UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 CURRENT REPORT

Yichunfeng (China) Biohealth Limited

(Exact name of registrant as specified in its charter)

Date: January 16, 2020

Golden Industrial Park, Nanfeng, Fuzhou, Jiangxi, 344500, China

Issuer's telephone number: +86 18977770618

Company email:  yichunfenglimited@outlook.com

(Address, including zip code, and telephone number,
including area code, of registrant’s principal mailing address)

Please send copies of all correspondence to:

V FINANCIAL GROUP, INC.

http://www.vfinancialgroup.com

780 Reservoir Avenue, #123

Cranston, RI 02910

TELEPHONE: (401) 440-9533

FAX: (401) 633-7300

Email: jeff@vfinancialgroup.com

(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. |X|

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the following box and list the Securities Act registration Statement number of the earlier effective registration statement for the same offering. |_|

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.|_|

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.|_|

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

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) of the Securities Act. |_|

CALCULATION OF REGISTRATION FEE

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY OUR EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. THERE IS NO MINIMUM PURCHASE REQUIREMENT FOR THE OFFERING TO PROCEED.

PRELIMINARY PROSPECTUS

Yichunfeng (China) Biohealth Limited

8,814,263 SHARES OF COMMON STOCK

$0.0001 PAR VALUE PER SHARE

Prior to this Offering, no public market has existed for the common stock of Yichunfeng (China) Biohealth Limited. Upon completion of this Offering, we will attempt to have the shares quoted on the OTCQB operated by OTC Markets Group, Inc. There is no assurance that the Shares will ever be quoted on the OTCQB.  To be quoted on the OTCQB, a market maker must apply to make a market in our common stock.  As of the date of this Prospectus, we have not made any arrangement with any market makers to quote our shares. Additionally, there is the possibility a market maker may not apply to make a market in our common stock.

In this public offering we, “Yichunfeng (China) Biohealth Limited” are offering 4,500,000 shares of our common stock and our selling shareholders are offering 4,314,263 shares of our common stock. We will not receive any of the proceeds from the sale of shares by the selling shareholders. The offering is being made on a self-underwritten, “best efforts” basis.  There is no minimum number of shares required to be purchased by each investor. The shares offered by the Company will be sold on our behalf by our Directors, Yuanhang Chen and Long Chen. Yuanhang Chen and Long Chen are deemed to be underwriters of this offering. The selling shareholders are also deemed to be underwriters of this offering. There is uncertainty that we will be able to sell any of the 4,500,000 shares being offered herein by the Company. Yuanhang Chen and Long Chen will not receive any commissions or proceeds for selling the shares on our behalf.  All of the shares being registered for sale by the Company will be sold at a fixed price of $1.00 per share for the duration of the Offering. Additionally, all of the shares offered by the selling shareholders will be sold at a fixed price of $1.00 for the duration of the Offering. Assuming all of the 4,500,000 shares being offered by the Company are sold, the Company will receive $4,500,000 in net proceeds. Assuming 3,375,000 shares (75%) being offered by the Company are sold, the Company will receive $3,375,000 in net proceeds. Assuming 2,250,000 shares (50%) being offered by the Company are sold, the Company will receive $2,250,000 in net proceeds. Assuming 1,125,000 shares (25%) being offered by the Company are sold, the Company will receive $1,125,000 in net proceeds. There is no minimum amount we are required to raise from the shares being offered by the Company and any funds received will be immediately available to us. There is no guarantee that we will sell any of the securities being offered in this offering. Additionally, there is no guarantee that this Offering will successfully raise enough funds to institute our Company's business plan. Additionally, there is no guarantee that a public market will ever develop and you may be unable to sell your shares.

This primary offering will terminate upon the earliest of (i) such time as all of the common stock has been sold pursuant to the registration statement or (ii) 365 days from the effective date of this Prospectus, unless extended by our directors for an additional 90 days. We may however, at any time and for any reason terminate the offering.

Yuanhang Chen and Long Chen will be selling shares of common stock on behalf of the Company simultaneously to selling shares of common stock in the Company from their own personal accounts. A conflict of interest may arise between the aforementioned parties interests in selling shares for their own personal accounts, and in selling shares on the Company’s behalf.

Regarding the sale of Yuanhang Chen’s and Long Chen’s shares, they will be sold at a fixed price of $1.00 for the duration of the offering. The Company estimates the costs of this offering at about $56,000. All expenses incurred in this offering are being paid for by the Company. For the duration of the offering any and all sellers of the shares being registered herein agree to provide this prospectus to potential investors in its entirety. 

The proceeds from the sale of the securities sold on behalf of the Company will be placed directly into the Company’s account and or the account of one of its subsidiaries; any investor who purchases shares will have no assurance that any monies, beside their own, will be subscribed to the prospectus. All proceeds from the sale of the securities are non-refundable, except as may be required by applicable laws.

The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, which became law in April 2012 and will be subject to reduced public company reporting requirements.

THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK.  YOU SHOULD PURCHASE SHARES ONLY IF YOU CAN AFFORD THE COMPLETE LOSS OF YOUR INVESTMENT.  PLEASE REFER TO ‘RISK FACTORS’ BEGINNING ON PAGE 5.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

You should rely only on the information contained in this Prospectus and the information we have referred you to. We have not authorized any person to provide you with any information about this Offering, the Company, or the shares of our Common Stock offered hereby that is different from the information included in this Prospectus. If anyone provides you with different information, you should not rely on it.

The following table of contents has been designed to help you find important information contained in this prospectus. We encourage you to read the entire prospectus. 

TABLE OF CONTENTS

You should rely only on the information contained in this prospectus or contained in any free writing prospectus filed with the Securities and Exchange Commission. We have not authorized anyone to provide you with additional information or information different from that contained in this prospectus filed with the Securities and Exchange Commission. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are offering to sell, and seeking offers to buy, our common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of shares of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

Through December 30, 2020 all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

 The date of this prospectus is January 16, 2020. 

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PROSPECTUS SUMMARY

In this Prospectus, ''Yichunfeng (China) Biohealth Limited'' the "Company,'' ''we,'' ''us,'' and ''our,'' refer to Yichunfeng (China) Biohealth Limited, unless the context otherwise requires. Unless otherwise indicated, the term ''fiscal year'' refers to our fiscal year ending December 31th. Unless otherwise indicated, the term ''common stock'' refers to shares of the Company's common stock.

This Prospectus, and any supplement to this Prospectus include “forward-looking statements”. To the extent that the information presented in this Prospectus discusses financial projections, information or expectations about our business plans, results of operations, products or markets, or otherwise makes statements about future events, such statements are forward-looking. Such forward-looking statements can be identified by the use of words such as “intends”, “anticipates”, “believes”, “estimates”, “projects”, “forecasts”, “expects”, “plans” and “proposes”. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These include, among others, the cautionary statements in the “Risk Factors” section and the “Management’s Discussion and Analysis of Financial Position and Results of Operations” section in this Prospectus.

This summary only highlights selected information contained in greater detail elsewhere in this Prospectus. This summary may not contain all of the information that you should consider before investing in our common stock. You should carefully read the entire Prospectus, including “Risk Factors” beginning on Page 5, and the financial statements, before making an investment decision.

The Company

Yichunfeng (China) Biohealth Limited, a Nevada corporation ("the Company") was incorporated under the laws of the State of Nevada on January 9, 2019.

On January 9, 2019, Mr. Yuanhang Chen was appointed Chief Executive Officer, President, Secretary, Treasurer and Director of the Company.

On January 9, 2019, Long Chen was appointed Chief Financial Officer and Director of the Company.

On March 28, 2019, Yichunfeng (China) Biohealth Limited, a Nevada Company, acquired 100% of the equity interests of Yichunfeng (China) Biohealth Holding Limited, a Seychelles Company, in consideration of $100 (U.S. Dollars). Our current officers and directors, Yuanhang Chen and Long Chen were the beneficiaries of the $100 (U.S. Dollars). Yichunfeng (China) Biohealth Holding Limited, a Seychelles Company, now owns 100% of Yichunfeng (China) Biohealth Holding Limited.

On March 29, 2019, Yichunfeng (China) Biohealth Holding Limited, our wholly owned subsidiary, acquired 100% of the equity interests of Yichunfeng (China) Biohealth Holding Limited, a Hong Kong Company, in consideration of $100 (Hong Kong Dollars). Our current officers and directors, Yuanhang Chen and Long Chen were the beneficiaries of the $100 (Hong Kong Dollars).

On May 15, 2019, Yichunfeng (China) Biohealth Holding Limited, a Hong Kong Company, incorporated a new subsidiary in Guangxi, China, called Yichunfeng International Biotechnology (China) Limited, whereas it is owned entirely (100%) by Yichunfeng (China) Biohealth Holding Limited, the Hong Kong Company. There was no consideration exchanged per the aforementioned transaction.

Our Company structure is broken down in the below chart. The percentages denote ownership.

On May 20, 2019, Yichunfeng International Biotechnology (China) Limited, the Hong Kong Company, also referred to herein as "YIBL", entered into and consummated an agreement with Long Chen and Hongwei Deng, whereas YIBL has the option to purchase all of the equity interests of Jiangxi Yichunfeng Biohealth Limited, also referred to herein as "JYBL", a Chinese, "PRC" Company, from Long Chen and Hongwei Deng. These equity interests would make up 100% of the equity interests of Jiangxi Yichunfeng Biohealth Limited. Jiangxi Yichunfeng Biohealth Limited is considered to be a variable interest entity, also referred to herein as a "VIE", to Yichunfeng International Biotechnology (China) Limited, and therefore a VIE of the issuer, Yichunfeng (China) Biohealth Limited, a Nevada Company. More information regarding this agreement can be found in exhibit 10.1, titled, "Call Option Agreement".

On May 20, 2019, YIBL entered into and consummated an agreement with Long Chen and Hongwei Deng whereas Long Chen and Hongwei Deng have given YIBL the right to appoint management of YIBL to act as proxy to existing shareholders of Jiangxi Yichunfeng Biohealth Limited. This gives management of YIBL the ability to conduct and control company affairs of Jiangxi Yichunfeng Biohealth Limited. Actions which management of YIBL may be able to carry out include, but are not limited to, exercising voting rights as proxy of the existing shareholder(s), appointing new directors, hiring new management, and carrying out corporate actions. More information regarding this agreement can be found in exhibit 10.2, titled, "Shareholder' Voting Rights Proxy Agreement."

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On May 20, 2019, YIBL entered into and consummated an agreement with Long Chen and Hongwei Deng whereas Long Chen and Hongwei Deng have engaged YIBL to provide management, financial, and other business services to Jiangxi Yichunfeng Biohealth Limited. YIBL is to be compensated with 100% of all profits generated by Jiangxi Yichunfeng Biohealth Limited. This Agreement is effective as of May 20, 2019 and will continue in effect for a period of ten (10) years (the "Initial Term"), and for succeeding periods of the same duration (each, "Subsequent Term"), until terminated by one of the following means either during the Initial Term or thereafter: Mutual Consent, Termination by YIBL, Breach or Insolvency. Jiangxi Yichunfeng Biohealth Limited is considered to be a variable interest entity to Yichunfeng International Biotechnology (China) Limited, and therefore a VIE of the issuer, Yichunfeng (China) Biohealth Limited. More information regarding this agreement can be found in exhibit 10.3, titled, "Management Services Agreement."

On May 20, 2019, YIBL entered into and consummated an agreement with Long Chen and Hongwei Deng whereas Long Chen and Hongwei Deng have pledged their equity interests in Jiangxi Yichunfeng Biohealth Limited, to YIBL. More information regarding this agreement can be found in exhibit 10.4, titled, "Equity Pledge Agreement."

On May 20, 2019, YIBL entered into a loan agreement with Long Chen and Hongwei Deng wherein YIBL will loan the amount of approximately CNY100,000 (Chinese Yuan) to Long Chen and Hongwei Deng, all of which shall be used for the benefit of Jiangxi Yichunfeng Biohealth Limited. More information regarding this agreement can be found in exhibit 10.5, titled, "Loan Agreement.

Foreign ownership in companies providing tonic wine products is subject to certain restrictions under PRC laws and regulations. To comply with the PRC laws and regulations, we, through our wholly owned subsidiary, Yichunfeng International Biotechnology (China) Limited (YIBL), entered into a set of contractual arrangements with Jiangxi Yichunfeng Biohealth Limited (JYBL) and its shareholders. The contractual arrangements between YIBL, JYBL and shareholders of JYBL allow us to:

1. exercise effective control over JYBL whereby having the power to direct JYBL's activities that most significantly drive the economic results of JYBL; 2. receive substantially all of the economic benefits and residual returns, and absorb substantially all the risks and expected losses from JYBL as if it was their sole shareholder; and 3. have an exclusive option to purchase all of the equity interests in JYBL.

A subsidiary is an entity in which we, directly or indirectly, control more than one half of the voting powers; or has the power to appoint or remove the majority of the members of the board of directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.

