10-Q

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: March 31, 2022

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

For the transition period from _____________ to _____________

Commission File Number: 333-123774

Microalliance Group Inc.

(Exact name of registrant as specified in its charter)

Nevada	86-1098668
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Room 601, Bldg. E,

No. 1, Huabao Fubao China Street, Futian District

Shenzhen City, Guangdong Province 518000

(Address of principal executive offices, Zip Code)

+86 185 6676 1769

(Registrant’s telephone number, including area code)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

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

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

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

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 each of the issuer’s classes of common stock, as of the latest practicable date: 609,316,077 shares as of May 16, 2022. 

TABLE OF CONTENTS

		Page
	PART I FINANCIAL INFORMATION
Item 1.	Financial Statements.	F-1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	2
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	7
Item 4.	Controls and Procedures.	7
	PART II OTHER INFORMATION
Item 1.	Legal Proceedings.	8
Item 1A.	Risk Factors.	8
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	8
Item 3.	Defaults Upon Senior Securities.	8
Item 4.	Mine Safety Disclosures.	8
Item 5.	Other Information.	8
Item 6.	Exhibits.	8

i

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MICROALLIANCE GROUP INC.

TABLE OF CONTENTS

	Pages
Condensed Consolidated Balance sheets as of March 31, 2022 (Unaudited) and December 31, 2021 (Audited)	F-2
Condensed Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2022 and 2021 (Unaudited)	F-3
Condensed Consolidated Statements of Changes in Equity for the three months ended March 31, 2022 and 2021 (Unaudited)	F-4
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (Unaudited)	F-5
Notes to Condensed Consolidated Financial Statements for the three months ended March 31, 2022 (Unaudited)	F-6-F-13

F-1

MICROALLIANCE GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In U.S. Dollars, except share data or otherwise stated)

AS OF MARCH 31, 2022 (UNAUDITED) AND DECEMBER 31, 2021 (AUDITED)

	March 31, 2022		December 31, 2021
	US$		US$
ASSETS
Current assets:
Cash and cash equivalents		59,171		1,190,465
Accounts receivable		2,170,843		3,012,256
Other receivables		261,141		227,359
Inventories		18,908,148		14,166,929
Prepayment		596		28,370
Advance to suppliers		11,650,978		11,676,326
Amount due from related parties		32,477		81,690
Total current assets		33,083,354		30,383,395
Non-current assets:
Leasehold improvements and equipment, net		406,267		429,500
Intangible assets		97,488		95,461
Operating lease right-of-use assets		29,687		83,957
Total non-current assets		533,442		608,918
Total assets		33,616,796		30,992,313
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable		459,603		29,048
Income tax payables		860,195		1,334,679
Other payables and accruals		340,798		481,258
Advance from customers		553,440		737,515
Amount due to related parties		40,184		79,849
Current operating lease liabilities		19,818		69,259
Total current liabilities		2,274,038		2,731,608
Non-current liabilities:
Non-current operating lease liabilities		9,869		14,698
Total non-current liabilities		9,869		14,698
Total liabilities		2,283,907		2,746,306
COMMITMENTS AND CONTINGENCIES
EQUITY (DEFICIT)
Share capital (750,000,000 shares of Common Stock, par value $0.00001 per share, authorized, of which 609,316,077 shares are issued and outstanding; and 100,000,000 shares of Series A Preferred Stock, par value $0.00001 per share, of which all 100,000,000 shares are issued and outstanding)
Series A Preferred Stock		1,000		1,000
Common Stock		6,093		6,093
Additional paid in capital		10,215,427		10,215,427
Foreign currency translation reserves		291,237		225,508
Statutory reserves		3,041,397		3,041,397
Retained earnings		17,777,735		14,756,582
Total equity		31,332,889		28,246,007
Total liabilities and equity		33,616,796		30,992,313

The accompanying notes are an integral part of the financial statements.

F-2

MICROALLIANCE GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In U.S. Dollars, except share data or otherwise stated)

FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021 (UNAUDITED)

	2022			2021
	US$			US$
Revenue		6,598,289			4,411,258
Cost of revenue		(1,830,697	)		(935,165	)
Gross profit		4,767,592			3,476,093
Selling and marketing expenses		(187,614	)		(36,479	)
General and administrative expense		(516,945	)		(267,800	)
Total operating expenses		(704,559	)		(304,279	)
Operating profit		4,063,033			3,171,814
Other (expenses) income, net		(6,777	)		(179	)
Profit before income taxes		4,056,256			3,171,635
Income taxes		(1,035,103	)		(779,372	)
Net profit for the year		3,021,153			2,392,263
Foreign currency translation differences		65,729			(21,529	)
Total comprehensive income for the year		3,086,882			2,370,734
Earnings per share:
-  Basic		0.005			0.004
-  Diluted		0.005			0.004
Weighted average number of shares used in computation:
-  Basic		609,316,077			600,034,500
-  Diluted		609,316,077			600,034,500

The accompanying notes are an integral part of the financial statements.

F-3

MICROALLIANCE GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In U.S. Dollars, except share data or otherwise stated)

FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021 (UNAUDITED)

	Share Capital							Foreign			(Accumulated Deficit) Retain Earnings
	Series A preferred Stock		Common Stock		Additional paid in Capital			Currency Translation Reserve			Unrestricted			Statutory Reserve		Total Equity (Deficit)
	US$		US$		US$			US$			US$			US$		US$
Balance at January 1, 2022 (Audited)		1,000		6,093		10,215,427			225,508			14,756,582			3,041,397		28,246,007
Profit for the period		-				-			-			3,021,153			-		3,021,153
Other comprehensive income		-				-			65,729			-			-		65,729
Balance at March 31, 2022 (Unaudited)		1,000		6,093		10,215,427			291,237			17,777,735			3,041,397		31,332,889
Balance at January 1, 2021 (Audited)		1,000		6,000		(15,146	)		(54,091	)		(980,262	)		6,894		(1,035,605	)
Profit for the period		-				-			-			2,392,263			-		2,392,263
Other comprehensive income		-				-			(21,529	)		-			-		(21,529	)
Balance at March 31, 2021 (Unaudited)		1,000		6,000		(15,146	)		(75,620	)		1,412,001			6,894		1,335,129

The accompanying notes are an integral part of the financial statements.

F-4

MICROALLIANCE GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In U.S. Dollars, except share data or otherwise stated)

FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021 (UNAUDITED)

	2022			2021
	US$			US$
Cash flows from operating activities:
Net profit		3,021,153			2,392,263
Adjustments for:
Depreciation and amortization		38,306			14,266
Changes in:
Accounts receivable		847,091			(3,546,989	)
Other receivables and prepayment		(5,437	)		(10,359	)
Advance to suppliers		51,038			-
Inventories		(4,704,622	)		(1,855	)
Accounts payable, other payables and accruals		288,641			941,940
Income tax payables		(476,884	)		774,671
Advance from customers		(185,490	)		(18,777	)
Amount due from/to related parties		9,541			(508,965	)
Net cash (used in) provided by operating activities		(1,116,663	)		36,195
Cash flows from investing activities:
Additions to leasehold improvements and equipment		(12,549	)		(15,424	)
Additions to intangible assets		(3,418	)		(33,597	)
Net cash used in investing activities		(15,967	)		(49,021	)
Effect of exchange rate changes on cash and cash equivalents		1,336			(92	)
Net decrease in cash and cash equivalents		(1,131,294	)		(12,918	)
Cash and cash equivalents at the beginning of year		1,190,465			61,517
Cash and cash equivalents at the end of the year		59,171			48,599
Supplemental disclosure of non-cash investing and financing activities:
Right-of-use assets obtained in exchange for operating lease obligations		23,180			301,093

The accompanying notes are an integral part of the financial statements.

F-5

MICROALLIANCE GROUP INC.

CONDENSED CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 (UNAUDITED)

1. DESCRIPTION OF BUSINESS

Microalliance Group Inc. and its subsidiaries (the “Company” or “FHAI”) are engaged in the business of wholesale distribution of “coffee tea” and “spirit” products to retail partners and corporate customers, selling “coffee tea” and “spirit” products to individual consumers and providing pre-opening assistance to retail partners to operate coffee stores in the People’s Public of China (“PRC” or “China”).

2. BASIS OF PRESENTATION

In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. All significant intercompany transactions and balances are eliminated in consolidation. However, the results of operations included in such financial statements may not necessarily be indicative of annual results.

The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (“SEC”) on March 31, 2022 (“2021 Form 10-K”).

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Use of estimates

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

There is no change on the accounting policies from the year ended December 31, 2021.

(b) Revenue Recognition

The Company’s revenues primarily include Company sales, franchise fees and income and revenues from transactions with franchisees.

Product sales

Product sales represents the sale of “coffee tea” and “spirit” products. Such revenue is recognized net of value-added taxes, upon delivery at such time that title passes to the customers.

Franchise fees and income

Franchise fees and income primarily include upfront franchise fees, such as initial fees, pre-opening assistance to operate spirit stores, subsequent training provided to franchisees and renewal fees. The Company has determined that the services provided in exchange for upfront franchise fees are highly interrelated with the franchise rights. The franchise rights are accounted for as rights to access the Company’s symbolic intellectual property in accordance with ASC 606, and the Company recognizes upfront franchise fees received from a franchisee as revenue when performance obligations are satisfied in accordance with the franchise agreement or the renewal agreement. The franchise agreement term is typically 3 years.

F-6

Revenues from transactions with franchisees

Revenues from transactions with franchisees consist primarily of sales of spirit products. The Company sells and delivers spirit products to the franchisees. The performance obligations arising from such transactions are considered distinct from the franchise agreement as they are not highly dependent on the franchise agreement and the customer can benefit from the procurement service on its own. Revenue is recognized upon transfer of control over ordered items, generally upon delivery to the franchisees.

