item 14 principal accounting fees services board directors preapproves services provided independent auditors services fees reviewed approved board directors either respective services rendered board directors considered nature amount fees billed independent auditors believes provision services activities unrelated audit compatible maintaining independent auditors’ independence part iv item 15 item 7 management’s discussion analysis financial condition results operations fountain healthy aging formerly immureboost inc incorporated state nevada february 25 2004 since inception company involved bankruptcy receivership similar proceedings undergone material reclassification merger consolidation purchase sale significant amount assets ordinary course business general prior august 18 2007 company business providing travel bookings timeshare rentals sales fountain healthy aging formerly immureboost inc formed february 25 2004 name celtic cross inc “for profit” corporation purpose acquiring timeshare entities discussed herein additional like entities going forward including full sales service website company elected fiscal year end december 31 july 17 2006 board directors voted change name company esavingstorecom inc accurately reflect company’s business plan july 5 2007 shareholders company approved name change immureboost inc august 18 2007 company entered asset purchase agreement immureboost thailand thai corporation seller develops processes products pharmaceuticals interact immune system terms agreement company acquire certain assets seller including patents trademarks consideration assets certain shareholders seller receive shares companys common stock company believe seller would able deliver assets set forth agreement seller might rights patents trademarks represented agreement therefore company opinion seller breeched agreement terminated rights obligations thereunder shares issued assets transferred pursuant agreement august 26 2008 shareholders company approved name change fountain healthy aging inc company established relationship natural planet company acquired rights distribute number antiaging products developed natural planet based upon company process developing business pioneering sciencebased company licenses distributes effective natural safe products slow delay aging process improve symptoms associated aging revenue date company generated revenues operations expenses year ended december 31 2008 consisted primary general administrative expenses totaling 369143 compared 330335 year ended december 31 2007 liquidity next 12 months company need significant working capital fund development business company intends obtain working capital either sale product private investments made third parties debt instruments item 7a item 7 management’s discussion analysis financial condition results operations overview business company please refer within annual report form 10k part item 1 “business” critical accounting policies use estimates prepare financial statements conformity us gaap requires management make certain estimates apply judgments base estimates judgments historical experience current trends factors management believes important time financial statements prepared regular basis review accounting policies applied disclosed condensed financial statements actual results could differ estimates made management believe significant accounting policies described note 2 consolidated financial statements following accounting policies involve greater degree judgment complexity accordingly policies believe critical aid fully understanding evaluating financial condition results operations revenue recognition recognize revenue sale “coffee tea” products net valueadded taxes upon delivery time title passes customer customers required pay advance making sales orders advance initially recorded advance customers year ended december 31 2020 2019 product revenue amounting 1194427 2107465 respectively addition provide preopening assistance retail partners operate coffee stores revenue recognized upon completion services year ended december 31 2020 2019 service revenue amounting 66022 nil respectively revenue recognition policy compliance asu 201409 revenue contracts customers revenue recognized customer obtains control promised goods recognized amount reflects consideration expect receive exchange goods addition standard requires disclosure nature amount timing uncertainty revenue cash flows arising contracts customers amount revenue recorded reflects consideration expect receive exchange goods apply following fivestep model order determine amount identification services contract ii determination whether services performance obligations including whether distinct context contract iii measurement transaction price including constraint variable consideration iv allocation transaction price performance obligations v recognition revenue company satisfies performance obligation apply fivestep model contracts probable collect consideration entitled exchange goods services transfer customer contract determined within scope asc 606 contract inception review contract determine performance obligations must deliver performance obligations distinct recognize revenues amount transaction price allocated respective performance obligation performance obligation satisfied generally performance obligations transferred customers point time typically upon delivery service rendered reporting periods disclosed value unsatisfied performance obligations product revenue contracts original expected length one year less optional exemption permitted adopted rules concentrations credit risk financial instruments potentially expose us significant concentration credit risk consist primarily cash equivalents december 31 2020 2019 substantially company’s cash equivalents deposited financial institutions highcredit ratings quality customers constituting 10 net revenues fiscal years 2020 2019 recently issued adopted accounting pronouncements june 2016 fasb issued asu 201613 financial instruments credit losses topic 326 measurement credit losses financial statements asu requires financial asset group financial assets measured amortized cost basis presented net amount expected collected allowance credit losses valuation account deducted amortized cost basis financial assets present net carrying value amount expected collected financial asset accounting standards update affects entities holding financial assets net investment leases accounted fair value net income amendments affect loans debt securities trade receivables net investments leases balance sheet credit exposures reinsurance receivables financial assets excluded scope contractual rights receive cash smaller public business entities amendments update effective fiscal years beginning january 1 2023 including interim periods within fiscal years entities may adopt amendments update cumulativeeffect adjustment retained earnings beginning first reporting period guidance effective modifiedretrospective approach process evaluating impact adoption pronouncement consolidated financial statements review new accounting standards issued identified new standards believe significant impact financial statements results operations following discussion read conjunction consolidated financial statements fountain healthy aging inc attached hereto year ended december 31 2020 2019 revenue generated 1194427 revenue year ended december 31 2020 compared 2107465 year ended december 31 2019 year ended december 31 2020 2019 product revenue amounting 1128405 2107465 respectively addition provide preopening assistance retail partners operate coffee stores revenue recognized upon completion services year ended december 31 2020 2019 service revenue amounting 66022 nil respectively covid19 pandemic developed rapidly 2020 