A consolidated VIE is an entity in which we, or our subsidiaries, through contractual agreements, bears the risks of, and enjoys the rewards normally associated with ownership of the entity. In determining whether we or our subsidiaries are the primary beneficiary, we considered whether it has the power to direct activities that are significant to the consolidated VIE's economic performance, and also our obligation to absorb losses of the consolidated VIE that could potentially be significant to the consolidated VIE or the right to receive benefits from the consolidated VIE that could potentially be significant to the consolidated VIE. We hold all the variable interests of the consolidated VIE and its subsidiaries and has been determined to be the primary beneficiary of the consolidated VIE.

We believe that the contractual arrangements among YIBL, JYBL and the shareholders of JYBL are in compliance with PRC law and are legally enforceable. However, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements and if the shareholders of our consolidated VIE were to reduce their interest in us, their interests may diverge from ours and that may potentially increase the risk that they would seek to act contrary to the contractual terms.

Our ability to control the consolidated VIE also depends on the voting rights proxy agreement and our company, through YIBL, has to vote on all matters requiring shareholder approval in the consolidated VIE. As noted above, we believe this voting rights proxy agreement is legally enforceable but may not be as effective as direct equity ownership.

Jiangxi Yichunfeng Biohealth Limited is the company through which we operate, and which shares our business plan with the goal of developing and providing tonic wine products to our future clients.

The Company's mailing address is Golden Industrial Park, Nanfeng, Fuzhou, Jiangxi, 344500, China.

We share the same business plan as that of our subsidiaries, which is developing and providing tonic wine products.

We believe we need to raise $4,500,000 to execute our business plan over the next 12 months. The funds raised in this offering, even assuming we sell all the shares being offered, may be insufficient to carry out our intended business operations.

We will receive proceeds from the sale of 4,500,000 shares of our common stock and intend to use the proceeds from this offering to further develop and market our products.

There is uncertainty that we will be able to sell any of the 4,500,000 shares being offered herein by the Company. The expenses of this offering, including the preparation of this prospectus and the filing of this registration statement, estimated at about $56,000, are being paid for by the Company.

Our budgetary allocations may vary depending upon the percentage of proceeds that we obtain from this offering. For example, we may determine that it is more beneficial to allocate funds toward securing potential financing and business opportunities in the short terms rather than to conserve funds to satisfy continuous disclosure requirements for a longer period. During the 12 months following the completion of this offering, we intend to continue our current business plan and increase our current level of operations. 

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Our Offering

We have authorized capital stock consisting of 600,000,000 shares of common stock, $0.0001 par value per share (“Common Stock”) and 200,000,000 shares of preferred stock, $0.0001 par value per share (“Preferred Stock”). We have 40,314,263 shares of Common Stock and no shares of Preferred Stock issued and outstanding. Through this offering we will register a total of 8,814,263 shares. These shares represent 4,500,000 additional shares of common stock to be issued by us and 4,314,263 shares of common stock by our selling stockholders. We may endeavor to sell all 4,500,000 shares of common stock after this registration becomes effective. Upon effectiveness of this Registration Statement, the selling stockholders may also sell their own shares. The price at which we, the company, offer these shares is at a fixed price of $1.00 per share for the duration of the offering. The selling stockholders will also sell shares at a fixed price of $1.00 for the duration of the offering. There is no arrangement to address the possible effect of the offering on the price of the stock. We will receive all proceeds from the sale of our common stock but we will not receive any proceeds from the selling stockholders.

Yuanhang Chen and Long Chen will be selling shares of common stock on behalf of the Company simultaneously to selling shares of common stock in the Company from their own personal accounts. A conflict of interest may arise between the aforementioned parties interests in selling shares for their own personal accounts, and in selling shares on the Company’s behalf. 

Regarding the sale of Yuanhang Chen’s and Long Chen’s shares, they will be sold at a fixed price of $1.00 for the duration of the offering.

*We will notify investors by filling a post-effective amendment to our registration statement that will be available for public viewing on the SEC Edgar Database of any such extension of the offering.

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You should rely only upon the information contained in this prospectus. We have not authorized anyone to provide you with information different from that which is contained in this prospectus. We are offering to sell common stock and seeking offers to common stock only in jurisdictions where offers and sales are permitted.

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RISK FACTORS

Please consider the following risk factors and other information in this prospectus relating to our business before deciding to invest in our common stock.

This offering and any investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and all of the information contained in this prospectus before deciding whether to purchase our common stock. If any of the following risks actually occur, our business, financial condition and results of operations could be harmed. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.

We consider the following to be the material risks for an investor regarding this offering. Our company should be viewed as a high-risk investment and speculative in nature. An investment in our common stock may result in a complete loss of the invested amount.

An investment in our common stock is highly speculative, and should only be made by persons who can afford to lose their entire investment in us. You should carefully consider the following risk factors and other information in this report before deciding to become a holder of our common stock. If any of the following risks actually occur, our business and financial results could be negatively affected to a significant extent.

Risks Relating to Our Company and Our Industry

We rely entirely on the operations of Jiangxi Yichunfeng Biohealth Limited. Any successes or failures of Jiangxi Yichunfeng Biohealth Limited will directly impact our financial condition and may cause your investment to be either positively or negatively impacted.

At present, we share the same business plan as, and rely entirely upon, Jiangxi Yichunfeng Biohealth Limited. Any successes or failures of Jiangxi Yichunfeng Biohealth Limited will directly impact our financial condition and may cause your investment to be either positively or negatively impacted. Jiangxi Yichunfeng Biohealth Limited is considered a variable interest entity through which we operate exclusively at this time and we have been deemed to currently be a direct beneficiary of Jiangxi Yichunfeng Biohealth Limited. As such, in the event that the business of operations of Jiangxi Yichunfeng Biohealth Limited were to fail, then our own business would, in turn, fail as well. We would be forced to either drastically alter our business strategy, or we would likely cease operations entirely, which could result in the whole or partial loss of any investments made in the company.

Our loan agreement contains operating and financial covenants that restrict our business and financing activities.

Borrowings under our loan agreement with certain lenders and Commercial Bank, are secured by substantially all of our assets, including our intellectual property. Our loan agreement also restricts our ability to, among other things:

• dispose of or sell our assets;

• make material changes in our business or management;

• consolidate or merge with other entities;

• incur additional indebtedness;

• create liens on our assets;

• pay dividends;

• make investments;

• enter into transactions with affiliates; and

• pay off or redeem subordinated indebtedness.

The operating and financial restrictions and covenants in the loan agreement, as well as any future financing agreements that we may enter into, could restrict our ability to finance our operations and to engage in, expand or otherwise pursue business activities and strategies that we or our stockholders may consider beneficial. If we do not have or are unable to generate sufficient cash available to repay our debt obligations when they become due and payable, either upon maturity or in the event of a default, we may not be able to obtain additional debt or equity financing on favorable terms, if at all. This could materially and adversely affect our liquidity and financial condition and our ability to operate and continue our business as a going concern.

Competition from both large, established industry participants and new market entrants may negatively affect our current and future results of operations.

We face vigorous competition from companies throughout the world and in China specifically, including large multinational wine companies. Some established competitors have greater resources and better accessibility than us, therefore they are able to adapt quicker to changes in customer requirements and reach customers easier from all over the globe. As a result of this intense competition there has been and may continue to be upward pressure on selling and promotional expenses. In addition, the tonic wine industry has experienced significant consolidation. Many competitors have greater financial, technical, marketing and public relations resources. Our sales may be harmed to the extent we are not able to compete successfully against such wine or alternative beverage producers’ costs. There can be no assurance that in the future we will be able to successfully compete with current competitors or that we will not face greater competition from other wineries and beverage manufacturers. If we are unable to continue to compete effectively, it could have an adverse impact on our business, results of operations and financial condition.

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A decline in general economic condition could lead to reduced consumer demand and could negatively impact our business operation and financial condition, which in turn could have a material adverse effect on our business, financial condition and results of operations.

Our operating and financial performance may be adversely affected by a variety of factors that influence the general economy. Consumer spending habits, including spending on products relating to the products we display, are affected by, among other things, prevailing economic conditions, levels of unemployment, salaries and wage rates, prevailing interest rates, income tax rates and policies, consumer confidence and consumer perception of economic conditions. In addition, consumer purchasing patterns may be influenced by consumers’ disposable income. In the event of an economic slowdown, consumer spending habits could be adversely affected, and we could experience lower net sales than expected on a quarterly or annual basis which could have a material adverse effect on our business, financial condition and results of operations.

We face inventory risk, and if we fail to predict accurately demand for products, we may face write-downs or other charges.

We are exposed to inventory risks that may adversely affect operating results as a result of new product launches, changes in product cycles and pricing, limited shelf-life of certain of our products, changes in consumer demand, and other factors. We endeavor to predict accurately, based on information from distributors and reasonable assumptions, the expected demand for their products in order to avoid overproduction. Demand for products, however, can change significantly between the time of production and the date of sale. It may be more difficult to make accurate predictions regarding new products. In part, we depend on the marketing initiatives and efforts of distributors in promoting products and creating consumer demand and we have limited or no control regarding their promotional initiatives or the success of their efforts. 

The success of our business relies heavily on brand image, reputation, and product quality.

It is important that we maintain and increase the image and reputation of our existing brands and products. Concerns about product quality, even when unsubstantiated, could be harmful to our image and reputation of our brands and products. While we have quality control programs in place, in the event we experienced an issue with product quality, we may experience recalls or liability in addition to business disruption which could further negatively impact brand image and reputation and negatively affect our sales. Our brand image and reputation may also be more difficult to protect due to less oversight and control as a result of the outsourcing of some of our operations. We also could be exposed to lawsuits relating to product liability or marketing or sales practices. Deterioration to our brand equity may be difficult to combat or reverse and could have a material effect on our business and financial results. In addition, because our brands carry family names, personal activities by certain members of the Truett or Hurst families that harm their public image or reputation could have an adverse effect on our brands.

Bad weather, drought, plant diseases and other factors could reduce the amount or quality of the grapes available to produce our wines.

A shortage in the supply of quality grapes may result from the occurrence of any number of factors which determine the quality and quantity of oyster and mulberry supply, such as weather conditions and natural disasters, such as floods, droughts, frosts, earthquakes, pruning methods, and the existence of diseases and pests, as well as the level of consumer demand for wine. Any shortage could cause an increase in the price of some or all of the oyster varieties required for Chinese tonic wine production and/or a reduction in the amount of wine we are able to produce, which could harm the business and reduce sales and profits.

Factors that reduce the quantity of oyster may also reduce their quality, which in turn could reduce the quality or amount of wine we produce. Deterioration in the quality of the wine produced could harm our brand name and a decrease in production could reduce sales and increase expenses.

Natural disasters, including earthquakes or fires, could destroy our facilities or our inventory, and/or negatively impact contracted third-party production and storage capacity and availability.

We must store our wine in a limited number of locations for a period of time prior to its sale or distribution. Any intervening catastrophes, such as an earthquake or fire, that result in the destruction of all or a portion of our wine would result in a loss of investment in, and anticipated profits and cash flows from, that wine. Such a loss would seriously harm business and reduce sales and profits.

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An increase in the cost of energy or the cost of environmental regulatory compliance could affect our profitability.

The energy costs could continue to rise, which would result in higher transportation, freight and other operating costs. We may experience significant future increases in the costs associated with environmental regulatory compliance, including fees, licenses and the cost of capital improvements to our operating facilities in order to meet environmental regulatory requirements. Future operating expenses and margins will be dependent on the ability to manage the impact of cost increases. We cannot guarantee that it will be able to pass along increased energy costs or increased costs associated with environmental regulatory compliance to our customers through increased prices.

The requirements of being a public company may strain our resources, divert our management's attention and affect our ability to attract and retain qualified board members.

As a public company, we are subject to the reporting requirements of the Exchange Act and are required to comply with the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, and other applicable securities rules and regulations. Compliance with these rules and regulations have increased our legal and financial compliance costs, made some activities more difficult, time-consuming or costly and increased demand on our systems and resources. Among other things, the Exchange Act requires that we file annual, quarterly and current reports with respect to our business and results of operations and maintain effective disclosure controls and procedures and internal controls over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal controls over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management's attention may be diverted from other business concerns, which could harm our business and results of operations. We may need to hire more employees to comply with these requirements in the future, which will increase our costs and expenses.

We may require additional capital to support growth, and such capital might not be available on terms acceptable to us, if at all. This could hamper our growth and adversely affect our business.

We intend to continue to make investments to support our business growth and may require additional funds, beyond those generated by this offering, to respond to business challenges, including the need to develop new features or enhance our platform, improve our operating infrastructure or acquire complementary businesses and technologies. Accordingly, we may need to engage in public or private equity, equity-linked or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing that we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, including the ability to pay dividends. This may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and respond to business challenges could be significantly impaired, and our business could be adversely affected.

We have no experience as a public company. Our inability to successfully operate as a public company could cause you to lose your entire investment.

