Statutory Reserves Disclosure [Abstract]  
Minimum statutory reserves allocation, percentage 10.00%
Income after tax until the reserves reaches, percentage 50.00%
Statutory reserves (in Dollars) $ 354,052
XML 58 R47.htm IDEA: XBRL DOCUMENT v3.20.2
Segments (Details)
9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
Number of reportable business segments 3
XML 59 R48.htm IDEA: XBRL DOCUMENT v3.20.2
Segments (Details) - Schedule of segment reporting - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Segment Reporting Information [Line Items]          
Sales $ 77,289 $ 158,516 $ 159,407 $ 468,766  
COGS 37,517 69,709 83,268 221,872  
Gross profit 39,772 88,807 76,139 246,894  
Loss from operations (194,617) (188,627) (728,035) (831,483)  
Depreciation and amortization 98,840 104,603 302,211 322,424  
Assets 524,482 535,245 524,482 535,245  
Other Loss, net (77) (71,635) (1,185) (72,826)  
Income Tax    
Income tax benefits  
Unallocated Assets 3,860,793 4,097,146 3,860,793 4,097,146  
Net Loss (194,694) (260,262) (729,220) (904,309)  
Total Assets 4,385,275 4,632,391 4,385,275 4,632,391 $ 4,608,181
Healthcare Knit Goods Series [Member]          
Segment Reporting Information [Line Items]          
Sales 15,431 14,546 21,984 61,733  
COGS 2,897 4,800 6,010 28,307  
Gross profit 12,534 9,746 15,974 33,426  
Loss from operations (30,622) (10,449) (94,930) (108,588)  
Depreciation and amortization 19,734 9,599 41,678 42,461  
Assets 114,429 139,577 114,429 139,577  
Daily Healthcare and Personal Care Series [Member]          
Segment Reporting Information [Line Items]          
Sales 13,373 74,313 44,035 156,208  
COGS 11,461 29,910 26,925 68,315  
Gross profit 1,912 44,403 17,110 87,893  
Loss from operations (14,363) (103,530) (205,038) (271,461)  
Depreciation and amortization 17,102 49,038 83,484 107,442  
Assets 211,852 219,620 211,852 219,620  
Wellness House and Activated Water Machine Series [Member]          
Segment Reporting Information [Line Items]          
Sales 48,485 69,657 93,388 250,825  
COGS 23,159 34,999 50,333 125,250  
Gross profit 25,326 34,658 43,055 125,575  
Loss from operations (149,632) (74,648) (428,067) (451,434)  
Depreciation and amortization 62,004 45,966 177,049 172,521  
Assets $ 198,201 $ 176,048 $ 198,201 $ 176,048  
XML 60 R49.htm IDEA: XBRL DOCUMENT v3.20.2
Franchise Revenues (Details)
9 Months Ended
Sep. 30, 2020
Franchise Revenues Disclosure [Abstract]  
Term of franchising renewable agreements 3 years
Franchising agreements, description The franchising agreements are generally for terms of three years and are renewable at the mutual agreement of both parties.
XML 61 R50.htm IDEA: XBRL DOCUMENT v3.20.2
Franchise Revenues (Details) - Schedule of revenue between franchise and non-franchise customers - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Franchise Revenues (Details) - Schedule of revenue between franchise and non-franchise customers [Line Items]        
Total sales $ 77,289 $ 158,516 $ 159,407 $ 468,766
Sales to Franchise Customers [Member]        
Franchise Revenues (Details) - Schedule of revenue between franchise and non-franchise customers [Line Items]        
Total sales 63,071 129,211 133,456 354,687
Sales to Non-Franchise Customers [Member]        
Franchise Revenues (Details) - Schedule of revenue between franchise and non-franchise customers [Line Items]        
Total sales $ 14,218 $ 29,305 $ 25,951 $ 114,079
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