resulting impact virus operations measures taken chinese government contain virus negatively affected results 2020 lead decline revenues 913038 433 compared fiscal year 2019 cost revenue cost revenue 176393 year ended december 31 2020 compared 275916 year ended december 31 2019 decrease cost revenue 99523 361 result negative impact covid19 pandemic cost revenue consists cost raw materials cost manufactured goods sold customers including labor cost rental expense research development costs etc decrease cost raw materials relatively line decrease revenue whereas decrease cost manufactured goods customers lower decrease revenue fixed costs nature gross profit gross profit year ended december 31 2020 1018034 compared 1831549 year ended december 31 2019 gross profit margin 793 year ended december 31 2020 compared 869 year ended december 31 2019 decrease gross profit primarily attributable fact revenue dropped 433 whereas decrease cost steadily incurred lower decrease revenue fixed costs operating expenses far significant component operating expenses year ended december 31 2020 2019 general administrative expenses 1519552 1963728 respectively following table sets forth main components general administrative expenses years ended december 31 2020 2019 decrease general administrative expenses 444176 226 1963728 year ended december 31 2019 1519552 year ended december 31 2020 mainly due decrease manpower number exhibitions held net loss incurred net loss 627870 year ended december 31 2020 compared net loss 351546 year ended december 31 2019 increase 276324 786 increase primarily attributable fact gross profit dropped significantly addition incurred less administrative expenses covid19 pandemic liquidity capital resources december 31 2020 cash equivalents 61517 date financed operations primarily advance related parties following table provides detailed information net cash flows year ended december 31 2020 2019 operating activities net cash provided operating activities 37755 year ended december 31 2020 compared net cash provided operating activities 211725 year ended december 31 2019 decrease net cash provided operating activities mainly attributable increase prepayment 135599 increase amounts due related parties 815535 864845 fiscal year 2020 compared 49310 fiscal year 2019 advance obtained mainly used operations increases offset decrease advance customers 898355 investing activities net cash used investing activities year ended december 31 2020 2800 compared 190895 year ended december 31 2019 decrease net cash used investing activities mainly attributable less acquisition leasehold improvements equipment intangible assets fiscal year 2020 capital expenditures capital expenditures year ended december 31 2020 2019 2800 190895 respectively decrease capital expenditures due less acquisition leasehold improvements equipment intangible assets evaluate assess covid19 pandemic impact business determine plan increasing capital expenditures 2021 fiscal year contractual obligations commercial commitments following contractual obligations commercial commitments december 31 2020 years ended december 31 2020 2019 entered various operating lease agreement commencing fiscal year 2020 2019 expiring variance dates september 2023 average monthly lease expense approximately 25856 outstanding lease commitment december 31 2020 428453 2019 entered noncancelable consultancy service agreement thirdparty provision services related us listing contract amount 1200000 outstanding commitment december 31 2020 120000 item 7a item 7a quantitative qualitative disclosures market risk applicable item 8 item 7a quantitative qualitative disclosures market risk “smaller reporting company” required provide information required item 8 item 8 financial statements supplementary data required financial statements included immediately following signatures section form 10k item 9 item 8 financial statements supplementary data financial statements report independent registered public accounting firm listed “index consolidated financial statements” page included pages immediately following signature page annual report form 10k item 9 item 15 exhibits financial statement schedules exhibits exhibit document location 31 articles incorporation previously filed 32 amendment articles previously filed 33 change articles previously filed 34 bylaws previously filed rule 13a14a15d14a certifications included section 1350 certifications included signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized fountain healthy aging inc byspaul hunston paul hunston ceo principal financial officer pursuant requirements securities exchange act 193 report signed following persons behalf registrant capacities dates indicated bys paul hunston paul hunston ceo principal financial officer director paul hunston tony jimenez director fountain healthy aging inc formerly immureboost inc development stage company financial statements year ended december 31 2008 2007 period february 25 2004 date inception december 31 2008 report independent registered public accounting firm board directors stockholders fountain healthy aging inc audited accompanying balance sheets fountain healthy aging inc development stage company december 31 2008 2007 related statements operations stockholders’ deficit cash flows years ended period february 25 2004 inception december 31 2008 financial statements responsibility companys management responsibility express opinion financial statements based audits conducted audits accordance standards public company accounting oversight board united states america standards require plan perform audits obtain reasonable assurance whether financial statements free material misstatement company required engaged perform audit internal control financial reporting audits included consideration internal control financial reporting basis designing audit procedures appropriate circumstances purpose expressing opinion effectiveness company’s internal control financial reporting accordingly express opinion audit also includes examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects financial position fountain healthy aging inc december 31 2008 2007 results operations cash flows periods ended conformity accounting principles generally accepted united states america accompanying financial statements prepared assuming company continue going concern discussed note 8 financial statements company incurred losses since inception generated minimal revenues planned principal operations raises substantial doubt company’s ability meet obligations continue going concern management’s plans regard matter described note 8 financial statements include adjustments might result outcome uncertainty schild van wagoner bradshaw pllc child van wagoner bradshaw pllc salt lake city utah april 15 2009 fountain healthy aging inc formerly immureboost inc development stage company balance sheets see accompanying notes financial statements fountain healthy aging inc formerly immureboost inc development stage company statements operations see accompanying notes financial statements fountain healthy aging inc formerly immureboost inc development stage company statement shareholders’ deficit see accompanying notes financial statements fountain healthy aging inc formerly immureboost inc development stage company statements cash flows see accompanying notes financial statements fountain healthy aging inc formerly immureboost inc development stage company notes financial statements unaudited year ended december 31 2008 1 organization summary significant accounting policies summary significant accounting policies fountain healthy aging inc formerly immureboost inc development stage company “the company” presented assist understanding companys financial statements accounting policies conform accounting principles