10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended June 30, 2019

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

Commission file number 0-17284

AIXIN LIFE INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Colorado	84-1085935
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

Hongxing International Business Building 2, 14^th FL, No. 69 Qingyun South Ave., Jinjiang District

Chengdu City, Sichuan Province, China

(Address of principal executive offices)

86-313-6732526

(Issuer’s telephone number)

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 [X] 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [  ] No [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer	[  ]	Accelerated filer	[  ]
Non-accelerated filer	[  ]	Smaller reporting company	[X]
		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 7(a)(2)(B) [  ]

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date: As of September 19, 2019, there were outstanding 297,838,699 shares of the registrant’s common stock.

AIXIN LIFE INTERNATIONAL, INC.

FORM 10-Q

JUNE 30, 2019

INDEX

		Page
Special Note Regarding Forward Looking Statements		3
Part I – Financial Information		4
Item 1.	Condensed Financial Statements	4
	Condensed Balance Sheets	4
	Condensed Statements of Operations	5
	Condensed Statements of Cash Flows	7
	Notes to Condensed Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 4.	Controls and Procedures	26
Part II – Other Information		27
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 5.	Other Information	27
Item 6.	Exhibits	27
	Signatures	28

2

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This report contains forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and are subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on forward-looking statements. Forward-looking statements include, among other things, statements relating to:

● our goals and strategies;

● our future business development, financial condition and results of operations;

● our expectations regarding demand for, and market acceptance of, our products;

● our expectations regarding keeping and strengthening our relationships with merchants, manufacturers and end-users; and

● general economic and business conditions in the regions where we provide our services.

Also, forward-looking statements represent our estimates and assumptions only as of the date of this report. You should read this report and the documents that we reference and filed as exhibits to the report completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

Use of Certain Defined Terms

Except where the context otherwise requires and for the purposes of this report only:

the “Company,” “we,” “us,” and “our” refer, prior to December 12, 2017, the date of the reverse acquisition resulting from the share exchange transaction described in this report, to the registrant, Mercari Communications Group, Ltd., a shell company, and thereafter, to the business of (i) AiXin (BVI) International Group Co., Ltd. a British Virgin Islands corporation (“AiXin BVI”) recently organized for the sole purpose of acquiring all of the outstanding shares of HK AiXin International Group Co., Limited, a Hong Kong limited company (“AiXin HK”), formed for the sole purpose of acquiring all of the outstanding shares of Chengdu AiXin Zhonghong Biological Technology Co., Ltd., a Chinese limited company (“AiXin Zhonghong”), which markets and sells innovative, premium-quality nutritional products in China. Effective February 1, 2019, pursuant to Articles of Amendment to our Articles of Incorporation filed with the Secretary of State of Colorado, we changed our name to AiXin Life International., Inc. (“AiXin”).

“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

“Hong Kong” refers to the Hong Kong Special Administrative Region of the People’s Republic of China;

“PRC,” “China,” and “Chinese,” refer to the People’s Republic of China (excluding Hong Kong and Taiwan);

“Renminbi” and “RMB” refer to the legal currency of China;

“Securities Act” refers to the Securities Act of 1933, as amended; and

“US dollars,” “dollars” and “$” refer to the legal currency of the United States.

3

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

AIXIN LIFE INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

	June 30, 2019			December 31, 2018
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	3,465		$	11,264
Accounts receivable, net		48,078			36,209
Other receivables and prepaid expenses		45,063			34,785
Advances to suppliers		681,040			1,591
Deferred commission		324,045			338,509
Deferred travel cost		210,664			220,200
Inventory		6,268			13,396
Advances to shareholder		118,218			-
Total current assets		1,436,841			655,954
NONCURRENT ASSETS
Property and equipment, net		73,706			1,464,415
Right of use asset		176,029			-
Total non-current assets		249,735			1,464,415
TOTAL ASSETS	$	1,686,576		$	2,120,369
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable	$	37,170		$	39,927
Unearned revenue		2,107,501			2,187,267
Taxes payable		1,218,387			1,222,486
Accrued liabilities and other payables		776,530			695,375
Lease liability - current		98,803			-
Advance from shareholder		-			1,166,198
Total current liabilities		4,238,391			5,311,253
LONG-TERM LIABILITIES:
Lease liability - non current		77,226			-
TOTAL LIABILITIES		4,315,617			5,311,253
CONTINGENCIES (NOTE 15)
STOCKHOLDERS’ DEFICIT
Undesignated preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding		-			-
Common stock, par value $0.00001 per share, 950,000,000 shares authorized; 287,838,699 shares issued and outstanding		2,879			2,879
Paid in capital		5,644,504			4,395,379
Statutory reserve		11,721			11,721
Accumulated deficit		(8,412,041	)		(7,736,440	)
Accumulated other comprehensive income		123,896			135,577
TOTAL STOCKHOLDERS’ DEFICIT		(2,629,041	)		(3,190,884	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	1,686,576		$	2,120,369

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

4

AIXIN LIFE INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net sales	$	10,787		$	40,613		$	101,266		$	145,161
Cost of Revenue		4,234			24,216			21,430			64,574
Gross profit		6,553			16,397			79,836			80,587
Operating expenses
Selling		112,734			126,262			236,370			255,056
General and administrative		255,744			245,384			468,956			593,336
Provision for bad debts		457			3,927			14,967			8,914
Asset impairment loss		1,063			-			1,063			-
Total operating expenses		369,998			375,573			721,356			857,306
Loss from operations		(363,445	)		(359,176	)		(641,520	)		(776,719	)
Non-operating income (expenses)
Financial expense		(481	)		(220	)		(855	)		(470	)
Loss from sale of building		-			-			(33,166	)		-
Other income		-			107			295			123
Other expense		(325	)		(231	)		(355	)		(403	)
Total non-operating income (expenses), net		(806	)		(344	)		(34,081	)		(750	)
Loss before income tax		(364,251	)		(359,520	)		(675,601	)		(777,469	)
Provision for income taxes		-			-			-			-
Net loss		(364,251	)		(359,520	)		(675,601	)		(777,469	)
Other comprehensive items
Foreign currency translation gain (loss)		68,702			179,855			(11,681	)		76,611
Comprehensive loss	$	(295,549	)	$	(179,665	)	$	(687,282	)	$	(700,858	)
Loss per share - Basic and diluted	$	(0.001	)	$	(0.001	)	$	(0.002	)	$	(0.002	)
Weighted average shares outstanding		287,838,699			287,838,699			287,838,699			290,170,696

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

5

AIXIN LIFE INTERNATIONAL, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

(Unaudited)

														Accumulated
														Other			Total
	Common Stock						Paid-in		Statutory		(Accumulated)			Comprehensive			Stockholders’
	Shares			Amount			Capital		Reserve		Deficit)			Income (Loss)			Deficit
Balance, December 31, 2017		317,988,089		$	3,180		$	3,371,857	$	11,721	$	(6,386,718	)	$	(70,154	)	$	(3,070,114	)
Cancellation of stock issued for services		(30,149,390	)		(301	)		301		-		-			-			-
Net loss		-			-			-		-		(417,949	)		-			(417,949	)
Foreign currency translation loss		-			-			-		-		-			(103,244	)		(103,244	)
Balance, March 31, 2018		287,838,699			2,879			3,372,158		11,721		(6,804,667	)		(173,398	)		(3,591,307	)
Capital contribution by principal shareholder								142,912										142,912
Net loss		-			-			-		-		(359,520	)		-			(359,520	)
Foreign currency translation gain		-			-			-		-		-			179,855			179,855
Balance, June 30, 2018		287,838,699		$	2,879		$	3,515,070	$	11,721	$	(7,164,187	)	$	6,457		$	(3,628,060	)
Balance, December 31, 2018		287,848,699		$	2,879		$	4,395,379	$	11,721	$	(7,736,440	)	$	135,577		$	(3,190,884	)
Capital contribution by principal shareholder		-			-			313,966		-		-			-			313,966
Net loss		-			-			-		-		(311,350	)		-			(311,350	)
Foreign currency translation loss		-			-			-		-		-			(80,384	)		(80,384	)
Balance, March 31, 2019 (Restated)		287,848,699			2,879			4,709,345		11,721		(8,047,790	)		55,194			(3,268,651	)
Capital contribution by principal shareholder		-			-			935,159		-		-			-			935,159
Net loss		-			-			-		-		(364,251	)		-			(364,251	)
Foreign currency translation gain		-			-			-		-		-			68,702			68,702
Balance, June 30, 2019		287,848,699		$	2,879		$	5,644,504	$	11,721	$	(8,412,041	)	$	123,896		$	(2,629,041	)

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

6

AIXIN LIFE INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(675,601	)	$	(777,469	)
Adjustments required to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		80,295			86,000
Provision for bad debts		14,967			8,914
Impairment of inventory		-			(15,356	)
Loss from sale of building		33,166			-
Changes in net assets and liabilities:
Accounts receivable		(26,833	)		8,335
Other receivables and prepaid expenses		(10,264	)		(5,407	)
Advances to suppliers		(687,533	)		1,276
Deferred commission		15,973			18,092
Deferred travel cost		10,519			15,867
Inventory		7,267			48,403
Accounts payable		(2,947	)		17,097
Unearned revenue		(89,354	)		(67,256	)
Taxes payable		(8,976	)		14,024
Accrued liabilities and other payables		79,418			196,650
Net cash used in operating activities		(1,259,903	)		(450,830	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		-			(1,405	)
Net cash used in investing activities		-			(1,405	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Lease liability		(8,890	)		-
Capital contribution		1,249,125			142,912
Change in advance from shareholder		5,146			271,428
Net cash provided by financing activities		1,245,381			414,340
EFFECT OF EXCHANGE RATE CHANGE ON CASH		6,723			3,857
NET DECREASE IN CASH		(7,799	)		(34,038	)
CASH BEGINNING OF PERIOD		11,264			37,630
CASH END OF PERIOD	$	3,465		$	3,592
Supplemental Cash flow data:
Income tax paid	$	-		$	-
Interest paid	$	-		$	-
Non-cash investing and financing activities:
Proceeds from sale of building offset against shareholder loans	$	1,326,260		$	-
Right of use asset and related liability	$	207,049		$	-
Lease liability paid by shareholder	$	17,780		$	-

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

7

AIXIN LIFE INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2019 AND 2018

(Unaudited)

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Aixin Life International, Inc. (the “Company” or “Aixin” or “we”) was incorporated under the laws of the State of Colorado on December 30, 1987 under the name Mercari Communications Group, Ltd (“Mercari”). From 1988 until 1990, Mercari provided educational products, counseling, seminar programs, and publications such as newsletters to adults aged 30 to 50. Mercari registered its common stock with the Securities and Exchange Commission (the “SEC”) under the Exchange Act in 1988. Mercari’s business failed in 1990. Mercari conducted no operating activities from June 1, 1990 to August 31, 2001 and was dormant.

During 2001, Mercari was reactivated. From November 30, 2001 to March 1, 2004, Mercari was in the development stage.

On November 9, 2009, Mercari entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Algodon Wines & Luxury Development Group, Inc. or “Algodon” (formerly Diversified Private Equity Corporation or “DPEC”), a then privately-held Delaware corporation, Kanouff, LLC (“KLLC”) and Underwood Family Partners, Ltd. (the “Partnership”), of which KLLC and the Partnership were the majority shareholders of the Company (the “Stock Purchase”). In connection with the Stock Purchase, Algodon purchased and the Company sold, 43,822,001 shares of common stock for $43,822, or $0.001 per share. In addition, Algodon purchased 200 shares of common stock from KLLC and 200 shares of common stock from the Partnership for $180,000 payable to each selling shareholder. Immediately following the closing of the transactions contemplated by the Stock Purchase Agreement, Algodon owned 43,822,401 shares of the Company’s common stock, or 96.5% of our outstanding shares.

During each year since Mercari was reactivated until 2017, the Company had no revenue and had losses approximately equal to the expenditures required to reactivate and comply with filing and reporting obligations. Expenditures were paid by Mercari from capital contributions and loans made by Mercari’s principal stockholders and entities controlled by Mercari’s directors.

On January 20, 2017, Algodon sold 43,822,401 shares of the Company’s common stock, 96.5% of the Company’s outstanding shares, to China Concentric, for $260,000, and assigned its right to the repayment of $150,087 of non-interest bearing advances to the Company for working capital as the Company’s controlling stockholder, pursuant to a Stock Purchase Agreement dated December 20, 2016, as amended. Prior to entering into the Stock Purchase Agreement with Algodon, neither China Concentric nor any of its affiliates had any relationship to the Company, Algodon or any of their respective affiliates.

On February 2, 2017, Mr. Quanzhong Lin purchased 29,521,410 shares of the Company’s common stock, 65.0% of its outstanding shares from China Concentric for $300,000, pursuant to a Stock Purchase Agreement dated December 21, 2016, which resulted in a change in control of our company.

On December 12, 2017, the Company issued 227,352,604 shares of common stock to Mr. Lin, the sole stockholder of AiXin (BVI) International Group Co., Ltd. a British Virgin Islands corporation (“AiXin BVI”), for his shares of AiXin BVI, pursuant to a Share Exchange Agreement. Mr. Lin now owns 256,874,014 shares of the Company’s common stock, 89.2% of our outstanding shares.

As a result of the Share Exchange, AiXin BVI became the Company’s wholly-owned subsidiary, and the Company now owns all of the outstanding shares of HK AiXin International Group Co., Limited, a Hong Kong limited company (“AiXin HK”), which in turn owns all of the outstanding shares of Chengdu AiXin Zhonghong Biological Technology Co., Ltd., a Chinese limited company (“AiXin Zhonghong”), which markets and sells premium-quality nutritional products in China.