We have never operated as a public company.  We have no experience in complying with the various rules and regulations, which are required of a public company.  As a result, we may not be able to operate successfully as a public company, even if our operations are successful.  We plan to comply with all of the various rules and regulations, which are required of a public company.  However, if we cannot operate successfully as a public company, your investment may be materially adversely affected.  Our inability to operate as a public company could be the basis of your losing your entire investment.

Introduction of new laws or changes to existing laws by the PRC government may adversely affect our business.

The PRC legal system is a codified legal system made up of written laws, regulations, circulars, administrative directives and internal guidelines. Unlike common law jurisdictions like the U.S., decided cases (which may be taken as reference) do not form part of the legal structure of the PRC and thus have no binding effect on subsequent cases with similar issues and fact patterns. Furthermore, in line with its transformation from a centrally planned economy to a more free market-oriented economy, the PRC government is still in the process of developing a comprehensive set of laws and regulations. As the legal system in the PRC is still evolving, laws and regulations or the interpretation of the same may be subject to further changes. Such changes, if implemented, may adversely affect our business operations and may reduce our profitability.

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American investors may have difficulty enforcing judgments against our Company and Officers.

We are a Nevada corporation and most of our assets are and will be located outside of the United States. Almost all of our operations will be conducted in China. In addition, our officers and directors are nationals and residents of a country other than the United States. All of their assets are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon them. It may also be difficult to enforce court judgments on the civil liability provisions of the U.S. federal securities laws against our Company and our officer and director, since he is not a resident in the United States. In addition, there is uncertainty as to whether the courts of Hong Kong or other Asian countries would recognize or enforce judgments of U.S. courts. 

The recently enacted JOBS Act will allow the Company to postpone the date by which it must comply with certain laws and regulations intended to protect investors and to reduce the amount of information provided in reports filed with the SEC.

The recently enacted JOBS Act is intended to reduce the regulatory burden on “emerging growth companies”. The Company meets the definition of an “emerging growth company” and so long as it qualifies as an “emerging growth company,” it will, among other things:

-be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that its independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting;

-be exempt from the "say on pay” provisions (requiring a non-binding shareholder vote to approve compensation of certain executive officers) and the "say on golden parachute” provisions (requiring a non-binding shareholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and certain disclosure requirements of the Dodd-Frank Act relating to compensation of Chief Executive Officers;

-be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and instead provide a reduced level of disclosure concerning executive compensation; and

-be exempt from any rules that may be adopted by the Public Company Accounting Oversight Board (the “PCAOB”) requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements.

Although the Company is still evaluating the JOBS Act, it currently intends to take advantage of all of the reduced regulatory and reporting requirements that will be available to it so long as it qualifies as an “emerging growth company”. The Company has elected not to opt out of the extension of time to comply with new or revised financial accounting standards available under Section 102(b)(1) of the JOBS Act. Among other things, this means that the Company's independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of the Company's internal control over financial reporting so long as it qualifies as an “emerging growth company”, which may increase the risk that weaknesses or deficiencies in the internal control over financial reporting go undetected. Likewise, so long as it qualifies as an “emerging growth company”, the Company may elect not to provide certain information, including certain financial information and certain information regarding compensation of executive officers, which would otherwise have been required to provide in filings with the SEC, which may make it more difficult for investors and securities analysts to evaluate the Company. As a result, investor confidence in the Company and the market price of its common stock may be adversely affected.

Notwithstanding the above, we are also currently a “smaller reporting company”, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year. In the event that we are still considered a “smaller reporting company”, at such time are we cease being an “emerging growth company”, the disclosure we will be required to provide in our SEC filings will increase, but will still be less than it would be if we were not considered either an “emerging growth company” or a “smaller reporting company”. Specifically, similar to “emerging growth companies”, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, being required to provide only two years of audited financial statements in annual reports. Decreased disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze the Company’s results of operations and financial prospects.

We are an “emerging growth company” under the JOBS Act of 2012, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to take advantage of the extended transition period for complying with new or revised accounting standards. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates.

We will remain an “emerging growth company” for up to five years, although we will lose that status sooner if our revenues exceed $1 billion, if we issue more than $1 billion in non-convertible debt in a three-year period, or if the market value of our common stock that is held by non-affiliates exceeds $700 million.

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Risks Relating to the Company’s Securities

We do not intend to pay dividends on our common stock.

We have no intention to declare or pay any cash dividend on our capital stock. We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future.

Our securities have no prior market and an active trading market may not develop, which may cause our common stock to trade at a discount from the initial public offering price.

Prior to this offering there has been no public market for our common stock. The initial public offering price for our common stock will be determined through negotiations between us and the representatives of the underwriters and may not be indicative of the market price of our common stock after this offering. If you purchase shares of our common stock, you may not be able to resell those shares at or above the initial public offering price. We cannot predict the extent to which investor interest in us will lead to the development of an active trading market on or otherwise or how liquid that market might become. An active public market for our common stock may not develop or be sustained after the offering. If an active public market does not develop or is not sustained, it may be difficult for you to sell your shares of common stock at a price that is attractive to you, or at all.

The offering price of the shares should not be used as an indicator of the future market price of the shares. Therefore, the offering price bears no relationship to the actual value of the company and may make our shares difficult to sell

Since our shares are not listed or quoted on any exchange or quotation system, the offering price for the sale of the shares of common stock by the Company was determined arbitrarily by management. The facts considered in determining the offering price were our financial condition and prospects, our current operating history and the general condition of the securities market. The offering price bears no relationship to the book value, assets or earnings of the Company or any other recognized criteria of value. The offering price should not be regarded as an indicator of the future market price of the shares.

We may never have a public market for our common stock or may never trade on a recognized exchange. Therefore, you may be unable to liquidate your investment in our stock.

There is no established public trading market for our securities. Our shares are not and have not been listed or quoted on any exchange or quotation system.

In order for our shares to be quoted, a market maker must agree to file the necessary documents with the National Association of Securities Dealers, which operates the OTCQB. In addition, it is possible that such application for quotation may not be approved and even if approved it is possible that a regular trading market will not develop or that if it did develop, will be sustained. In the absence of a trading market, an investor may be unable to liquidate their investment.

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There may be future sales of our securities or other dilution of our equity, which may adversely affect the market price of our common stock.

We are generally not restricted from issuing additional common stock, including any securities that are convertible into or exchangeable for, or that represent the right to receive, common stock. The market price of our common stock could decline as a result of sales of common stock or securities that are convertible into or exchangeable for, or that represent the right to receive, common stock after this offering or the perception that such sales could occur.

A large number of shares issued in this offering may be sold in the market following this offering, which may depress the market price of our common stock.

A large number of shares issued in this offering may be sold in the market following this offering, which may depress the market price of our common stock. Sales of a substantial number of shares of our common stock in the public market following this offering could cause the market price of our common stock to decline. If there are more shares of common stock offered for sale than buyers are willing to purchase, then the market price of our common stock may decline to a market price at which buyers are willing to purchase the offered shares of common stock and sellers remain willing to sell the shares. All of the securities issued in the offering will be freely tradable without restriction or further registration under the Securities Act.

We may issue shares of preferred stock in the future which may adversely impact your rights as holders of our common stock.

Our Certificate of Incorporation authorizes us to issue up to 200,000,000 shares of preferred stock. Accordingly, our board of directors will have the authority to fix and determine the relative rights and preferences of preferred shares, as well as the authority to issue such shares, without further stockholder approval. At this time, we have no shares of preferred stock issued and outstanding.

Our preferred stock does not have any dividend, conversion, liquidation, or other rights or preferences, including redemption or sinking fund provisions. However, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders preferred rights to our assets upon liquidation, the right to receive dividends before dividends are declared to holders of our common stock, and the right to the redemption of such preferred shares, together with a premium, prior to the redemption of the common stock. To the extent that we do issue such additional shares of preferred stock, your rights as holders of common stock could be impaired thereby, including, without limitation, dilution of your ownership interests in us. In addition, shares of preferred stock could be issued with terms calculated to delay or prevent a change in control or make removal of management more difficult, which may not be in your interest as holders of common stock. 

There is the possibility that that your periodic reporting obligations will be suspended under Section 15(d) if you have less than 300 holders of record in the fiscal year after the year of effectiveness of the registration statement.

We do not intend to register our common stock under Section 12 of the Securities Exchange Act of 1934, such as by filing a Form 8-A registration statement. Upon effectiveness, we believe we will only have a reporting requirement pursuant to Section 15(d) of the Exchange Act. Section 15(d) (15 USCS § 78p) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) which provides that any issuer who registers a class of securities under the Securities Act of 1933, as amended (the “Securities Act”) shall become subject to periodic reporting requirements under Section 13(a) (15 USCS § 78m) of the Exchange Act, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Pursuant to section 15(d) of the Exchange Act, our Reporting Requirements may be suspended if either is to occur: if the class of securities registered with the SEC is held by less than 300 record holders at the beginning of any fiscal year (other than a year in which the registration statement became effective) or (ii) at any time, by relying on Exchange Act Rule 12h-3’s conditional suspension, if the class of securities is held by less than 300 record holders or less than either 2,000 record holders or 500 non-accredited record holders and the issuer’s assets do not exceed $10 million at the end of each of its last three fiscal years.)

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 Risks Relating to this Offering 

Investors cannot withdraw funds once invested and will not receive a refund.

Investors do not have the right to withdraw invested funds. Subscription payments will be paid to Yichunfeng (China) Biohealth Limited and held in our, or a subsidiary’s corporate bank account, if the Subscription Agreements are in good order and the Company accepts the investor’s investment. Therefore, once an investment is made, investors will not have the use or right to return of such funds.

If an active, liquid trading market for our common stock does not develop, you may not be able to sell your shares quickly or at or above the initial offering price.

There has not been a public market for our common stock. An active and liquid trading market for our common stock may not develop or be sustained following this offering. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair market value of your shares. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire other companies or assets by using our shares as consideration. You may not be able to sell your shares quickly or at or above the initial offering price. The initial public offering price will be determined by negotiations with the representatives of the underwriters. This price may not be indicative of the price at which our common stock will trade after this offering, and our common stock could trade below the initial public offering price.

Our stock price may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at, or above, the initial public offering price and the price of our common stock may fluctuate significantly.

After this offering, the market price for our common stock is likely to be volatile, in part because our shares have not been traded publicly. In addition, the market price of our common stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including:

• changes in general economic or market conditions or trends in our industry or the economy as a whole and, in particular, in the leisure travel environment;
• changes in key personnel;
• entry into new geographic markets;
• actions and announcements by us or our competitors or significant acquisitions, divestitures, strategic partnerships, joint ventures or capital commitments;
• fluctuations in quarterly operating results, as well as differences between our actual financial and operating results and those expected by investors;
• the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC;
• announcements relating to litigation;
• guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;
• changes in financial estimates or ratings by any securities analysts who follow our common stock, our failure to meet these estimates or failure of those analysts to initiate or maintain coverage of our common stock;
• the development and sustainability of an active trading market for our common stock;
• future sales of our common stock by our officers, directors and significant stockholders; and
• changes in accounting principles.

These and other factors may lower the market price of our common stock regardless of our actual operating performance. As a result, our common stock may trade at prices significantly below the initial public offering price.

We may be subject to the penny stock rules which will make shares of our common stock more difficult to sell.

We may be subject now and in the future to the SEC’s “penny stock” rules if our shares of common stock sell below $5.00 per share. Penny stocks generally are equity securities with a price of less than $5.00. The penny stock rules require broker-dealers to deliver a standardized risk disclosure document prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing prior to completing the transaction and must be given to the customer in writing before or with the customer’s confirmation.

In addition, the penny stock rules require that prior to a transaction, the broker dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. The penny stock rules are burdensome and may reduce purchases of any offerings and reduce the trading activity for shares of our common stock. As long as our shares of common stock are subject to the penny stock rules, the holders of such shares of common stock may find it more difficult to sell their securities.

We are selling the shares of this offering without an underwriter and may be unable to sell any shares.

This offering is self-underwritten, which means that we are not going to engage the services of an underwriter to sell the shares. We intend to sell our shares through our Chief Executive Officer, Yuanhang Chen, who will receive no commissions. There is no guarantee that she will be able to sell any of the shares. Unless she is successful in selling all of the shares of our Company’s offering, we may have to seek alternative financing to implement our business plan.

We will require additional funding to satisfy our future capital needs, and future financing strategies may adversely affect holders of our common stock.

Our operations will require significant additional funding due to the absence of any meaningful revenues in the near future. We do not know whether additional financing will be available to us on favorable terms or at all. To the extent we are successful in raising additional capital by issuing equity securities, our stockholders are likely to experience substantial dilution. Any additional equity securities we issue may have rights, preferences or privileges senior to those of existing holders of stock. To the extent that we raise additional funds through collaboration and licensing arrangements, we may be required to relinquish some rights to our technologies or product candidates, or grant licenses on terms that are not favorable to us. There can be no assurance that we will be able to obtain adequate capital funding in the future to continue operations and implement our strategy. As a result of these uncertainties, there is substantial doubt about our ability to continue as a going concern.