In determining the amount and timing of revenue from contracts with customers, the Company exercises significant judgment with respect to collectability of the amount; however, the timing of recognition does not require significant judgment, as it is based on either the franchise term or the date of product shipment, none of which require estimation.

The Company does not incur a significant amount of contract acquisition costs in conducting its franchising activities. The Company believes its franchising arrangements do not contain a significant financing component.

The Company’s revenue recognition policy is compliant with ASC 606, Revenue from Contracts with Customers, and revenue is recognized when a customer obtains control of promised goods and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount:

(i) identification of the goods and services in the contract;

(ii) determination of whether the goods and services are performance obligations, including whether they are distinct in the context of the contract;

(iii) measurement of the transaction price, including the constraint on variable consideration;

(iv) allocation of the transaction price to the performance obligations; and

(v) recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery or service being rendered.

For all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adopted rules.

(c) Accounts Receivable

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

F-7

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

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

The following customers had an accounts receivable balance greater than 10% of total accounts receivable at March 31, 2022.

	March 31, 2022					December 31, 2021
	Amount		%			Amount		%
Customer A	$	-		-	%	$	1,540,197		51	%
Customer B		-		-	%		1,472,059		49	%
Customer C		1,330,653		61	%		-		-	%
Customer D		840,190		39	%		-		-	%
	$	2,170,843		100	%	$	3,012,256		100	%

(c) Recently issued accounting pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. This ASU requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. This Accounting Standards Update affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual rights to receive cash. For smaller public business entities, the amendments in this Update are effective for fiscal years beginning after January 1, 2023, including interim periods within those fiscal years. All entities may adopt the amendments in this Update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). The Company is in the process of evaluating the impact of the adoption of this pronouncement on its consolidated financial statements.

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

F-8

4. RISKS AND UNCERTAINTIES

(a) Economic and Political Risks

The Company’s operations are conducted 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 economy.

The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.

(b) Foreign Currency Translation

The Company’s reporting currency is the U.S. dollar. The functional currency of the parent company is the U.S. dollar and the functional currency of the Company’s operating subsidiaries is the Chinese Renminbi (“RMB”). For the subsidiaries whose functional currencies are the RMB, all assets and liabilities are translated at exchange rates at the balance sheet date and revenue and expenses are translated at the average yearly exchange rates and equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustments to other comprehensive loss, a component of equity.

(c) Concentration of credit risk

Financial instruments that potentially expose the Company to significant concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable, other receivables and advance to suppliers. As of March 31, 2022 and December 31, 2021, substantially all of the Company’s cash and cash equivalents were deposited with financial institutions with high-credit ratings and quality. The Company did not have any customers constituting 10% or more of the net revenue in the three months ended March 31, 2022. The Company had two customers constituting 10% or more of the net revenues in the three months ended March 31, 2021 as follows:

	2022					2021
	Amount		%			Amount		%
Customer A	$	-		-	%	$	867,850		20	%
Customer B		-		-	%		435,070		10	%
	$	-		-	%	$	1,302,920		30	%

5. REVENUE

	For the three months ended March 31,
Revenue	2022		2021
Product sales	$	2,432,537	$	4,363,917
Franchise fees and income		458,626		47,341
Revenues from transactions with franchisees		3,707,126		-
	$	6,598,289	$	4,411,258

Contract liabilities	As of March 31, 2022		As of December 31, 2021
Deferred revenue related to prepaid coffee and liquor products	$	4,013	$	20,881
Deferred revenue related to upfront franchise fees		549,427		716,634
	$	553,440	$	737,515

F-9

Contract liabilities primarily consist of deferred revenue related to prepaid coffee and spirit products and upfront franchise fees. Deferred revenue related to prepaid spirit products represents advance from franchisees for future supply of products which is expected to recognize as revenue in the next 12 months. Deferred revenue related to upfront franchise fees represents the training service to be delivered over the term of franchise agreement that as of December 31, 2021, the Company expects to recognize as revenue of $221,085 within the next 12 months.

The Company has elected, as a practical expedient, not to disclose the value of remaining performance obligations associated with the franchise agreement in exchange for franchise right and related training services. The remaining duration of the performance obligation is the remaining contractual term of each franchise agreement. Revenue from training services provided to franchisees is recognized upon the conduct and delivery of training.

6. OTHER RECEIVABLES

As of March 31, 2022 and December 31, 2021, other receivables mainly consist of employees advance to be spent for company purposes and refundable rental deposits. The balances are unsecured, non-interest bearing and repayable on demand.

7. INVENTORY

	March 31,		December 31,
	2022		2021
Raw materials (1)	$	18,200,736	$	14,000,162
Finished goods		652,795		61,684
Goods in transit		54,617		105,083
	$	18,908,148	$	14,166,929

(1) Raw materials mainly consist of unprocessed coffee tea beans, puree spirit and packaging materials

8. ADVANCE TO SUPPLIERS

The suppliers require the Company to pay in advance for the purchase of liquor products. Such advance is appropriated against future purchase orders. These advances are interest free, unsecured and short-term in nature.

9. LEASEHOLD IMPROVEMENT AND EQUIPMENT, NET

	March 31,			December 31,
	2022			2021
Leasehold improvement	$	66,089		$	65,944
Equipment		32,611			21,079
Machinery		34,162			34,087
Computer equipment and software		47,888			46,228
Motor vehicle		492,705			469,114
	$	673,455		$	636,452
Less: accumulated depreciation		(267,188	)		(206,952	)
	$	406,267		$	429,500

Depreciation expense for the three months ended March 31, 2022 and 2021 was $36,703 and $13,986 respectively.

F-10

10. INTANGIBLE ASSETS

	March 31,			December 31,
	2022			2021
APP Platform	$	110,391		$	110,148
Trademarks		3,422			-
Less: accumulated amortization		(16,325	)		(14,687	)
	$	97,488		$	95,461

Amortization expense for the three months ended March 31, 2022 and 2021 was $1,603 and $280, respectively.

As of March 31, 2022 and December 31, 2021, cost of intangible assets included an APP platform amounting to approximately $16,000 (RMB100,000) acquired by the Company during the year which was in the testing phase, no amortization was recorded until that platform was fully operational in 2022.

11. OTHER PAYABLES AND ACCRUALS

	March 31,		December 31,
	2022		2021
Accrued payroll and welfare payable	$	71,423	$	178,706
VAT and other taxes payable		241,121		192,563
Others (1)		28,254		109,989
	$	340,798	$	481,258

(1) As of March 31, 2022 and December 31, 2021, others mainly consist of the outstanding refundable balance upon termination of the cooperative agreement with one customer and payables for rental expenses.

12. ADVANCE FROM CUSTOMERS

The Company requires retail partners to sign cooperative agreement and to pay in advance for the supply of goods. Such advance is appropriated against future sales orders. These advances are interest free, unsecured and short-term in nature.

13. INCOME TAXES

FHAI was incorporated in the State of Nevada. FHAI is an U.S. entity and is subject to the United States federal income tax. No provision for income taxes in the United States has been made as FHAI had no United States taxable income for the years ended December 31, 2021 and 2020.

WLJM Cayman was incorporated in Cayman Islands. Under the current tax laws of Cayman Islands, WLJM Cayman is not subject to tax on their income or capital gains. In addition, upon of dividends by WLJM Cayman to its shareholders, no Cayman Islands withholding tax will be imposed.

WLJM HK was incorporated in Hong Kong and is subject to an income tax rate of 16.5% for taxable income generated from operations in Hong Kong.

JYWM WFOE, Shenzhen Wei Lian, Dongguan Dishi, Shenzhen Nainiang and Nainiang Liquor were incorporated in the PRC and they are subject to profits tax rate at 25% for income generated and operation in the country.

F-11

The full realization of the tax benefit associated with the losses carried forward depends predominantly upon the Company’s ability to generate taxable income during the carry forward period.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.

The Company did not record deferred tax assets as of March 31, 2022 and December 31, 2021.

A reconciliation of tax expense from 25% statutory tax rates for the three months ended March 31, 2022 and 2021 is as follows:

	For the three months ended March 31,
	2022			2021
Profit before tax	$	4,056,256		$	3,171,635
Tax benefit calculated at statutory tax rate		25	%		25	%
Computed expected tax expense		1,014,064			792,909
Others		21,039			(13,537	)
	$	1,035,103		$	779,372

14. LEASES

The Company has leases for the office, factory and warehouse in the PRC, under operating leases expiring on various dates through September 2023, which is classified as operating leases. There are no residual value guarantees and no restrictions or covenants imposed by the leases. Lease liabilities are measured at present value of the sum of remaining rental payments as of March 31, 2022, with discounted rate of 4.75%. A single lease cost is recognized over the lease term on a generally straight-line basis. All cash payments of operating lease cost are classified within operating activities in the statement of cash flows. Rent expense for the three months ended March 31, 2022 and 2021 were $70,267 and $78,596, respectively.

Upon expiration of the terms of leases, the Company has not entered into new lease agreements or extended the existing lease agreements as of March 31, 2022 and December 31, 2021.