8

AiXin BVI was incorporated on September 21, 2017 as a holding company and AiXin HK was established in Hong Kong on February 25, 2016 as an intermediate holding company. AiXin Zhonghong was established in the People’s Republic of China (“PRC”) on March 4, 2013, and on May 27, 2017, the local government of the PRC issued a certificate of approval regarding the foreign ownership of AiXin Zhonghong by AiXin HK. Neither AiXin BVI nor AiXin HK had operations prior to December 12, 2017.

For accounting purposes, the acquisition was accounted for as a reverse acquisition and treated as a recapitalization of Mercari effected by a share exchange, with AiXin BVI as the accounting acquirer. Since neither AiXin BVI nor AiXin HK had operations prior to December 12, 2017, the historical consolidated financial statements (“CFS”) of AiXin Zhonghong are now the historical CFS of the Company. The assets and liabilities of AiXin Zhonghong were brought forward at their book value and no goodwill was recognized.

Effective February 1, 2018, pursuant to Articles of Amendment to the Company’s Articles of Incorporation filed with the Secretary of State of Colorado, the Company changed its name to AiXin Life International., Inc.

The Company, through its indirectly owned AiXin Zhonghong subsidiary, mainly develops and distributes consumer products by offering a line of nutritional products. The Company sells the products through exhibition events, conferences, and person-to-person marketing. During 2018, the Company’s revenue was primarily generated from sales of products, which include cell food, goat milk power, clear lung Kangbao, light tea, bear gall powders, and other nutritional supplements. During 2019, the Company’s revenue was primarily generated from sales of goat milk power. The Company’s business mainly focuses on a proactive approach to its customers such as hosting events for clients, which it believes is ideally suited to marketing its products because sales of nutrition products are strengthened by ongoing personal contact and support, coaching and education of its clients, as to the benefits of a healthy and active lifestyle.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying Consolidated Financial Statements (CFS) are prepared in conformity with United States Generally Accepted Accounting Principles (“US GAAP”). The functional currency of Aixin is Chinese Renminbi (‘‘RMB’’). The accompanying CFS are translated from RMB and presented in U.S. dollars (“USD”).

The CFS includes the accounts of the Company and its current wholly owned subsidiaries, AiXin HK and AiXin Zhonghong. Intercompany transactions and accounts were eliminated in consolidation.

Unaudited Interim Financial Information

These unaudited interim financial statements have been prepared in accordance with GAAP for interim financial reporting and the rules and regulations of the Securities and Exchange Commission that permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been made. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2019.

The balance sheets and certain comparative information as of December 31, 2018 are derived from the audited financial statements and related notes for the year ended December 31, 2018 (“2018 Annual Financial Statements”), included in the Company’s 2018 Annual Report on Form 10-K. These unaudited interim financial statements should be read in conjunction with the 2018 Annual Financial Statements.

Going Concern

The Company incurred net losses of $675,601 and $777,469 for the six months ended June 30, 2019 and 2018, respectively. The Company also had a stockholders’ deficit of approximately $2.6 million as of June 30, 2019. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company plans to increase its income by improving communications with suppliers to ensure sufficient and quality products supply, building a competitive and efficient sales force, providing attractive sales incentive program, increasing marketing and promotion activities, and minimize operating costs. Subsequent to the close of the second quarter, the Company sold 10,000,000 shares of its common stock for gross proceeds of $1,000,000 in a private offering. The Company did not pay any commissions in connection with the sale of the shares. If necessary, the Company will seek to raise additional capital through sales of its equity securities to solve its working capital needs. As of June 30, 2019, the Company received RMB 15.6 million (approximately $2.2 million) from Quanzhong Lin. The CFS do not include any adjustments that might result from the outcome of this uncertainty.

Use of Estimates

In preparing CFS in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the CFS, as well as the reported amounts of revenues and expenses during the reporting period.

Significant estimates, required by management, include the recoverability of long-lived assets, allowance for doubtful accounts, and the reserve for obsolete and slow-moving inventories. Actual results could differ from those estimates.

9

Cash and Equivalents

For financial statement purposes, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Accounts Receivable

The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. As of June 30, 2019 and December 31, 2018, the bad debt allowance was $93,049 and $77,955, respectively.

Inventory

Inventory mainly consists of health supplement products. Inventory is valued at the lower of average cost or market, cost being determined on a moving weighted average method at the end of the month. Management compares the cost of inventories with the net realizable value and an allowance is made for writing down their inventories to market value, if lower. The Company recorded inventory impairment of $1,063 and $0 for the six months ended June 30, 2019 and 2018, respectively.

In July 2015, the FASB issued Accounting Standards Update (“ASU”) 2015-11, “Inventory (Topic 330) - Simplifying the Measurement of Inventory,” which requires that inventory within the scope of the ASU be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation, and impairment losses, if any. Major repairs and betterments that significantly extend original useful lives or improve productivity are capitalized and depreciated over the period benefited. Maintenance and repairs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets with 5% salvage value and estimated lives as follows:

Building	20 years
Office furniture	5 years
Electronic Equipment	3 years
Vehicles	5 years

Impairment of Long-Lived Assets

Long-lived assets, which include property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, but at least annually.

Recoverability of long-lived assets to be held and used is measured by comparing of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by it. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds its fair value (“FV”). FV is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of June 30, 2019 and December 31, 2018, there were no significant impairments of its long-lived assets.

10

Income Taxes

Income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company follows Accounting Standards Codification (“ASC”) Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures.

Under ASC Topic 740, when tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the CFS in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statement of income.

At June 30, 2019 and December 31, 2018, the Company did not take any uncertain positions that would necessitate recording a tax related liability.

Revenue Recognition

ASU No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), became effective for the Company January 1, 2018. The Company’s revenue recognition disclosure reflects its updated accounting policies that are affected by this new standard. The Company applied the “modified retrospective” transition method for open contracts for the implementation of Topic 606. As sales are and have been primarily from platform fees and related services, and the Company has no significant post-delivery obligations, this did not result in a material recognition of revenue on our accompanying CFS for the cumulative impact of applying this new standard. The Company made no adjustments to its previously-reported total revenues, as those periods continue to be presented in accordance with its historical accounting practices under Topic 605, Revenue Recognition.

Revenue from sale of goods under Topic 606 in a manner that reasonably reflects the delivery of its services to customers in return for expected consideration and includes the following elements:

● executed contract(s) with our customers that we believe is legally enforceable;

● identification of performance obligation in the respective contract;

● determination of the transaction price for each performance obligation in the respective contract;

● allocation the transaction price to each performance obligation; and

● recognition of revenue only when the Company satisfies each performance obligation.

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These five elements, as applied to each of the Company’s revenue categories, is summarized below:

● Revenue from sale of goods is recognized when goods are shipped to the customer and no other obligation exits. The Company does not provide unconditional return or other concessions to the customer. The Company’s sales policy allows for the return of unopened products for cash after deducting certain service and transaction fees. As alternatives for the product return option, the customers have options of asking an exchange of the products with same value.

● As part of the Company’s sales incentive program, the Company occasionally provides free travel to its customers whose prepayment to purchase the Company’s products reaches to certain amount. There are different travel incentives offered to the customers based on amount received from each customer. The Company records the to-be-provided free travel cost when cash is collected from customers as a debit deferred travel cost with corresponding credit to accrued travel cost. Once the customer utilizes the travel incentive, the cost of travel is recorded as a reduction of sales.

Sales revenue represents the invoiced value of goods, net of value-added taxes (“VAT”). All of the Company’s products sold in China are subject to the PRC VAT of 17% of the gross sales price prior to May 1, 2018, 16% since May 1, 2018 and 13% since April 1, 2019. This VAT may be offset by VAT paid by the Company on raw materials and other materials purchased in China. The Company records VAT payable and VAT receivable net of payments in the financial statements. The VAT tax return is filed offsetting the payables against the receivables. Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government.

Cost of Revenue

Cost of revenue (“COR”) consists primarily of cost of purchasing inventory. Write-down of inventory to lower of cost or market is also recorded in COR.

Concentration of Credit Risk

The operations of the Company are in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by the political, economic, and legal environments in the PRC, and by the general state of the PRC economy.

The Company has cash on hand and demand deposits in accounts maintained with state-owned banks within the PRC. Cash in state-owned banks is covered by insurance up to RMB 500,000 ($72,500) per bank. The Company has not experienced any losses in such accounts and believes they are not exposed to any risks on their cash in these bank accounts.

Statement of Cash Flows

In accordance with ASC Topic 230, “Statement of Cash Flows,” cash flows from the Company’s operations are calculated based on the local currencies using the average translation rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.

Fair Value (“FV”) of Financial Instruments

Certain of the Company’s financial instruments, including cash and equivalents, accrued liabilities and accounts payable, carrying amounts approximate their FV due to their short maturities. FASB ASC Topic 825, “Financial Instruments,” requires disclosure of the FV of financial instruments held by the Company. The carrying amounts reported in the balance sheets for current liabilities each qualify as financial instruments and are a reasonable estimate of their FV because of the short period of time between the origination of such instruments and their expected realization and the current market rate of interest.

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Fair Value Measurements and Disclosures

ASC Topic 820, “Fair Value Measurements and Disclosures,” defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The three levels are defined as follow:

● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

● Level 3 inputs to the valuation methodology are unobservable and significant to the FV measurement.

As of June 30, 2019 and December 31, 2018, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at FV.

Foreign Currency Translation and Comprehensive Income (Loss)

The functional currency of the Company is RMB. For financial reporting purposes, RMB is translated into USD as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet dates. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period.

Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated other comprehensive income”. Gains and losses resulting from foreign currency transactions are included in income. There was no significant fluctuation in the exchange rate for the conversion of RMB to USD after the balance sheet date.

The Company uses FASB ASC Topic 220, “Comprehensive Income”. Comprehensive loss is comprised of net loss and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. Comprehensive income (loss) for the first six months of 2019 and 2018 consisted of net loss and foreign currency translation adjustments.

Earnings per Share

Basic loss per share is computed on the basis of the weighted average number of common stock outstanding during the period.

Dilution is computed by applying the treasury stock method for options and warrants. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

As of June 30, 2019 and 2018 and for the periods then ended, the Company did not have any potentially dilutive instruments.

Stock-Based Compensation

The Company periodically grants stock options and warrants to employees and non-employees in non-capital raising transactions as compensation for services rendered. The Company accounts for stock option and stock warrant grants to employees based on the authoritative guidance provided by the FASB where the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and stock warrant grants to non-employees in accordance with the authoritative guidance of the FASB where the value of the stock compensation is determined based upon the measurement date at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option or warrant grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date.

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During the year ended December 31, 2017, the Company’s board of directors (“BOD”) authorized the issuance of 45,224,085 shares of common stock to three individuals for services rendered the Company. The stock-based compensation was valued at $3,617,927 based on the Company’s stock price at the date of agreement and was vested immediately for services already rendered. On January 15, 2018, the Company’s BOD determined it was not in the Company’s best interests to issue any shares to two of the three individuals because BOD believes the two individuals did not perform the services as expected.

Segment Reporting

ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s chief operating decision maker organizes segments within the Company for making operating decisions assessing performance and allocating resources. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company.

Management determined the Company’s operations constitute a single reportable segment in accordance with ASC 280. The Company operates exclusively in one business and industry segment: sale of health supplement products.

New Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application is permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the standard will have on its CFS.

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3. ADVANCES TO SUPPLIERS

Advances to suppliers include a prepayment of $680,098 to one supplier for donkey hide gelatin powder which is expected to be delivered in October 2019.

4. DEFERRED COMMISSION

The Company paid commission to its salesmen based on cash collected from the sales. The Company calculated and paid commission based on certain proportion of monthly cash receipts from sales; however, the customers sometimes delays taking delivery of the products after payment is made to the Company, which is recorded as unearned revenue. Accordingly, the Company only recognizes current commission cost as the related revenue is recognized. Commission expenses are recorded as selling expenses. As of June 30, 2019 and December 31, 2018, the Company had deferred commission of $324,045 and $338,509 respectively.

5. DEFERRED TRAVEL COST

As part of the Company’s sales incentive program, the Company occasionally provided free travel to its customers whose prepayment to purchase the Company’s products reached a certain amount. There are different travel incentives offered to its customers based on amount received from each customer. The Company recorded the to-be-provided free travel cost when cash is collected from customers as deferred travel cost with corresponding account of accrued travel cost, and recorded as net of sales once the prepayment from customers was recognized as revenue. As of June 30, 2019 and December 31, 2018, the Company had deferred travel cost of $210,664 and $220,200, respectively.

6. INVENTORY

Inventory consisted of the following at June 30, 2019 and December 31, 2018:

	June 30, 2019		December 31, 2018
Finished goods – health supplements	$	6,268	$	13,396

7. PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following at June 30, 2019 and December 31, 2018:

	June 30, 2019			December 31, 2018
Office furniture	$	46,051		$	228,996
Building		-			1,510,312
Vehicles		213,803			212,972
Electronic equipment		14,113			14,058
Total		273,967			1,966,338
Less: Accumulated depreciation		(200,261	)		(501,923	)
Net	$	73,706		$	1,464,415

Depreciation for the six months ended June 30, 2019 and 2018 was $53,626 and $86,000, respectively. Depreciation for the three months ended June 30, 2019 and 2018 was $13,265 and $42,952, respectively.