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We will have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds from this offering, including for any of the purposes described in the section entitled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess whether the net proceeds are being used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. Our management may not apply the net proceeds from this offering in ways that ultimately increase the value of your investment. The failure by our management to apply these funds effectively could harm our business. Pending their use, we may invest the net proceeds from this offering in short-term, investment-grade, interest-bearing securities. These investments may not yield a favorable return to our stockholders. If we do not invest or apply the net proceeds from this offering in ways that enhance stockholder value, we may fail to achieve expected financial results, which could cause our stock price to decline.

We will incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies.

We will incur significant legal, accounting and other expenses that we did not incur as a private company, including costs associated with public company reporting requirements. We will also incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act, as well as new rules implemented by the SEC and the OTC Markets. Our executive officers and other personnel will need to devote substantial time to these rules and regulations. These rules and regulations are expected to increase our legal and financial compliance costs and to make some other activities more time-consuming and costly. These rules and regulations may also make it difficult and expensive for us to obtain directors' and officers' liability insurance. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers of the Company, which may adversely affect investor confidence and could cause our business or stock price to suffer.

We will incur ongoing costs and expenses for SEC reporting and compliance. Without revenue, we may not be able to remain in compliance, making it difficult for investors to sell their shares, if at all.

The estimated cost of this registration statement is approximately $55,644.09. After the effective date of this prospectus, we will be required to file annual, quarterly and current reports, or other information with the SEC as provided by the Securities Exchange Act. We plan to contact a market maker immediately following the close of the offering and apply to have the shares quoted on the OTCQB. To be eligible for quotation, issuers must remain current in their filings with the SEC. In order for us to remain in compliance we will require future revenues to cover the cost of these filings, which could comprise a portion of our available cash resources. The costs associated with being a publicly traded company in the next 12 months will be approximately $55,644.09. If we are unable to generate sufficient revenues to remain in compliance it may be difficult for you to resell any shares you may purchase, if at all. Also, if we are not able to pay the expenses associated with our reporting obligations, we will not be able to apply for quotation on the OTCQB. 

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The Company is electing to not opt out of JOBS Act extended accounting transition period. This may make its financial statements more difficult to compare to other companies.

Pursuant to the JOBS Act of 2012, as an emerging growth company the Company can elect to opt out of the extended transition period for any new or revised accounting standards that may be issued by the PCAOB or the SEC. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the standard for the private company. This may make comparison of the Company’s financial statements with any other public company which is not either an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible as possible different or revised standards may be used.

Emerging Growth Company

The recently enacted JOBS Act is intended to reduce the regulatory burden on emerging growth companies. The Company meets the definition of an emerging growth company and so long as it qualifies as an “emerging growth company,” it will, among other things:

Our company will continue to be an emerging growth company until the earliest of:

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Our cash and cash equivalents total $32,106 as of September 30, 2019. In order to implement our plan of operations for the next twelve-month period, we require further funding.

Comparison of the periods ended September 30, 2019, December 31, 2018 and December 31, 2017

Revenues, net

Total revenue for the nine months ended September 30, 2019 were $1. Total revenues were $59,720 and $0 for the years ended December 31, 2018 and 2017, respectively. The increase of $59,720 is primarily due to the fact that the Company, in October of 2017, commenced material operations which consisted of manufacturing and selling Chinese tonic wines. As a result, the Company began generating revenues in October 2017. To date, most of our sales occurred in October 2019. It should be noted that for the nine months ended September 30, 2019 revenue was down significantly due to seasonal impacts effecting the wine we sell. We currently, and in the past, due to seasonal changes, have sold our wine only in October-December. Going forward we may plan to offer supplemental wines which we can produce and sell throughout the course of the year. We may also endeavor to further stock our seasonal wines so they can be sold throughout the year.

We expect revenue from our business services segment to increase as we continue to grow our business and expand into new territories.

Cost of Revenues

Cost of revenues for the nine months ended September 30, 2019 was $0. For the year ended December 31, 2018, our cost of revenues were $18,754. This resulted from costs related to wine production.

Other income was $226,929 and $0 for the years ended December 31, 2018 and 2017 respectively. This resulted from the governmental funds provided by local government.

Operating expenses

Operating expenses were $413,798 for the nine months ended September 30, 2019. Operating expenses were $5,621,056 and $168,739 for the years ended December 31, 2018 and 2017, respectively. The general and administrative expenses consisted primarily of salaries and wages, research expenses, travelling expenses, professional consulting fees, construction expenses and maintenance fees. The increase of $5,452,317 in general and administrative expense is primarily due to increases in salaries and wages, professional consulting fees, construction expenses and maintenance fees. We expect our general and administrative expense to continue to increase as we expand upon our existing businesses.

Net Loss

Net loss was $414,044 for the nine months ended September 30, 2019. The net loss was $5,352,333 for the years ended December 31, 2018 and the net loss was $164,138 for the year ended December 31, 2017. The increase in net loss is due to lesser revenue generated for the particular period and increases in cost of revenue and general and administrative expenses.

We believe there were no seasonal aspects that had a material effects on the financial condition or results of operations of the Company.

Other than as disclosed elsewhere in this prospectus, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2018 that are reasonably likely to have a material adverse effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

Liquidity and Capital Resources

Cash Used in Operating Activities

For the nine months ended September 30, 2019, net cash provided by and used in operating activities was $285,309. For the year ended December 31, 2018, net cash provided by operating activities was $2,696,789 compared to net cash used in operating activities of $9,346,748 for the year ended December 31, 2017. The cash used in operating activities was primarily a result of cost of revenues, VAT, general and administrative expenses and increased receivables from a customer.

Cash Used in Investing Activities

For the nine months ended September 30, 2019, net cash used in investing activities was $366,505. For the year ended December 31, 2018, net cash used in investing activities was $2,145,890 compared to net cash used in investing activities of $741,886 for the year ended December 31, 2017. The cash used in investing activities was mainly for the purchase of property and equipment.

Cash Provided from Financing Activities

For the nine months ended September 30, 2019, net cash provided by investing activities was $28,497. For the year ended December 31, 2018, net cash used in financing activities was $756,430 compared to net cash provided from financing activities of $8,136,095 for the year ended December 31, 2017. The cash used in financing activities was mainly issuance of capital, advances to a director.

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INDUSTRY OVERVIEW

This section includes market and industry data that we have developed from publicly available information; various industry publications and other published industry sources and our internal data and estimates. Although we believe the publications and reports are reliable, we have not independently verified the data. Our internal data, estimates and forecasts are based upon information obtained from trade and business organizations and other contacts in the market in which we operate and our management’s understanding of industry conditions.

As of the date of the preparation of this section, these and other independent government and trade publications cited herein are publicly available on the Internet without charge. Upon request, the Company will also provide copies of such sources cited herein.

Chinese Tonic Wine Industry

At present, Yichunfeng Limited aims to solely produce and manufacture Chinese tonic wine, which is mainly sold to consumers in China, although the Company may evaluate this focus in the future and may consider expanding into other countries. Given the demand for our production will be limited to China, at least initially, we will focus primarily on the Chinese tonic wine industry as it pertains to China.

Chinese Tonic Wine Industry - Worldwide and In China

The Chinese tonic wine industry has shown a market trend of vigorous development in the past decade. The Chinese consumption of tonic wine has increased significantly, from 184,200 kl in 2010 to 976,800 kl in 2018, with growth rate of 430%. The Chinese tonic wine market reached 35.64 billion dollars during the same period. With the improvement of economic conditions and the growing awareness of health care, the global tonic wine industry has a broad market. Emerging markets remain the main source of growth.

In China, Chinese tonic wine is an important part of traditional medicine. China has a history of thousands of years of tonic wine and always has been one of the world's most important producers of tonic wine. In recent years, with the increase of consumer's health awareness and purchasing power, the market capacity of Chinese tonic wine shows a growing trend. The aging population in China also helps to facilitate the growth of the tonic wine market. In the global market, tonic wine is 12% the size of the liquor market. However, the market size of Chinese tonic wine accounts for close to 40 billion RMB in 2018. We expect it will reach 100 billion in the near future. There is still large room for growth in this industry.

At present, with new innovative technology ranging from the development of traditional Chinese medicine soaking to the use of bioengineering, including the extraction of important active ingredients into high content of functional medicinal wine, has been generated significant recognition from the market. Chinese tonic wine has also become a popular gift for festivals. In 2001, the market size of Chinese tonic wine was only 800 million RMB. However, in 2012, the market size expanded to 13.4 billion. By the end of 2017, the overall market size reached 32.54 billion RMB. Compared with 2001, the annual compound growth rate is as high as 26.1%.

Reference:

https://bg.qianzhan.com/report/detail/459/181227-636ccd02.html

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FORWARD LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve risk and uncertainties. We use words such as “anticipate”, “believe”, “plan”, “expect”, “future”, “intend”, and similar expressions to identify such forward-looking statements. Investors should be aware that all forward-looking statements contained within this filing are good faith estimates of management as of the date of this filing. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us as described in the “Risk Factors” section and elsewhere in this prospectus.

DESCRIPTION OF BUSINESS

Corporate History

Yichunfeng (China) Biohealth Limited, a Nevada corporation ("the Company") was incorporated under the laws of the State of Nevada on January 9, 2019. 

On January 9, 2019, Mr. Yuanhang Chen was appointed Chief Executive Officer, President, Secretary, Treasurer and Director of the Company.

On January 9, 2019, Long Chen was appointed Chief Financial Officer and Director of the Company.

On March 28, 2019, Yichunfeng (China) Biohealth Limited, a Nevada Company, acquired 100% of the equity interests of Yichunfeng (China) Biohealth Holding Limited, a Seychelles Company, in consideration of $100 (U.S. Dollars). Our current officers and directors, Yuanhang Chen and Long Chen were the beneficiaries of the $100 (U.S. Dollars). Yichunfeng (China) Biohealth Holding Limited, a Seychelles Company, now owns 100% of Yichunfeng (China) Biohealth Holding Limited.

On March 29, 2019, Yichunfeng (China) Biohealth Holding Limited, our wholly owned subsidiary, acquired 100% of the equity interests of Yichunfeng (China) Biohealth Holding Limited, a Hong Kong Company, in consideration of $100 (Hong Kong Dollars). Our current officers and directors, Yuanhang Chen and Long Chen were the beneficiaries of the $100 (Hong Kong Dollars).

On May 15, 2019, Yichunfeng (China) Biohealth Holding Limited, a Hong Kong Company, incorporated a new subsidiary in Guangxi, China, called Yichunfeng International Biotechnology (China) Limited, whereas it is owned entirely (100%) by Yichunfeng (China) Biohealth Holding Limited, the Hong Kong Company. There was no consideration exchanged per the aforementioned transaction.

On May 20, 2019, Yichunfeng International Biotechnology (China) Limited, the Hong Kong Company, also referred to herein as "YIBL", entered into and consummated an agreement with Long Chen and Hongwei Deng, whereas YIBL has the option to purchase all of the equity interests of Jiangxi Yichunfeng Biohealth Limited, also referred to herein as "JYBL", a Chinese, "PRC" Company, from Long Chen and Hongwei Deng. These equity interests would make up 100% of the equity interests of Jiangxi Yichunfeng Biohealth Limited. Jiangxi Yichunfeng Biohealth Limited is considered to be a variable interest entity, also referred to herein as a "VIE", to Yichunfeng International Biotechnology (China) Limited, and therefore a VIE of the issuer, Yichunfeng (China) Biohealth Limited, a Nevada Company. More information regarding this agreement can be found in exhibit 10.1, titled, "Call Option Agreement".

On May 20, 2019, YIBL entered into and consummated an agreement with Long Chen and Hongwei Deng whereas Long Chen and Hongwei Deng have given YIBL the right to appoint management of YIBL to act as proxy to existing shareholders of Jiangxi Yichunfeng Biohealth Limited. This gives management of YIBL the ability to conduct and control company affairs of Jiangxi Yichunfeng Biohealth Limited. Actions which management of YIBL may be able to carry out include, but are not limited to, exercising voting rights as proxy of the existing shareholder(s), appointing new directors, hiring new management, and carrying out corporate actions. More information regarding this agreement can be found in exhibit 10.2, titled, "Shareholder' Voting Rights Proxy Agreement."

On May 20, 2019, YIBL entered into and consummated an agreement with Long Chen and Hongwei Deng whereas Long Chen and Hongwei Deng have engaged YIBL to provide management, financial, and other business services to Jiangxi Yichunfeng Biohealth Limited. YIBL is to be compensated with 100% of all profits generated by Jiangxi Yichunfeng Biohealth Limited. This Agreement is effective as of May 20, 2019 and will continue in effect for a period of ten (10) years (the "Initial Term"), and for succeeding periods of the same duration (each, "Subsequent Term"), until terminated by one of the following means either during the Initial Term or thereafter: Mutual Consent, Termination by YIBL, Breach or Insolvency. Jiangxi Yichunfeng Biohealth Limited is considered to be a variable interest entity to Yichunfeng International Biotechnology (China) Limited, and therefore a VIE of the issuer, Yichunfeng (China) Biohealth Limited. More information regarding this agreement can be found in exhibit 10.3, titled, "Management Services Agreement."