The Company’s future minimum payments under long-term non-cancelable operating leases are as follows:

	March 31, 2022
Within 1 year	$	25,634
After 1 year but within 5 years		11,290
Total lease payments	$	36,924
Less: imputed interest		(7,237	)
Total lease obligations		29,687
Less: current obligations		(19,818	)
Long-term lease obligations	$	9,869

F-12

Other information:

	For the three months ended March 31,
	2022			2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flow from operating leases	$	70,267		$	78,596
Right-of-use assets obtained in exchange for operating lease liabilities		23,180			301,093
Remaining lease term for operating leases (years)		1.5			2.5
Weighted average discount rate for operating leases		4.75	%		4.75	%

15. RELATED PARTIES TRANSACTIONS

The Company had the following balances with related parties:

(a) Amount due from related parties

		March 31,		December 31,
	Relationship	2022		2021
Shenzhen Weilian Jin Meng Culture Spreading Limited	Zhu Hong is the shareholder	$	32,477	$	81,690
Total		$	32,477	$	81,690

The balances represent cash advance to a related party. The balances are unsecured, non-interest bearing and repayable on demand.

(b) Amount due to related parties

		March 31,		December 31,
	Relationship	2022		2021
Zhu Hong	Majority shareholder of the Company	$	40,184	$	79,849
Total		$	40,184	$	79,849

The balances represent Company’s expenses paid on behalf by a related party. The balances are unsecured, non-interest bearing and repayable on demand.

16. COMMITMENTS AND CONTINGENCIES

Commitments consist of a non-cancelable consultancy service agreement entered into with a third-party for the provision of services related to the US listing with a contract sum of $1,200,000. The outstanding committed contract amount is $120,000. The terms of the agreement are for various milestones stages to be completed within two years through 2021 which has extended to 2022. Future commitments within one year as of December 31, 2021 was $120,000. No future commitments more than one year as of March 31, 2022.

Except the above commitments and the operating lease commitment as disclosed at Note 14, there are no material commitments.

17. SUBSEQUENT EVENTS

There are no subsequent events have occurred that would require recognition or disclosure in the financial statements.

F-13

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

The following management’s discussion and analysis should be read in conjunction with our financial statements and the notes thereto and the other financial information appearing elsewhere in this report. Our financial statements are prepared in U.S. dollars and in accordance with U.S. GAAP.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “pursue,” “expect,” “predict,” “project,” “goals,” “strategy,” “future,” “likely,” “forecast,” “potential,” “continue,” negatives thereof or similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding business strategies, macro-economic and sector-specific trends, future cash flows, financing plans, plans and objectives of management and any other statements which are not statements of historical facts.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual future results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, legal and regulatory changes in the jurisdictions in which we operate, volatility or decline in our stock price, potential fluctuation of our quarterly and annual financial and operational results, rapid adverse changes in markets, decline in demand for our goods and services, insufficient revenues to cover our operating costs and such other factors as identified in “Item 1A. Risk Factors” described in our most recent annual report on Form 10-K.

Readers are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the SEC. These reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of operations and prospects. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation, except as required by law, to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.

Unless otherwise indicated by the context, references to the “Company, “we,” “us,” “our” in this report are to the combined business of Microalliance Group Inc., a Nevada corporation, and its consolidated subsidiaries.

Overview

The Company is primarily engaged in offering two types of products: coffee and liquor. The Company, through its subsidiaries in China, develops, produces, markets and sells flagship “coffee tea” products, which are innovative specialty coffee products with Chinese black tea’s taste, as well as black coffee products and other coffee products. We sell our coffee products wholesale to retail partners and corporate customers, and we also sell directly to consumers in the PRC via our e-commerce channels. We commit to build the first brand of “coffee tea” culture in the PRC. As of the date of this report, we have entered into franchise agreements with a large number of franchisees relating to the distribution, marketing and sale of our coffee products. Our coffee product offerings consist of five different coffee products.

Our liquor products are sold across China through sales agents, distributors and franchisees. Our licensed “Nainiang Liquor” retail stores have opened in a dozen of cities in China, such as Beijing, Shanghai, Shenzhen, Xiamen, Chongqing, Chengdu, Kunming, Foshan, Zhaoqing, Huangshan, Jingzhou and Baoding, to mainly market and sell our proprietary brand liquor products to consumers. We supply the licensed retail stores with our liquor products and maintain quality and uniformity throughout the licensed stores by requiring uniform retail prices, providing continual trainings, periodic field visits by our marketing personnel and holding annual and special meetings of franchisees. Such retail stores launch marketing initiatives like tasting events to increase our brand awareness and promote sales. We currently sell six liquor products, including featured “coffee spirit” products and vintage “Baijiu” products. Our “coffee spirit” products are independently innovated by us and unique in China, with premium quality, good taste and large profit margin. Our “Baijiu” (a type of Chinese liquor made from whole grain with alcohol content from 40-60%) products have excellent quality and we own a large stock of vintage Baijiu whose value grows as they age. As of March 31, 2022, we had RMB114,774,000 (approximately $18.1 million) of such vintage Baijiu in stock based on the historical purchase cost. The liquor market size is massive which generates more revenues than the coffee business.

COVID-19 Impact

Our coffee factory in Dongguan as well as offices, contracted liquor producers and licensed “Nainiang Liquor” retail stores in Shenzhen were temporarily closed due to COVID-19 resurgences and local containment measures in the first quarter of 2022. Consumer demand for liquor products has dropped during lockdown periods as a result of social distancing policies and reduced gatherings. In addition, our plan to expand internationally has largely stalled due to the COVID-19 pandemic. It remains difficult to predict the full impact of the COVID-19 pandemic on the broader economy and our coffee and liquor business in particular.

2

Critical Accounting Policies and Use of Estimates

We prepare our consolidated financial statements in conformity with U.S. GAAP, which requires management to make certain estimates and to apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared. On a regular basis, we review our accounting policies and how they are applied and disclosed in our condensed consolidated financial statements. Actual results could differ from those estimates made by management.

We believe that of our significant accounting policies, which are described in Note 3 to our consolidated financial statements, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.

Revenue Recognition

The Company’s revenues primarily include Company sales, franchise fees and income and revenues from transactions with franchisees.

Product sales

Product sales represent the sale of “coffee tea” and “spirit” products. Such revenue is recognized net of value-added taxes, upon delivery at such time that title passes to the customers.

Franchise fees and income

Franchise fees and income primarily include upfront franchise fees, such as initial fees, pre-opening assistance to operate spirit stores, subsequent training provided to franchisees and renewal fees. The Company has determined that the services provided in exchange for upfront franchise fees are highly interrelated with the franchise rights. The franchise rights are accounted for as rights to access the Company’s symbolic intellectual property in accordance with ASC 606, and the Company recognizes upfront franchise fees received from a franchisee as revenue when performance obligations are satisfied in accordance with the franchise agreement or the renewal agreement. The franchise agreement term is typically 3 years.

Revenues from transactions with franchisees

Revenues from transactions with franchisees consist primarily of sales of spirit products. The Company sells and delivers spirit products to the franchisees. The performance obligations arising from such transactions are considered distinct from the franchise agreement as they are not highly dependent on the franchise agreement and the customer can benefit from the procurement service on its own. Revenue is recognized upon transfer of control over ordered items, generally upon delivery to the franchisees.

In determining the amount and timing of revenue from contracts with customers, the Company exercises significant judgment with respect to collectability of the amount; however, the timing of recognition does not require significant judgment, as it is based on either the franchise term or the date of product shipment, none of which require estimation.

The Company does not incur a significant amount of contract acquisition costs in conducting its franchising activities. The Company believes its franchising arrangements do not contain a significant financing component.

The Company’s revenue recognition policy is compliant with ASC 606, Revenue from Contracts with Customers, and revenue is recognized when a customer obtains control of promised goods and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount:

(i) identification of the goods and services in the contract;

(ii) determination of whether the goods and services are performance obligations, including whether they are distinct in the context of the contract;

(iii) measurement of the transaction price, including the constraint on variable consideration;

(iv) allocation of the transaction price to the performance obligations; and

(v) recognition of revenue when (or as) the Company satisfies each performance obligation.

3

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery or service being rendered.

For all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adopted rules.

	For the three months ended March 31,
Revenue	2022		2021
Product sales	$	2,432,537	$	4,363,917
Franchise fees and income		458,626		47,341
Revenues from transactions with franchisees		3,707,126		-
	$	6,598,289	$	4,411,258

Contract liabilities	As of March 31, 2022		As of December 31, 2021
Deferred revenue related to prepaid coffee and liquor products	$	4,013	$	20,881
Deferred revenue related to upfront franchise fees		549,427		716,634
	$	553,440	$	737,515

Contract liabilities primarily consist of deferred revenue related to prepaid spirit products and upfront franchise fees. Deferred revenue related to prepaid spirit products represents advance from franchisees for future supply of products which is expected to be recognized as revenue in the next 12 months. Deferred revenue related to upfront franchise fees represents the training service to be delivered over the term of franchise agreement that as of March 31, 2022, we expect to recognize revenue of $221,085 within the next 12 months.

We have elected, as a practical expedient, not to disclose the value of remaining performance obligations associated with the franchise agreement in exchange for franchise right and related training services. The remaining duration of the performance obligation is the remaining contractual term of each franchise agreement. Revenue from training services provided to franchisees is recognized upon the conduct and delivery of training.

Concentrations of Credit Risk

Financial instruments that potentially expose us to significant concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. As of March 31, 2021 and December 31, 2021, substantially all of our cash and cash equivalents were deposited with financial institutions with high-credit ratings and quality. The following customers had an accounts receivable balance greater than 10% of total accounts receivable at March 31, 2022 and December 31, 2021.