The Company sold property rights to a portion of a building for RMB 9,000,000 ($1,340,862) and incurred a loss of $33,166 in the first quarter of 2019 and leased it back for two years beginning March 31, 2019. (See Note 10)

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8. TAXES PAYABLE

Taxes payable consisted of the following at June 30, 2019 and December 31, 2018 (audited):

	June 30, 2019		December 31, 2018
Income	$	35,655	$	35,517
Value-added		1091,223		1,101,372
City construction		47,660		48,541
Education		34,000		34,683
Other		9,848		2,373
Taxes payable	$	1,218,387	$	1,222,486

9. ACCRUED LIABILITIES AND OTHER PAYABLES

Accrued liabilities and other payables consisted of the following at June 30, 2019 and December 31, 2018 (audited):

	Jun 30, 2019		December 31, 2018
Accrued liability – travel cost (see Note 4)	$	6,180		6,156
Salary payable		193,283		162,030
Other payables		577,067		527,189
Total	$	776,530	$	695,375

Other payables mainly consisted of payables for employees’ social insurance and disabled employment security fund of $337,585 and commission payable of $104,273 at June 30, 2019; and payables of employees’ social insurance and disabled employment security fund of $296,173 and commission payable of $103,978 at December 31, 2018, respectively.

10. LEASE

On September 12, 2018, the Company entered into a contract to sell its rights to a portion of a building (see Note 7), at which time the Buyer paid RMB 100,000 ($14,898) to a shareholder of the Company as a down payment. The contract stipulated the remaining RMB 8,900,000 ($1,325,964) should be paid by the Buyer on or before September 30, 2018 and before the Company would be required to go to the relevant authority to effectuate the transfer of its property rights. The Buyer failed to make the payment on or prior to September 30, 2018, a default under the contract which gave the Company the right to terminate the contract. In October 2018, the Buyer delivered to the shareholder an additional RMB 7 million ($1.0 million). On March 25, 2019, the parties entered in to a supplemental agreement which provided that the Company would transfer the property rights to Buyer if it agreed the Company would get the benefit of the RMB 7,000,000 ($1,042,893) and otherwise pay the remaining balance of RMB 1,200,000 ($178,782) on or prior to March 31, 2019. The RMB1,200,000 ($178,782) was paid directly to the shareholder on a timely basis and the Company was given the benefit of the RMB 8,900,000 ($1,325,964) delivered to the Shareholder.

As a result, $207,049 (RMB 1,389,731) was recorded as right of use assets and lease liability on March 31, 2019 when the lease commenced based on a 4.75% discount factor. The net right of use asset was $176,029 as of June 30, 2019, net of accumulated amortization of $26,669.

Maturities of lease liabilities were as follows:

For the 12 months ending June 30,:
2020	$	105,422
2021		79,067
Total lease payments		184,489
Less imputed interest		(8,460	)
Total		176,029
Less Current Portion		(98,803	)
Long Term Portion	$	77,226

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The cost and accumulated depreciation of the building was $1,739,228 and $364,834, respectively. The Company recorded a loss on sale of $33,136 during the quarter ended March 31, 2019. $1,340,862 of the sale proceeds were collected by the principal shareholder which was offset against amounts due to the shareholder.

11. RELATED PARTY TRANSACTIONS

Advance from a Shareholder

At June 30, 2019 and December 31, 2018 (audited), the Company had advance to a major shareholder of $118,218 and $-0-, respectively. As of June 30, 2019 and December 31, 2018, the Company had an advance from the same major shareholder of $-0- and $1,166,198, respectively. The advance from the shareholder was payable on demand, and bore no interest and was satisfied though the sale of the building described in Note 10 with the excess of the amount paid to the shareholder by the Buyer recognized as an advance to shareholder.

Office lease from a Major Shareholder

In May 2014, the Company entered an office lease with its major shareholder; the lease term was three years until May 2017 with an option to renew. The monthly rent was RMB 5,000 ($721), the Company was required to prepay each year’s annual rent at 15th of May of each year. The Company renewed the lease in May 2017 for another three years until May 28, 2020 with monthly rents of RMB 5,000 ($721), payable quarterly. The future annual minimum lease payment at June 30, 2019 is $7,931 for the year ending June 30, 2020.

12. INCOME TAXES

The Company was incorporated in the United States of America (“USA”) and has operations in one tax jurisdiction, the PRC. The Company generated substantially all of its sales from its operations in the PRC for the six months ended June 30, 2019 and 2018, and recorded income tax provision for the periods.

China has a tax rate of 25% for all enterprises (including foreign-invested enterprises).

Uncertain Tax Positions

Interest associated with unrecognized tax benefits are classified as income tax, and penalties are classified in selling, general and administrative expenses in the statements of operations. For the six months ended June 30, 2019 and 2018, the Company had no unrecognized tax benefits and related interest and penalties expenses. Currently, the Company is not subject to examination by major tax jurisdictions.

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13. SHAREHOLDERS’ DEFICIT

The Company is authorized to issue 20,000,000 shares of blank check preferred stock at $0.001 par value and 950,000,000 shares of common stock at $.00001 par value per share. At June 30, 2019 and December 31, 2018, the Company had 287,838,699 shares issued and outstanding

14. STATUTORY RESERVES

Pursuant to the PRC corporate law, the Company is now only required to maintain one statutory reserve by appropriating from its after-tax profit before declaration or payment of dividends. The statutory reserve represents restricted retained earnings.

Surplus reserve fund

The Company is now required to transfer 10% of its net income, as determined under PRC accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the Company’s registered capital.

The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital.

Common welfare fund

Common welfare fund is a voluntary fund that the Company can elect to transfer 5% to 10% of its net income, as determined under PRC accounting rules and regulations, to this fund. The Company did not make any contribution to this fund during the six months ended June 30, 2019 and 2018.

This fund can only be utilized on capital items for the collective benefit of the Company’s employees, such as construction of dormitories, cafeteria facilities, and other staff welfare facilities. This fund is non-distributable other than upon liquidation.

15. OPERATING CONTINGENCIES

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

The Company’s sales, purchases and expenses are denominated in RMB and all of the Company’s assets and liabilities are also denominated in RMB. The RMB is not freely convertible into foreign currencies under the current law. In China, foreign exchange transactions are required by law to be transacted only by authorized financial institutions. Remittances in currencies other than RMB may require certain supporting documentation to effect the remittance.

The Company is, from time to time, involved in litigation incidental to the conduct of its business litigation regarding merchandise sold, including product litigation with respect to various employment matters, including litigation with present and former employees, wage and hour litigation and litigation regarding intellectual property rights.

The Company believes that current pending litigation will not have a material adverse effect on its consolidated financial position, results of operations or cash flows.

16. SUBSEQUENT EVENT

On August 7, 2019, AiXin Life International, Inc. (the “Company”) completed the sale of 10,000,000 shares of its common stock for gross proceeds of $1,000,000 in a private offering exempt from the registration requirements of the Securities Act pursuant to Regulation S. The sales were effected in off-shore transactions and none of the purchasers were U.S. Persons (as defined in Rule 902(k) of Regulation S). The Company did not pay any commissions in connection with the sale of the shares. The certificates representing the shares were imprinted with a legend restricting transfers and prohibiting hedging transactions in accordance with Regulation S.

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

The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes to those statements included elsewhere in this Form 10-Q and with the audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Form 10-K”). This discussion contains forward-looking statements that involve risks and uncertainties. You should specifically consider the various risk factors identified in our 2018 Form 10-K, that could cause actual results to differ materially from those anticipated in these forward-looking statements.

Overview

We, through our indirectly wholly owned subsidiary AiXin Zhonghong, market and sell consumer products in China by offering premium-quality nutritional products. We sell the products through our sales offices, exhibition events we organize and sponsor, and person-to-person marketing. Our revenue is primarily generated from the sales of our cell food, goat milk powder, clear lung Kangbao, light tea, bear gall powders, and other nutritional supplements. Our business mainly focuses on proactively approaching our customers such as by hosting events for clients, which we believe is ideally suited to marketing our products because sales of nutritional products are strengthened by ongoing personal contact and support, coaching and education among the Company and our clients towards how to achieve a healthy and active lifestyle.

We do not independently test products to determine efficacy. Rather we rely upon information we uncover through inquiries in the community and a review of scientific and other literature. Once we determine to offer a product and believe it will be purchased by our clients, we will purchase a bulk quantity, enabling us to acquire products at prices below those available to smaller distributors.

In addition to our ongoing operations, we seek to acquire an interest in additional businesses through opportunities found by our management or presented by persons or firms which desire to take advantage of the perceived advantages of an Exchange Act registered corporation. We do not restrict our search to any specific business, industry, or geographical location and may participate in a business venture of virtually any kind or nature. We are not currently engaged in negotiations regarding the acquisition of any business.

The chart below presents our current corporate structure:

AiXin Life International, Inc. (a Colorado corporation)

(formerly known as Mercari Communications Group, Ltd.)

100%

AiXin (BVI) International Group Co., Ltd (BVI)

100%

HK AiXin International Group Co., Limited (HK)

(“AiXin HK”)

100%

Chengdu Aixin Zhonghong Biological Technology Co., Ltd (PRC)

(“AiXin Zhonghong”)

Our executive offices are located at Hongxing International Business Building 2, 14^thFL, No. 69 Qingyun South Ave., Jinjiang District, Chengdu City, Sichuan Province, China, and our telephone number is +86-28-8669-1072.

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Results of Operations

The following table sets forth the results of our operations for the periods indicated as a percentage of net revenue, certain columns may not add due to rounding:

	Three Months Ended June 30,
	2019						2018
	$			% of Revenue			$			% of Revenue
Revenue	$	10,787			100	%	$	40,613			100	%
Cost of revenue		4,234			39	%		24,216			60	%
Gross profit		6,553			61	%		16,397			40	%
Operating expenses		369,998			3430	%		375,573			925	%
Loss from operations		(363,445	)		(3369	)%		(359,176	)		(885	)%
Non-operating income (expenses), net		(806	)		(8	)%		(344	)		(0.8	)%
Income tax expense		-			-	%		-			-	%
Net loss	$	(364,251	)		(3377	)%	$	(359,520	)		(886	)%

	Six Months Ended June 30,
	2019						2018
	$			% of Revenue			$			% of Revenue
Revenue	$	101,266			100	%	$	145,161			100	%
Cost of revenue		21,430			21	%		64,574			44	%
Gross profit		79,836			79	%		80,587			56	%
Operating expenses		721,356			712	%		857,306			591	%
Loss from operations		(641,520	)		(633	)%		(776,719	)		(535	)%
Non-operating income (expenses), net		(34,081	)		(34	)%		(750	)		(1	)%
Income tax expense		-			-	%		-			-	%
Net loss	$	(675,601	)		(667	)%	$	(777,469	)		(536	)%

Revenue

Revenue for the quarter ended June 30, 2019, was $10,787, while revenue for 2018 period was $40,613, a decrease of $29,826 or 73%. Revenue for the six months ended June 30, 2019, was $101,266, while revenue for the 2018 period was $145,161, a decrease of $43,895 or 30%. The decrease in sales was primarily because the market for health supplements declined as a result of the government’s exposure of fraudulent practices in the industry, reducing the demand for nutritional supplements. In addition, during this period of reduced demand, a substantial focus of our company was on adjusting our product structure, sales model, customer structure and infrastructure in order to build a solid foundation for future business development.

Cost of Revenue

Cost of revenue (“COR”) was $4,234 and $21,430 in the quarter and six months ended June 30, 2019, compared to $24,216 and $64,574 in the comparable 2018 periods, a decrease of $19,982 or 83% and $43,144 or 67%, respectively. The decrease in our COR is attributable to the decrease in our revenue. The COR as a percentage of sales was 39% and 21% in the quarter and six months ended June 30, 2019, compared to 60% and 44% for the comparable 2018 periods. The COR as a percentage of sales decreased because the Company has stopped selling certain higher cost products.

Gross Profit

Gross profit was $6,553 and $79,836 in the quarter and six months ended June 30, 2019, compared to $16,397 and $80,587 in the comparable 2018 periods, a decrease of $9,844 or 60% and $751 or 1%, respectively. The decrease in our gross profit was mainly due to the decrease of revenue. Gross margin was 61% and 79% in the quarter and six months ended June 30, 2019, compared to 40% and 56% for the comparable 2018 periods as a result of the decrease in the COR as a percentage of sales.

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Operating Expenses

Operating expenses were $369,998 and $721,356 for the quarter and six months ended June 30, 2019, compared to $375,573 and $857,306 for the comparable 2018 periods, a decrease of $5,575 or 2% and $135,950 or 13%. The decrease in operating expenses in the first half of 2019 was mainly due to a $18,686 decrease in selling expense and a $124,380 decrease in general and administrative expenses as a result of a decrease in public company related expenses

Net Loss

Our net loss for the quarter and six months ended June 30, 2019, was $364,251 and $675,601compared to $359,520 and $777,469 for the comparable 2018 periods, an increase in net loss of $4,731 or 1% for the quarter and a decrease in net loss of $101,868 or 13% for the half. The increase in net loss in the quarter was mainly due to the lower gross profit, partially offset by lower operating expenses. The decrease in net loss in the first half of 2019 was mainly due to lower operating expenses, partially offset by the loss from disposal of fixed assets.

Liquidity and Capital Resources

Currently, we depend upon advances from our major shareholder to continue our operations. As of June 30, 2019, cash and equivalents were $3,465, compared to $11,264 as of December 31, 2018. At June 30, 2019, we had a working capital deficit of $(2,801,550) compared to the $(4,655,299) deficit at December 31, 2018. The decrease in the working capital deficit was mainly due to the building sale in the first quarter of 2019, partly offset by continued losses.

The following is a summary of cash provided by or used in each of the indicated types of activities during the six months ended June 30, 2019 and 2018, respectively.

	June 30, 2019			June 30, 2018
Net cash used in operating activities	$	(1,259,903	)	$	(450,830	)
Net cash used in investing activities	$	-		$	(1,405	)
Net cash provided by financing activities	$	1,245,381		$	414,340

Net cash used in operating activities

For the six months ended June 30, 2019, net cash used in operating activities was $1,259,903. This was primarily due to a net loss of $675,601, adjusted by non-cash related expenses including depreciation of $80,295, provision for bad debt of $14,967, impairment of inventory of $1,063 and loss from sale of a building of $33,166, then decreased by unfavorable changes in working capital of $713,794. The unfavorable changes in working capital mainly resulted from an increase in advances to suppliers of $687,533, a decrease in unearned revenue of $89,354, and an increase in accounts receivable of $26,833, partly offset by an increase in accrued liabilities and other payables of $79,418.