generally accepted united states america consistently applied preparation accompanying financial statements company realized minimal revenues planned principal business purpose accordingly considered development stage accordance sfas 7 business description fountain healthy aging inc nevada corporation originally organized february 25 2004 acquire timeshares like entities facilitate rentals sales entities travel packages via fullservice travel website august 18 2007 company entered asset purchase agreement immureboost inc thailand company intention purchase intellectual property develop products affect human body’s immune system assets acquired stock issued date result agreement note 9 company elected fiscal year end december 31 july 17 2006 board directors voted change name company celtic cross ltd esavingsstorecom inc accurately reflect company’s business plan july 5 2007 stockholders company approved name change immureboost inc third quarterthe board directors changed name fountain healthy aging income taxes company recognizes tax effects transactions year transactions enter determination net income regardless reported tax purposes deferred taxes provided financial statements sfas 109 give effect resulting temporary differences may arise differences bases fixed assets depreciation methods allowances startup costs based income taxes expected payable future years development stage deferred tax assets approximating 273000 arising result net operating loss carryforwards totaling 804056 offset completely valuation allowance due uncertainty utilization future periods valuation allowance increased approximately 118000 2800 year ended december 31 2008 2007 respectively estimates preparation financial statements accordance accounting principles generally accepted united states america requires use estimates depreciation valuation timeshare points use estimates inherent financial reporting process actual results could differ significantly estimates fixed assets fixed assets stated cost consist computers office equipment depreciation computed using accelerated doubledeclining method based estimated useful lives 3 years cash equivalents purpose statements cash flows company considers highly liquid debt instruments purchased maturity six months less cash equivalents company 0 7473 cash december 31 2008 december 31 2007 respectively fountain healthy aging inc formerly immureboost inc development stage company notes financial statements unaudited year ended december 31 2008 1 organization summary significant accounting policies continued advertising company generally expenses advertising costs incurred advertising costs incurred period february 25 2004 inception december 31 2008 recently issued accounting pronouncements march 2008 financial accounting standards board “fasb” issued statement financial accounting standards “sfas” 161 “disclosures derivative instruments hedging activities amendment sfas 133” statement effective financial statements issued fiscal years interim periods beginning november 15 2008 requires enhanced disclosures respect derivative hedging activities company comply disclosure requirements statement utilizes derivative instruments engages hedging activities upon effectiveness december 2007 fasb issued sfas 141 revised 2007 “business combinations” revision sfas 141 requires acquirer recognize assets acquired liabilities assumed noncontrolling interest acquiree acquisition date fair values acquisition date limited exceptions revision also requires acquisitionrelated costs recognized separately assets acquired expected restructuring costs recognized liability assumed acquisition date recognized separately business combination addition revision requires business combination achieved stages identifiable assets liabilities well noncontrolling interest acquiree recognized full amounts fair values company believes development stage activities seeking reverse acquisition operating entity occur accounting statement may relevance december 2007 fasb issued sfas 160 “noncontrolling interests consolidated financial statements amendment arb 51” objective statement improve relevance comparability transparency financial statements establishing accounting reporting standards noncontrolling interest subsidiary deconsolidation subsidiary company believes statement impact financial statements unless becomes entity requiring consolidation one corporations september 2006 fasb issued sfas 158 “employers’ accounting defined benefit pension postretirement plans amendment fasb statements 87 88 106 132r” statement improves financial reporting requiring employer recognize overfunded underfunded status defined benefit postretirement plan multiemployer plan asset liability statement financial position recognize changes funded status year changes occur comprehensive income business entity changes unrestricted net assets notforprofit organization statement also improves financial reporting requiring employer measure funded status plan date yearend statement financial position limited exceptions employer publicly traded equity securities required initially recognize funded status defined benefit postretirement plan provide required disclosures end first fiscal year ending december 15 2006 september 2006 fasb issued sfas 157 “fair value measurements” statement defines fair value establishes framework measuring fair value generally accepted accounting principles gaap expands disclosures fair value measurements statement applies accounting pronouncements require permit fair value measurements board previously concluded accounting pronouncements fair value relevant measurement attribute accordingly statement require new fair value measurements however entities application statement change current practice sfas 157 effective first fiscal year begins november 15 2007 none new pronouncements current application company may applicable company’s future financial reporting fountain healthy aging inc formerly immureboost inc development stage company notes financial statements unaudited year ended december 31 2008 1 organization summary significant accounting policies continued revenue recognition described note 3 company acquired interest timeshare property revenues originally intended recognized upon sale timeshare points redeemable utilization property company performs travel related services company recognized minimal revenue 4000 initial intended business purpose since inception december 31 2008 fully described note 9 company entered asset purchase agreement august 2007 fountain healthy aging inc thailand whereby plans develop processes products pharmaceuticals interact immune system company reexamine revenue recognition policy upon completion agreement yet occurred earnings loss per share computation net income loss per share common stock based weighted average number shares outstanding period presented potentially dilutive common share equivalents outstanding periods shown accordingly computation net loss per share fully dilutive basis basic net loss per share 2 related party transactions april 22 2004 company entered consulting agreement entity affiliated former presidentdirector entity engaged perform consulting services provide office space company term six months commencing april 22 2004 exchange 15000 december 30 2004 presidentdirector resigned position company period february 25 2004 inception april 22 2004 see paragraph period july 2006 present note 5 office space services provided without charge companys ceo costs immaterial financial statements reflected therein february 2007 company’s sole officer “the former officer” loaned company 300 pay operating expenses upon resignation positions company effective august 28 2007 former officer forgave amounts owed company written debt additional paidin capital june 15 2007 company