	March 31, 2022					December 31, 2021
	Amount		%			Amount		%
Customer A	$	-		-	%	$	1,540,197		51	%
Customer B		-		-	%		1,472,059		49	%
Customer C		1,330,653		61	%		-		-	%
Customer D		840,190		39	%		-		-	%
	$	2,170,843		100	%	$	3,012,256		100	%

We did not have customers constituting 10% or more of the net revenues in the three months ended March 31, 2022. We had two customers constituting 10% or more of the net revenues in the three months ended March 31, 2021 as follows:

	2022					2021
	Amount		%			Amount		%
Customer A	$	-		-	%	$	867,850		20	%
Customer B		-		-	%		435,070		10	%
	$	-		-	%	$	1,302,920		30	%

4

Recently Issued and Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. This ASU requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. This Accounting Standards Update affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual rights to receive cash. For smaller public business entities, the amendments in this Update are effective for fiscal years beginning after January 1, 2023, including interim periods within those fiscal years. All entities may adopt the amendments in this Update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). We are currently evaluating the impact of the adoption of this pronouncement on its consolidated financial statements.

We review new accounting standards as issued. We have not identified any other new standards that we believe will have a significant impact on our financial statements.

Results of Operations

The following discussion should be read in conjunction with the condensed consolidated financial statements of Microalliance Group Inc. attached hereto for the three months ended March 31, 2022 and 2021.

Comparison of Three Months Ended March 31, 2022 and 2021

Revenue

We generated $6,598,289 in revenue for the three months ended March 31, 2022 compared to $4,411,258 for the three months ended March 31, 2022. There was an increase in total revenues of $2,187,031 or 49.6% compared with the three months ended March 31, 2021, because of acquiring 99% of the equity interests of Shenzhen Nainiang Liquor Industrial Co., Ltd., a company formed under the laws of China (“Nainiang Liquor”), on June 3, 2021, which contributed $4,771,156 to our consolidated revenue for the three months ended March 31, 2022.

Apart from the results consolidated from the acquisition of Nainiang Liquor, revenue for the three months ended March 31, 2022 decreased compared to the same business operations for the three months ended March 31, 2021. Outbreaks of additional variants of COVID-19 which are more transmissible (like the Omicron variant) or result in more severe sickness (like the Delta variant) have caused negative impacts to our business since January 2022. The Chinese government has been taking actions to contain COVID-19 such as re-imposing previously lifted measures or putting in place additional restrictions including the Shenzhen and Shanghai lockdowns to slow the spread of COVID-19. We expect our business will be gradually recovering from recent surges of COVID-19 cases beginning near the end of 2021.

Cost of Revenue

Cost of revenue was $1,830,697 for the three months ended March 31, 2022 compared to $935,165 for the three months ended March 31, 2021, an increase in cost of revenue by $895,532 or 95.8%. The cost of revenue consists of the cost of raw materials and cost of manufactured goods sold to customers, including labor cost, rental expense, research, and development costs, etc. The acquisition of Nainiang Liquor contributed $1,584,866 to our consolidated cost of revenue for the three months ended March 31, 2022.

Gross profit

Gross profit for the three months ended December 31, 2021 was $4,767,592 compared with $3,476,093 for the three months ended March 31, 2021. The gross profit margin was 72.3% for the three months ended March 31, 2022 compared to 78.8% for the three months ended March 31, 2021, which decrease was due to a lower margin for the new liquor products from the acquisition of Nainiang Liquor. The gross profit margin of Nainiang Liquor for the three months ended March 31, 2022 was 66.8%.

Operating Expenses

Selling and marketing expenses

Our selling expenses for the three months ended March 31, 2022 and 2021 were $187,614 and $36,479, respectively. The selling and marketing expenses increased by $151,135 or 414.3%. Selling expenses consist primarily of salary and welfare for sales staff, advertising expense and exhibition expense. The acquisition of Nainiang Liquor contributed $127,658 to our consolidated selling and marketing expenses for the three months ended March 31, 2022.

5

General and administrative expenses

By far the most significant component of our operating expenses for both the three months ended March 31, 2022 and 2021 was general and administrative expenses of $516,945 and $267,800, respectively. The following table sets forth the main components of our general and administrative expenses for the three months ended March 31, 2022 and 2021.

	2022					2021
	Amount (US$)		% of Total			Amount (US$)		% of Total
General and administrative expense:
Consultancy fee	$	253,108		49.0	%	$	91,730		34.3	%
Salary and welfare		100,557		19.5	%		50,484		18.9	%
Rental expenses		104,399		20.2	%		78,596		29.3	%
Research and development costs		-		0.0	%		21,996		8.2	%
Office expenses		6,468		1.3	%		8,875		3.3	%
Travel and accommodations		13,105		2.5	%		5,218		1.9	%
Entertainment		3,579		0.7	%		4,585		1.7	%
Others		35,729		6.8	%		6,316		2.4	%
Total general and administrative expenses	$	516,945		100	%	$	267,800		100	%

General and administrative expenses increased by $249,145 or 93.0% from $267,800 for the three months ended March 31, 2021 to $516,945 for the three months ended March 31, 2022. The increase was mainly due to the increase in legal and professional fees. The acquisition of Nainiang Liquor contributed $115,542 to our consolidated general and administrative expenses for the three months ended March 31, 2022. 

Net Profit

We reported a net profit of $3,021,153 for the three months ended March 31, 2021 compared to a net profit of $2,392,263 for the three months ended March 31, 2021, an increase of $628,890 or 26.3%. The increase was primarily attributable to the fact that our revenue has increased significantly, whereas the increase in administrative expenses is lower than the increase of revenue, because some expenses are fixed costs in nature. In addition, the acquisition of Nainiang Liquor contributed $2,208,275 to our consolidated net profit for the three months ended March 31, 2022.

Liquidity and Capital Resources

	March 31,			December 31,
Working capital:	2022			2021
Total current assets	$	33,083,354		$	30,383,395
Total current liabilities		(2,274,038	)		(2,731,608	)
Working capital surplus	$	30,809,316		$	27,651,787

As of March 31, 2022, we had cash and cash equivalents of $59,171. To date, we have financed our operations primarily through our working capital. The following table provides detailed information about our net cash flows for the three months ended March 31, 2022 and 2021:

Cash flows:	2022			2021
Net cash (used in) provided by operating activities	$	(1,116,663	)		36,195
Net cash used in investing activities		(15,967	)		(49,021	)
Net cash provided by financing activities		-			-
Effect of exchange rate changes on cash and cash equivalents		1,336			(92	)
Net decrease in cash and cash equivalents		(1,131,294	)		(12,918	)
Cash and cash equivalents at the beginning of year		1,190,465			61,517
Cash and cash equivalents at the end of the three-month period	$	59,171			48,599

Operating Activities

Net cash used in operating activities was $1,116,663 for the three months ended March 31, 2022. The difference between our net profit of $3,021,153 and net cash used in operating activities was mainly attributable to the depreciation of fixed assets and amortization of intangible assets of $38,306, and the decrease in other operating assets and liabilities of $4,176,122 which was generally due to the increase in purchase of inventories of $4,704,622 and the decrease in income tax payables balance of $476,884.  

6

Investing Activities

Cash used in investing activities for the three months ended March 31, 2022 was $15,967, as compared to $49,021 for the three months ended March 31, 2021. The decrease in cash used in investing activities was mainly attributable to less acquisition of equipment and intangible assets during the three months ended March 31, 2022. We will evaluate and assess the COVID-19 pandemic’s impact on our business to determine the plan for increasing our capital expenditures in the future periods.

Financing Activities

There were no cash flow movements from financing activities during the three months ended March 31, 2022 and 2021.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our senior management, including our Chief Executive and Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of March 31, 2022. Based on this evaluation, our Chief Executive and Financial Officer concluded as of March 31, 2022 that our disclosure controls and procedures were not effective such that the information relating to us required to be disclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive and Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Company’s former management abandoned all operations for several years, and only recently (in 2019) did the Company appoint new management to make filings with the SEC on behalf of the Company. Additionally, our Chief Executive and Financial Officer and the Company’s employees do not have deep experience operating companies which are required to make periodic disclosures with the SEC, which we believe negatively impacts our ability to provide timely disclosure.

As we disclosed in our most recent Annual Report on Form 10-K, during our assessment of the effectiveness of internal control over financial reporting as of December 31, 2021, management identified the following material weaknesses in our internal control over financial reporting: (1) lack of a functioning audit committee, (2) lack of a majority of outside directors on our Board, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; (4) the management of subsidiary companies who do not possess a mature understanding of U.S. GAAP or U.S. securities laws; and (5) management dominated by a small group of individuals without adequate compensating controls.

Our management has hired outside consultants experienced in US GAAP financial reporting to assist us and is committed to taking further action and implementing additional improvements.

Our management does not believe that the foregoing material weaknesses had a material effect on our financial condition or results of operations or caused our unaudited condensed consolidated financial statements as of and for the period ended March 31, 2022 to contain a material misstatement.

Changes in Internal Control over Financial Reporting

Except for the matters described above, there were no changes in our internal controls over financial reporting during the quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

7

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. We are currently not aware of any legal proceedings or claims that would require disclosure under Item 103 of Regulation S-K. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

ITEM 1A. RISK FACTORS.

There are no material changes from the risk factors previously disclosed in Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Other than as previously disclosed in current reports on Form 8-K, there were no unregistered sales of equity securities or repurchase of common stock during the period covered by this report. 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

The following exhibits are filed as part of this report or incorporated by reference:

8

Exhibit No.	Description
31.1	Certifications of Principal Executive Officer and Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications of Principal Executive Officer and Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (the cover page XBRL tags are embedded within the iXBRL document).