For the six months ended June 30, 2018, net cash used in operating activities was $450,830. This was primarily due to a net loss of $777,469, adjusted by non-cash related expenses including depreciation of $86,000, provision for bad debt of $8,914 and recovery of inventory of $15,356, then increased by favorable changes in working capital of $247,081. The favorable changes in working capital mainly resulted from an increase in accrued liabilities and other payables of $196,650, an increase in accounts payable of $17,097, a decrease in inventory of $48,403, a decrease in deferred commission of $18,092, and a decrease in deferred travel cost of $15,867, partly offset by a decrease in unearned revenue of $67,256.

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Net cash used in investing activities

For the six months ended June 30, 2018, net cash used in investing activities was $1,405 for purchase of property and equipment.

Net cash provided by financing activities

For the six months ended June 30, 2019, net cash provided by financing activities was $1,245,381 which was mainly due to shareholder capital contributions of $1,249,125, partly offset by lease liability payment of $8,890.

For the six months ended June 30, 2018, net cash provided by financing activities was $414,340 which was due to shareholder capital contributions of $142,912 and an advance from shareholder of $271,428.

Recent Private Placement

To supplement our cash on August 7, 2019, we completed the sale of 10,000,000 shares of our common stock for gross proceeds of $1,000,000 in a private offering exempt from the registration requirements of the Securities Act pursuant to Regulation S. The sales were effected in off-shore transactions and none of the purchasers were U.S. Persons (as defined in Rule 902(k) of Regulation S). We did not pay any commissions in connection with the sale of the shares.

Impact of Inflation

The general annual inflation rate in China was 2.5% in 2018 and 1.4% in 2017 according to the National Bureau of Statistics. Our results of operations may be affected by inflation, particularly rising prices for products and other operating costs.

Contractual Obligations

We have no long-term fixed contractual obligations or commitments.

Off-Balance Sheet Arrangements

We have not entered into any financial guarantees or other commitments to guarantee the obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any uncombined entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

Contingencies

The Company’s operations are conducted in the PRC and are subject to specific 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 environments in China and foreign currency exchange. The Company’s results may be adversely affected by changes in PRC government policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad and rates and methods of taxation, among other things.

The Company’s sales, purchases and expense transactions in China are denominated in RMB and all of the Company’s assets and liabilities in China are also denominated in RMB. The RMB is not freely convertible into foreign currencies under the current PRC law. In China, foreign exchange transactions are required by law to be transacted only by authorized financial institutions. Remittances in currencies other than RMB may require certain supporting documentation in order to affect the remittance.

22

Significant Accounting Policies

While our significant accounting policies are more fully described in Note 2 to our financial statements, we believe the following accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis.

Basis of Presentation

The accompanying financial statements are prepared in conformity with U.S. Generally Accepted Accounting Principles (“US GAAP”). The functional currency of Aixin is Chinese Renminbi (‘‘RMB’’). The accompanying financial statements are translated from RMB and presented in U.S. dollars (“USD”).

Going Concern

We incurred net losses of $675,601 and $777,469 for the six months ended June 30, 2019 and 2018, respectively. We also had a stockholders’ deficit of $2.6 million as of June 30, 2019. These conditions raise a substantial doubt about our ability to continue as a going concern. We plan to increase our income by improving communications with suppliers to ensure a sufficient supply of quality products, building a competitive and efficient sales force, providing an attractive sales incentive program, increasing marketing and promotional activities, and minimizing operating costs. Subsequent to the close of the second quarter, we sold 10,000,000 shares of our common stock for gross proceeds of $1,000,000 in a private offering. We did not pay any commissions in connection with the sale of the shares. If necessary, we will seek to raise additional capital through sales of our equity securities to solve our working capital needs. As of June 30, 2019, we had received RMB 15.6 million (approximately $2.2 million) from Quanzhong Lin, our majority shareholder. Our financial statements included herein do not include any adjustments that might result from the outcome of this uncertainty.

Use of Estimates

In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period.

Significant estimates, required by management, include the recoverability of long-lived assets, allowance for doubtful accounts, and the reserve for obsolete and slow-moving inventories. Actual results could differ from those estimates.

Accounts Receivable

The Company maintains an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. During the six months ended June 30, 2019 and 2018, bad debt expense was $14,967 and $8,914, respectively. As of June 30, 2019 and December 31, 2018, the bad debt allowance was $93,049 and $32,667, respectively.

Revenue Recognition

ASU No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), became effective for the Company on January 1, 2018. The Company’s revenue recognition disclosure reflects its updated accounting policies that are affected by this new standard. The Company applied the “modified retrospective” transition method for open contracts for the implementation of Topic 606. As sales are and have been primarily from platform fees and related services, and the Company has no significant post-delivery obligations, this did not result in a material recognition of revenue on our accompanying CFS for the cumulative impact of applying this new standard. The Company made no adjustments to its previously-reported total revenues, as those periods continue to be presented in accordance with its historical accounting practices under Topic 605, Revenue Recognition.

23

Revenue from sale of goods under Topic 606 in a manner that reasonably reflects the delivery of its services to customers in return for expected consideration and includes the following elements:

● executed contract(s) with our customers that we believe is legally enforceable;

● identification of performance obligation in the respective contract;

● determination of the transaction price for each performance obligation in the respective contract;

● allocation the transaction price to each performance obligation; and

● recognition of revenue only when the Company satisfies each performance obligation.

These five elements, as applied to each of the Company’s revenue category, is summarized below:

● Revenue from sale of goods is recognized when goods are shipped to the customer and no other obligation exits. The Company does not provide unconditional return or other concessions to the customer. The Company’s sales policy allows for the return of unopened products for cash after deducting certain service and transaction fees. As alternatives for the product return option, the customers have options of asking an exchange of the products with same value. As part of the Company’s sales incentive program, the Company occasionally provides free travel to its customers whose prepayment to purchase the Company’s products reaches to certain amount. There are different travel incentives offered to the customers based on amount received from each customer. The Company records the to-be-provided free travel cost when cash is collected from customers as a debit deferred travel cost with corresponding credit to accrued travel cost. Once the customer utilizes the travel incentive, the cost of travel is recorded as a reduction of sales.

Sales revenue represents the invoiced value of goods, net of value-added taxes (“VAT”). All of the Company’s products sold in China are subject to the PRC VAT of 17% of the gross sales price prior to May 1, 2018, 16% since May 1, 2018 and 13% since April 1, 2019. This VAT may be offset by VAT paid by the Company on raw materials and other materials purchased in China. The Company records VAT payable and VAT receivable net of payments in the financial statements. The VAT tax return is filed offsetting the payables against the receivables. Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government.

Foreign Currency Translation and Comprehensive Income (Loss)

The functional currency of the Company is RMB. For financial reporting purposes, RMB is translated into USD as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet dates. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period.

Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated other comprehensive income”. Gains and losses resulting from foreign currency transactions are included in income. There was no significant fluctuation in the exchange rate for the conversion of RMB to USD after the balance sheet date.

The Company uses FASB ASC Topic 220, “Comprehensive Income”. Comprehensive income (loss) is comprised of net income (loss) and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. Comprehensive loss for the first half of 2019 and 2018 consisted of net loss and foreign currency translation adjustments.

24

New Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application is permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the standard will have on its CFS.

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Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Management of AiXin Life International, Inc. is responsible for maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. In addition, the disclosure controls and procedures must ensure that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial and other required disclosures.

At June 30, 2019, an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based on their evaluation of our disclosure controls and procedures, they concluded that at June 30, 2019, such disclosure controls and procedures were not effective. This was due to our limited resources, including the absence of a financial staff with accounting and financial expertise and deficiencies in the design or operation of our internal control over financial reporting that adversely affected our disclosure controls and that may be considered to be “material weaknesses.” These deficiencies resulted in the failure to include in the financial statements for the first quarter of 2019 the sale of property rights to a portion of a building and the lease liability arising from the lease back of the building, the satisfaction of an advance due to a shareholder and the making of an advance to a related party.

We plan to designate individuals responsible for identifying reportable developments and to implement procedures designed to remediate the material weakness by focusing additional attention and resources in our internal accounting functions. However, the material weakness will not be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Control over Financial Reporting

There have not been any changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter which is the subject of this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

There is no pending litigation to which the Company is presently a party or to which the Company’s property is subject and management is not aware of any litigation which may arise in the future.

Item 1A. Risk Factors

Reference is made to the risks and uncertainties disclosed in Item 1A (“Risk Factors”) of our 2018 Form 10-K, which are incorporated by reference into this report. Prospective investors are encouraged to consider the risks described in the 2018 Form 10-K, Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this report and other information publicly disclosed or contained in documents we file with the Securities and Exchange Commission before purchasing our securities. In particular, we note that approximately 95% of our outstanding shares of common stock are owned by members of our management and that there is no regular trading market for our common stock. Consequently, the trading price of our common stock is subject to wide fluctuations and, as is likely the case in respect of recent reported prices, may exceed the value of our company based upon the value of its assets or generally recognized valuation measures.

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

During the quarter ended June 30, 2019, we did not have any sales of equity securities in transactions that were not registered under the Securities Act of 1933, as amended, that have not been previously reported in a report filed pursuant to the Exchange Act.

Item 3. Defaults Upon Senior Securities

None.

Item 5. Other Information

None

Item 6. Exhibits

Exhibit No.	Description
2.1	Share Exchange Agreement, dated as of December 12, 2017, among the Company, AiXin BVI, AiXin HK, AiXinZhonghong and the stockholders of AixinZhonghong (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on December 14, 2017).
3.1	Articles of Incorporation (incorporated by reference to the Company’s Annual Report on Form 10-KSB for the fiscal year ended May 31, 2006 as filed with the SEC on March 7, 2007).
3.2	Articles of Amendment to Articles of Incorporation (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on June 3, 2008).
3.3	Articles of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.3 the Company’s Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2017 as filed with the SEC on January 16, 2019).
3.4	Bylaws of the Registrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on June 3, 2008).
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14 or Rule 15d-14 of Securities Exchange Act of 1934.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14 or Rule 15d-14 of Securities Exchange Act of 1934.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
32.2	Certification of Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation
101.DEF	XBRL Taxonomy Extension Definition
101.LAB	XBRL Taxonomy Extension Label
101.PRE	XBRL Taxonomy Extension Presentation

27

SIGNATURES

Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	AIXIN LIFE INTERNATIONAL, INC.
Dated: September 26, 2019	By:	/s/ Quanzhong Lin
		Quanzhong Lin
		President and Chief Executive Officer
		(Principal Executive Officer)

28

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a) UNDER THE EXCHANGE ACT

I, Quanzhong Lin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AiXin Life International, Inc.;

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

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

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

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

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

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

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

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 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.

Dated: September 26, 2019

/s/ Quanzhong Lin

Quanzhong Lin

Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a) UNDER THE EXCHANGE ACT

I, Guolu Li, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AiXin Life International, Inc.

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

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

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

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

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

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

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

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 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.

Dated: September 26, 2019

/s/ Guolu Li

Guolu Li

Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of AiXin Life International, Inc., a Colorado corporation (the “Company”), on Form 10-Q for the period ended June 30, 2019, as filed with the Securities and Exchange Commission (the “Report”) Quanzhong Lin, Chief Executive Officer of the Company, does hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. ss. 1350), that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Dated: September 26, 2019

/s/ Quanzhong Lin

Quanzhong Lin

Chief Executive Officer (Principal Executive Officer)

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

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of AiXin Life International, Inc., a Colorado corporation (the “Company”), on Form 10-Q for the period ended June 30, 2019, as filed with the Securities and Exchange Commission (the “Report”), Guolu Li, Chief Financial Officer of the Company, does hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. ss. 1350), that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Dated: September 26, 2019

/s/ Guolu Li

Guolu Li

Chief Financial Officer (Principal Financial Officer)

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

XML

Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Property and Equipment (Details)	6 Months Ended
	Jun. 30, 2019
Building [Member]
Estimated Useful Lives of Property and Equipment	20 years
Office Furniture [Member]
Estimated Useful Lives of Property and Equipment	5 years
Electronic Equipment [Member]
Estimated Useful Lives of Property and Equipment	3 years
Vehicles [Member]
Estimated Useful Lives of Property and Equipment	5 years

XML

Inventory - Schedule of Inventory (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Finished goods - health supplements	$ 6,268	$ 13,396

XML

Accrued Liabilities and Other Payables

6 Months Ended

Jun. 30, 2019

Payables and Accruals [Abstract]

Accrued Liabilities and Other Payables

9. ACCRUED LIABILITIES AND OTHER PAYABLES

Accrued liabilities and other payables consisted of the following at June 30, 2019 and December 31, 2018 (audited):

	Jun 30, 2019		December 31, 2018
Accrued liability – travel cost (see Note 4)	$	6,180		6,156
Salary payable		193,283		162,030
Other payables		577,067		527,189
Total	$	776,530	$	695,375

Other payables mainly consisted of payables for employees’ social insurance and disabled employment security fund of $337,585 and commission payable of $104,273 at June 30, 2019; and payables of employees’ social insurance and disabled employment security fund of $296,173 and commission payable of $103,978 at December 31, 2018, respectively.