appointed new director board directors august 28 2007 individual appointed company’s ceo “the officer” march 2007 prior appointments officer advanced company total 32000 pursuant two promissory notes note 7 notes due demand accrue interest 8 per annum payments made notes since inception resulting accrued interest 1493 december 31 2008 july 6 2007 company entered employment agreement officer whereby officer would perform various services company exchange annual officer compensation 300000 euros plus 100000 euros annual directors fees compensation translated euros us dollars using weighted average exchange rate prorated period july 2007 june 2008 resulting 156266 compensation expense six months ended june 2008 total accrued compensation 592873 june 30 2008 agreement also states officer entitled stock options pursuant separate agreement yet executed may applicable future fountain healthy aging inc formerly immureboost inc development stage company notes financial statements unaudited year ended december 31 2008 august 5 2008 ceo released claims salary 32000 loan company management elected record release current quarter addition paid capital 627006 3 intangible asset company acquired undivided interest wyndham vacation resorts formerly fairfield resorts inc wvr timeshare resort along rights participate timeshare use allow certain others use specified number days lodging wvr timeshare properties rights granted form points june 2004 company purchased 315000 points wvr given bonus 300000 additional points incentive receive 315000 points anniversary date next 99 years points operate currency redeemable time wvr resort year although points represent specific interest grand desert resort las vegas nevada used time exchange accommodations properties around world owned wvr contract sales price points 33100 financed wvr note 7 december 31 2008 company received total 1560000 travel points august 25 2006 company entered agreement consultant “the consultant” whereby company transferred 600000 travel points valued consultant 0046 per point consultant settle debts totaling 27576 resulting balance 645000 points december 31 2006 2007 company paid 300000 points also valued 0046 per point pursuant consulting agreement note 6 resulting remaining total available points 660000 december 31 2007 explained fully note 10 point transfers result reduction intangible asset equal original cost points transferred difference fair market value cost points reported gain disposal assets income expense section statements operations perpoint original cost 0001 resulted reduction intangible asset 600 300 years ended december 31 2007 2006 respectively due points transfers resulting carrying value intangible asset 32200 32500 december 31 2007 2006 restated respectively company recognized gain disposal assets 13488 26976 years ended december 31 2007 2006 restated respectively point transfers occurred year ended december 31 2008 2007 light asset purchase agreement entered august 2007 note 9 company decided focus immune boosting business currently seeking dispose intangible asset result carrying value asset impaired 0 fourth quarter 2007 impairment recorded separate component income expenses statements operations 4 stockholders equity march april 2004 company issued common stock cash accordance separate private offering memorandums follows number shares price per share cash received 13500000 000067 14250000 00067 9500 15000000 002 30000 5700000 0033 19000 2400000 0067 16000 75000 0067 500 50925000 75900 21 forward split 101850000 75400 services transfer agent fountain healthy aging inc formerly immureboost inc development stage company notes financial statements unaudited year ended december 31 2008 board directors authorized 301 forward stock split july 1 2006 21 reverse stock split june 12 2007 number shares issued accordance private offerings 2004 listed retroactively restated include effects splits pursuant form 8k filed sec july 28 2006 board directors voted increase company’s authorized common shares 75000000 1000000000 shares october 1 2006 company issued 75000 shares common stock 0067 per share transfer agent 500 services resulting 50925000 common shares issued outstanding december 31 2007 december 22 2008 board directors approved forward split 21 101850000 shares issued outstanding december 31 2008 5 commitments contingencies company entered lease agreement office space nevada oneyear period commencing april 1 2005 monthly rent payments 400 company paid 4800 entire year rent front initial security deposit 1200 625 use lessor’s office furniture term lease initial security deposit applied towards rent period april june 2006 rent expense amortization office furniture fund year ended december 31 2006 2816 resulting 0 prepaid rent deposits december 31 2006 contract renewed upon expiration period july 2006 present company’s officers providing office space cost company 6 consulting agreement october 2006 company entered agreement unrelated consultant “the consultant” would perform services company fourth quarter 2006 compensation company required pay consultant 9000 cash 300000 timeshare points valued 0046 proportionate 600000 points transferred another consultant satisfy 27576 debt owed consultant note 3 accordingly 300000 points assigned value 13788 resulting payable due consultant 22788 december 31 2006 points transferred consultant year ended december 31 2007 resulting 300 reduction original cost intangible asset timeshare investment gain disposal assets 13488 upon transfer points company failed record corresponding reduction consulting fees due consultant paid additional cash attempt satisfy perceived remaining payable resulting overpayment also 2007 consultant forgave debts owed company totaling 3036 net inadvertent 13788 overpayment 3036 debt forgiveness resulted net receivable due consultant 10752 december 31 2007 december 31 2008 consultant receivable zero balance accounting treatment points transfer fully discussed notes 3 10 agreement renewed subsequent term fountain healthy aging inc formerly immureboost inc development stage company notes financial statements unaudited year ended december 31 2008 7 notes payable accrued interest expense 3649 december 31 2008 13675 total related party notes payable 13675 32000 total notes payable 104881 93058 less current portions shortterm loans 87283 72564 total notes payable longterm 17598 20494 fountain healthy aging inc formerly immureboost inc development stage company notes financial statements unaudited year ended december 31 2008 8 going concern liquidity considerations accompanying financial statements prepared assuming company continue going concern contemplates among things realization assets satisfaction liabilities normal course business december 31 2008 company working capital deficit 1147741 accumulated deficit 835555 unanticipated costs expenses inability generate revenues could require additional financing would sought bank borrowings equity debt financing asset sales extent financing available company may able may delayed developing services meeting obligations company continue evaluate projected expenditures relative available cash evaluate additional means financing order satisfy working capital cash requirements accompanying financial statements reflect adjustments might result outcome uncertainties 9 asset purchase agreement august 18 2007 company entered asset purchase agreement immureboost inc thai corporation seller develops processes products pharmaceuticals interact immune system terms agreement company acquire certain assets seller including patents trademarks consideration assets certain shareholders seller receive 20370000 restricted shares defined rule 144 securities act 1933 companys common stock shall constitute 40 stock issued outstanding december 31 2007 29 total shares