9

SIGNATURES

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

	MICROALLIANCE GROUP INC.
	(Registrant)
Dated: May 16, 2022	By:	/s/ Hong Zhu
		Hong Zhu
		Chief Executive Officer and Chief Financial Officer

10

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Hong Zhu, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Microalliance 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. I am 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 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: May 16, 2022

/s/ Hong Zhu

Hong Zhu

Chief Executive Officer and Chief Financial Officer

(Principal Executive Officer and Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Hong Zhu, the Chief Executive and Financial Officer of MICROALLIANCE GROUP INC. (the “Company”), DOES HEREBY CERTIFY that:

1. The Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2022 (the “Report”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

2. Information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

IN WITNESS WHEREOF, the undersigned has executed this statement this 16^th day of May, 2022.

/s/ Hong Zhu

Hong Zhu

Chief Executive Officer and Chief Financial Officer

(Principal Executive Officer and Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to Microalliance Group Inc. and will be retained by Microalliance Group Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The forgoing certification is being furnished to the Securities and Exchange Commission pursuant to § 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2022	May 16, 2022
Document Information Line Items
Entity Registrant Name	Microalliance Group Inc.
Trading Symbol	N/A
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		609,316,077
Amendment Flag	false
Entity Central Index Key	0001309251
Entity Current Reporting Status	No
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Mar. 31, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	333-123774
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	86-1098668
Entity Address, Address Line One	Room 601, Bldg. E
Entity Address, Address Line Two	No. 1, Huabao Fubao China Street
Entity Address, Address Line Three	Futian District
Entity Address, City or Town	Shenzhen City
Entity Address, Country	BB
Entity Address, Postal Zip Code	518000
City Area Code	+86
Local Phone Number	185 6676 1769
Title of 12(b) Security	None
Security Exchange Name	NONE
Entity Interactive Data Current	Yes

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Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 59,171	$ 1,190,465
Accounts receivable	2,170,843	3,012,256
Other receivables	261,141	227,359
Inventories	18,908,148	14,166,929
Prepayment	596	28,370
Advance to suppliers	11,650,978	11,676,326
Amount due from related parties	32,477	81,690
Total current assets	33,083,354	30,383,395
Non-current assets:
Leasehold improvements and equipment, net	406,267	429,500
Intangible assets	97,488	95,461
Operating lease right-of-use assets	29,687	83,957
Total non-current assets	533,442	608,918
Total assets	33,616,796	30,992,313
Current liabilities:
Accounts payable	459,603	29,048
Income tax payables	860,195	1,334,679
Other payables and accruals	340,798	481,258
Advance from customers	553,440	737,515
Amount due to related parties	40,184	79,849
Current operating lease liabilities	19,818	69,259
Total current liabilities	2,274,038	2,731,608
Non-current liabilities:
Non-current operating lease liabilities	9,869	14,698
Total non-current liabilities	9,869	14,698
Total liabilities	2,283,907	2,746,306
COMMITMENTS AND CONTINGENCIES
EQUITY (DEFICIT)
Share capital (750,000,000 shares of Common Stock, par value $0.00001 per share, authorized, of which 609,316,077 shares are issued and outstanding; and 100,000,000 shares of Series A Preferred Stock, par value $0.00001 per share, of which all 100,000,000 shares are issued and outstanding)
Series A Preferred Stock	1,000	1,000
Common Stock	6,093	6,093
Additional paid in capital	10,215,427	10,215,427
Foreign currency translation reserves	291,237	225,508
Statutory reserves	3,041,397	3,041,397
Retained earnings	17,777,735	14,756,582
Total equity	31,332,889	28,246,007
Total liabilities and equity	$ 33,616,796	$ 30,992,313

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Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Common stock, shares authorized	750,000,000	750,000,000
Common stock, par value (in Dollars per share)	$ 0.00001	$ 0.00001
Common stock, shares issued	609,316,077	609,316,077
Common stock, shares outstanding	609,316,077	609,316,077
Series A Preferred Stock
Series A preferred stock, shares authorized	100,000,000	100,000,000
Series A preferred stock, par value (in Dollars per share)	$ 0.00001	$ 0.00001
Series A preferred stock, shares issued	100,000,000	100,000,000
Series A preferred stock, shares outstanding	100,000,000	100,000,000

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Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Statement [Abstract]
Revenue	$ 6,598,289	$ 4,411,258
Cost of revenue	(1,830,697)	(935,165)
Gross profit	4,767,592	3,476,093
Selling and marketing expenses	(187,614)	(36,479)
General and administrative expense	(516,945)	(267,800)
Total operating expenses	(704,559)	(304,279)
Operating profit	4,063,033	3,171,814
Other (expenses) income, net	(6,777)	(179)
Profit before income taxes	4,056,256	3,171,635
Income taxes	(1,035,103)	(779,372)
Net profit for the year	3,021,153	2,392,263
Foreign currency translation differences	65,729	(21,529)
Total comprehensive income for the year	$ 3,086,882	$ 2,370,734
Earnings per share:
- Basic (in Dollars per share)	$ 0.005	$ 0.004
- Diluted (in Dollars per share)	$ 0.005	$ 0.004
Weighted average number of shares used in computation:
- Basic (in Shares)	609,316,077	600,034,500
- Diluted (in Shares)	609,316,077	600,034,500

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Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($)	Series A preferred Stock	Common Stock	Additional paid in Capital	Foreign Currency Translation Reserve	(Accumulated Deficit) Unrestricted	(Accumulated Deficit) Statutory Reserves	Total
Balance at Dec. 31, 2020	$ 1,000	$ 6,000	$ (15,146)	$ (54,091)	$ (980,262)	$ 6,894	$ (1,035,605)
Income (loss) for the year					2,392,263		2,392,263
Other comprehensive income				(21,529)			(21,529)
Balance at Mar. 31, 2021	1,000	6,000	(15,146)	(75,620)	1,412,001	6,894	1,335,129
Balance at Dec. 31, 2021	1,000	6,093	10,215,427	225,508	14,756,582	3,041,397	28,246,007
Income (loss) for the year					3,021,153		3,021,153
Other comprehensive income				65,729			65,729
Balance at Mar. 31, 2022	$ 1,000	$ 6,093	$ 10,215,427	$ 291,237	$ 17,777,735	$ 3,041,397	$ 31,332,889

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net profit	$ 3,021,153	$ 2,392,263
Adjustments for:
Depreciation and amortization	38,306	14,266
Changes in:
Accounts receivable	847,091	(3,546,989)
Other receivables and prepayment	(5,437)	(10,359)
Advance to suppliers	51,038
Inventories	(4,704,622)	(1,855)
Accounts payable, other payables and accruals	288,641	941,940
Income tax payables	(476,884)	774,671
Advance from customers	(185,490)	(18,777)
Amount due from/to related parties	9,541	(508,965)
Net cash (used in) provided by operating activities	(1,116,663)	36,195
Cash flows from investing activities:
Additions to leasehold improvements and equipment	(12,549)	(15,424)
Additions to intangible assets	(3,418)	(33,597)
Net cash used in investing activities	(15,967)	(49,021)
Effect of exchange rate changes on cash and cash equivalents	1,336	(92)
Net decrease in cash and cash equivalents	(1,131,294)	(12,918)
Cash and cash equivalents at the beginning of year	1,190,465	61,517
Cash and cash equivalents at the end of the year	59,171	48,599
Supplemental disclosure of non-cash investing and financing activities:
Right-of-use assets obtained in exchange for operating lease obligations	$ 23,180	$ 301,093

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Description of Business

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

DESCRIPTION OF BUSINESS

1. DESCRIPTION OF BUSINESS

Microalliance Group Inc. and its subsidiaries (the “Company” or “FHAI”) are engaged in the business of wholesale distribution of “coffee tea” and “spirit” products to retail partners and corporate customers, selling “coffee tea” and “spirit” products to individual consumers and providing pre-opening assistance to retail partners to operate coffee stores in the People’s Public of China (“PRC” or “China”).

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Basis of Presentation

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

BASIS OF PRESENTATION

2. BASIS OF PRESENTATION

In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. All significant intercompany transactions and balances are eliminated in consolidation. However, the results of operations included in such financial statements may not necessarily be indicative of annual results.

The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (“SEC”) on March 31, 2022 (“2021 Form 10-K”).

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Use of estimates

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

There is no change on the accounting policies from the year ended December 31, 2021.

(b) Revenue Recognition

The Company’s revenues primarily include Company sales, franchise fees and income and revenues from transactions with franchisees.

Product sales

Product sales represents the sale of “coffee tea” and “spirit” products. Such revenue is recognized net of value-added taxes, upon delivery at such time that title passes to the customers.

Franchise fees and income

Franchise fees and income primarily include upfront franchise fees, such as initial fees, pre-opening assistance to operate spirit stores, subsequent training provided to franchisees and renewal fees. The Company has determined that the services provided in exchange for upfront franchise fees are highly interrelated with the franchise rights. The franchise rights are accounted for as rights to access the Company’s symbolic intellectual property in accordance with ASC 606, and the Company recognizes upfront franchise fees received from a franchisee as revenue when performance obligations are satisfied in accordance with the franchise agreement or the renewal agreement. The franchise agreement term is typically 3 years.

Revenues from transactions with franchisees

Revenues from transactions with franchisees consist primarily of sales of spirit products. The Company sells and delivers spirit products to the franchisees. The performance obligations arising from such transactions are considered distinct from the franchise agreement as they are not highly dependent on the franchise agreement and the customer can benefit from the procurement service on its own. Revenue is recognized upon transfer of control over ordered items, generally upon delivery to the franchisees.

In determining the amount and timing of revenue from contracts with customers, the Company exercises significant judgment with respect to collectability of the amount; however, the timing of recognition does not require significant judgment, as it is based on either the franchise term or the date of product shipment, none of which require estimation.