XML

Deferred Travel Cost

6 Months Ended

Jun. 30, 2019

Deferred Travel Cost

Deferred Travel Cost

5. DEFERRED TRAVEL COST

As part of the Company’s sales incentive program, the Company occasionally provided free travel to its customers whose prepayment to purchase the Company’s products reached a certain amount. There are different travel incentives offered to its customers based on amount received from each customer. The Company recorded the to-be-provided free travel cost when cash is collected from customers as deferred travel cost with corresponding account of accrued travel cost, and recorded as net of sales once the prepayment from customers was recognized as revenue. As of June 30, 2019 and December 31, 2018, the Company had deferred travel cost of $210,664 and $220,200, respectively.

XML

Shareholders' Deficit

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Shareholders' Deficit

13. SHAREHOLDERS’ DEFICIT

The Company is authorized to issue 20,000,000 shares of blank check preferred stock at $0.001 par value and 950,000,000 shares of common stock at $.00001 par value per share. At June 30, 2019 and December 31, 2018, the Company had 287,838,699 shares issued and outstanding

XML

Taxes Payable (Tables)

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Schedule of Taxes Payable

Taxes payable consisted of the following at June 30, 2019 and December 31, 2018 (audited):

	June 30, 2019		December 31, 2018
Income	$	35,655	$	35,517
Value-added		1091,223		1,101,372
City construction		47,660		48,541
Education		34,000		34,683
Other		9,848		2,373
Taxes payable	$	1,218,387	$	1,222,486

XML

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying Consolidated Financial Statements (CFS) are prepared in conformity with United States Generally Accepted Accounting Principles (“US GAAP”). The functional currency of Aixin is Chinese Renminbi (‘‘RMB’’). The accompanying CFS are translated from RMB and presented in U.S. dollars (“USD”).

The CFS includes the accounts of the Company and its current wholly owned subsidiaries, AiXin HK and AiXin Zhonghong. Intercompany transactions and accounts were eliminated in consolidation.

Unaudited Interim Financial Information

These unaudited interim financial statements have been prepared in accordance with GAAP for interim financial reporting and the rules and regulations of the Securities and Exchange Commission that permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been made. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2019.

The balance sheets and certain comparative information as of December 31, 2018 are derived from the audited financial statements and related notes for the year ended December 31, 2018 (“2018 Annual Financial Statements”), included in the Company’s 2018 Annual Report on Form 10-K. These unaudited interim financial statements should be read in conjunction with the 2018 Annual Financial Statements.

Going Concern

Going Concern

The Company incurred net losses of $675,601 and $777,469 for the six months ended June 30, 2019 and 2018, respectively. The Company also had a stockholders’ deficit of approximately $2.6 million as of June 30, 2019. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company plans to increase its income by improving communications with suppliers to ensure sufficient and quality products supply, building a competitive and efficient sales force, providing attractive sales incentive program, increasing marketing and promotion activities, and minimize operating costs. Subsequent to the close of the second quarter, the Company sold 10,000,000 shares of its common stock for gross proceeds of $1,000,000 in a private offering. The Company did not pay any commissions in connection with the sale of the shares. If necessary, the Company will seek to raise additional capital through sales of its equity securities to solve its working capital needs. As of June 30, 2019, the Company received RMB 15.6 million (approximately $2.2 million) from Quanzhong Lin. The CFS do not include any adjustments that might result from the outcome of this uncertainty.

Use of Estimates

Use of Estimates

In preparing CFS in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the CFS, as well as the reported amounts of revenues and expenses during the reporting period.

Significant estimates, required by management, include the recoverability of long-lived assets, allowance for doubtful accounts, and the reserve for obsolete and slow-moving inventories. Actual results could differ from those estimates.

Cash and Equivalents

Cash and Equivalents

For financial statement purposes, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts Receivable

The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. As of June 30, 2019 and December 31, 2018, the bad debt allowance was $93,049 and $77,955, respectively.

Inventory

Inventory

Inventory mainly consists of health supplement products. Inventory is valued at the lower of average cost or market, cost being determined on a moving weighted average method at the end of the month. Management compares the cost of inventories with the net realizable value and an allowance is made for writing down their inventories to market value, if lower. The Company recorded inventory impairment of $1,063 and $0 for the six months ended June 30, 2019 and 2018, respectively.

In July 2015, the FASB issued Accounting Standards Update (“ASU”) 2015-11, “Inventory (Topic 330) - Simplifying the Measurement of Inventory,” which requires that inventory within the scope of the ASU be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

Property and Equipment

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation, and impairment losses, if any. Major repairs and betterments that significantly extend original useful lives or improve productivity are capitalized and depreciated over the period benefited. Maintenance and repairs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets with 5% salvage value and estimated lives as follows:

Building	20 years
Office furniture	5 years
Electronic Equipment	3 years
Vehicles	5 years

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

Long-lived assets, which include property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, but at least annually.

Recoverability of long-lived assets to be held and used is measured by comparing of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by it. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds its fair value (“FV”). FV is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of June 30, 2019 and December 31, 2018, there were no significant impairments of its long-lived assets.

Income Taxes

Income Taxes

Income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company follows Accounting Standards Codification (“ASC”) Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures.

Under ASC Topic 740, when tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the CFS in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statement of income.

At June 30, 2019 and December 31, 2018, the Company did not take any uncertain positions that would necessitate recording a tax related liability.

Revenue Recognition

Revenue Recognition

ASU No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), became effective for the Company January 1, 2018. The Company’s revenue recognition disclosure reflects its updated accounting policies that are affected by this new standard. The Company applied the “modified retrospective” transition method for open contracts for the implementation of Topic 606. As sales are and have been primarily from platform fees and related services, and the Company has no significant post-delivery obligations, this did not result in a material recognition of revenue on our accompanying CFS for the cumulative impact of applying this new standard. The Company made no adjustments to its previously-reported total revenues, as those periods continue to be presented in accordance with its historical accounting practices under Topic 605, Revenue Recognition.

Revenue from sale of goods under Topic 606 in a manner that reasonably reflects the delivery of its services to customers in return for expected consideration and includes the following elements:

● executed contract(s) with our customers that we believe is legally enforceable;

● identification of performance obligation in the respective contract;

● determination of the transaction price for each performance obligation in the respective contract;

● allocation the transaction price to each performance obligation; and

● recognition of revenue only when the Company satisfies each performance obligation.

These five elements, as applied to each of the Company’s revenue categories, is summarized below:

● Revenue from sale of goods is recognized when goods are shipped to the customer and no other obligation exits. The Company does not provide unconditional return or other concessions to the customer. The Company’s sales policy allows for the return of unopened products for cash after deducting certain service and transaction fees. As alternatives for the product return option, the customers have options of asking an exchange of the products with same value.

● As part of the Company’s sales incentive program, the Company occasionally provides free travel to its customers whose prepayment to purchase the Company’s products reaches to certain amount. There are different travel incentives offered to the customers based on amount received from each customer. The Company records the to-be-provided free travel cost when cash is collected from customers as a debit deferred travel cost with corresponding credit to accrued travel cost. Once the customer utilizes the travel incentive, the cost of travel is recorded as a reduction of sales.

Sales revenue represents the invoiced value of goods, net of value-added taxes (“VAT”). All of the Company’s products sold in China are subject to the PRC VAT of 17% of the gross sales price prior to May 1, 2018, 16% since May 1, 2018 and 13% since April 1, 2019. This VAT may be offset by VAT paid by the Company on raw materials and other materials purchased in China. The Company records VAT payable and VAT receivable net of payments in the financial statements. The VAT tax return is filed offsetting the payables against the receivables. Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government.

Cost of Revenue

Cost of Revenue

Cost of revenue (“COR”) consists primarily of cost of purchasing inventory. Write-down of inventory to lower of cost or market is also recorded in COR.

Concentration of Credit Risk

Concentration of Credit Risk

The operations of the Company are in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by the political, economic, and legal environments in the PRC, and by the general state of the PRC economy.

The Company has cash on hand and demand deposits in accounts maintained with state-owned banks within the PRC. Cash in state-owned banks is covered by insurance up to RMB 500,000 ($72,500) per bank. The Company has not experienced any losses in such accounts and believes they are not exposed to any risks on their cash in these bank accounts.

Statement of Cash Flows

Statement of Cash Flows

In accordance with ASC Topic 230, “Statement of Cash Flows,” cash flows from the Company’s operations are calculated based on the local currencies using the average translation rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.

Fair Value ("FV") of Financial Instruments

Fair Value (“FV”) of Financial Instruments

Certain of the Company’s financial instruments, including cash and equivalents, accrued liabilities and accounts payable, carrying amounts approximate their FV due to their short maturities. FASB ASC Topic 825, “Financial Instruments,” requires disclosure of the FV of financial instruments held by the Company. The carrying amounts reported in the balance sheets for current liabilities each qualify as financial instruments and are a reasonable estimate of their FV because of the short period of time between the origination of such instruments and their expected realization and the current market rate of interest.

Fair Value Measurements and Disclosures

Fair Value Measurements and Disclosures

ASC Topic 820, “Fair Value Measurements and Disclosures,” defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The three levels are defined as follow:

● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

● Level 3 inputs to the valuation methodology are unobservable and significant to the FV measurement.

As of June 30, 2019 and December 31, 2018, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at FV.

Foreign Currency Translation and Comprehensive Income (Loss)

Foreign Currency Translation and Comprehensive Income (Loss)

The functional currency of the Company is RMB. For financial reporting purposes, RMB is translated into USD as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet dates. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period.

Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated other comprehensive income”. Gains and losses resulting from foreign currency transactions are included in income. There was no significant fluctuation in the exchange rate for the conversion of RMB to USD after the balance sheet date.

The Company uses FASB ASC Topic 220, “Comprehensive Income”. Comprehensive loss is comprised of net loss and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. Comprehensive income (loss) for the first six months of 2019 and 2018 consisted of net loss and foreign currency translation adjustments.

Earnings Per Share

Earnings per Share

Basic loss per share is computed on the basis of the weighted average number of common stock outstanding during the period.

Dilution is computed by applying the treasury stock method for options and warrants. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

As of June 30, 2019 and 2018 and for the periods then ended, the Company did not have any potentially dilutive instruments.

Stock-Based Compensation

Stock-Based Compensation

The Company periodically grants stock options and warrants to employees and non-employees in non-capital raising transactions as compensation for services rendered. The Company accounts for stock option and stock warrant grants to employees based on the authoritative guidance provided by the FASB where the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and stock warrant grants to non-employees in accordance with the authoritative guidance of the FASB where the value of the stock compensation is determined based upon the measurement date at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option or warrant grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date.

During the year ended December 31, 2017, the Company’s board of directors (“BOD”) authorized the issuance of 45,224,085 shares of common stock to three individuals for services rendered the Company. The stock-based compensation was valued at $3,617,927 based on the Company’s stock price at the date of agreement and was vested immediately for services already rendered. On January 15, 2018, the Company’s BOD determined it was not in the Company’s best interests to issue any shares to two of the three individuals because BOD believes the two individuals did not perform the services as expected.

Segment Reporting

Segment Reporting

ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s chief operating decision maker organizes segments within the Company for making operating decisions assessing performance and allocating resources. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company.

Management determined the Company’s operations constitute a single reportable segment in accordance with ASC 280. The Company operates exclusively in one business and industry segment: sale of health supplement products

New Accounting Pronouncements

New Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application is permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the standard will have on its CFS.

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Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Statement [Abstract]
Net sales	$ 10,787	$ 40,613	$ 101,266	$ 145,161
Cost of Revenue	4,234	24,216	21,430	64,574
Gross profit	6,553	16,397	79,836	80,587
Operating expenses
Selling	112,734	126,262	236,370	255,056
General and administrative	255,744	245,384	468,956	593,336
Provision for bad debts	457	3,927	14,967	8,914
Asset impairment loss	1,063		1,063
Total operating expenses	369,998	375,573	721,356	857,306
Loss from operations	(363,445)	(359,176)	(641,520)	(776,719)
Non-operating income (expenses)
Financial expense	(481)	(220)	(855)	(470)
Loss from sale of building			(33,166)
Other income		107	295	123
Other expense	(325)	(231)	(355)	(403)
Total non-operating income (expenses), net	(806)	(344)	(34,081)	(750)
Loss before income tax	(364,251)	(359,520)	(675,601)	(777,469)
Provision for income taxes
Net loss	(364,251)	(359,520)	(675,601)	(777,469)
Other comprehensive items
Foreign currency translation gain (loss)	68,702	179,855	(11,681)	76,611
Comprehensive loss	$ (295,549)	$ (179,665)	$ (687,282)	$ (700,858)
Loss per share - Basic and diluted	$ (0.001)	$ (0.001)	$ (0.002)	$ (0.002)
Weighted average shares outstanding	287,838,699	287,838,699	287,838,699	290,170,696

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying Consolidated Financial Statements (CFS) are prepared in conformity with United States Generally Accepted Accounting Principles (“US GAAP”). The functional currency of Aixin is Chinese Renminbi (‘‘RMB’’). The accompanying CFS are translated from RMB and presented in U.S. dollars (“USD”).

The CFS includes the accounts of the Company and its current wholly owned subsidiaries, AiXin HK and AiXin Zhonghong. Intercompany transactions and accounts were eliminated in consolidation.

Unaudited Interim Financial Information

These unaudited interim financial statements have been prepared in accordance with GAAP for interim financial reporting and the rules and regulations of the Securities and Exchange Commission that permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been made. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2019.

The balance sheets and certain comparative information as of December 31, 2018 are derived from the audited financial statements and related notes for the year ended December 31, 2018 (“2018 Annual Financial Statements”), included in the Company’s 2018 Annual Report on Form 10-K. These unaudited interim financial statements should be read in conjunction with the 2018 Annual Financial Statements.