issued outstanding shares issued purchase yet completed shares issued assets acquired result agreement item 15 exhibits financial statement schedules financial statements report independent registered public accounting firm listed “index consolidated financial statements” page included pages immediately following signature page annual report form 10k following exhibits included part report filed herewith furnished herewith pursuant rule 406t regulation st interactive data files exhibit 101 hereto deemed filed part registration statement prospectus purposes sections 11 12 securities act 1933 deemed filed purposes section 18 securities exchange act 1934 otherwise subject liability sections signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereto duly authorized pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities dates indicated dated april 15 2021 zhu hong zhu hong president chief executive officer director dated april 15 2021 zhu hong zhu hong treasurer chief financial officer director fountain healthy aging inc consolidated financial statements years ended december 31 2020 2019 fountain healthy aging inc report independent registered public accounting firm board directors stockholders fountain healthy aging inc opinion financial statements audited accompanying consolidated balance sheets fountain healthy aging inc together subsidiaries “the company” december 31 2020 2019 related consolidated statements loss comprehensive loss stockholders’ deficit cash flows years ended related notes collectively referred “financial statements” opinion financial statements present fairly material respects financial position company december 31 2020 2019 results operations cash flows years ended conformity accounting principles generally accepted united states going concern uncertainty accompanying financial statements prepared assuming company continue going concern discussed note 2 financial statements company incurred recurring losses operations net current liabilities accumulated deficits raise substantial doubt ability continue going concern management’s plans regard matters also described note 2 financial statements include adjustments might result outcome uncertainty basis opinion financial statements responsibility company’s management responsibility express opinion company’s financial statements based audits public accounting firm registered public company accounting oversight board united states “pcaob” required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audits accordance standards pcaob standards require plan perform audits obtain reasonable assurance whether financial statements free material misstatement whether due error fraud company required engaged perform audit internal control financial reporting part audits required obtain understanding internal control financial reporting purpose expressing opinion effectiveness company’s internal control financial reporting accordingly express opinion audits included performing procedures assess risks material misstatement financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures financial statements audits also included evaluating accounting principles used significant estimates made management well evaluating overall presentation financial statements believe audits provide reasonable basis opinion emphasis matter company significant transactions related parties described note 12 financial statements transactions involving related parties cannot presumed carried arm’s length basis requisite conditions competitive free market dealings may exist audit alliance llp served company’s auditor since 2021 singapore april 15 2021 fountain healthy aging inc consolidated balance sheets us dollars except share data otherwise stated december 31 2020 2019 audited accompanying notes integral part financial statements fountain healthy aging inc consolidated statements loss comprehensive loss us dollars except share data otherwise stated years ended december 31 2020 2019 audited accompanying notes integral part financial statements fountain healthy aging inc consolidated statements changes equity deficit us dollars except share data otherwise stated years ended december 31 2020 2019 audited accompanying notes integral part financial statements fountain healthy aging inc consolidated statements cash flows us dollars except share data otherwise stated years ended december 31 2020 2019 audited accompanying notes integral part financial statements fountain healthy aging inc consolidated notes financial statements years ended december 31 2020 2019 audited 1description business fountain healthy aging inc “company” “fhai” incorporated laws state nevada february 25 2004 original company name celtic cross ltd initially purpose acquiring timeshare entities additional like entities unknown reasons fhai later abandoned ceased filings nevada secretary state ten years following december 2 2008 thereafter april 2019 district court nevada appointed custodian ventures llc “custodian” custodian fhai upon application appointment custodian filed custodian brought fhai active status state nevada appointed directors officers fhai took control fhai february 2 2021 fhai engaged business shell company february 1 2021 fhai entered share exchange agreement “exchange agreement” wei lian jin meng group limited liability company incorporated cayman islands “wljm cayman” together subsidiaries “wljm subsidiaries group” shareholders together shares constituting 100 issued outstanding shares wljm cayman “sellers” pursuant terms exchange agreement sellers transferred fhai shares wljm cayman exchange issuance 600000000 shares “shares” fhai’s common stock “acquisition” acquisition accounted recapitalization fhai whereby wljm cayman accounting acquirer result acquisition fhai holding company engaged providing products services food beverage industry including producing selling “coffee tea” products represent drinks made mixture coffee tea black coffee products coffee products immediately completion acquisition february 2 2020 “closing date” fhai’s capital stock consisted 750000000 shares common stock par value 000001 per share “common stock” authorized 600034500 shares issued outstanding ii 100000000 shares preferred stock par value 000001 per share 100000000 shares designated series preferred stock “series preferred stock” 100000000 shares issued outstanding result acquisition closing date company ceased fall definition shell company defined rule 12b2 exchange act 1934 amended “exchange act” wljm cayman wholly owned subsidiary accounting purposes share exchange treated reverse acquisition wljm cayman acquirer company acquired party wljm cayman incorporated cayman islands cayman islands companies law june 30 2020 company conduct substantive operations instead conducts business operations subsidiaries peoples’ republic china “prc” wei lian jin meng hong kong co ltd “wljm hk” incorporated hong kong hong kong companies’ ordinance chapter 622 august 5 2020 wljm hk 100 owned subsidiary wljm cayman jin wei meng shenzhen consulting co ltd “jywm wfoe” incorporated peoples’ republic china “prc” november 24 2020 jywm wfoe 100 owned subsidiary wljm hk shenzhen wei lian jin meng electronic commerce limited “shenzhen wei lian” incorporated peoples’ republic china “prc” october 17 2017 shenzhen wei lian 100 owned subsidiary jywm wfoe shenzhen wei lian wholesales “coffee tea” products retail partners corporate customers dongguan dishi coffee limited “dongguan dishi” incorporated peoples’ republic china “prc” october 25 2018 dongguan dishi 100 owned subsidiary shenzhen wei lian dongguan dishi merchandizes “coffee tea” products shenzhen wei lian shenzhen nainiang coffee art museum limited “shenzhen nainiang” incorporated peoples’ republic china “prc” june 20 2019 shenzhen nainiang 100 owned subsidiary shenzhen