The Company does not incur a significant amount of contract acquisition costs in conducting its franchising activities. The Company believes its franchising arrangements do not contain a significant financing component.

The Company’s revenue recognition policy is compliant with ASC 606, Revenue from Contracts with Customers, and revenue is recognized when a customer obtains control of promised goods and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount:

(i) identification of the goods and services in the contract;

(ii) determination of whether the goods and services are performance obligations, including whether they are distinct in the context of the contract;

(iii) measurement of the transaction price, including the constraint on variable consideration;

(iv) allocation of the transaction price to the performance obligations; and

(v) recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery or service being rendered.

For all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adopted rules.

(c) Accounts Receivable

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

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

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

The following customers had an accounts receivable balance greater than 10% of total accounts receivable at March 31, 2022.

	March 31, 2022					December 31, 2021
	Amount		%			Amount		%
Customer A	$	-		-	%	$	1,540,197		51	%
Customer B		-		-	%		1,472,059		49	%
Customer C		1,330,653		61	%		-		-	%
Customer D		840,190		39	%		-		-	%
	$	2,170,843		100	%	$	3,012,256		100	%

(c) Recently issued accounting pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. This ASU requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. This Accounting Standards Update affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual rights to receive cash. For smaller public business entities, the amendments in this Update are effective for fiscal years beginning after January 1, 2023, including interim periods within those fiscal years. All entities may adopt the amendments in this Update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). The Company is in the process of evaluating the impact of the adoption of this pronouncement on its consolidated financial statements.

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

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Risks and Uncertainties

3 Months Ended

Mar. 31, 2022

Risks and Uncertainties [Abstract]

RISKS AND UNCERTAINTIES

4. RISKS AND UNCERTAINTIES

(a) Economic and Political Risks

The Company’s operations are conducted 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 economy.

The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.

(b) Foreign Currency Translation

The Company’s reporting currency is the U.S. dollar. The functional currency of the parent company is the U.S. dollar and the functional currency of the Company’s operating subsidiaries is the Chinese Renminbi (“RMB”). For the subsidiaries whose functional currencies are the RMB, all assets and liabilities are translated at exchange rates at the balance sheet date and revenue and expenses are translated at the average yearly exchange rates and equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustments to other comprehensive loss, a component of equity.

(c) Concentration of credit risk

Financial instruments that potentially expose the Company to significant concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable, other receivables and advance to suppliers. As of March 31, 2022 and December 31, 2021, substantially all of the Company’s cash and cash equivalents were deposited with financial institutions with high-credit ratings and quality. The Company did not have any customers constituting 10% or more of the net revenue in the three months ended March 31, 2022. The Company had two customers constituting 10% or more of the net revenues in the three months ended March 31, 2021 as follows:

	2022					2021
	Amount		%			Amount		%
Customer A	$	-		-	%	$	867,850		20	%
Customer B		-		-	%		435,070		10	%
	$	-		-	%	$	1,302,920		30	%

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Revenue

3 Months Ended

Mar. 31, 2022

Revenue [Abstract]

REVENUE

5. REVENUE

	For the three months ended March 31,
Revenue	2022		2021
Product sales	$	2,432,537	$	4,363,917
Franchise fees and income		458,626		47,341
Revenues from transactions with franchisees		3,707,126		-
	$	6,598,289	$	4,411,258

Contract liabilities	As of March 31, 2022		As of December 31, 2021
Deferred revenue related to prepaid coffee and liquor products	$	4,013	$	20,881
Deferred revenue related to upfront franchise fees		549,427		716,634
	$	553,440	$	737,515

Contract liabilities primarily consist of deferred revenue related to prepaid coffee and spirit products and upfront franchise fees. Deferred revenue related to prepaid spirit products represents advance from franchisees for future supply of products which is expected to recognize as revenue in the next 12 months. Deferred revenue related to upfront franchise fees represents the training service to be delivered over the term of franchise agreement that as of December 31, 2021, the Company expects to recognize as revenue of $221,085 within the next 12 months.

The Company has elected, as a practical expedient, not to disclose the value of remaining performance obligations associated with the franchise agreement in exchange for franchise right and related training services. The remaining duration of the performance obligation is the remaining contractual term of each franchise agreement. Revenue from training services provided to franchisees is recognized upon the conduct and delivery of training.

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Other Receivables

3 Months Ended

Mar. 31, 2022

Other Receivables [Abstract]

OTHER RECEIVABLES

6. OTHER RECEIVABLES

As of March 31, 2022 and December 31, 2021, other receivables mainly consist of employees advance to be spent for company purposes and refundable rental deposits. The balances are unsecured, non-interest bearing and repayable on demand.

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Inventories

3 Months Ended

Mar. 31, 2022

Inventory Disclosure [Abstract]

INVENTORIES

7. INVENTORY

	March 31,		December 31,
	2022		2021
Raw materials (1)	$	18,200,736	$	14,000,162
Finished goods		652,795		61,684
Goods in transit		54,617		105,083
	$	18,908,148	$	14,166,929

(1) Raw materials mainly consist of unprocessed coffee tea beans, puree spirit and packaging materials

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Advance to Suppliers

3 Months Ended

Mar. 31, 2022

Advance To Suppliers [Abstract]

ADVANCE TO SUPPLIERS

8. ADVANCE TO SUPPLIERS

The suppliers require the Company to pay in advance for the purchase of liquor products. Such advance is appropriated against future purchase orders. These advances are interest free, unsecured and short-term in nature.

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Leasehold Improvement and Equipment, Net

3 Months Ended

Mar. 31, 2022

Leasehold Improvement and Equipment, Net [Abstract]

LEASEHOLD IMPROVEMENT AND EQUIPMENT, NET

9. LEASEHOLD IMPROVEMENT AND EQUIPMENT, NET

	March 31,			December 31,
	2022			2021
Leasehold improvement	$	66,089		$	65,944
Equipment		32,611			21,079
Machinery		34,162			34,087
Computer equipment and software		47,888			46,228
Motor vehicle		492,705			469,114
	$	673,455		$	636,452
Less: accumulated depreciation		(267,188	)		(206,952	)
	$	406,267		$	429,500

Depreciation expense for the three months ended March 31, 2022 and 2021 was $36,703 and $13,986 respectively.

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Intangible Assets

3 Months Ended

Mar. 31, 2022

Intangible Assets [Abstract]

INTANGIBLE ASSETS

10. INTANGIBLE ASSETS

	March 31,			December 31,
	2022			2021
APP Platform	$	110,391		$	110,148
Trademarks		3,422			-
Less: accumulated amortization		(16,325	)		(14,687	)
	$	97,488		$	95,461

Amortization expense for the three months ended March 31, 2022 and 2021 was $1,603 and $280, respectively.

As of March 31, 2022 and December 31, 2021, cost of intangible assets included an APP platform amounting to approximately $16,000 (RMB100,000) acquired by the Company during the year which was in the testing phase, no amortization was recorded until that platform was fully operational in 2022.

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Other Payables and Accruals

3 Months Ended

Mar. 31, 2022

Other Payables and Accruals [Abstract]

OTHER PAYABLES AND ACCRUALS

11. OTHER PAYABLES AND ACCRUALS

	March 31,		December 31,
	2022		2021
Accrued payroll and welfare payable	$	71,423	$	178,706
VAT and other taxes payable		241,121		192,563
Others (1)		28,254		109,989
	$	340,798	$	481,258

(1) As of March 31, 2022 and December 31, 2021, others mainly consist of the outstanding refundable balance upon termination of the cooperative agreement with one customer and payables for rental expenses.

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Advance from Customers

3 Months Ended

Mar. 31, 2022

Advance from Customers [Abstract]

ADVANCE FROM CUSTOMERS

12. ADVANCE FROM CUSTOMERS

The Company requires retail partners to sign cooperative agreement and to pay in advance for the supply of goods. Such advance is appropriated against future sales orders. These advances are interest free, unsecured and short-term in nature.

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Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

13. INCOME TAXES

FHAI was incorporated in the State of Nevada. FHAI is an U.S. entity and is subject to the United States federal income tax. No provision for income taxes in the United States has been made as FHAI had no United States taxable income for the years ended December 31, 2021 and 2020.

WLJM Cayman was incorporated in Cayman Islands. Under the current tax laws of Cayman Islands, WLJM Cayman is not subject to tax on their income or capital gains. In addition, upon of dividends by WLJM Cayman to its shareholders, no Cayman Islands withholding tax will be imposed.

WLJM HK was incorporated in Hong Kong and is subject to an income tax rate of 16.5% for taxable income generated from operations in Hong Kong.

JYWM WFOE, Shenzhen Wei Lian, Dongguan Dishi, Shenzhen Nainiang and Nainiang Liquor were incorporated in the PRC and they are subject to profits tax rate at 25% for income generated and operation in the country.

The full realization of the tax benefit associated with the losses carried forward depends predominantly upon the Company’s ability to generate taxable income during the carry forward period.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.

The Company did not record deferred tax assets as of March 31, 2022 and December 31, 2021.

A reconciliation of tax expense from 25% statutory tax rates for the three months ended March 31, 2022 and 2021 is as follows:

	For the three months ended March 31,
	2022			2021
Profit before tax	$	4,056,256		$	3,171,635
Tax benefit calculated at statutory tax rate		25	%		25	%
Computed expected tax expense		1,014,064			792,909
Others		21,039			(13,537	)
	$	1,035,103		$	779,372

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Leases

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

LEASES

14. LEASES

The Company has leases for the office, factory and warehouse in the PRC, under operating leases expiring on various dates through September 2023, which is classified as operating leases. There are no residual value guarantees and no restrictions or covenants imposed by the leases. Lease liabilities are measured at present value of the sum of remaining rental payments as of March 31, 2022, with discounted rate of 4.75%. A single lease cost is recognized over the lease term on a generally straight-line basis. All cash payments of operating lease cost are classified within operating activities in the statement of cash flows. Rent expense for the three months ended March 31, 2022 and 2021 were $70,267 and $78,596, respectively.