Going Concern

The Company incurred net losses of $675,601 and $777,469 for the six months ended June 30, 2019 and 2018, respectively. The Company also had a stockholders’ deficit of approximately $2.6 million as of June 30, 2019. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company plans to increase its income by improving communications with suppliers to ensure sufficient and quality products supply, building a competitive and efficient sales force, providing attractive sales incentive program, increasing marketing and promotion activities, and minimize operating costs. Subsequent to the close of the second quarter, the Company sold 10,000,000 shares of its common stock for gross proceeds of $1,000,000 in a private offering. The Company did not pay any commissions in connection with the sale of the shares. If necessary, the Company will seek to raise additional capital through sales of its equity securities to solve its working capital needs. As of June 30, 2019, the Company received RMB 15.6 million (approximately $2.2 million) from Quanzhong Lin. The CFS do not include any adjustments that might result from the outcome of this uncertainty.

Use of Estimates

In preparing CFS in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the CFS, as well as the reported amounts of revenues and expenses during the reporting period.

Significant estimates, required by management, include the recoverability of long-lived assets, allowance for doubtful accounts, and the reserve for obsolete and slow-moving inventories. Actual results could differ from those estimates.

Cash and Equivalents

For financial statement purposes, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Accounts Receivable

The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. As of June 30, 2019 and December 31, 2018, the bad debt allowance was $93,049 and $77,955, respectively.

Inventory

Inventory mainly consists of health supplement products. Inventory is valued at the lower of average cost or market, cost being determined on a moving weighted average method at the end of the month. Management compares the cost of inventories with the net realizable value and an allowance is made for writing down their inventories to market value, if lower. The Company recorded inventory impairment of $1,063 and $0 for the six months ended June 30, 2019 and 2018, respectively.

In July 2015, the FASB issued Accounting Standards Update (“ASU”) 2015-11, “Inventory (Topic 330) - Simplifying the Measurement of Inventory,” which requires that inventory within the scope of the ASU be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation, and impairment losses, if any. Major repairs and betterments that significantly extend original useful lives or improve productivity are capitalized and depreciated over the period benefited. Maintenance and repairs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets with 5% salvage value and estimated lives as follows:

Building	20 years
Office furniture	5 years
Electronic Equipment	3 years
Vehicles	5 years

Impairment of Long-Lived Assets

Long-lived assets, which include property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, but at least annually.

Recoverability of long-lived assets to be held and used is measured by comparing of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by it. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds its fair value (“FV”). FV is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of June 30, 2019 and December 31, 2018, there were no significant impairments of its long-lived assets.

Income Taxes

Income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company follows Accounting Standards Codification (“ASC”) Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures.

Under ASC Topic 740, when tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the CFS in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statement of income.

At June 30, 2019 and December 31, 2018, the Company did not take any uncertain positions that would necessitate recording a tax related liability.

Revenue Recognition

ASU No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), became effective for the Company January 1, 2018. The Company’s revenue recognition disclosure reflects its updated accounting policies that are affected by this new standard. The Company applied the “modified retrospective” transition method for open contracts for the implementation of Topic 606. As sales are and have been primarily from platform fees and related services, and the Company has no significant post-delivery obligations, this did not result in a material recognition of revenue on our accompanying CFS for the cumulative impact of applying this new standard. The Company made no adjustments to its previously-reported total revenues, as those periods continue to be presented in accordance with its historical accounting practices under Topic 605, Revenue Recognition.

Revenue from sale of goods under Topic 606 in a manner that reasonably reflects the delivery of its services to customers in return for expected consideration and includes the following elements:

● executed contract(s) with our customers that we believe is legally enforceable;

● identification of performance obligation in the respective contract;

● determination of the transaction price for each performance obligation in the respective contract;

● allocation the transaction price to each performance obligation; and

● recognition of revenue only when the Company satisfies each performance obligation.

These five elements, as applied to each of the Company’s revenue categories, is summarized below:

● Revenue from sale of goods is recognized when goods are shipped to the customer and no other obligation exits. The Company does not provide unconditional return or other concessions to the customer. The Company’s sales policy allows for the return of unopened products for cash after deducting certain service and transaction fees. As alternatives for the product return option, the customers have options of asking an exchange of the products with same value.

● As part of the Company’s sales incentive program, the Company occasionally provides free travel to its customers whose prepayment to purchase the Company’s products reaches to certain amount. There are different travel incentives offered to the customers based on amount received from each customer. The Company records the to-be-provided free travel cost when cash is collected from customers as a debit deferred travel cost with corresponding credit to accrued travel cost. Once the customer utilizes the travel incentive, the cost of travel is recorded as a reduction of sales.

Sales revenue represents the invoiced value of goods, net of value-added taxes (“VAT”). All of the Company’s products sold in China are subject to the PRC VAT of 17% of the gross sales price prior to May 1, 2018, 16% since May 1, 2018 and 13% since April 1, 2019. This VAT may be offset by VAT paid by the Company on raw materials and other materials purchased in China. The Company records VAT payable and VAT receivable net of payments in the financial statements. The VAT tax return is filed offsetting the payables against the receivables. Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government.

Cost of Revenue

Cost of revenue (“COR”) consists primarily of cost of purchasing inventory. Write-down of inventory to lower of cost or market is also recorded in COR.

Concentration of Credit Risk

The operations of the Company are in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by the political, economic, and legal environments in the PRC, and by the general state of the PRC economy.

The Company has cash on hand and demand deposits in accounts maintained with state-owned banks within the PRC. Cash in state-owned banks is covered by insurance up to RMB 500,000 ($72,500) per bank. The Company has not experienced any losses in such accounts and believes they are not exposed to any risks on their cash in these bank accounts.

Statement of Cash Flows

In accordance with ASC Topic 230, “Statement of Cash Flows,” cash flows from the Company’s operations are calculated based on the local currencies using the average translation rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.

Fair Value (“FV”) of Financial Instruments

Certain of the Company’s financial instruments, including cash and equivalents, accrued liabilities and accounts payable, carrying amounts approximate their FV due to their short maturities. FASB ASC Topic 825, “Financial Instruments,” requires disclosure of the FV of financial instruments held by the Company. The carrying amounts reported in the balance sheets for current liabilities each qualify as financial instruments and are a reasonable estimate of their FV because of the short period of time between the origination of such instruments and their expected realization and the current market rate of interest.

Fair Value Measurements and Disclosures

ASC Topic 820, “Fair Value Measurements and Disclosures,” defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The three levels are defined as follow:

● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

● Level 3 inputs to the valuation methodology are unobservable and significant to the FV measurement.

As of June 30, 2019 and December 31, 2018, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at FV.

Foreign Currency Translation and Comprehensive Income (Loss)

The functional currency of the Company is RMB. For financial reporting purposes, RMB is translated into USD as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet dates. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period.

Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated other comprehensive income”. Gains and losses resulting from foreign currency transactions are included in income. There was no significant fluctuation in the exchange rate for the conversion of RMB to USD after the balance sheet date.

The Company uses FASB ASC Topic 220, “Comprehensive Income”. Comprehensive loss is comprised of net loss and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. Comprehensive income (loss) for the first six months of 2019 and 2018 consisted of net loss and foreign currency translation adjustments.

Earnings per Share

Basic loss per share is computed on the basis of the weighted average number of common stock outstanding during the period.

Dilution is computed by applying the treasury stock method for options and warrants. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

As of June 30, 2019 and 2018 and for the periods then ended, the Company did not have any potentially dilutive instruments.

Stock-Based Compensation

The Company periodically grants stock options and warrants to employees and non-employees in non-capital raising transactions as compensation for services rendered. The Company accounts for stock option and stock warrant grants to employees based on the authoritative guidance provided by the FASB where the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and stock warrant grants to non-employees in accordance with the authoritative guidance of the FASB where the value of the stock compensation is determined based upon the measurement date at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option or warrant grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date.

During the year ended December 31, 2017, the Company’s board of directors (“BOD”) authorized the issuance of 45,224,085 shares of common stock to three individuals for services rendered the Company. The stock-based compensation was valued at $3,617,927 based on the Company’s stock price at the date of agreement and was vested immediately for services already rendered. On January 15, 2018, the Company’s BOD determined it was not in the Company’s best interests to issue any shares to two of the three individuals because BOD believes the two individuals did not perform the services as expected.

Segment Reporting

ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s chief operating decision maker organizes segments within the Company for making operating decisions assessing performance and allocating resources. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company.

Management determined the Company’s operations constitute a single reportable segment in accordance with ASC 280. The Company operates exclusively in one business and industry segment: sale of health supplement products.

New Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application is permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the standard will have on its CFS.

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Lease (Details Narrative)						1 Months Ended		3 Months Ended		6 Months Ended
	Mar. 25, 2019	Sep. 30, 2018 USD ($)	Sep. 30, 2018 CNY (¥)	Sep. 12, 2018 USD ($)	Sep. 12, 2018 CNY (¥)	Oct. 31, 2018 USD ($)	Oct. 31, 2018 CNY (¥)	Mar. 31, 2019 USD ($)	Mar. 31, 2019 CNY (¥)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 CNY (¥)	Dec. 31, 2018 USD ($)
Proceeds from sale of building								$ 1,340,862
Payments to secure right to purchase the property rights						$ 1,000,000
Right of use assets								207,049		$ 176,029
Lease liability								207,049		$ 176,029
Lease, discount rate										4.75%
Accumulated amortization of lease										$ 26,669
Cost of building										1,739,228
Accumulated depreciation of building										$ 364,834
Loss on sale of property rights								$ 33,136
Supplemental Agreement [Member]
Agreement payment, description	On March 25, 2019, the parties entered in to a supplemental agreement which provided that the Company would transfer the property rights to Buyer if it agreed the Company would get the benefit of the RMB 7,000,000 ($1,042,893) and otherwise pay the remaining balance of RMB 1,200,000 ($178,782) on or prior to March 31, 2019. The RMB1,200,000 ($178,782) was paid directly to the shareholder on a timely basis and the Company was given the benefit of the RMB total RMB 8,900,000 ($1,325,964) delivered to the Shareholder.
Building [Member]
Proceeds from sale of building		$ 1,325,964
Building [Member] | Shareholder [Member]
Proceeds from sale of building				$ 14,898
RMB [Member]
Proceeds from sale of building | ¥									¥ 9,000,000
Payments to secure right to purchase the property rights | ¥							¥ 7,000,000
Right of use assets | ¥											¥ 1,389,731
Lease liability | ¥											¥ 1,389,731
RMB [Member] | Building [Member]
Proceeds from sale of building | ¥			¥ 8,900,000
RMB [Member] | Building [Member] | Shareholder [Member]
Proceeds from sale of building | ¥					¥ 100,000

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Shareholders' Deficit (Details Narrative) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Equity [Abstract]
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	950,000,000	950,000,000
Common stock, par value	$ 0.00001	$ 0.00001
Common stock, shares issued	287,838,699	287,838,699
Common stock, shares outstanding	287,838,699	287,838,699

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Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2019

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consisted of the following at June 30, 2019 and December 31, 2018:

	June 30, 2019			December 31, 2018
Office furniture	$	46,051		$	228,996
Building		-			1,510,312
Vehicles		213,803			212,972
Electronic equipment		14,113			14,058
Total		273,967			1,966,338
Less: Accumulated depreciation		(200,261	)		(501,923	)
Net	$	73,706		$	1,464,415

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Subsequent Event

6 Months Ended

Jun. 30, 2019

Subsequent Events [Abstract]

Subsequent Event

16. SUBSEQUENT EVENT

On August 7, 2019, AiXin Life International, Inc. (the “Company”) completed the sale of 10,000,000 shares of its common stock for gross proceeds of $1,000,000 in a private offering exempt from the registration requirements of the Securities Act pursuant to Regulation S. The sales were effected in off-shore transactions and none of the purchasers were U.S. Persons (as defined in Rule 902(k) of Regulation S). The Company did not pay any commissions in connection with the sale of the shares. The certificates representing the shares were imprinted with a legend restricting transfers and prohibiting hedging transactions in accordance with Regulation S.

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Advances to Suppliers

6 Months Ended

Jun. 30, 2019

Advances To Suppliers

Advances to Suppliers

3. ADVANCES TO SUPPLIERS

Advances to suppliers include a prepayment of $680,098 to one supplier for donkey hide gelatin powder which is expected to be delivered in October 2019.