wei lian shenzhen nainiang starts generating revenues fiscal year 2020 currently shenzhen nainiang sells “coffee tea” products individual consumers provides preopening assistance retail partners operate coffee stores shenzhen nainiang plans operate selfowned retailed stores sell “coffee tea” products serve cups freshly brewed “coffee tea” company evaluating number stores opened subsequent december 31 2020 given covid19 situation reorganization wljm cayman subsidiaries completed december 24 2020 2summary significant accounting policies abasis presentation accompanying financial statements include balances results operations company prepared pursuant rules regulations us securities exchanges commission “sec” conformity generally accepted accounting principles us “us gaap” accompanying financial statements presented basis company going concern going concern assumption contemplates realization assets satisfaction liabilities normal course business company incurred net loss 627870 351546 years ended december 31 2020 2019 respectively december 31 2020 company net current liability 1442635 deficit equity 1035605 ability continue going concern dependent upon company’s profit generating operations future andor obtaining necessary financing meet obligations repay liabilities arising normal business operations become due consolidated financial statements include adjustments recoverability classification recorded asset amounts classification liabilities might necessary company unable continue going concern company expects finance operations primarily cash flow revenue capital contributions shareholders company event company requires additional funding finance growth company’s current expected future operations well achieve strategic objectives shareholders company indicated intent ability provide additional equity financing conditions raise substantial doubt company’s ability continue going concern company’s continuation going concern dependent company’s ability meet obligations become due obtain additional equity alternative financing required fund operations sufficient sources recurring revenues generated assurance company successful plans described attracting equity alternative financing acceptable terms consolidated financial statements include adjustments might result outcome uncertainty bbasis consolidation pursuant reorganization wljm cayman became holding company wljm subsidiaries group common control controlling shareholder reorganization result acquisition fhai accordingly fhai subsidiaries’ collectively referred “company” financial statements prepared consolidated basis applying predecessor value method reorganization completed beginning earliest reporting period consolidated statements profit loss comprehensive income consolidated statements changes equity consolidated statements cash flows company relevant periods include results cash flows companies comprising company earliest date presented since date subsidiaries andor businesses first came common control controlling shareholders wherever period shorter consolidated balance sheets company december 31 2020 2019 prepared present assets liabilities subsidiaries using existing book values controlling shareholders’ perspective adjustments made reflect fair values recognize new assets liabilities result reorganization intragroup intercompany transactions balances eliminated consolidation cuse estimates preparation financial statements conformity us gaap requires management make estimates assumptions affect reported amounts assets liabilities related disclosures contingent liabilities balance sheet date revenue expenses financial statements accompanying notes significant accounting estimates reflected company’s financial statements include valuation allowance deferred tax assets economic lives impairment leasehold improvements equipment allowance doubtful accounts etc actual results could differ estimates differences could affect results operations reported future periods dcash cash equivalents company considers highly liquid investments purchased original maturities three months less cash equivalents cash equivalents relate cash hand cash bank december 31 2020 2019 renminbi freely convertible foreign currencies prc foreign exchange control regulations administration settlement sales payment foreign exchange regulations company permitted exchange renminbi foreign currencies banks authorized conduct foreign exchange business eleasehold improvement equipment item leasehold improvement equipment stated cost less accumulated depreciation accumulated allowance decrease value cost item leasehold improvement equipment comprises purchase price import duties nonrefundable purchase taxes deducting trade discounts rebates costs directly attributable bringing asset location condition necessary capable operating manner intended management include initial estimate costs dismantling removing item restoring site located obligation entity incurs either item acquired consequence used item particular period cost replacing part leasehold improvement equipment included carrying amount asset probable future economic benefits flow company carrying amount replaced parts derecognized repairs maintenance charged statement profit loss financial period incurred depreciation calculated straightline basis write cost asset residual value estimated useful life follows assets’ residual value useful lives depreciation method regularly reviewed fimpairment longlived assets company reviews longlived assets impairment whenever events changes circumstances indicate carrying amount asset may longer recoverable whenever indication showing permanent decrease amount leasehold improvement equipment evidence obsolescence physical damage asset significant changes manner asset used expected used company shall recognize loss decrease value leasehold improvement equipment statement profit loss carrying amount asset higher recoverable amount company measures impairment comparing carrying value longlived assets estimated discounted future cash flows expected result use assets eventual disposition sum expected discounted cash flow less carrying amount assets company would recognize impairment loss based fair value assets company recorded impairment loss intangible assets 77264 nil years ended december 31 2020 2019 respectively grevenue recognition company recognizes revenue sale “coffee tea” products net valueadded taxes upon delivery time title passes customer customers required pay advance making sales orders advance initially recorded advance customers year ended december 31 2020 2019 product revenue amounted 1218256 2107465 respectively addition company provides preopening assistance retail partners operate coffee stores revenue recognized upon completion services year ended december 31 2020 2019 service revenue amounted 66022 nil respectively company’s revenue recognition policy compliance asu 201409 revenue contracts customers whereby revenue recognized customer obtains control promised goods recognized amount reflects consideration company expects receive exchange goods addition standard requires disclosure nature amount timing uncertainty revenue cash flows arising contracts customers amount revenue recorded reflects consideration company expects receive exchange goods company applies following fivestep model order determine amount identification services contract ii determination whether services performance obligations including whether distinct context contract iii measurement transaction price including constraint variable consideration iv allocation transaction price performance obligations v recognition revenue company satisfies performance obligation company applies fivestep model contracts probable company collect consideration entitled exchange goods services transfers customer contract