On May 20, 2019, YIBL entered into and consummated an agreement with Long Chen and Hongwei Deng whereas Long Chen and Hongwei Deng have pledged their equity interests in Jiangxi Yichunfeng Biohealth Limited, to YIBL. More information regarding this agreement can be found in exhibit 10.4, titled, "Equity Pledge Agreement."

On May 20, 2019, YIBL entered into a loan agreement with Long Chen and Hongwei Deng wherein YIBL will loan the amount of approximately CNY100,000 (Chinese Yuan) to Long Chen and Hongwei Deng, all of which shall be used for the benefit of Jiangxi Yichunfeng Biohealth Limited. More information regarding this agreement can be found in exhibit 10.5, titled, "Loan Agreement. 

Business Information

Yichunfeng (China) Biohealth Limited, the US Company, operates through its wholly owned subsidiary, Yichunfeng (China) Biohealth Holding Limited, a Seychelles Company; which operates through its wholly owned subsidiary, Yichunfeng (China) Biohealth Holding Limited, a Hong Kong Company; which operates through its wholly owned subsidiary, Yichunfeng International Biohealth (China) Holding Limited, a Chinese Company. The US, Seychelles and Hong Kong Companies act solely for holding purposes whereas all current and future operations in China are planned to be carried out via Yichunfeng International Biohealth (China) Holding Limited, the Chinese Company. The purpose of the Hong Kong Company is to function as the current regional hub of the Company.

Prior to July 2019, JYBL did not manufacture its own wine products and exclusively sourced products from our suppliers. With the advancement in modern biopharmaceutical technology, our Directors determined that we had the capability to manufacture Chinese tonic wine products ourselves, which we believed would increase profitability, and accordingly the Company adopted its current business plan beginning in July 2019. JYBL set up its first factory in Golden Industrial Park, Nanfeng, Fuzhou, Jiangxi, China and manufactured the first batch of Chinese tonic wine products in September 2019.

We commenced our business in June 2016 from our office located in Nanning, Guangxi, China. We then moved to Golden Industrial Park, Nanfeng, Fuzhou, Jiangxi, China, and built our winery factory for manufacturing Chinese tonic wine starting in December 2017. We have set up a plantation at Dingdangzhen, Long'an, Nanning, Guangxi, China, in January 2017, with one thousand mu of mulberry trees planted. The purpose of the plantation is to prepare for the future development of mulberry wine, one of our new Chinese tonic wine products. We have also established the Mulberry Wine Research and Development Center with Beijing Technology and Business University located inside the university in July 2017.

All of the previous entities share the same exact business plan, with the goal of offering products that support the development of a nutritious and healthy lifestyle for our future clients. We aim to promote the effect of improving health and virility in our clients. We will, at least initially, primarily focus our efforts on attracting customers in China. In the coming years, and subsequently, we intend to make efforts to expand throughout South East Asia, especially in Malaysia.

Chinese Tonic Wine Production 

Our wine products share a common principal wine-making process, although the types of raw materials and Chinese medicine added to the products varies, and other factors or processes may differ in accordance with our individual wine formulas. Typically we begin by combining the primary ingredient of our wine (for example, Dehydrated Oyster) with distilled liquor. We then begin the mixing and steeping process and proceed to filtration and extraction. After the extraction has been completed, we add various Chinese Medicine(s). Then, the wine undergoes sterilization, filtration and finally bottling before it is a finished product ready for distribution.

Raw Materials

We purchase raw materials from independent third party suppliers (Zhongshi Limited and Guilin Yinli Brewery) to be used in Chinese tonic wine productions. The raw materials are provided along with the respective certificates issued by independent food laboratories, which can be reliably depended upon to verify that the batch of raw materials is up to the standards as required by the China National Health Commission’s “National Food Safety Standard”, as well as our own standards for manufacturing Chinese tonic wine. Our agreements with our suppliers contain a quality requirement, wherein all raw materials provided are required to meet these strict standards, and in the event that they do not do so then the suppliers shall bear the full responsibility for this breach in contract.

Mixing and Steeping

Before our steeping process, we rinse the raw materials with distilled water and while doing so we confirm that the raw materials are in good condition to proceed. Subsequent to our quality check of the raw materials, we mix the distilled liquor with the main ingredients (eg, dehydrated oyster for Oyster Wine). The ingredients that remain are left for steeping in the steeping tank (with volume of ten tons), for a period of time depending upon the types of wine and main ingredients. Generally, the steeping time will not be less than 20 days.

Filtration of the extract

When the steeping process is completed, we filter out the raw materials (eg, dehydrated oyster for Oyster Wine) and extract the semi-finished wine to the next tank for further processing.

Addition of Chinese Medicine

As determined by our unique formulas, we then add different types of Chinese medicine in precise portions (such as the extract of oyster peptide and other Chinese medicine) to the circulation tank and mix well with the semi-finished wine.

Sterilization, Filtration and Bottling

We then perform a stringent and germ-free filtration process to remove bacteria and the residue that has formed. The semi-finished wine is then delivered to our advanced bottling line for bottling, corking and labeling. The wine-making process is then completed, and the Chinese tonic wine products are transported to our warehouse for storage.

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Sales and Products

Yichunfeng International Biohealth (China) Holding Limited, branded as “Yichunfeng”, a winery in China, has recently developed its own wine brand, advocating the concept of Chinese tonic wine. Traditional Chinese medicines are added into its wine with modern biopharmaceutical technology.

We principally sell our wine products through an exclusive distributor, Yi Men Chen Limited (“YMC”), which is an affiliated party of the Company, primarily to the PRC market. We do not sell our wine products directly to end-users. We have signed a distribution agreement with YMC, in which YMC is authorized to appoint sub-distributors on behalf of our Company to further extend the outreach of our wine products. YMC is principally engaged in both wholesale distribution and direct retail of our products. Appointment of sub-distributors must be notified to us, at which point our sales team retains records and may adjust our distribution strategies and marketing efforts accordingly to avoid undue competition among distributors and sub-distributors. We do not have a direct business relationship with any sub-distributors.

As of December 31, 2018, our Company has 208 sub-distributors in the PRC, of which 31 sub-distributors are located in the Guangxi Zhuang Autonomous Region, 29 sub-distributors are in the Gansu Province, Qinghai Province and Ningxia Autonomous Region, 18 sub-distributors are in the Guangdong Province and the remaining 130 sub-distributors are spread over the provinces of Zhejiang, Shaanxi, Liaoning, Shandong, Jiangxi, Chongqing and Xinjiang Uygur Autonomous Region, etc.

Main Products: Yichunfeng Deep Sea Oyster Wines

Our premiere product, Deep Sea Oyster Wine of Yichunfeng, uses purple oyster as the main ingredient and it combines the essence of premium oyster and wine. Although we believe that oysters are well known in the PRC for their purported aphrodisiac qualities, oysters also have numerous documented health benefits. Oysters are low in calories yet loaded with nutrients, including protein, healthy fats, vitamins, and minerals. They are also a good source of omega-3 fatty acids, a family of polyunsaturated fats that play important roles the body, such as regulating inflammation and maintaining the health of the heart and brain.

In accordance with our vision to combine traditional Chinese medicine with high-quality wine, we have added the extract of oyster peptide and other Chinese medicine to our Deep Sea Oyster Wine. Multiple articles published in “Guiding Journal of Traditional Chinese Medicine and Pharmacy” and “Journal of Food Safety and Quality” have described the research results pertaining to the effects of oyster peptide, in which is was determined that oyster peptides have a positive result on improving bodily health and virility.

Marketing Plan

Our marketing plan is, at least in the short term, primarily focused upon our efforts to attract customers in China. In the coming years, and subsequently, we intend to make efforts to expand throughout South East Asia, especially in Malaysia. Accordingly, we anticipate spending a substantial amount in marketing and advertising in the coming years.

While our marketing plans have not yet been determined in full, we do have tentative plans to penetrate the marketplace and attract sub-distributors and customers by building our brand image through print ads, and possibly online paid advertisements to create brand awareness. We plan to develop a corporate website, although we do not have any definitive timeline in place to do so, which will introduce the benefits of Chinese tonic wine to our prospective clients. We intend to market our products through this corporate website and utilize search engine marketing to improve the number of sub-distributors and consumers who can find and view our future website.

The global presence social media has provided is an invaluable resource. As we begin to grow, create brand awareness and expand our operations to South East Asia, especially in Malaysia, we intend to use social media to reach and engage additional sub-distributors and customers. We intend to create social media pages, on platforms such as Weibo, Twitter, Instagram and Facebook, in the future in order to promote our products to overseas markets. However, we do not have any definitive plans for how we will manage or grow our social media presence at this time.

All of the above marketing plans have not yet been determined in sufficient detail to outline at this time and remain under development.

Competition

It should be noted that the Company is operating in a highly competitive market and fierce competition exists in the form of multinational wine companies with far greater brand awareness and greater resources. Although there are numerous alternative brands to our own, we intend to distinguish ourselves by creating a strong relationship with our distributors, sub-distributors and customers with our unique Chinese tonic wine products. We believe that we will have competitive strengths that will allow us to effectively compete in this market. It is our intention to create competitive strengths via our future pricing model and the quality of our Chinese tonic wine product.

Future Plans

In the future, we intend to continue solidifying our market position within the Chinese tonic wine market in the PRC and enhancing our market penetration into different customer segments and preferences. We also plan to expand our products to South East Asia, especially Malaysia, and manufacture a new product - mulberry wine.

For our future expansion plan to South East Asia, especially in Malaysia, we plan to apply for the respective licenses required in order to sell Chinese tonic wines in Malaysia and select suitable distributors in South East Asia. We also plan to promote the concept of traditional Chinese medicine, as well as our Chinese tonic wine, to South East Asia. We anticipate there will be a need to hire additional staff in Malaysia and that we will incur marketing cost for our future offline and online marketing initiatives. Accordingly, we plan to hire an additional ten to twenty employees in order to increase our marketing presence in South East Asia. However, we do not have a distinct and detailed expansion and marketing plan as of this point in time.

In regards to our future plan to manufacture mulberry wine, we plan to utilize the research results from the Mulberry Wine Research and Development Center (which was set up in 2017 together with Beijing Technology and Business University) and develop a mulberry production line in our factory located in Golden Industrial Park. However, without determining an appropriate budget and conducting intensive research, plans referring to development, expansion and concrete timescales cannot be determined at present. We cannot say with certainty, at this point in time, how long it will take for us to conduct the research that will be required to move forward in these endeavors.

Employees

We currently have seventeen equivalent full-time employees and contractors, of which two are executives (Yuanhang Chen and Long Chen), six are focused on accounting and administrative, five are focused on direct and indirect production, one is focused on sales and marketing and three are focused on logistics. We also hire seasonal, part-time labor and consultants as necessary.

Yuanhang Chen and Long Chen, have the ability to be involved in our business operations for up to 35 hours per week, but they are prepared to devote more time if necessary. The Company intends to employ ten more employees by the end of June 2020. We currently intend to hire three employees for selling, general and administration departments. The Company intends to hire more employees who hold relevant professional certificates and above average Mandarin proficiency.

We do not presently have pension, health, annuity, insurance, stock options, profit sharing, or similar benefit plans; however, we may adopt plans in the future. There are presently no personal benefits available to our employee, Officer and Director.

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USE OF PROCEEDS

Our offering is being made on a self-underwritten basis: no minimum number of shares must be sold in order for the offering to proceed. The offering price per share is $1.00. The following table sets forth the uses of proceeds assuming the sale of 100%, 75%, 50% and 25% of the securities offered for sale by the Company. There is no assurance that we will raise the full $4,500,000 as anticipated.

The above figures represent only estimated costs for the next 12 months. Funds may be allocated in differing quantities should the Company decide at a later date it would be in the Company’s best interests.

The Company estimates the costs of this offering at about $56,000. All expenses incurred in this offering are being paid for by the Company. The Company will utilize existing cash to pay for any offering expenses and does not intend to use any monies from offering proceeds to fund the offering.  

DETERMINATION OF OFFERING PRICE

Since our shares are not listed or quoted on any exchange or quotation system, the offering price of the shares of common stock was arbitrarily determined. The offering price was determined by us and is based on our own assessment of our financial condition and prospects, limited offering history, and the general condition of the securities market. It does not necessarily bear any relationship to our book value, assets, past operating results, financial condition or any other established criteria of value. Although our common stock is not listed on a public exchange, we will be filing to obtain a listing on the OTCQB concurrently with the filing of this prospectus. In order to be quoted on the OTCQB, a market maker must file an application on our behalf in order to make a market for our common stock.

There is no assurance that our common stock will trade at market prices in excess of the initial public offering price as prices for the common stock in any public market which may develop will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for the common stock, investor perception of us and general economic and market conditions. 

