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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended ~~September~~March 3031, ~~2024~~2025

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

Commission file number 0-17284

AIXIN LIFE INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

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

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

Chengdu City, Sichuan Province, 610021 China

(Address of principal executive offices)

86-313-6732526

(Issuer’s telephone number)

Securities Registered Pursuant to Section 12(g) of the Act:

Title of Each Class		Trading Symbol(s)		Name of each Exchange on which Registered
Common Stock, $0.00001 Par Value		AIXN		~~OTCQB~~OTCQX

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☐ No ☒

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date: As of ~~December~~June 2420, ~~2024~~ 2025, there were outstanding 24,999,~~842~~834 shares of the registrant’s common stock.

AIXIN LIFE INTERNATIONAL, INC.

FORM 10-Q

~~September~~March 3031, ~~2024~~2025

INDEX

		Page
Special Note Regarding Forward Looking Statements		3
Part I – Financial Information		4
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	4
	Consolidated Balance Sheets	4
	Condensed Consolidated Balance Sheets as of March 31, 2025 (Unaudited) and December 31, 2024	4
	Consolidated Statements of Operations and Comprehensive Loss	5
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	5
	Consolidated Statements of Stockholders’ Deficit	6
	Condensed Consolidated Statements of Stockholders’ Deficit for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	6
	Consolidated Statements of Cash Flows	7
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	7
	Notes to Consolidated Financial Statements	8
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2826
Item 4.	Controls and Procedures	4035
Part II – Other Information		4136
Item 1A.	Risk Factors	41
Item 1.	Legal Proceedings	36
Item 6.	Exhibits	41
Item 1A.	Risk Factors	36
	Signatures	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults Upon Senior Securities	36
Item 5.	Other Information	36
Item 6.	Exhibits	37
	Signatures	38

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

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

	●	our goals and strategies;

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

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

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

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

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

Use of Certain Defined Terms

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

the “Company,” “we,” “us,” and “our” refer to AiXin Life International., Inc. (“AiXin”) and its subsidiaries.

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

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

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

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

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

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

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

AIXIN LIFE INTERNATIONAL, INC.

~~CONSOLIDATED~~CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	As of March 31,			As of December 31,
	2024			2023
	2025			2024
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	568,318		$	443,758
Cash and equivalents	$	63,109		$	62,310
Restricted cash		-			23,208
Accounts receivable		132,131			153,378
Accounts receivable, including related parties, net		455,123			253,586
Accounts receivable - related parties		394,974			515,087
Other receivables and prepaid expenses		325,595			170,831
Accounts receivable		394,974			515,087
Advances to suppliers		35,466			152,563
Other receivables and prepaid expenses		154,440			127,912
Inventory, net		523,111			441,098
Advances to suppliers		45,092			37,247
Due from related parties		64,022			12,400
Inventory, net		450,619			503,990
Total current assets		1,971,635			1,497,444
Due from related parties		4,127			53,784
Property and equipment, net		1,644,611			1,679,675
Total current assets		1,244,492			1,453,708
Intangible assets, net		5,144			3,917
Property and equipment, net		1,410,046			1,493,325
Long term prepaid expense		4,214			-
Intangible assets, net		4,107			4,514
Security deposit		214			84,508
Long term prepaid expenses		3,650			4,051
Operating lease right-of-use assets		21,~~022~~388,~~758~~179			1,~~576~~450,~~814~~762
Goodwill, net		-			-
Total assets	$	4,050,474		$	4,406,360
Total assets	$	5,648,576		$	4,842,358
Liabilities and stockholders’ equity
Liabilities and stockholders’ deficit
Current liabilities
Accounts payable	$	~~725~~726,~~667~~077		$	~~478~~781,~~456~~695
Accounts payable - related party		-			1,776
Accounts payable - related parties		88,996			82,928
Accounts payable		-88,996			182,~~776~~928
Unearned revenue		~~385~~130,~~960~~697			~~172~~127,~~753~~646
Taxes payable		~~111~~72,~~352~~564			49103,~~249~~945
Accrued liabilities and other payables		2,~~384~~417,~~396~~975			2,~~163~~579,~~066~~182
Government grant		~~934~~522,~~066~~668			~~923~~733,~~238~~721
Loan from third parties		85,499			84,508
Operating lease liabilities		175,872			108,282
Operating lease liabilities		136,001			864,519
Due to related parties		3,818,111			2,957,472
Due to related parties		2,093,815			1,226,885
Total current liabilities		7,952,960			7,474,871
Total current liabilities		6,856,756			5,964,450
Operating lease liabilities - non-current		1,128,318			1,213,892
Operating lease liabilities - non-current		1,794,500			789,489
Total liabilities		9,081,278			8,688,763
Total liabilities		8,651,256			6,753,939
Stockholders’ deficit
Undesignated preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding		-			-
Preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued or outstanding as of March 31, 2025 and December 31, 2024		-			-
Common stock, par value $0.00001 per share, 500,000,000 shares authorized; 24,999,834 shares issued and outstanding as of September 30, 2024 and December 31, 2023		250			250
Common stock, par value $0.00001 per share, 500,000,000 shares authorized; 24,999,834 shares issued and outstanding as of March 31, 2025 and December 31, 2024		250			250
Additional paid in capital		15,~~254~~276,~~078~~550			1415,~~975~~276,~~423~~550
Statutory reserve		151,988			151,988
Accumulated deficit		(1820,~~546~~710,~~961~~441	)		(1719,~~220~~988,~~392~~733	)
Accumulated other comprehensive income		~~137~~250,~~965~~849			~~181~~277,~~150~~542
Total stockholders’ deficit		(35,~~002~~030,~~680~~804	)		(14,~~911~~282,~~581~~403	)
Total liabilities and stockholders’ deficit	$	54,~~648~~050,~~576~~474		$	4,~~842~~406,~~358~~360