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Consolidated Statement of Stockholders' Deficit (Unaudited) - USD ($)	Common Stock [Member]	Paid-in Capital [Member]	Statutory Reserve [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Beginning balance at Dec. 31, 2017	$ 3,180	$ 3,371,857	$ 11,721	$ (6,386,718)	$ (70,154)	$ (3,070,114)
Beginning balance, shares at Dec. 31, 2017	317,988,089
Cancellation of stock issued for services	$ (301)	301
Cancellation of stock issued for services, shares	(30,149,390)
Net loss				(417,949)		(417,949)
Foreign currency translation gain (loss)					(103,244)	(103,244)
Ending balance at Mar. 31, 2018	$ 2,879	3,372,158	11,721	(6,804,667)	(173,398)	(3,591,307)
Ending balance, shares at Mar. 31, 2018	287,838,699
Beginning balance at Dec. 31, 2017	$ 3,180	3,371,857	11,721	(6,386,718)	(70,154)	(3,070,114)
Beginning balance, shares at Dec. 31, 2017	317,988,089
Net loss						(777,469)
Foreign currency translation gain (loss)						76,611
Ending balance at Jun. 30, 2018	$ 2,879	3,515,070	11,721	(7,164,187)	6,457	(3,628,060)
Ending balance, shares at Jun. 30, 2018	287,838,699
Beginning balance at Mar. 31, 2018	$ 2,879	3,372,158	11,721	(6,804,667)	(173,398)	(3,591,307)
Beginning balance, shares at Mar. 31, 2018	287,838,699
Capital contribution by principal shareholder		142,912				142,912
Net loss				(359,520)		(359,520)
Foreign currency translation gain (loss)					179,855	179,855
Ending balance at Jun. 30, 2018	$ 2,879	3,515,070	11,721	(7,164,187)	6,457	(3,628,060)
Ending balance, shares at Jun. 30, 2018	287,838,699
Beginning balance at Dec. 31, 2018	$ 2,879	4,395,379	11,721	(7,736,440)	135,577	(3,190,884)
Beginning balance, shares at Dec. 31, 2018	287,848,699
Capital contribution by principal shareholder		313,966				313,966
Net loss				(311,350)		(311,350)
Foreign currency translation gain (loss)					(80,384)	(80,384)
Ending balance at Mar. 31, 2019	$ 2,879	4,709,345	11,721	(8,047,790)	55,194	(3,268,651)
Ending balance, shares at Mar. 31, 2019	287,848,699
Beginning balance at Dec. 31, 2018	$ 2,879	4,395,379	11,721	(7,736,440)	135,577	(3,190,884)
Beginning balance, shares at Dec. 31, 2018	287,848,699
Net loss						(675,601)
Foreign currency translation gain (loss)						(11,681)
Ending balance at Jun. 30, 2019	$ 2,879	5,644,504	11,721	(8,412,041)	123,896	(2,629,041)
Ending balance, shares at Jun. 30, 2019	287,848,699
Beginning balance at Mar. 31, 2019	$ 2,879	4,709,345	11,721	(8,047,790)	55,194	(3,268,651)
Beginning balance, shares at Mar. 31, 2019	287,848,699
Capital contribution by principal shareholder		935,159				935,159
Net loss				(364,251)		(364,251)
Foreign currency translation gain (loss)					68,702	68,702
Ending balance at Jun. 30, 2019	$ 2,879	$ 5,644,504	$ 11,721	$ (8,412,041)	$ 123,896	$ (2,629,041)
Ending balance, shares at Jun. 30, 2019	287,848,699

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Sep. 19, 2019
Document And Entity Information
Entity Registrant Name	AiXin Life International, Inc.
Entity Central Index Key	0000835662
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Reporting Status Current	Yes
Entity Interactive Data Current	No
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		297,838,699
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2019

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Lease - Schedule of Maturities of Lease Liabilities (Details) - USD ($)	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018
Leases [Abstract]
2020	$ 105,422
2021	79,067
Total lease payments	184,489
Less imputed interest	(8,460)
Total	176,029	$ 207,049
Less Current Portion	(98,803)
Long Term Portion	$ 77,226

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Statutory Reserves (Details Narrative)	6 Months Ended
	Jun. 30, 2019
Capital reserve, percentage	50.00%
Minimum [Member]
Net income transfer percentage	5.00%
Capital reserve, percentage	25.00%
Maximum [Member]
Net income transfer percentage	10.00%

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Advances to Suppliers (Details Narrative) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Advances to suppliers prepayment amount	$ 681,040	$ 1,591
One Supplier [Member] | October 2019 [Member]
Advances to suppliers prepayment amount	$ 680,098

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Property and Equipment, Net (Details Narrative)	3 Months Ended				6 Months Ended
	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Mar. 31, 2019 CNY (¥)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)
Depreciation	$ 13,265			$ 42,952	$ 53,626	$ 86,000
Proceeds from sale of building		$ 1,340,862
Loss on disposition of assets		$ 33,166
Saleslease back term		P2Y	P2Y
RMB [Member]
Proceeds from sale of building | ¥			¥ 9,000,000

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Income Taxes

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

12. INCOME TAXES

The Company was incorporated in the United States of America (“USA”) and has operations in one tax jurisdiction, the PRC. The Company generated substantially all of its sales from its operations in the PRC for the six months ended June 30, 2019 and 2018, and recorded income tax provision for the periods.

China has a tax rate of 25% for all enterprises (including foreign-invested enterprises).

Uncertain Tax Positions

Interest associated with unrecognized tax benefits are classified as income tax, and penalties are classified in selling, general and administrative expenses in the statements of operations. For the six months ended June 30, 2019 and 2018, the Company had no unrecognized tax benefits and related interest and penalties expenses. Currently, the Company is not subject to examination by major tax jurisdictions.

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Taxes Payable

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Taxes Payable

8. TAXES PAYABLE

Taxes payable consisted of the following at June 30, 2019 and December 31, 2018 (audited):

	June 30, 2019		December 31, 2018
Income	$	35,655	$	35,517
Value-added		1091,223		1,101,372
City construction		47,660		48,541
Education		34,000		34,683
Other		9,848		2,373
Taxes payable	$	1,218,387	$	1,222,486

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Deferred Commission

6 Months Ended

Jun. 30, 2019

Equity Method Investment Aggregate Cost Previously Paid

Deferred Commission

4. DEFERRED COMMISSION

The Company paid commission to its salesmen based on cash collected from the sales. The Company calculated and paid commission based on certain proportion of monthly cash receipts from sales; however, the customers sometimes delays taking delivery of the products after payment is made to the Company, which is recorded as unearned revenue. Accordingly, the Company only recognizes current commission cost as the related revenue is recognized. Commission expenses are recorded as selling expenses. As of June 30, 2019 and December 31, 2018, the Company had deferred commission of $324,045 and $338,509 respectively.

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Organization and Description of Business

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Organization and Description of Business

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Aixin Life International, Inc. (the “Company” or “Aixin” or “we”) was incorporated under the laws of the State of Colorado on December 30, 1987 under the name Mercari Communications Group, Ltd (“Mercari”). From 1988 until 1990, Mercari provided educational products, counseling, seminar programs, and publications such as newsletters to adults aged 30 to 50. Mercari registered its common stock with the Securities and Exchange Commission (the “SEC”) under the Exchange Act in 1988. Mercari’s business failed in 1990. Mercari conducted no operating activities from June 1, 1990 to August 31, 2001 and was dormant.

During 2001, Mercari was reactivated. From November 30, 2001 to March 1, 2004, Mercari was in the development stage.

On November 9, 2009, Mercari entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Algodon Wines & Luxury Development Group, Inc. or “Algodon” (formerly Diversified Private Equity Corporation or “DPEC”), a then privately-held Delaware corporation, Kanouff, LLC (“KLLC”) and Underwood Family Partners, Ltd. (the “Partnership”), of which KLLC and the Partnership were the majority shareholders of the Company (the “Stock Purchase”). In connection with the Stock Purchase, Algodon purchased and the Company sold, 43,822,001 shares of common stock for $43,822, or $0.001 per share. In addition, Algodon purchased 200 shares of common stock from KLLC and 200 shares of common stock from the Partnership for $180,000 payable to each selling shareholder. Immediately following the closing of the transactions contemplated by the Stock Purchase Agreement, Algodon owned 43,822,401 shares of the Company’s common stock, or 96.5% of our outstanding shares.

During each year since Mercari was reactivated until 2017, the Company had no revenue and had losses approximately equal to the expenditures required to reactivate and comply with filing and reporting obligations. Expenditures were paid by Mercari from capital contributions and loans made by Mercari’s principal stockholders and entities controlled by Mercari’s directors.

On January 20, 2017, Algodon sold 43,822,401 shares of the Company’s common stock, 96.5% of the Company’s outstanding shares, to China Concentric, for $260,000, and assigned its right to the repayment of $150,087 of non-interest bearing advances to the Company for working capital as the Company’s controlling stockholder, pursuant to a Stock Purchase Agreement dated December 20, 2016, as amended. Prior to entering into the Stock Purchase Agreement with Algodon, neither China Concentric nor any of its affiliates had any relationship to the Company, Algodon or any of their respective affiliates.

On February 2, 2017, Mr. Quanzhong Lin purchased 29,521,410 shares of the Company’s common stock, 65.0% of its outstanding shares from China Concentric for $300,000, pursuant to a Stock Purchase Agreement dated December 21, 2016, which resulted in a change in control of our company.

On December 12, 2017, the Company issued 227,352,604 shares of common stock to Mr. Lin, the sole stockholder of AiXin (BVI) International Group Co., Ltd. a British Virgin Islands corporation (“AiXin BVI”), for his shares of AiXin BVI, pursuant to a Share Exchange Agreement. Mr. Lin now owns 256,874,014 shares of the Company’s common stock, 89.2% of our outstanding shares.

As a result of the Share Exchange, AiXin BVI became the Company’s wholly-owned subsidiary, and the Company now owns all of the outstanding shares of HK AiXin International Group Co., Limited, a Hong Kong limited company (“AiXin HK”), which in turn owns all of the outstanding shares of Chengdu AiXin Zhonghong Biological Technology Co., Ltd., a Chinese limited company (“AiXin Zhonghong”), which markets and sells premium-quality nutritional products in China.

AiXin BVI was incorporated on September 21, 2017 as a holding company and AiXin HK was established in Hong Kong on February 25, 2016 as an intermediate holding company. AiXin Zhonghong was established in the People’s Republic of China (“PRC”) on March 4, 2013, and on May 27, 2017, the local government of the PRC issued a certificate of approval regarding the foreign ownership of AiXin Zhonghong by AiXin HK. Neither AiXin BVI nor AiXin HK had operations prior to December 12, 2017.

For accounting purposes, the acquisition was accounted for as a reverse acquisition and treated as a recapitalization of Mercari effected by a share exchange, with AiXin BVI as the accounting acquirer. Since neither AiXin BVI nor AiXin HK had operations prior to December 12, 2017, the historical consolidated financial statements (“CFS”) of AiXin Zhonghong are now the historical CFS of the Company. The assets and liabilities of AiXin Zhonghong were brought forward at their book value and no goodwill was recognized.

Effective February 1, 2018, pursuant to Articles of Amendment to the Company’s Articles of Incorporation filed with the Secretary of State of Colorado, the Company changed its name to AiXin Life International., Inc.

The Company, through its indirectly owned AiXin Zhonghong subsidiary, mainly develops and distributes consumer products by offering a line of nutritional products. The Company sells the products through exhibition events, conferences, and person-to-person marketing. During 2018, the Company’s revenue was primarily generated from sales of products, which include cell food, goat milk power, clear lung Kangbao, light tea, bear gall powders, and other nutritional supplements. During 2019, the Company’s revenue was primarily generated from sales of goat milk power. The Company’s business mainly focuses on a proactive approach to its customers such as hosting events for clients, which it believes is ideally suited to marketing its products because sales of nutrition products are strengthened by ongoing personal contact and support, coaching and education of its clients, as to the benefits of a healthy and active lifestyle.

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Undesignated preferred stock, par value	$ 0.001	$ 0.001
Undesignated preferred stock, shares authorized	20,000,000	20,000,000
Undesignated preferred stock, shares issued
Undesignated preferred stock, shares outstanding
Common stock, par value	$ 0.00001	$ 0.00001
Common stock, shares authorized	950,000,000	950,000,000
Common stock, shares issued	287,838,699	287,838,699
Common stock, shares outstanding	287,838,699	287,838,699

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Schedule of Estimated Useful Lives of Property and Equipment

Depreciation of property and equipment is provided using the straight-line method for substantially all assets with 5% salvage value and estimated lives as follows:

Building	20 years
Office furniture	5 years
Electronic Equipment	3 years
Vehicles	5 years

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Statutory Reserves

6 Months Ended

Jun. 30, 2019

Statutory Reserves

Statutory Reserves

14. STATUTORY RESERVES

Pursuant to the PRC corporate law, the Company is now only required to maintain one statutory reserve by appropriating from its after-tax profit before declaration or payment of dividends. The statutory reserve represents restricted retained earnings.

Surplus reserve fund

The Company is now required to transfer 10% of its net income, as determined under PRC accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the Company’s registered capital.

The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital.

Common welfare fund

Common welfare fund is a voluntary fund that the Company can elect to transfer 5% to 10% of its net income, as determined under PRC accounting rules and regulations, to this fund. The Company did not make any contribution to this fund during the six months ended June 30, 2019 and 2018.

This fund can only be utilized on capital items for the collective benefit of the Company’s employees, such as construction of dormitories, cafeteria facilities, and other staff welfare facilities. This fund is non-distributable other than upon liquidation.

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Accrued Liabilities and Other Payables (Tables)

6 Months Ended

Jun. 30, 2019

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities and Other Payables

Accrued liabilities and other payables consisted of the following at June 30, 2019 and December 31, 2018 (audited):

	Jun 30, 2019		December 31, 2018
Accrued liability – travel cost (see Note 4)	$	6,180		6,156
Salary payable		193,283		162,030
Other payables		577,067		527,189
Total	$	776,530	$	695,375

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Accrued Liabilities and Other Payables - Schedule of Accrued Liabilities and Other Payables (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Accrued liability - travel cost (see Note 4)	$ 6,180	$ 6,156
Salary payable	193,283	162,030
Other payables	577,067	527,189
Total	$ 776,530	$ 695,375

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Income Taxes (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Tax rate description	On December 22, 2017, the President of the United States signed and enacted into law H.R. 1 (the "Tax Reform Law"). The Tax Reform Law, effective for tax years beginning on or after January 1, 2018, except for certain provisions, resulted in significant changes to existing United States tax law, including various provisions that are expected to impact the Company.
Unrecognized tax benefits, income tax penalties and interest expense
China [Member]
Income tax rate	25.00%

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Lease

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Lease

10. LEASE

On September 12, 2018, the Company entered into a contract to sell its rights to a portion of a building (see Note 7), at which time the Buyer paid RMB 100,000 ($14,898) to a shareholder of the Company as a down payment. The contract stipulated the remaining RMB 8,900,000 ($1,325,964) should be paid by the Buyer on or before September 30, 2018 and before the Company would be required to go to the relevant authority to effectuate the transfer of its property rights. The Buyer failed to make the payment on or prior to September 30, 2018, a default under the contract which gave the Company the right to terminate the contract. In October 2018, the Buyer delivered to the shareholder an additional RMB 7 million ($1.0 million). On March 25, 2019, the parties entered in to a supplemental agreement which provided that the Company would transfer the property rights to Buyer if it agreed the Company would get the benefit of the RMB 7,000,000 ($1,042,893) and otherwise pay the remaining balance of RMB 1,200,000 ($178,782) on or prior to March 31, 2019. The RMB1,200,000 ($178,782) was paid directly to the shareholder on a timely basis and the Company was given the benefit of the RMB 8,900,000 ($1,325,964) delivered to the Shareholder.