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DILUTION

The price of the current offering is fixed at $1.00 per share.

Dilution represents the difference between the offering price and the net tangible book value per share immediately after completion of this offering. Net tangible book value is the amount that results from subtracting total liabilities and intangible assets from total assets. Dilution arises mainly as a result of our arbitrary determination of the offering price of the shares being offered. Dilution of the value of the shares you purchase is also a result of the lower book value of the shares held by our existing stockholders. The following tables compare the differences of your investment in our shares with the investment of our existing stockholders.

The following table illustrates the dilution to the purchasers of the common stock in this offering.

Note: “Net increase to original shareholder” below is based upon a par value of $0.0001.

Net Value Calculation 

If 100% of the shares in the offering are sold

Net Value Calculation 

If 75% of the shares in the offering are sold 

Net Value Calculation

If 50% of the shares in the offering are sold 

 Net Value Calculation 

If 25% of the shares in the offering are sold

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SELLING SHAREHOLDERS

The shares being offered for resale by the selling stockholders consist of 4,314,263 shares of our common stock.

The following table sets forth the name of the selling stockholders, the number of shares of common stock beneficially owned by each of the selling stockholders as of January 16, 2020 and the number of shares of common stock being offered by the selling stockholders. The shares being offered hereby are being registered to permit public secondary trading, and the selling stockholders may offer all or part of the shares for resale from time to time. However, the selling stockholders are under no obligation to sell all or any portion of such shares nor are the selling stockholders obligated to sell any shares immediately upon effectiveness of this prospectus. All information with respect to share ownership has been furnished by the selling stockholders.

Note: The Percent of common stock owned after offering (if all shares are sold) is calculated under the assumption 100% of the shares are sold herein pursuant to the offering by the selling shareholders and also that of the Company.

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PLAN OF DISTRIBUTION

The Company has 40,314,263 shares of common stock issued and outstanding as of the date of this prospectus. Pursuant to this offering the Company is registering for resale 4,314,263 shares of our common stock held by existing shareholders at a fixed price of $1.00 per share for the duration of the offering. The Company is also registering an additional 4,500,000 shares of its common stock for sale at the fixed price of $1.00 per share for the duration of the offering.

There is no arrangement to address the possible effect of the offering on the price of the stock.

In connection with the Company’s selling efforts in the offering, our Directors will not register as broker-dealers pursuant to Section 15 of the Exchange Act, but rather will rely upon the “safe harbor” provisions of SEC Rule 3a4-1, promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Generally speaking, Rule 3a4-1 provides an exemption from the broker-dealer registration requirements of the Exchange Act for persons associated with an issuer that participate in an offering of the issuer’s securities. Our Directors are not subject to any statutory disqualification, as that term is defined in Section 3(a)(39) of the Exchange Act. Our Directors will not be compensated in connection with his participation in the offering by the payment of commissions or other remuneration based either directly or indirectly on transactions in our securities. Our Directors are not, nor have they been within the past 12 months, brokers or dealers, and they are not, nor have they been within the past 12 months, an associated person of a broker or dealer. At the end of the offering, our Directors will continue to primarily perform substantial duties for the Company or on its behalf otherwise than in connection with transactions in securities. Our Directors will not participate in selling an offering of securities for any issuer more than once every 12 months other than in reliance on Exchange Act Rule 3a4-1(a)(4)(i) or (iii).

The Company will receive all proceeds from the sale of the 4,500,000 shares being offered on behalf of the Company itself. The proceeds from the 4,314,263 shares held by shareholders, if sold, will not go to the Company, but will go to the shareholders directly. The price per share is fixed at $1.00 for the duration of this offering. Although our common stock is not listed on a public exchange or quoted over-the counter, we intend to seek to have our shares of common stock quoted on the OTC Marketplace. In order to be quoted on the OTC Marketplace a market maker must file an application on our behalf in order to make a market for our common stock. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, nor can there be any assurance that such an application for quotation will be approved. However, sales by the Company and selling shareholders must be made at the fixed price of $1.00 for the duration of this offering. The Company will not offer its shares for sale through underwriters, dealers, agents or anyone who may receive compensation in the form of underwriting discounts, concessions or commissions from the Company and/or the purchasers of the shares for whom they may act as agents. The shares of common stock sold by the Company and the selling shareholders may be occasionally sold in one or more transactions; all shares sold under this prospectus will be sold at a fixed price of $1.00 per share.

In order to comply with the applicable securities laws of certain states, the securities will be offered or sold in those states only if they have been registered or qualified for sale; an exemption from such registration or if qualification requirement is available and with which the Company has complied.

In addition and without limiting the foregoing, the Company will be subject to applicable provisions, rules and regulations under the Exchange Act with regard to security transactions during the period of time when this Registration Statement is effective.

The Company will pay all expenses incidental to the registration of the shares (including registration pursuant to the securities laws of certain states), which we expect to be no more than, about, $56,000. At this time the Company only has plans to sell to non U.S. citizens outside of the United States.

Procedures for Subscribing (Shares offered by us, “The Company”)

If you decide to subscribe for any shares in this offering that are offered by us, “The Company”, you must

- Execute and deliver a subscription agreement; and

- Deliver a check or certified funds to us for acceptance or rejection.

All checks for subscriptions must be either made payable to (i) “Yichunfeng (China) Biohealth Limited”, (ii) a subsidiary of the Company, or (iii) escrow agent as agreed by the Company. Wire transfer and telegraphic transfer are also accepted. The Company will deliver stock certificates attributable to shares of common stock purchased directly to the purchasers within ninety (90) days of the close of the offering.

Right to Reject Subscriptions (Shares offered by us, “The Company”)

We have the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will be returned immediately by us to the subscriber, without interest or deductions. Subscriptions for securities will be accepted or rejected with letter by mail within 48 hours after we receive them.

In Regards to Shares sold by the Selling Shareholders

The selling shareholders are deemed to be underwriters of this offering. Any selling shareholder named herein is responsible, prior to reselling any shares registered herein that they may own, the Company’s prospectus.

A final summary prospectus, or statutory prospectus, must and will be delivered, at no cost, by any selling shareholder named herein to any potential purchaser of shares no later than upon receiving payment from the purchasing party for such shares. The prospectus must and will be provided to any beneficial owner to whom a prospectus is delivered, and a copy of any or all of the reports or documents that have been incorporated by reference in the prospectus or contained in the registration statement, but not delivered within the prospectus itself, must and will be included.

If you decide to subscribe for any shares in this offering that are offered by the selling shareholders the selling shareholder(s) will inform you, “the purchaser”, of their preferred method of payment and the procedures they have for subscribing. Procedures may vary from shareholder to shareholder. It should be noted that we will in no way be affiliated with any private transactions in which our selling shareholders sell shares of their own common stock. Selling shareholders may or may not decide to reject subscriptions. This is at their own discretion. Selling Shareholders will be responsible for following any applicable laws or regulations in regards to the sale(s) of their own shares of common stock.

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DESCRIPTION OF SECURITIES

We have authorized capital stock consisting of 600,000,000 shares of common stock, $0.0001 par value per share (“Common Stock”) and 200,000,000 shares of preferred stock, $0.0001 par value per share (“Preferred Stock”). As of the date of this filing we have 40,314,263 shares of Common Stock and no shares of Preferred Stock issued and outstanding.

Common Stock

The holders of outstanding shares of Common Stock are entitled to receive dividends out of assets or funds legally available for the payment of dividends of such times and in such amounts as the board from time to time may determine. Holders of Common Stock are entitled to one vote for each share held on all matters submitted to a vote of shareholders. There is no cumulative voting of the election of directors then standing for election. The Common Stock is not entitled to pre-emptive rights and is not subject to conversion or redemption. Upon liquidation, dissolution or winding up of our Company, the assets legally available for distribution to stockholders are distributable ratably among the holders of the Common Stock after payment of liquidation preferences, if any, on any outstanding payment of other claims of creditors.

Preferred Stock

At this time, we have no preferred stock issued and outstanding. Preferred stock may be issued in one or more series, each series to be appropriately designated by a distinguishing letter or title prior to the issuance of any shares thereof. The voting powers, designations, preferences, limitations, restrictions, conversion rights, cumulative, relative, participating, optional, and other right, the qualification, limitations or restrictions thereof, of the Preferred shall hereinafter by prescribed by resolution of the board of directors.

Options and Warrants

None.

Convertible Notes 

None. 

Dividend Policy

We have not paid any cash dividends to shareholders. The declaration of any future cash dividends is at the discretion of our board of directors and depends upon our earnings, if any, our capital requirements and financial position, general economic conditions, and other pertinent conditions.  It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.

Transfer Agent

At this time, we do not have a transfer agent.

Penny Stock Regulation

The SEC has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) of less than $5.00 per share or an exercise price of less than $5.00 per share. Such securities are subject to rules that impose additional sales practice requirements on broker-dealers who sell them. For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchaser of such securities and have received the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prepared by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, among other requirements, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. As the Shares immediately following this Offering will likely be subject to such penny stock rules, purchasers in this Offering will in all likelihood find it more difficult to sell their Shares in the secondary market.

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INTERESTS OF NAMED EXPERTS AND COUNSEL

The validity of the shares of common stock offered hereby will be passed upon for us by Carl Ranno Esq. of 2733 East Vista Dr. Phoenix, Arizona 85032.

The financial statements included in this prospectus and the registration statement have been audited by Total Asia Associates PLT, to the extent and for the periods set forth in their report appearing elsewhere herein and in the registration statement, and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.

REPORTS TO SECURITIES HOLDERS

We will and will continue to make our financial information equally available to any interested parties or investors through compliance with the disclosure rules of Regulation S-K for a smaller reporting company under the Securities Exchange Act. In addition, we will file Form 8-K and other proxy and information statements from time to time as required. The public may read and copy any materials that we file with the SEC at the SEC's Public Reference Room at 100 F Street NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

The Company’s mailing address is Golden Industrial Park, Nanfeng, Fuzhou, Jiangxi, 344500, China. If a shareholder wishes to contact the Company in writing please utilize the aforementioned mailing address and address mail to one or both of our Directors.

DESCRIPTION OF FACILITIES

The Company's mailing address is Golden Industrial Park, Nanfeng, Fuzhou, Jiangxi, 344500, China, which is our production plant (47,557.40 m²) location. We currently have one production line in use and will open a new production line if the current production capacity could not meet the market demand. The current factory has 2,600 square meters. The other factory for two production lines of Mulberry Wine is still under construction.

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LEGAL PROCEEDINGS

From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future.

PATENTS AND TRADEMARKS

We currently have two patents which cover various images on our wine bottles, and the design of the bottles themselves. The patents are applicable in the following jurisdictions: National Intellectual Property Administration of PRC (CNIPA), and our patents have a 10-year protection period which will expire in 2027.

DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Biographical information regarding the officers and directors of the Company, who will continue to serve as officers and directors of the Company are provided below:

Officer Biographies

Yuanhang Chen – Chief Executive Officer, President, Secretary, Treasurer, Director

Mr. Chen Yuanhang, age 57, received his bachelor’s degree from Guangxi Normal University in 1989. In 2009, he received an Executive Master of Business Administration Program in Peking University.

In 1997, Mr. Chen Yuanhang founded Guangxi Chuanggu Group, operating out of Guangxi, China. Mr. Chen Yuanhang continues to serve as the President and Director and has been responsible for encouraging business investments, while also providing leadership and strategic direction for the company. He also joined the Guangdong’s Association for Promotion of Cooperation between Guangdong, Hong Kong & Macao and served as Vice President in 2015.

Due to Mr. Chen Yuanhang 's over 30 years of experience in top management of various businesses, in January of 2019, the Board of Directors elected to appoint him to the positions of President, Secretary, Treasurer and Chairman of Board of Directors of Yichunfeng (China) Biohealth Limited.

Long Chen - Chief Financial Officer, Director

Mr. Chen Long, age 54, was born in Jiangxi province and received his bachelor’s degree of Business Administration program from Jiangxi Normal University, People Republic of China. From 2013 to 2015, Mr. Chen Long was the founder and Chairman of Guangxi Yi men Chen Capital Ltd in Jiangxi, a multilevel investment management business.

In 2016, Mr. Chen Long founded, and remains as Chairman to the present day, a new business called Jiangxi Yi Chun Feng Bioengineering Co., Ltd, a multilevel bioengineering business in People Republic of China. When he first started this company, its business plan was to generate deep sea oyster wine and mulberry fruit wine along with other tonic wine.

Due to Mr. Chen Long’s status as a qualified expert in the tonic wine industry, along with his 4 years of professional working experience, the Board of Directors has elected to appoint him to the position of Director of the Company.

Corporate Governance

The Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with the Securities and Exchange Commission (the “SEC”) and in other public communications made by the Company; and strives to be compliant with applicable governmental laws, rules and regulations. The Company has not formally adopted a written code of business conduct and ethics that governs the Company’s employees, officers and Directors as the Company is not required to do so.