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

AIXIN LIFE INTERNATIONAL, INC.

~~CONSOLIDATED~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024
	2024			2023			2024			2023
	Three Months Ended March 31,
Sales revenue:
	2025			2024
Products	$	745,545		$	897,457		$	2,655,192		$	2,405,280
Sales revenue
Room revenues		100,935			74,265			195,677			473,167
Direct sales	$	20,631		$	165,749
Food and beverage revenues		83,330			77,524			243,278			356,009
Pharmacies		35,966			241,118
Others		6,596			17,673			26,468			63,233
Hotel		80,706			154,465
Total revenue, net		936,406			1,066,919			3,120,615			3,297,689
Manufacture and Sale		261,528			290,227
Operating costs and expenses
Total revenue, net		398,831			851,559
Cost of goods sold		355,740			509,723			1,163,640			1,136,411
Operating costs and expenses
Hotel operating costs		360,803			447,419			1,185,992			1,387,993
Cost of sales		312,999			327,811
Selling		241,372			210,906			650,146			628,754
Hotel operating costs		270,820			461,079
General and administrative		488,314			499,638			1,326,696			1,268,119
Selling expenses		75,700			222,233
(Reversal of) provision for bad debts		(125	)		41,603			8,140			(10,250	)
General and administrative		421,797			368,797
Stock-based compensation		~~92,885~~-			92,885			~~278,655~~			~~278,655~~
Total operating costs and expenses		1,~~538~~081,~~989~~316			1,~~802~~472,~~174~~805			~~4,613,269~~			~~4,689,682~~
Loss from operations		(~~602~~682,~~583~~485	)		(~~735~~621,~~255~~246	)		~~(1,492,654~~	)		~~(1,391,993~~	)
Non-operating income (expenses)
Non-operating (expenses) income
Interest income		214			135			525			692
Interest (expense) income		(5,097	)		114
Other income		~~56,712~~-			~~297~~18,~~614~~802			~~170,900~~			~~336,716~~
Other expenses		(~~528~~33,305	)		(~~135~~1,270	)		~~(4,813~~	)		~~(5,022~~	)
Total non-operating income, net		56,398			297,614			166,612			332,386
Total non-operating (expenses) income , net		(38,402	)		17,646
Loss before income tax		(~~546~~720,~~185~~887	)		(~~437~~603,~~641~~600	)		~~(1,326,042~~	)		~~(1,059,607~~	)
Income tax expense		1821			~~515~~-			~~527~~			~~5,879~~
Net loss		(~~546~~721,~~186~~708	)		(~~438~~603,~~156~~600	)		~~(1,326,569~~	)		~~(1,065,486~~	)
Other comprehensive items
Foreign currency translation (loss) gain		(9626,~~133~~693	)		1633,~~086~~520			~~(43,185~~	)		~~42,473~~
Comprehensive loss	$	(~~642~~748,~~319~~401	)	$	(~~422~~570,~~070~~080	)	$	~~(1,369,754~~	)	$	~~(1,023,013~~	)
Income per share - basic and diluted	$	(0.022	)	$	(0.018	)	$	(0.053	)	$	(0.043	)
Loss per share of common stock - basic and diluted	$	(0.029	)	$	(0.024	)
Weighted average shares outstanding		24,999,834			24,999,842			24,999,834			24,999,842
Weighted average shares outstanding-basic and diluted		24,999,834			24,999,834

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

AIXIN LIFE INTERNATIONAL, INC.