Upon expiration of the terms of leases, the Company has not entered into new lease agreements or extended the existing lease agreements as of March 31, 2022 and December 31, 2021.

The Company’s future minimum payments under long-term non-cancelable operating leases are as follows:

	March 31, 2022
Within 1 year	$	25,634
After 1 year but within 5 years		11,290
Total lease payments	$	36,924
Less: imputed interest		(7,237	)
Total lease obligations		29,687
Less: current obligations		(19,818	)
Long-term lease obligations	$	9,869

Other information:

	For the three months ended March 31,
	2022			2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flow from operating leases	$	70,267		$	78,596
Right-of-use assets obtained in exchange for operating lease liabilities		23,180			301,093
Remaining lease term for operating leases (years)		1.5			2.5
Weighted average discount rate for operating leases		4.75	%		4.75	%

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Related Parties Transactions

3 Months Ended

Mar. 31, 2022

Related Party Transactions [Abstract]

RELATED PARTIES TRANSACTIONS

15. RELATED PARTIES TRANSACTIONS

The Company had the following balances with related parties:

(a) Amount due from related parties

		March 31,		December 31,
	Relationship	2022		2021
Shenzhen Weilian Jin Meng Culture Spreading Limited	Zhu Hong is the shareholder	$	32,477	$	81,690
Total		$	32,477	$	81,690

The balances represent cash advance to a related party. The balances are unsecured, non-interest bearing and repayable on demand.

(b) Amount due to related parties

		March 31,		December 31,
	Relationship	2022		2021
Zhu Hong	Majority shareholder of the Company	$	40,184	$	79,849
Total		$	40,184	$	79,849

The balances represent Company’s expenses paid on behalf by a related party. The balances are unsecured, non-interest bearing and repayable on demand.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

16. COMMITMENTS AND CONTINGENCIES

Commitments consist of a non-cancelable consultancy service agreement entered into with a third-party for the provision of services related to the US listing with a contract sum of $1,200,000. The outstanding committed contract amount is $120,000. The terms of the agreement are for various milestones stages to be completed within two years through 2021 which has extended to 2022. Future commitments within one year as of December 31, 2021 was $120,000. No future commitments more than one year as of March 31, 2022.

Except the above commitments and the operating lease commitment as disclosed at Note 14, there are no material commitments.

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Subsequent Events

3 Months Ended

Mar. 31, 2022

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

17. SUBSEQUENT EVENTS

There are no subsequent events have occurred that would require recognition or disclosure in the financial statements.

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Accounting Policies, by Policy (Policies)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Use of estimates

(a) Use of estimates

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

There is no change on the accounting policies from the year ended December 31, 2021.

Revenue Recognition

(b) Revenue Recognition

The Company’s revenues primarily include Company sales, franchise fees and income and revenues from transactions with franchisees.

Product sales

Product sales represents the sale of “coffee tea” and “spirit” products. Such revenue is recognized net of value-added taxes, upon delivery at such time that title passes to the customers.

Franchise fees and income

Franchise fees and income primarily include upfront franchise fees, such as initial fees, pre-opening assistance to operate spirit stores, subsequent training provided to franchisees and renewal fees. The Company has determined that the services provided in exchange for upfront franchise fees are highly interrelated with the franchise rights. The franchise rights are accounted for as rights to access the Company’s symbolic intellectual property in accordance with ASC 606, and the Company recognizes upfront franchise fees received from a franchisee as revenue when performance obligations are satisfied in accordance with the franchise agreement or the renewal agreement. The franchise agreement term is typically 3 years.

Revenues from transactions with franchisees

Revenues from transactions with franchisees consist primarily of sales of spirit products. The Company sells and delivers spirit products to the franchisees. The performance obligations arising from such transactions are considered distinct from the franchise agreement as they are not highly dependent on the franchise agreement and the customer can benefit from the procurement service on its own. Revenue is recognized upon transfer of control over ordered items, generally upon delivery to the franchisees.

In determining the amount and timing of revenue from contracts with customers, the Company exercises significant judgment with respect to collectability of the amount; however, the timing of recognition does not require significant judgment, as it is based on either the franchise term or the date of product shipment, none of which require estimation.

The Company does not incur a significant amount of contract acquisition costs in conducting its franchising activities. The Company believes its franchising arrangements do not contain a significant financing component.

The Company’s revenue recognition policy is compliant with ASC 606, Revenue from Contracts with Customers, and revenue is recognized when a customer obtains control of promised goods and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount:

(i) identification of the goods and services in the contract;

(ii) determination of whether the goods and services are performance obligations, including whether they are distinct in the context of the contract;

(iii) measurement of the transaction price, including the constraint on variable consideration;

(iv) allocation of the transaction price to the performance obligations; and

(v) recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery or service being rendered.

For all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adopted rules.

Accounts Receivable

(c) Accounts Receivable

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

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

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

The following customers had an accounts receivable balance greater than 10% of total accounts receivable at March 31, 2022.

	March 31, 2022					December 31, 2021
	Amount		%			Amount		%
Customer A	$	-		-	%	$	1,540,197		51	%
Customer B		-		-	%		1,472,059		49	%
Customer C		1,330,653		61	%		-		-	%
Customer D		840,190		39	%		-		-	%
	$	2,170,843		100	%	$	3,012,256		100	%

Recently issued accounting pronouncements

(c) Recently issued accounting pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. This ASU requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. This Accounting Standards Update affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual rights to receive cash. For smaller public business entities, the amendments in this Update are effective for fiscal years beginning after January 1, 2023, including interim periods within those fiscal years. All entities may adopt the amendments in this Update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). The Company is in the process of evaluating the impact of the adoption of this pronouncement on its consolidated financial statements.

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

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Schedule of accounts receivable

	March 31, 2022					December 31, 2021
	Amount		%			Amount		%
Customer A	$	-		-	%	$	1,540,197		51	%
Customer B		-		-	%		1,472,059		49	%
Customer C		1,330,653		61	%		-		-	%
Customer D		840,190		39	%		-		-	%
	$	2,170,843		100	%	$	3,012,256		100	%

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Risks and Uncertainties (Tables)

3 Months Ended

Mar. 31, 2022

Risks and Uncertainties [Abstract]

Schedule of concentration of credit risk

	2022					2021
	Amount		%			Amount		%
Customer A	$	-		-	%	$	867,850		20	%
Customer B		-		-	%		435,070		10	%
	$	-		-	%	$	1,302,920		30	%

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Revenue (Tables)

3 Months Ended

Mar. 31, 2022

Revenue [Abstract]

Schedule of revenue

	For the three months ended March 31,
Revenue	2022		2021
Product sales	$	2,432,537	$	4,363,917
Franchise fees and income		458,626		47,341
Revenues from transactions with franchisees		3,707,126		-
	$	6,598,289	$	4,411,258

Schedule of contract liabilities

Contract liabilities	As of March 31, 2022		As of December 31, 2021
Deferred revenue related to prepaid coffee and liquor products	$	4,013	$	20,881
Deferred revenue related to upfront franchise fees		549,427		716,634
	$	553,440	$	737,515

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Inventories (Tables)

3 Months Ended

Mar. 31, 2022

Inventory Disclosure [Abstract]

Schedule of inventories

	March 31,		December 31,
	2022		2021
Raw materials (1)	$	18,200,736	$	14,000,162
Finished goods		652,795		61,684
Goods in transit		54,617		105,083
	$	18,908,148	$	14,166,929

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Leasehold Improvement and Equipment, Net (Tables)

3 Months Ended

Mar. 31, 2022

Leasehold Improvement and Equipment, Net [Abstract]

Schedule of leasehold improvement and equipment, net

	March 31,			December 31,
	2022			2021
Leasehold improvement	$	66,089		$	65,944
Equipment		32,611			21,079
Machinery		34,162			34,087
Computer equipment and software		47,888			46,228
Motor vehicle		492,705			469,114
	$	673,455		$	636,452
Less: accumulated depreciation		(267,188	)		(206,952	)
	$	406,267		$	429,500

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Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2022

Intangible Assets [Abstract]

Schedule of intangible assets

	March 31,			December 31,
	2022			2021
APP Platform	$	110,391		$	110,148
Trademarks		3,422			-
Less: accumulated amortization		(16,325	)		(14,687	)
	$	97,488		$	95,461

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Other Payables and Accruals (Tables)

3 Months Ended

Mar. 31, 2022

Other Payables and Accruals [Abstract]

Schedule of other payables and accruals

	March 31,		December 31,
	2022		2021
Accrued payroll and welfare payable	$	71,423	$	178,706
VAT and other taxes payable		241,121		192,563
Others (1)		28,254		109,989
	$	340,798	$	481,258

(1) As of March 31, 2022 and December 31, 2021, others mainly consist of the outstanding refundable balance upon termination of the cooperative agreement with one customer and payables for rental expenses.