In lieu of an Audit Committee, the Company’s Board of Directors, is responsible for reviewing and making recommendations concerning the selection of outside auditors, reviewing the scope, results and effectiveness of the annual audit of the Company's financial statements and other services provided by the Company’s independent public accountants. The Board of Directors, the Chief Executive Officer and the Chief Financial Officer of the Company review the Company's internal accounting controls, practices and policies.

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Committees of the Board

Our Company currently does not have nominating, compensation, or audit committees or committees performing similar functions nor does our Company have a written nominating, compensation or audit committee charter. Our Directors believe that it is not necessary to have such committees, at this time, because the Director(s) can adequately perform the functions of such committees.

Audit Committee Financial Expert

Our Board of Directors has determined that we do not have a board member that qualifies as an “audit committee financial expert” as defined in Item 407(D)(5) of Regulation S-K, nor do we have a Board member that qualifies as “independent” as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(14) of the FINRA Rules.

We believe that our Director(s) are capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. The Director(s) of our Company does not believe that it is necessary to have an audit committee because management believes that the Board of Directors can adequately perform the functions of an audit committee. In addition, we believe that retaining an independent Director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given the stage of our development and the fact that we have not generated any positive cash flows from operations to date.

Involvement in Certain Legal Proceedings

Our Directors and our Executive officers have not been involved in any of the following events during the past ten years:

Independence of Directors

We are not required to have independent members of our Board of Directors, and do not anticipate having independent Directors until such time as we are required to do so.

Code of Ethics

We have not adopted a formal Code of Ethics. The Board of Directors evaluated the business of the Company and the number of employees and determined that since the business is operated by a small number of persons, general rules of fiduciary duty and federal and state criminal, business conduct and securities laws are adequate ethical guidelines. In the event our operations, employees and/or Directors expand in the future, we may take actions to adopt a formal Code of Ethics.

Shareholder Proposals

Our Company does not have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for Directors. The Board of Directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our Company does not currently have any specific or minimum criteria for the election of nominees to the Board of Directors and we do not have any specific process or procedure for evaluating such nominees. The Board of Directors will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.

A shareholder who wishes to communicate with our Board of Directors may do so by directing a written request addressed to our President, at the address appearing on the first page of this Information Statement.

EXECUTIVE COMPENSATION

Summary Compensation Table:

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Summary of Compensation

Stock Option Grants

We have not granted any stock options to our executive officers since our incorporation.

Employment Agreements

We do not have an employment or consulting agreement with any officers or Directors.

Compensation Discussion and Analysis

Director Compensation

Our Board of Directors does not currently receive any consideration for their services as members of the Board of Directors. The Board of Directors reserves the right in the future to award the members of the Board of Directors cash or stock based consideration for their services to the Company, which awards, if granted shall be in the sole determination of the Board of Directors.

Executive Compensation Philosophy

Our Board of Directors determines the compensation given to our executive officers in their sole determination. Our Board of Directors reserves the right to pay our executive or any future executives a salary, and/or issue them shares of common stock issued in consideration for services rendered and/or to award incentive bonuses which are linked to our performance, as well as to the individual executive officer’s performance. This package may also include long-term stock based compensation to certain executives, which is intended to align the performance of our executives with our long-term business strategies. Additionally, while our Board of Directors has not granted any performance base stock options to date, the Board of Directors reserves the right to grant such options in the future, if the Board in its sole determination believes such grants would be in the best interests of the Company.

Incentive Bonus

The Board of Directors may grant incentive bonuses to our executive officer and/or future executive officers in its sole discretion, if the Board of Directors believes such bonuses are in the Company’s best interest, after analyzing our current business objectives and growth, if any, and the amount of revenue we are able to generate each month, which revenue is a direct result of the actions and ability of such executives.

Long-term, Stock Based Compensation

In order to attract, retain and motivate executive talent necessary to support the Company’s long-term business strategy we may award our executive and any future executives with long-term, stock-based compensation in the future, at the sole discretion of our Board of Directors, which we do not currently have any immediate plans to award.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of January 16, 2020 the Company has 40,314,263 shares of common stock issued and outstanding, which number of issued and outstanding shares of common stock have been used throughout this report.

Notes to table:

Beneficial ownership in the table above has been determined in accordance with Rule 13d-3 under the Exchange Act. Under this rule, certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire shares (for example, upon exercise of an option or warrant) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares is deemed to include the amount of shares beneficially owned by such person by reason of such acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the following table does not necessarily reflect the person’s actual voting power at any particular date.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On March 28, 2019, Yichunfeng (China) Biohealth Limited, a Nevada Company, acquired 100% of the equity interests of Yichunfeng (China) Biohealth Holding Limited, a Seychelles Company, in consideration of $100 (U.S. Dollars). Our current officers and directors, Yuanhang Chen and Long Chen were the beneficiaries of the $100 (U.S. Dollars). Yichunfeng (China) Biohealth Holding Limited, a Seychelles Company, now owns 100% of Yichunfeng (China) Biohealth Holding Limited.

On March 29, 2019, Yichunfeng (China) Biohealth Holding Limited, our wholly owned subsidiary, acquired 100% of the equity interests of Yichunfeng (China) Biohealth Holding Limited, a Hong Kong Company, in consideration of $100 (Hong Kong Dollars). Our current officers and directors, Yuanhang Chen and Long Chen were the beneficiaries of the $100 (Hong Kong Dollars).

On May 15, 2019, Yichunfeng (China) Biohealth Holding Limited, a Hong Kong Company, incorporated a new subsidiary in Guangxi, China, called Yichunfeng International Biotechnology (China) Limited, whereas it is owned entirely (100%) by Yichunfeng (China) Biohealth Holding Limited, the Hong Kong Company. There was no consideration exchanged per the aforementioned transaction.

On May 20, 2019, Yichunfeng International Biotechnology (China) Limited, the Hong Kong Company, also referred to herein as "YIBL", entered into and consummated an agreement with Long Chen and Hongwei Deng, whereas YIBL has the option to purchase all of the equity interests of Jiangxi Yichunfeng Biohealth Limited, also referred to herein as "JYBL", a Chinese, "PRC" Company, from Long Chen and Hongwei Deng. These equity interests would make up 100% of the equity interests of Jiangxi Yichunfeng Biohealth Limited. Jiangxi Yichunfeng Biohealth Limited is considered to be a variable interest entity, also referred to herein as a "VIE", to Yichunfeng International Biotechnology (China) Limited, and therefore a VIE of the issuer, Yichunfeng (China) Biohealth Limited, a Nevada Company. More information regarding this agreement can be found in exhibit 10.1, titled, "Call Option Agreement".

On May 20, 2019, YIBL entered into and consummated an agreement with Long Chen and Hongwei Deng whereas Long Chen and Hongwei Deng have given YIBL the right to appoint management of YIBL to act as proxy to existing shareholders of Jiangxi Yichunfeng Biohealth Limited. This gives management of YIBL the ability to conduct and control company affairs of Jiangxi Yichunfeng Biohealth Limited. Actions which management of YIBL may be able to carry out include, but are not limited to, exercising voting rights as proxy of the existing shareholder(s), appointing new directors, hiring new management, and carrying out corporate actions. More information regarding this agreement can be found in exhibit 10.2, titled, "Shareholder' Voting Rights Proxy Agreement."

On May 20, 2019, YIBL entered into and consummated an agreement with Long Chen and Hongwei Deng whereas Long Chen and Hongwei Deng have engaged YIBL to provide management, financial, and other business services to Jiangxi Yichunfeng Biohealth Limited. YIBL is to be compensated with 100% of all profits generated by Jiangxi Yichunfeng Biohealth Limited. This Agreement is effective as of May 20, 2019 and will continue in effect for a period of ten (10) years (the "Initial Term"), and for succeeding periods of the same duration (each, "Subsequent Term"), until terminated by one of the following means either during the Initial Term or thereafter: Mutual Consent, Termination by YIBL, Breach or Insolvency. Jiangxi Yichunfeng Biohealth Limited is considered to be a variable interest entity to Yichunfeng International Biotechnology (China) Limited, and therefore a VIE of the issuer, Yichunfeng (China) Biohealth Limited. More information regarding this agreement can be found in exhibit 10.3, titled, "Management Services Agreement."

On May 20, 2019, YIBL entered into and consummated an agreement with Long Chen and Hongwei Deng whereas Long Chen and Hongwei Deng have pledged their equity interests in Jiangxi Yichunfeng Biohealth Limited, to YIBL. More information regarding this agreement can be found in exhibit 10.4, titled, "Equity Pledge Agreement."

On May 20, 2019, YIBL entered into a loan agreement with Long Chen and Hongwei Deng wherein YIBL will loan the amount of approximately CNY100,000 (Chinese Yuan) to Long Chen and Hongwei Deng, all of which shall be used for the benefit of Jiangxi Yichunfeng Biohealth Limited. More information regarding this agreement can be found in exhibit 10.5, titled, "Loan Agreement.

Foreign ownership in companies providing tonic wine products is subject to certain restrictions under PRC laws and regulations. To comply with the PRC laws and regulations, we, through our wholly owned subsidiary, Yichunfeng International Biotechnology (China) Limited (YIBL), entered into a set of contractual arrangements with Jiangxi Yichunfeng Biohealth Limited (JYBL) and its shareholders. The contractual arrangements between YIBL, JYBL and shareholders of JYBL allow us to:

1. exercise effective control over JYBL whereby having the power to direct JYBL's activities that most significantly drive the economic results of JYBL; 2. receive substantially all of the economic benefits and residual returns, and absorb substantially all the risks and expected losses from JYBL as if it was their sole shareholder; and 3. have an exclusive option to purchase all of the equity interests in JYBL.

On January 9, 2019, Yuanhang Chen, our Chief Executive Officer, President, Secretary, Treasurer and Director, purchased 18,400,000 shares of restricted common stock at a purchase price of $0.0001 (par value) per share. The $1,840.00 in proceeds from the aforementioned sale of shares has gone to the Company to be used as working capital. 

On January 9, 2019, Long Chen, our Chief Financial Officer and Director, purchased 20,293,100 shares of restricted common stock at a purchase price of $0.0001 (par value) per share. The $2,029.31 in proceeds from the aforementioned sale of shares has gone to the Company to be used as working capital. 

In regards to all of the above transactions we claim an exemption from registration afforded by Section 4a(2) and/or Regulation S of the Securities Act of 1933, as amended ("Regulation S") due to the fact that all sales of stock were made to non-U.S. persons (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing.

Review, Approval and Ratification of Related Party Transactions

Given our small size and limited financial resources, we have not adopted formal policies and procedures for the review, approval or ratification of transactions, such as those described above, with our executive officer(s), Director(s) and significant stockholders. We intend to establish formal policies and procedures in the future, once we have sufficient resources and have appointed additional Directors, so that such transactions will be subject to the review, approval or ratification of our Board of Directors, or an appropriate committee thereof. On a moving forward basis, our Directors will continue to approve any related party transaction.

PRINCIPAL ACCOUNTING FEES AND SERVICES

Below is the aggregate amount of fees billed for professional services rendered by our principal accountants with respect to our last two fiscal years.

All of the professional services rendered by principal accountants for the audit of our annual financial statements that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for last two fiscal years were approved by our board of directors.

MATERIAL CHANGES

None.

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FINANCIAL STATEMENTS AND EXHIBITS

INDEX TO FINANCIAL STATEMENTS

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of Yichunfeng (China) Biohealth Limited

Golden Industrial Park,

Nanfeng, Fuzhou, Jiangxi,

344500, China.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Yichunfeng (China) Biohealth Limited (“the Company”) as of December 31, 2017 and December 31, 2018, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the year ended December 31, 2017 and December 31, 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and December 31, 2018, and the results of its operations and its cash flows for the year ended December 31, 2017 and December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, for the year ended December 31, 2017 and December 31, 2018 the Company incurred a net loss. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ TOTAL ASIA ASSOCIATE PLT

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Yichunfeng (China) Biohealth Limited

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2018, AND 2017

(CURRENCY EXPRESSED IN UNITED STATES DOLLARS (“US$”), EXCEPT FOR NUMBER OF SHARES)

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Yichunfeng (China) Biohealth Limited

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018, AND 2017

(CURRENCY EXPRESSED IN UNITED STATES DOLLARS (“US$”), EXCEPT FOR NUMBER OF SHARES) 

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Yichunfeng (China) Biohealth Limited

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2018, AND 2017

(CURRENCY EXPRESSED IN UNITED STATES DOLLARS (“US$”), EXCEPT FOR NUMBER OF SHARES)

For the year ended December 31, 2017

For the year ended December 31, 2018

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Yichunfeng (China) Biohealth Limited

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018, AND 2017

(CURRENCY EXPRESSED IN UNITED STATES DOLLARS (“US$”), EXCEPT FOR NUMBER OF SHARES)

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YICHUNFENG (CHINA) BIOHEALTH HOLDING LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2018 and 2017

(Currency expressed in United States Dollars (“US$”), except for number of shares)

1. ORGANIZATION AND BUSINESS BACKGROUND

Yichunfeng (China) Biohealth Limited, a Nevada corporation ("the Company") was incorporated under the laws of the State of Nevada on January 9, 2019.