~~CONSOLIDATED~~CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED MARCH 31, 2025

(UNAUDITED)

	Common Stock				Additional							Accumulated other
	Shares		Amount		capital		reserves		deficit			income			Total
	Shares		Amount		paid in capital		Statutory reserves		Accumulated deficit			comprehensive income			Total
	Common Stock				Additional paid in		Statutory		Accumulated			Accumulated other comprehensive
Balance at December 31, 2023		24,999,834	$	250	$	14,975,423	$	151,988	$	(17,220,392	)	$	181,150		$	(1,911,581	)
	Shares		Amount		capital		reserves		deficit			income			Total
Stock-based compensation		-		-		92,885		-		-			-			92,885
Balance at December 31, 2024		24,999,834	$	250	$	15,276,550	$	151,988	$	(19,988,733	)	$	277,542		$	(4,282,403	)
Net loss		-		-		-		-		(~~603~~721,~~600~~708	)		-			(~~603~~721,~~600~~708	)
Foreign currency translation gain		-		-		-		-		-			33,520			33,520
Foreign currency translation loss		-		-		-		-		-			(26,693	)		(26,693	)
Balance at March 31, 2024		24,999,834		250		15,068,308		151,988		(17,823,992	)		214,670			(2,388,776	)
Balance at March 31, 2025		24,999,834	$	250	$	15,276,550	$	151,988	$	(20,710,441	)	$	250,849		$	(5,030,804	)
Stock-based compensation		-		-		92,885		-		-			-			92,885
Net loss		-		-		-		-		(176,783	)		-			(176,783	)
Foreign currency translation gain		-		-		-		-		-			19,428			19,428
Balance at June 30, 2024		24,999,834		250		15,161,193		151,988		(18,000,775	)		234,098			(2,453,246	)
Stock-based compensation		-		-		92,885		-		-			-			92,885
Net loss		-		-		-		-		(546,186	)		-			(546,186	)
Foreign currency translation loss		-		-		-		-		-			(96,133	)		(96,133	)
Balance at September 30, 2024		24,999,834	$	250	$	15,254,078	$	151,988	$	(18,546,961	)	$	137,965		$	(3,002,680	)
Balance at December 31, 2022		24,999,842	$	250	$	14,458,583	$	151,988	$	(15,249,858	)	$	172,849		$	(466,188	)
Stock-based compensation		-		-		92,885		-		-			-			92,885
Disposal of subsidiary		-		-		-		-		120,160			-			120,160
Net loss		-		-		-		-		(529,784	)		-			(529,784	)
Foreign currency translation gain		-		-		-		-		-			24,542			24,542
Balance at March 31, 2023		24,999,842		250		14,551,468		151,988		(15,659,482	)		197,391			(758,385	)
Stock-based compensation		-		-		92,885		-		-			-			92,885
Capital contribution		-		-		145,300		-		-			-			145,300
Net loss		-		-		-		-		(97,546	)		-			(97,546	)
Foreign currency translation gain		-		-		-		-		-			1,845			1,845
Balance at June 30, 2023		24,999,842		250		14,789,653		151,988		(15,757,028	)		199,236			(615,901	)
Balance		24,999,842		250		14,789,653		151,988		(15,757,028	)		199,236			(615,901	)
Stock-based compensation		-		-		92,885		-		-			-			92,885
Net loss		-		-		-		-		(438,156	)		-			(438,156	)
Foreign currency translation gain		-		-		-		-		-			16,086			16,086
Balance at September 30, 2023		24,999,842	$	250	$	14,882,538	$	151,988	$	(16,195,184	)	$	215,322		$	(945,086	)
Balance		24,999,842	$	250	$	14,882,538	$	151,988	$	(16,195,184	)	$	215,322		$	(945,086	)

FOR THE THREE MONTHS ENDED MARCH 31, 2024

(UNAUDITED)

	Common Stock				Additional paid in		Statutory		Accumulated			Accumulated other comprehensive
	Shares		Amount		capital		reserves		deficit			income		Total
Balance at December 31, 2023		24,999,834	$	250	$	14,975,423	$	151,988	$	(17,220,392	)	$	181,150	$	(1,911,581	)
Balance		24,999,834	$	250	$	14,975,423	$	151,988	$	(17,220,392	)	$	181,150	$	(1,911,581	)
Stock-based compensation		-		-		92,885		-		-			-		92,885
Net loss		-		-		-		-		(603,600	)		-		(603,600	)
Foreign currency translation gain		-		-		-		-		-			33,520		33,520
Foreign currency translation gain (loss)		-		-		-		-		-			33,520		33,520
Balance at March 31, 2024		24,999,834	$	250	$	15,068,308	$	151,988	$	(17,823,992	)	$	214,670	$	(2,388,776	)
Balance		24,999,834	$	250	$	15,068,308	$	151,988	$	(17,823,992	)	$	214,670	$	(2,388,776	)

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

AIXIN LIFE INTERNATIONAL, INC.