determined within scope asc 606 contract inception company reviews contract determine performance obligations company must deliver performance obligations distinct company recognizes revenues amount transaction price allocated respective performance obligation performance obligation satisfied generally company’s performance obligations transferred customers point time typically upon delivery service rendered reporting periods company disclosed value unsatisfied performance obligations product revenue contracts original expected length one year less optional exemption permitted adopted rules hresearch development costs research development costs expensed incurred research development costs included general administrative expenses years ended december 31 2020 2019 98892 99687 respectively ioperating leases company determines arrangement contains lease inception company elected practical expedient asset classes account lease component contract associated nonlease components single lease component rather allocating standalone value component lease purposes calculating operating lease obligations standard company’s lease terms may include options extend terminate lease reasonably certain company exercise option company’s leases contain material residual value guarantees material restrictive covenants operating lease expense recognized straightline basis lease terms discount rate used measure lease obligation usually rate implicit lease however company’s operating leases generally provide implicit rate accordingly company uses incremental borrowing rate lease commencement determine present value lease payments incremental borrowing rate entityspecific rate represents rate interest lessee would pay borrow collateralized basis similar term similar payments jforeign currency translation company’s reporting currency us dollar functional currency chinese renminbi “rmb” assets liabilities translated exchange rates balance sheet date revenue expenses translated average yearly exchange rates equity translated historical exchange rates translation adjustments resulting included determining net income included foreign exchange adjustment comprehensive income component equity transactions currencies functional currencies year converted applicable functional currencies applicable rates exchange prevailing dates transactions exchange gains losses recognized statements operations exchange rates utilized follows representation made rmb amounts could converted us dollars rates used translation kforeign currency risk rmb freely convertible currency state administration foreign exchange authority people’s bank china controls conversion rmb currencies value rmb subject changes central government policies international economic political developments affecting supply demand china foreign exchange trading system market company’s cash equivalents rmb lcovid19 coronavirus disease covid19 outbreak measures taken contain spread pandemic created high level uncertainty global economic prospects impacted company’s operations financial performance last two months financial year subsequent financial year end situation continues evolve significant level uncertainty company unable reasonably estimate full financial impact covid19 outbreak company monitoring situation closely mitigate financial impact conscientiously managing cost adopting operating cost reduction strategy conserving liquidity working major creditors align repayment obligations receivable collections mfair value fair value price would received selling asset paid transfer liability orderly transaction market participants measurement date determining fair value measurements assets liabilities required permitted recorded fair value company considers principal advantageous market would transact considers assumptions market participants would use valuing asset liability authoritative literature provides fair value hierarchy prioritizes inputs valuation techniques used measure fair value three broad levels level hierarchy within fair value measurement entirety falls based upon lowest level input significant fair value measurement follows level 1 level 1 applies assets liabilities quoted prices active markets identical assets liabilities level 2 level 2 applies assets liabilities inputs quoted prices included within level 1 observable asset liability quoted prices similar assets liabilities active markets quoted prices identical assets liabilities markets insufficient volume infrequent transactions less active markets modelderived valuations significant inputs observable derived principally corroborated observable market data level 3 level 3 applies assets liabilities unobservable inputs valuation methodology significant measurement fair value assets liabilities nfair value financial instruments company’s financial instruments consist primarily cash equivalents accounts receivables accounts payable payables advance customers carrying amounts balances approximate fair values due shortterm maturities instruments oinventories inventories primarily consist packing materials finished goods stated lower cost determined weighted average basis net realizable value net realizable value estimated selling price ordinary course business less estimated cost completion estimated costs necessary make sale inventories sold carrying amount charged expense period revenue recognized writedowns declines net realizable value losses inventories recognized expense period impairment loss occurs allowance obsolete finished goods years ended december 31 2020 2019 pearnings per share company reports earnings per share accordance asc 260 “earnings per share” requires presentation basic diluted earnings per share conjunction disclosure methodology used computing earnings per share basic earnings per share excludes dilution computed dividing income available common stockholders weighted average common shares outstanding period diluted earnings per share takes account potential dilution could occur securities contracts issue common stock exercised converted common stock number common shares outstanding increases result stock dividend stock split decreases result reverse stock split computations basic diluted earnings per share shall adjusted retroactively periods presented reflect change capital structure company’s basic earnings per share computed dividing net income available holders weighted average number company’s ordinary shares outstanding diluted earnings per share reflects amount net income available ordinary share outstanding period plus number additional shares would outstanding potentially dilutive securities issued series preferred stock included dilutive ordinary shares december 31 2020 2019 qincome taxes income tax expense comprises current deferred taxation recognized profit loss except extent relates items recognized directly comprehensive income equity case recognized directly comprehensive income equity current tax expected tax payable taxable income year using tax rates enacted substantively enacted reporting date adjustment tax payable respect previous periods company accounts income taxes using asset liability approach method deferred tax assets liabilities determined based difference financial reporting tax basis assets liabilities net operating loss carry forwards credits applying enacted tax rates effect period differences expected reverse effect deferred taxes change tax rates recognized statements operations period change company accounts uncertain tax positions reporting liability unrecognized tax benefits resulting uncertain tax positions taken expected taken tax return tax benefits recognized uncertain tax positions company believes likely tax position sustained examination tax authorities based technical merits position company recognizes interest penalties related unrecognized tax