On January 9, 2019, Mr. Yuanhang Chen was appointed Chief Executive Officer, President, Secretary, Treasurer and Director of the Company.

On January 9, 2019, Long Chen was appointed Chief Financial Officer and Director of the Company.

On March 28, 2019, Yichunfeng (China) Biohealth Limited, a Nevada Company, acquired 100% of the equity interests of Yichunfeng (China) Biohealth Holding Limited, a Seychelles Company, in consideration of $100 (U.S. Dollars). Our current officers and directors, Yuanhang Chen and Long Chen were the beneficiaries of the $100 (U.S. Dollars). Yichunfeng (China) Biohealth Holding Limited, a Seychelles Company, now owns 100% of Yichunfeng (China) Biohealth Holding Limited.

On March 29, 2019, Yichunfeng (China) Biohealth Holding Limited, our wholly owned subsidiary, acquired 100% of the equity interests of Yichunfeng (China) Biohealth Holding Limited, a Hong Kong Company, in consideration of $100 (Hong Kong Dollars). Our current officers and directors, Yuanhang Chen and Long Chen were the beneficiaries of the $100 (Hong Kong Dollars).

On May 15, 2019, Yichunfeng (China) Biohealth Holding Limited, a Hong Kong Company, incorporated a new subsidiary in Guangxi, China, called Yichunfeng International Biotechnology (China) Limited, whereas it is owned entirely (100%) by Yichunfeng (China) Biohealth Holding Limited, the Hong Kong Company. There was no consideration exchanged per the aforementioned transaction.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The consolidated financial statements for YICHUNFENG (CHINA) BIOHEALTH HOLDING LIMITED and its subsidiaries for the years ended December 31, 2017 and 2018 are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of its wholly owned subsidiaries YICHUNFENG (CHINA) BIOHEALTH HOLDING LIMITED (Republic of Seychelle), YICHUNFENG (CHINA) BIOHEALTH HOLDING LIMITED (Hong Kong), YICHUNFENG (CHINA) BIOHEALTH HOLDING LIMITED (PRC) and JIANGXI YICHUNFENG (CHINA) BIOHEALTH HOLDING LIMITED . Intercompany accounts and transactions have been eliminated in consolidation. The Company has adopted December 31 as its fiscal year end.

Basis of consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions have been eliminated upon consolidation.

Use of estimates

Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheets, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates.

Revenue recognition

Effective January 1, 2018, the Company adopted the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. The implementation of ASC 606 did not have a material impact on the Company’s consolidated financial statements. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition”, the Company recognizes revenue when the following four revenue criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) there are no continuing obligations to the customer; and (4) the collection of related accounts receivable is probable.

Revenue from provision of training program is recognized when there is (i) an existence of contract or an arrangement (ii) services are rendered, (iii) the service price is fixed or determinable, and (iv) collectability is reasonable assured.

Cost of revenue

Cost of revenue on provision of services primarily consist of wine production costs and other related administrative costs directly attributable to cost in related to the services.

Cash and cash equivalents

Cash and cash equivalents are carried at cost and represent cash at bank.

Accounts receivable

Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. We make estimates for the allowance for doubtful accounts and allowance for unbilled receivables based upon our assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, and other factors that may affect our ability to collect from customers.

Plant and equipment

Plant and equipment are stated at cost less accumulated depreciation and impairment. Depreciation of plant and equipment are calculated on the straight-line method over their estimated useful lives or lease terms generally as follows:

Expenditures for maintenance and repairs are expensed as incurred. 

Income taxes

Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

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Net income/(loss) per share

The Company calculates net income/(loss) per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income/(loss) per share is computed by dividing the net income/(loss) by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income/(loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

Imputed Interest

The Company owned director and related parties some loans which are unsecured, interest-free with no fixed payment term, for working capital purpose. Imputed interest is considered insignificant.

Foreign currencies translation

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations and comprehensive income.

The reporting currency of the Company is United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. In addition, the Company’s subsidiary in Hong Kong China maintains its books and record in its local currency, Hong Kong Dollar (“HKD”), which is functional currency as being the primary currency of the economic environment in which the entity operates.

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of stockholders’ equity.

Translation of amounts from CNY into US$1 has been made at the following exchange rates for the respective periods:

Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected

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in the accompanying financial statements, for the year ended December 31, 2018 and 2017, the Company incurred a net loss of $5,352,333 and $164,138 respectively.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company’s profit generating operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. 

The Company expects to finance its operations primarily through cash flow from revenue and continuing financial support from a shareholder. In the event that we require additional funding to finance the growth of the Company’s current and expected future operations as well as to achieve our strategic objectives, the shareholder has indicated the intent and ability to provide additional financing.

No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.

Related parties

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

Fair value of financial instruments:

The carrying value of the Company's financial instruments: cash and cash equivalents, prepayment, deposits, accounts payable and accrued liabilities and amount due from directors approximate at their fair values because of the short-term nature of these financial instruments. 

The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” ("ASC 820-10"), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices in active markets;

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Recent accounting pronouncements 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of such any pronouncements may be expected to cause a material impact on its financial condition or the results of its operations, as follow:

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted.

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In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements - Going Concern, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”), which establishes management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and, if so, to provide related footnote disclosures. ASU 2014-15 provides a definition of the term “substantial doubt” and requires an assessment for a period of one year after the date that the financial statements are issued or available to be issued. Management will also be required to evaluate and disclose whether its plans alleviate that doubt. The guidance is effective for the annual periods ending after December 15, 2016 and interim periods thereafter with early adoption permitted. The Company is currently evaluating the impact the adoption of ASU 2014-15 on the Company’s financial statement presentation and disclosures.

In August 2015, the FASB issued an Accounting Standards Update to defer by one year the effective dates of its new revenue recognition standard until annual reporting periods beginning after December 15, 2017 (2018 for calendar-year public entities) and interim periods therein. Management is currently assessing the impact of the adoption of ASU 2014-09 and has not determined the effect of the standard on our ongoing financial reporting.

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) . Under the new guidance, lessees will be required recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those years. The Company is evaluating this ASU and has not determined the effect of this standard on its ongoing financial reporting.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The amendments in ASU 2016-13 require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration.  The amendment is effective for public entities for annual reporting periods beginning after December 15, 2019, however early application is permitted for reporting periods beginning after December 15, 2018. The Company does not anticipate ASU 2016-13 to have a material impact to the consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, “Clarifying the Definition of a Business.” ASU 2017-01 changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. If substantially all of the fair value is concentrated in a single asset or a group of similar assets, the acquired set is not a business. If this is not met, the entity then evaluates whether the set meets the requirement that a business include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. Determining whether a set constitutes a business is critical because the accounting for a business combination differs significantly from that of an asset acquisition. We early adopted ASU 2017-01 on January 1, 2017 on a prospective basis, and it has not had a material impact to our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment.” ASU 2017-04 removes Step 2 of the goodwill impairment test, which required a hypothetical purchase price allocation. A goodwill impairment will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 provides a more stream-lined approach to evaluating goodwill impairment and we early adopted on January 1, 2017 on a prospective basis as a change in accounting principle. See Note 4 to the consolidated financial statements for an update on goodwill impairment.

On September 29, 2017 the FASB issued “ASU 2017-13—Revenue recognition (Topic 605), Revenue from contracts with customers (Topic 606), Leases (Topic 840), and Leases (Topic 842)”. This update addresses Transition Related to Accounting Standards Updates No. 2014-09, Revenue from Contracts with Customers (Topic 606), and No. 2016-02, Leases (Topic 842). This Update also supersedes SEC paragraphs pursuant the rescission of SEC Staff Announcement, “Accounting for Management Fees Based on a Formula”, effective upon the initial adoption of Topic 606, Revenue from Contracts with Customers, and SEC Staff Announcement, “Lessor Consideration of Third-Party Value Guarantees,” effective upon the initial adoption of Topic 842, Leases. The adoption of this standard is not expected to have a material impact on the Company’s financial statements.

In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02), which allows companies to reclassify stranded tax effects resulting from the Tax Act, from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election.  ASU 2018-02 is effective for us in the first quarter of fiscal 2020, and earlier adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2018-02 on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 removes, modifies and adds certain disclosure requirements in Topic 820 “Fair Value Measurement”. ASU 2018-13 eliminates certain disclosures related to transfers and the valuations process, modifies disclosures for investments that are valued based on net asset value, clarifies the measurement uncertainty disclosure, and requires additional disclosures for Level 3 fair value measurements. ASU 2018-13 is effective for the Company for annual and interim reporting periods beginning July 1, 2020. The Company is currently evaluating the impact ASU 2018-13 will have on its consolidated financial statements.

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3. PROPERTY PLANT AND EQUIPMENT

Plant and equipment as of December 31, 2018 and December 31, 2017 are summarized below:

The depreciation expense is $20,061 the years ended December 31, 2018 and $8,388 for the year ended December 31, 2017.

4. INVENTORY

Inventory as of December 31, 2018 and December 31, 2017 is $1,647 and $0, respectively. The company started selling tonic wine in 2018.

5. CONSTRUCTION IN PROGRESS

The amount of construction in progress as of December 31, 2018 and December 31, 2017 was $2,591,341 and $679,871.

6. ACCOUNT RECEIVABLES, NET

As of December 31, 2018, and 2017, our account receivables are $173,475 and $8,345,979, respectively. And account receivables allowance is $3,699,151 and nil as of December 31, 2018 and 2017. The account receivables were collected in January 2019.

7. PREPAID EXPENSES

Prepaid expenses at December 31, 2018 and December 31, 2017:

As of December 31, 2017, the balance $1,083,179 represented an outstanding prepaid expense which included construction expenses and packaging expenses. As of December 31, 2018, the balance $1,654,870 represented an outstanding prepaid expense which included construction expenses and packaging expenses.

8. LOAN TO DIRECTORS

As of December 31, 2018, and 2017, amount loan to directors are $4,282 and $0, respectively. Provision for impairment in 2018 is $751,967 and $nil in 2017.

9. OTHER PAYABLES AND ACCRUED LIABILITIES

Other payables consisted of the following at December 31, 2018 and December 31, 2017:

Other payables include deposits received from distributor.

10. INCOME TAXES

For the years ended December 31, 2018 and 2017 the local (United States) and foreign components of income/(loss) before income taxes were comprised of the following:

The provision for income taxes consisted of the following:

The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company has subsidiaries that operate in various countries: United States, Seychelles and Hong Kong that are subject to taxes in the jurisdictions in which they operate, as follows:

United States of America

The Company is registered in the State of Nevada and is subject to the tax laws of the United States of America and the tax rate is 21%. As of December 2018, the operations in the United States of America incurred $0 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2039, if unutilized. The Company has provided for a full valuation allowance of $0 against the deferred tax assets on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

Seychelles

Under the current laws of the Seychelles, YICHUNFENG (CHINA) BIOHEALTH HOLDING LIMITED is registered as an international business company which governs by the International Business Companies Act of Seychelles. A company is subject to Seychelles income tax if it does business in Seychelles. A company that incorporated in Seychelles, but does not do business in Seychelles, is not subject to income tax there. YICHUNFENG (CHINA) BIOHEALTH HOLDING LIMITED did not do business in Seychelles, and it does not intend to do business in Seychelles in the future.

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Hong Kong

YICHUNFENG (CHINA) BIOHEALTH HOLDING LIMITED is subject to Hong Kong Profits Tax, which is charged at the statutory income rate of 16.5% on its assessable income.

Mainland China

JIANGXI YICHUNFENG BIOHEALTH HOLDING LIMITED (PRC) is subject to the tax laws of PRC and the tax rate is 25%.

The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of December 31, 2018 and December 31, 2017:

The Company is exposed to the following concentrations of risk:

For the years ended December 31, 2018 and 2017, the customers who accounted for 10% or more of the Company’s revenues and its outstanding receivable balance at period-end are presented as follows:

All customers are located in China.

For the years ended December 31, 2018 and 2017, the vendors who accounted for 10% or more of the Company’s wages and its outstanding payable balance at period-end are presented as follows:

The Company cannot guarantee that the current exchange rate will remain stable, therefore there is a possibility that the Company could post the same amount of income for two comparable periods and because of the fluctuating exchange rate actually post higher or lower income depending on exchange rate of CNY converted to US$ and HK$ converted into US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.

12. SUBSEQUENT EVENTS

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after December 31, 2018 up through the date the Company issued the audited consolidated financial statements. During the period, there was no subsequent event that required recognition or disclosure. 

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FINANCIAL STATEMENTS AND EXHIBITS

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Yichunfeng (China) Biohealth Limited

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2019, and December 31, 2018

(CURRENCY EXPRESSED IN UNITED STATES DOLLARS (“US$”), EXCEPT FOR NUMBER OF SHARES)