As a result, $207,049 (RMB 1,389,731) was recorded as right of use assets and lease liability on March 31, 2019 when the lease commenced based on a 4.75% discount factor. The net right of use asset was $176,029 as of June 30, 2019, net of accumulated amortization of $26,669.

Maturities of lease liabilities were as follows:

For the 12 months ending June 30,:
2020	$	105,422
2021		79,067
Total lease payments		184,489
Less imputed interest		(8,460	)
Total		176,029
Less Current Portion		(98,803	)
Long Term Portion	$	77,226

The cost and accumulated depreciation of the building was $1,739,228 and $364,834, respectively. The Company recorded a loss on sale of $33,136 during the quarter ended March 31, 2019. $1,340,862 of the sale proceeds were collected by the principal shareholder which was offset against amounts due to the shareholder.

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Inventory

6 Months Ended

Jun. 30, 2019

Inventory Disclosure [Abstract]

Inventory

6. INVENTORY

Inventory consisted of the following at June 30, 2019 and December 31, 2018:

	June 30, 2019		December 31, 2018
Finished goods – health supplements	$	6,268	$	13,396

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Taxes Payable - Schedule of Taxes Payable (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Taxes payable	$ 1,218,387	$ 1,222,486
Income [Member]
Taxes payable	35,655	35,517
Value-added [Member]
Taxes payable	1,091,223	1,101,372
City Construction [Member]
Taxes payable	47,660	48,541
Education [Member]
Taxes payable	34,000	34,683
Other [Member]
Taxes payable	$ 9,848	$ 2,373

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Summary of Significant Accounting Policies (Details Narrative)			1 Months Ended	3 Months Ended				6 Months Ended		12 Months Ended
	Apr. 02, 2019	May 02, 2018	Aug. 07, 2019 USD ($) shares	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Jun. 30, 2019 USD ($) Integer	Jun. 30, 2018 USD ($)	Dec. 31, 2017 USD ($) shares	Jun. 30, 2019 CNY (¥)	Dec. 31, 2018 USD ($)
Net losses				$ 364,251	$ 311,350	$ 359,520	$ 417,949	$ 675,601	$ 777,469
Shareholders' deficit				(2,629,041)	$ (3,268,651)	(3,628,060)	$ (3,591,307)	(2,629,041)	(3,628,060)	$ (3,070,114)		$ (3,190,884)
Investment				2,200,000				2,200,000
Bad debt allowance				93,049				93,049				$ 77,955
Inventory impairment				$ 1,063				$ 1,063
Property plant and equipment salvage value percentage				5.00%				5.00%			5.00%
Income tax description								More than 50%
VAT of gross sales price percentage	13.00%	16.00%
Number of reporting segment | Integer								1
Board of Directors [Member]
Number of common stock shares issued for services, shares | shares										45,224,085
Number of common stock shares issued for services										$ 3,617,927
Maximum [Member]
Cash in insurance covered by bank				$ 72,500				$ 72,500
Prior to May 1, 2018 [Member]
VAT of gross sales price percentage								17.00%
RMB [Member]
Investment | ¥											¥ 15,600,000
RMB [Member] | Maximum [Member]
Cash in insurance covered by bank | ¥											¥ 500,000
Subsequent Event [Member]
Number of shares sold during period | shares			10,000,000
Proceed from private offering			$ 1,000,000

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Deferred Travel Cost (Details Narrative) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Deferred Travel Cost
Deferred travel cost	$ 210,664	$ 220,200

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Related Party Transactions

6 Months Ended

Jun. 30, 2019

Related Party Transactions [Abstract]

Related Party Transactions

11. RELATED PARTY TRANSACTIONS

Advance from a Shareholder

At June 30, 2019 and December 31, 2018 (audited), the Company had advance to a major shareholder of $118,218 and $-0-, respectively. As of June 30, 2019 and December 31, 2018, the Company had an advance from the same major shareholder of $-0- and $1,166,198, respectively. The advance from the shareholder was payable on demand, and bore no interest and was satisfied though the sale of the building described in Note 10 with the excess of the amount paid to the shareholder by the Buyer recognized as an advance to shareholder.

Office lease from a Major Shareholder

In May 2014, the Company entered an office lease with its major shareholder; the lease term was three years until May 2017 with an option to renew. The monthly rent was RMB 5,000 ($721), the Company was required to prepay each year’s annual rent at 15th of May of each year. The Company renewed the lease in May 2017 for another three years until May 28, 2020 with monthly rents of RMB 5,000 ($721), payable quarterly. The future annual minimum lease payment at June 30, 2019 is $7,931 for the year ending June 30, 2020.

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Property and Equipment, Net

6 Months Ended

Jun. 30, 2019

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

7. PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following at June 30, 2019 and December 31, 2018:

	June 30, 2019			December 31, 2018
Office furniture	$	46,051		$	228,996
Building		-			1,510,312
Vehicles		213,803			212,972
Electronic equipment		14,113			14,058
Total		273,967			1,966,338
Less: Accumulated depreciation		(200,261	)		(501,923	)
Net	$	73,706		$	1,464,415

Depreciation for the six months ended June 30, 2019 and 2018 was $53,626 and $86,000, respectively. Depreciation for the three months ended June 30, 2019 and 2018 was $13,265 and $42,952, respectively.

The Company sold property rights to a portion of a building for RMB 9,000,000 ($1,340,862) and incurred a loss of $33,166 in the first quarter of 2019 and leased it back for two years beginning March 31, 2019. (See Note 10)

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Organization and Description of Business (Details Narrative) - USD ($)					6 Months Ended
	Dec. 12, 2017	Feb. 02, 2017	Jan. 20, 2017	Nov. 09, 2009	Jun. 30, 2019
Entity incorporation, date of incorporation					Dec. 30, 1987
Entity incorporation, state country code					CO
Quanzhong Lin [Member]
Aggregate number of common stock shares owned	256,874,014
Ownership percentage	89.20%
Number of common stock shares issued	227,352,604
Kanouff, LLC [Member]
Number of common stock shares purchased				200
Purchase price of common stock				$ 180,000
Underwood Family Partners, Ltd [Member]
Number of common stock shares purchased				200
Purchase price of common stock				$ 180,000
Algodon Wines & Luxury Development Group, Inc [Member]
Aggregate number of common stock shares owned				43,822,401
Ownership percentage				96.50%
China Concentric [Member]
Number of common stock sold, shares			43,822,401
Number of common stock sold			$ 260,000
Number of common stock shares purchased		29,521,410
Purchase price of common stock		$ 300,000
Ownership percentage		65.00%	96.50%
Repayment of non-interest bearing advances			$ 150,087
Stock Purchase Agreement [Member]
Number of common stock sold, shares				43,822,001
Number of common stock sold				$ 43,822
Sale of stock price per share				$ 0.001

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Deferred Commission (Details Narrative) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Equity Method Investment Aggregate Cost Previously Paid
Deferred commission	$ 324,045	$ 338,509

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Property and Equipment, Net - Schedule of Property and Equipment (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Property and equipment, gross	$ 273,967	$ 1,966,338
Less: Accumulated depreciation	(200,261)	(501,923)
Property and equipment, net	73,706	1,464,415
Office Furniture [Member]
Property and equipment, gross	46,051	228,996
Building [Member]
Property and equipment, gross		1,510,312
Vehicles [Member]
Property and equipment, gross	213,803	212,972
Electronic Equipment [Member]
Property and equipment, gross	$ 14,113	$ 14,058

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (675,601)	$ (777,469)
Adjustments required to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	80,295	86,000
Provision for bad debts	14,967	8,914
Impairment of inventory		(15,356)
Loss from sale of building	33,166
Changes in net assets and liabilities:
Accounts receivable	(26,833)	8,335
Other receivables and prepaid expenses	(10,264)	(5,407)
Advances to suppliers	(687,533)	1,276
Deferred commission	15,973	18,092
Deferred travel cost	10,519	15,867
Inventory	7,267	48,403
Accounts payable	(2,947)	17,097
Unearned revenue	(89,354)	(67,256)
Taxes payable	(8,976)	14,024
Accrued liabilities and other payables	79,418	196,650
Net cash used in operating activities	(1,259,903)	(450,830)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(1,405)
Net cash used in investing activities		(1,405)
CASH FLOWS FROM FINANCING ACTIVITIES:
Lease liability	(8,890)
Capital contribution	1,249,125	142,912
Change in advance from shareholder	5,146	271,428
Net cash provided by financing activities	1,245,381	414,340
EFFECT OF EXCHANGE RATE CHANGE ON CASH	6,723	3,857
NET DECREASE IN CASH	(7,799)	(34,038)
CASH BEGINNING OF PERIOD	11,264	37,630
CASH END OF PERIOD	3,465	3,592
Supplemental Cash flow data:
Income tax paid
Interest paid
Non-cash investing and financing activities:
Proceeds from sale of building offset against shareholder loans	1,326,260
Right of use asset and related liability	207,049
Lease liability paid by shareholder	$ 17,780

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Consolidated Balance Sheets - USD ($)	Jun. 30, 2019	Dec. 31, 2018
CURRENT ASSETS
Cash	$ 3,465	$ 11,264
Accounts receivable, net	48,078	36,209
Other receivables and prepaid expenses	45,063	34,785
Advances to suppliers	681,040	1,591
Deferred commission	324,045	338,509
Deferred travel cost	210,664	220,200
Inventory	6,268	13,396
Advances to shareholder	118,218
Total current assets	1,436,841	655,954
NONCURRENT ASSETS
Property and equipment, net	73,706	1,464,415
Right of use asset	176,029
Total non-current assets	249,735	1,464,415
TOTAL ASSETS	1,686,576	2,120,369
CURRENT LIABILITIES
Accounts payable	37,170	39,927
Unearned revenue	2,107,501	2,187,267
Taxes payable	1,218,387	1,222,486
Accrued liabilities and other payables	776,530	695,375
Lease liability - current	98,803
Advance from shareholder		1,166,198
Total current liabilities	4,238,391	5,311,253
LONG-TERM LIABILITIES:
Lease liability - non current	77,226
TOTAL LIABILITIES	4,315,617	5,311,253
CONTINGENCIES (NOTE 15)
STOCKHOLDERS' DEFICIT
Undesignated preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding
Common stock, par value $0.00001 per share, 950,000,000 shares authorized; 287,838,699 shares issued and outstanding	2,879	2,879
Paid in capital	5,644,504	4,395,379
Statutory reserve	11,721	11,721
Accumulated deficit	(8,412,041)	(7,736,440)
Accumulated other comprehensive income	123,896	135,577
TOTAL STOCKHOLDERS' DEFICIT	(2,629,041)	(3,190,884)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 1,686,576	$ 2,120,369

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Lease (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Schedule of Maturities of Lease Liabilities

Maturities of lease liabilities were as follows:

For the 12 months ending June 30,:
2020	$	105,422
2021		79,067
Total lease payments		184,489
Less imputed interest		(8,460	)
Total		176,029
Less Current Portion		(98,803	)
Long Term Portion	$	77,226

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Inventory (Tables)

6 Months Ended

Jun. 30, 2019

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory consisted of the following at June 30, 2019 and December 31, 2018:

	June 30, 2019		December 31, 2018
Finished goods – health supplements	$	6,268	$	13,396

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Operating Contingencies

6 Months Ended

Jun. 30, 2019

Risks and Uncertainties [Abstract]

Operating Contingencies

15. OPERATING CONTINGENCIES

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

The Company’s sales, purchases and expenses are denominated in RMB and all of the Company’s assets and liabilities are also denominated in RMB. The RMB is not freely convertible into foreign currencies under the current law. In China, foreign exchange transactions are required by law to be transacted only by authorized financial institutions. Remittances in currencies other than RMB may require certain supporting documentation to effect the remittance.

The Company is, from time to time, involved in litigation incidental to the conduct of its business litigation regarding merchandise sold, including product litigation with respect to various employment matters, including litigation with present and former employees, wage and hour litigation and litigation regarding intellectual property rights.

The Company believes that current pending litigation will not have a material adverse effect on its consolidated financial position, results of operations or cash flows.

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Accrued Liabilities and Other Payables (Details Narrative) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Payable to employees	$ 337,585	$ 296,173
Commission payable	$ 104,273	$ 103,978

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Related Party Transactions (Details Narrative)	1 Months Ended				6 Months Ended
	May 31, 2017 USD ($)	May 31, 2017 CNY (¥)	May 31, 2014 USD ($)	May 31, 2014 CNY (¥)	Jun. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)
Advance to shareholder					$ 118,218
Advance from shareholder						$ 1,166,198
Lease term			3 years	3 years
Monthly rent	$ 721		$ 721
Lease renewal term	3 years	3 years
Lease expiry date	May 28, 2020	May 28, 2020
June 30, 2020 [Member]
Future annual minimum lease payment					$ 7,931
Major Shareholder [Member]
Lease payments description					The monthly rent was RMB 5,000 ($721), the Company was required to prepay each year's annual rent at 15th of May of each year. The Company renewed the lease in May 2017 for another three years until May 28, 2020 with monthly rents of RMB 5,000 ($721), payable quarterly.
RMB [Member]
Monthly rent | ¥		¥ 5,000		¥ 5,000

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Subsequent Event (Details Narrative) - Subsequent Event [Member]	1 Months Ended
	Aug. 07, 2019 USD ($) shares
Number of shares issued | shares	10,000,000
Proceed from private offering | $	$ 1,000,000