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of statutory tax rates

	For the three months ended March 31,
	2022			2021
Profit before tax	$	4,056,256		$	3,171,635
Tax benefit calculated at statutory tax rate		25	%		25	%
Computed expected tax expense		1,014,064			792,909
Others		21,039			(13,537	)
	$	1,035,103		$	779,372

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Leases (Tables)

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Schedule of future minimum payments under long-term non-cancelable operating leases

	March 31, 2022
Within 1 year	$	25,634
After 1 year but within 5 years		11,290
Total lease payments	$	36,924
Less: imputed interest		(7,237	)
Total lease obligations		29,687
Less: current obligations		(19,818	)
Long-term lease obligations	$	9,869

Schedule of other information

	For the three months ended March 31,
	2022			2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flow from operating leases	$	70,267		$	78,596
Right-of-use assets obtained in exchange for operating lease liabilities		23,180			301,093
Remaining lease term for operating leases (years)		1.5			2.5
Weighted average discount rate for operating leases		4.75	%		4.75	%

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Related Parties Transactions (Tables)

3 Months Ended

Mar. 31, 2022

Related Party Transactions [Abstract]

Schedule of amount due from related parties

		March 31,		December 31,
	Relationship	2022		2021
Shenzhen Weilian Jin Meng Culture Spreading Limited	Zhu Hong is the shareholder	$	32,477	$	81,690
Total		$	32,477	$	81,690

Schedule of amount due to related parties

		March 31,		December 31,
	Relationship	2022		2021
Zhu Hong	Majority shareholder of the Company	$	40,184	$	79,849
Total		$	40,184	$	79,849

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Description of Business (Details)	Mar. 31, 2022
Accounting Policies [Abstract]
Capital stock transaction description	Inc. and its subsidiaries (the “Company” or “FHAI”) are engaged in the business of wholesale distribution of “coffee tea” and “spirit” products to retail partners and corporate customers, selling “coffee tea” and “spirit” products to individual consumers and providing pre-opening assistance to retail partners to operate coffee stores in the People’s Public of China (“PRC” or “China”).

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Summary of Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2022
Accounting Policies [Abstract]
Agreement term	3 years
Percentage of accounts receivable	10.00%

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Summary of Significant Accounting Policies (Details) - Schedule of accounts receivable - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, amount	$ 2,170,843	$ 3,012,256
Accounts receivable, percentage	100.00%	100.00%
Customer A [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, amount		$ 1,540,197
Accounts receivable, percentage		51.00%
Customer B [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, amount		$ 1,472,059
Accounts receivable, percentage		49.00%
Customer C [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, amount	$ 1,330,653
Accounts receivable, percentage	61.00%
Customer D [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, amount	$ 840,190
Accounts receivable, percentage	39.00%

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Risks and Uncertainties (Details)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Risks and Uncertainties [Abstract]
Percentage of net revenues	10.00%	10.00%

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Risks and Uncertainties (Details) - Schedule of concentration of credit risk - USD ($)	Mar. 31, 2022	Mar. 31, 2021
Revenue, Major Customer [Line Items]
Net revenue, amount		$ 1,302,920
Net revenue, percentage		30.00%
Customer A [Member]
Revenue, Major Customer [Line Items]
Net revenue, amount		$ 867,850
Net revenue, percentage		20.00%
Customer B [Member]
Revenue, Major Customer [Line Items]
Net revenue, amount		$ 435,070
Net revenue, percentage		10.00%

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Revenue (Details)	3 Months Ended
	Mar. 31, 2022 USD ($)
Revenue [Abstract]
Expected recognize revenue term	12 months
Expect to recognize revenue amount	$ 221,085

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Revenue (Details) - Schedule of revenue - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Schedule of revenue [Abstract]
Product sales	$ 2,432,537	$ 4,363,917
Franchise fees and income	458,626	47,341
Revenues from transactions with franchisees	3,707,126
Revenue	$ 6,598,289	$ 4,411,258

XML

Revenue (Details) - Schedule of contract liabilities - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Schedule of contract liabilities [Abstract]
Deferred revenue related to prepaid coffee and liquor products	$ 4,013	$ 20,881
Deferred revenue related to upfront franchise fees	549,427	716,634
Contract liabilities	$ 553,440	$ 737,515

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Inventories (Details) - Schedule of inventories - USD ($)		Mar. 31, 2022	Dec. 31, 2021
Schedule of inventories [Abstract]
Raw materials	[1]	$ 18,200,736	$ 14,000,162
Finished goods		652,795	61,684
Goods in transit		54,617	105,083
Inventory, total		$ 18,908,148	$ 14,166,929

[1] Raw materials mainly consist of unprocessed coffee tea beans, puree spirit and packaging materials

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Leasehold Improvement and Equipment, Net (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Leasehold Improvement and Equipment, Net [Abstract]
Depreciation expense	$ 36,703	$ 13,986

XML

Leasehold Improvement and Equipment, Net (Details) - Schedule of leasehold improvement and equipment, net - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Leasehold improvement and equipment, gross	$ 673,455	$ 636,452
Less: accumulated depreciation	(267,188)	(206,952)
Leasehold improvement and equipment, net	406,267	429,500
Leasehold improvement [Member]
Property, Plant and Equipment [Line Items]
Leasehold improvement and equipment, gross	66,089	65,944
Equipment [Member]
Property, Plant and Equipment [Line Items]
Leasehold improvement and equipment, gross	32,611	21,079
Machinery [Member]
Property, Plant and Equipment [Line Items]
Leasehold improvement and equipment, gross	34,162	34,087
Computer equipment and software [Member]
Property, Plant and Equipment [Line Items]
Leasehold improvement and equipment, gross	47,888	46,228
Motor vehicles [Member]
Property, Plant and Equipment [Line Items]
Leasehold improvement and equipment, gross	$ 492,705	$ 469,114

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Intangible Assets (Details)	3 Months Ended
	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2022 CNY (¥)
Intangible Assets [Abstract]
Amortization expense	$ 1,603	$ 280
Cost of intangible assets	$ 16,000		¥ 100,000

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Intangible Assets (Details) - Schedule of intangible assets - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Schedule of intangible assets [Abstract]
APP Platform	$ 110,391	$ 110,148
Trademarks	3,422
Less: accumulated amortization	(16,325)	(14,687)
Intangible assets, net	$ 97,488	$ 95,461

XML

Other Payables and Accruals (Details)	Mar. 31, 2022	Dec. 31, 2021
Other Payables and Accruals [Abstract]
Number of customers	1	1

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Other Payables and Accruals (Details) - Schedule of other payables and accruals - USD ($)		Mar. 31, 2022	Dec. 31, 2021
Schedule of other payables and accruals [Abstract]
Accrued payroll and welfare payable		$ 71,423	$ 178,706
VAT and other taxes payable		241,121	192,563
Others	[1]	28,254	109,989
Other payables and accruals		$ 340,798	$ 481,258

[1] As of March 31, 2022 and December 31, 2021, others mainly consist of the outstanding refundable balance upon termination of the cooperative agreement with one customer and payables for rental expenses.

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Income Taxes (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Income Taxes (Details) [Line Items]
Statutory tax rates	25.00%	25.00%
Hong Kong [Member]
Income Taxes (Details) [Line Items]
Income tax rate	16.50%
PRC [Member]
Income Taxes (Details) [Line Items]
Subject to profits tax rate	25.00%

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Income Taxes (Details) - Schedule of statutory tax rates - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Schedule of statutory tax rates [Abstract]
Profit before tax	$ 4,056,256	$ 3,171,635
Tax benefit calculated at statutory tax rate	25.00%	25.00%
Computed expected tax expense	$ 1,014,064	$ 792,909
Others	21,039	(13,537)
Income tax	$ 1,035,103	$ 779,372

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Leases (Details) - USD ($)	Mar. 31, 2022	Mar. 31, 2021
Leases [Abstract]
Lease discounted rate	4.75%
Rent expenses	$ 70,267	$ 78,596

XML

Leases (Details) - Schedule of future minimum payments under long-term non-cancelable operating leases	Mar. 31, 2022 USD ($)
Schedule of future minimum payments under long-term non-cancelable operating leases [Abstract]
Within 1 year	$ 25,634
After 1 year but within 5 years	11,290
Total lease payments	36,924
Less: imputed interest	(7,237)
Total lease obligations	29,687
Less: current obligations	(19,818)
Long-term lease obligations	$ 9,869

XML

Leases (Details) - Schedule of other information - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flow from operating leases	$ 70,267	$ 78,596
Right-of-use assets obtained in exchange for operating lease liabilities	$ 23,180	$ 301,093
Remaining lease term for operating leases (years)	1 year 6 months	2 years 6 months
Weighted average discount rate for operating leases	4.75%	4.75%

XML

Related Parties Transactions (Details) - Schedule of amount due from related parties - USD ($)	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Related Parties Transactions (Details) - Schedule of amount due from related parties [Line Items]
Due to related parties	$ 32,477
Total		$ 81,690
Shenzhen Weilian Jin Meng Culture Spreading Limited [Member]
Related Parties Transactions (Details) - Schedule of amount due from related parties [Line Items]
Relationship, description	Zhu Hong is the shareholder
Due to related parties	$ 32,477
Total		$ 81,690

XML

Related Parties Transactions (Details) - Schedule of amount due to related parties - USD ($)	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Related Parties Transactions (Details) - Schedule of amount due to related parties [Line Items]
Total	$ 40,184	$ 79,849
Zhu Hong [Member]
Related Parties Transactions (Details) - Schedule of amount due to related parties [Line Items]
Relationship, decription	Majority shareholder of the Company
Total	$ 40,184	$ 79,849

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Commitments and Contingencies (Details)	3 Months Ended
	Mar. 31, 2022 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Commitments contract amount	$ 1,200,000
Outstanding contract amount	$ 120,000
Milestones stages, description	The terms of the agreement are for various milestones stages to be completed within two years through 2021 which has extended to 2022. Future commitments within one year as of December 31, 2021 was $120,000. No future commitments more than one year as of March 31, 2022.