benefits income tax expenses rcomprehensive income comprehensive income includes net income foreign currency translation adjustments comprehensive income reported statements comprehensive income sconcentration credit risk financial instruments potentially expose company significant concentration credit risk consist primarily cash equivalents receivables amounts due related parties december 31 2020 2019 substantially company’s cash equivalents deposited financial institutions highcredit ratings quality company customers constituting 10 net revenues years 2020 2019 trecent accounting pronouncements june 2016 fasb issued asu 201613 financial instruments credit losses topic 326 measurement credit losses financial statements asu requires financial asset group financial assets measured amortized cost basis presented net amount expected collected allowance credit losses valuation account deducted amortized cost basis financial assets present net carrying value amount expected collected financial asset accounting standards update affects entities holding financial assets net investment leases accounted fair value net income amendments affect loans debt securities trade receivables net investments leases balance sheet credit exposures reinsurance receivables financial assets excluded scope contractual rights receive cash smaller public business entities amendments update effective fiscal years beginning january 1 2023 including interim periods within fiscal years entities may adopt amendments update cumulativeeffect adjustment retained earnings beginning first reporting period guidance effective modifiedretrospective approach company process evaluating impact adoption pronouncement consolidated financial statements company reviews new accounting standards issued management identified new standards believes significant impact company’s financial statements 3other receivables december 31 2020 2019 receivables mainly consist employees advance spent company purposes refundable rental deposits balances unsecured noninterest bearing repayable demand 4inventory 1raw materials mainly consist unprocessed coffee beans packaging materials 5prepayment december 31 2020 2019 prepayment mainly consists prepaid administrative expenses utilized subsequently 6leasehold improvement equipment net depreciation expense years ended december 31 2020 2019 25559 24635 respectively 7intangible assets amortization expense years ended december 31 2020 2019 nil 3368 respectively company recorded impairment loss intangible assets 77264 write app platform year ended december 31 2020 8other payables accruals 1as december 31 2020 2019 others mainly consist outstanding refundable balance upon termination cooperative agreement one customer 30634 rmb200000 33031 rmb230000 respectively addition payables rental expenses 21865 rmb142748 december 31 2020 9advance customers company requires retail partners sign cooperative agreement pay advance supply goods advance appropriated future sales orders advances interest free unsecured shortterm nature 10income taxes fhai incorporated state nevada fhai us entity subject united states federal income tax provision income taxes united states made fhai united states taxable income years ended december 31 2020 2019 wljm cayman incorporated cayman islands current tax laws cayman islands wljm cayman subject tax income capital gains addition upon dividends wljm cayman shareholders cayman islands withholding tax imposed wljm hk incorporated hong kong subject income tax rate 165 taxable income generated operations hong kong jywm wfoe shenzhen wei lian dongguan dishi shenzhen nainiang incorporated prc subject profits tax rate 25 income generated operation country full realization tax benefit associated losses carried forward depends predominantly upon company’s ability generate taxable income carry forward period assessing realization deferred tax assets management considers whether likely portion deferred tax assets realized ultimate realization deferred tax assets dependent upon generation future taxable income periods temporary differences become deductible management considers scheduled reversal deferred tax liabilities projected future taxable income tax planning strategies making assessment valuation allowance provided deferred tax assets likely items either expire company able realize benefits future deductibility uncertain company record deferred tax assets december 31 2020 2019 income tax expense benefits reconciliation effective tax rates 25 statutory tax rates years ended december 31 2020 2019 follows 11leases adoption new lease guidance material impact company’s results operations liquidity resulted recognition operating lease liabilities operating lease rightofuse assets balance sheets rightofuse “rou” assets represent right use underlying asset lease term lease liabilities represent obligation make lease payments arising lease rou assets liabilities recognized lease commencement date based estimated present value lease payments lease term company leases office factory warehouse prc operating leases expiring various dates september 2023 classified operating leases residual value guarantees restrictions covenants imposed leases rent expense years ended december 31 2020 2019 268120 208949 respectively cash paid operating leases included operating cash flows december 31 2020 company 383203 rightofuse assets 319697 current operating lease liabilities 63506 noncurrent operating lease liabilities december 31 2019 company 613831 rightofuse assets 243959 current operating lease liabilities 369872 noncurrent operating lease liabilities significant assumptions judgments made part adoption new lease standard include determining whether contract contains lease ii whether contract involves identified asset iii party contract directs use asset discount rates used calculate present value lease payments determined based hypothetical borrowing rates available company terms similar lease terms company’s future minimum payments longterm noncancelable operating leases follows information 12related parties transactions company following balances related parties aamount due related parties amount due related parties represents cash advance ye aiyun shareholder company balance unsecured noninterest bearing repayable demand bamount due related parties balances represent cash advances related parties offset company’s assets expenses paid behalf related parties balances related party unsecured noninterest bearing repayable demand ctransactions 13reserves astatutory reserve pursuant laws applicable prc’s foreign investment enterprises company must make appropriations aftertax profit nondistributable reserve funds subject certain cumulative limits general reserve requires annual appropriations 10 aftertax profits determined prc laws regulations yearend balance reaches 50 prc entity registered capital reserve appropriations company’s discretion reserves used specific purposes enterprise expansion distributable cash dividends company accrue statutory reserve years ended december 31 2020 2019 bcurrency translation reserve currency translation reserve represents translation differences arising translation foreign currency financial statements company’s reporting currency 14commitments contingencies commitment consist noncancelable consultancy service agreement entered thirdparty provision services related us listing contract sum 1200000 outstanding committed contract amount 120000 terms agreement various milestones stages completed within two years 2021 future commitments within one year december 31 2020 120000 future commitments one year december 31 2020 except commitments operating lease commitment disclosed note 6 material commitments 15subsequent events subsequent events occurred would require recognition disclosure financial statements