~~CONSOLIDATED~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine Months Ended September 30,
	2025			2024
	2024			2023
	Three Months Ended March 31,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1721,~~326,569~~708	)	$	(1603,~~065,486~~600	)
Adjustments required to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		~~298~~92,~~789~~276			~~308~~106,~~114~~299
Loss on disposal of fixed assets		1,145			-
Bad debts provision		32,896			8,027
Provision for (reversal of) bad debts		8,140			(10,250	)
Inventory impairment		209			9,405
(Reversal of) provision for inventory reserve		(3,523	)		8,558
Operating lease expense		70,941			233,070
Operating lease expense		439,723			618,085
Stock based compensation		-			92,885
Stock-based compensation		278,655			278,655
Government grant income		(124,177	)		(284,321	)
Deferred tax		-			1,481
Changes in assets and liabilities:
Accounts receivable		(3210,~~283~~798	)		~~313~~(38,~~060~~491	)
Accounts receivable - related party		~~(169~~122,~~443~~865	)		(11100,~~434~~603	)
Other receivables and prepaid expenses		(5425,~~053~~705	)		(1820,~~596~~080	)
Advances to suppliers		~~116~~(7,~~119~~609	)		~~133~~(39,~~520~~498	)
Prepaid expense - related party		(99,197	)		(97,872	)
Inventory		55,996			(35,192	)
Inventory		(71,359	)		(186,658	)
Security deposit		423			(70	)
Security deposit		83,152			-
Accounts payable		(60,073	)		17,528
Accounts payable		235,498			233,112
Accounts payable - related party		5,569			(1,754	)
Accounts payable - related party		(1,751	)		(162,768	)
Unearned revenue		2,297			78,999
Unearned revenue		205,852			347,347
Taxes payable		(31,920	)		32,823
Taxes payable		59,984			12,273
Accrued liabilities and other payables		(175,913	)		124,299
Payment of lease liability		(607,312	)		(500,056	)
Operating lease liabilities		(25,694	)		(325,498	)
Accrued liabilities and other payables		214,480			(136,638	)
Net cash used in operating activities		(675,948	)		(461,451	)
Net cash used in operating activities		(548,130	)		(219,874	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash disposed at disposal of subsidiary		-			(3,341	)
Purchase of property and equipment		-			(41,053	)
Purchase of property and equipment		(245,009	)		(212,607	)
Net cash used in investing activities		-			(41,053	)
Cash received on disposal of fixed assets		88			-
Purchase of intangible asset		(2,778	)		(2,608	)
Net cash used in investing activities		(247,699	)		(218,556	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in advance from related parties		765,118			(79,072	)
Advance from related parties		1,421,841			555,991
Proceeds from government grant		124,177			284,321
Repayment to related parties		(530,559	)		(172,189	)
Capital contribution		-			142,200
Repayment of government grant		(214,884	)		-
Net cash provided by financing activities		~~889~~676,~~295~~398			~~347~~383,~~449~~802
EFFECT OF EXCHANGE RATE CHANGE ON CASH		~~7,886~~349			(307,~~584~~270	)
NET INCREASE (DECREASE) IN CASH & RESTRICTED CASH		101,352			(121,565	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICED CASH		799			(125,972	)
CASH & RESTRICTED CASH, BEGINNING OF PERIOD		466,966			619,900
CASH AND CASH EQUIVALENTS AND RESTRICED CASH, BEGINNING OF PERIOD		62,310			466,966
CASH & RESTRICTED CASH, END OF PERIOD	$	568,318		$	498,335
CASH AND CASH EQUIVALENTS AND RESTRICED CASH, END OF PERIOD	$	63,109		$	340,994
Supplemental Cash flow data:
Income tax paid	$	~~527~~-		$	~~4,398~~-
Interest paid	$	-		$	-

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

AIXIN LIFE INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Aixin Life International, Inc. (the “Company” or “Aixin Life” or “we”) was incorporated under the laws of the State of Colorado on December 30, 1987. On February 2, 2017, Mr. Quanzhong Lin (Mr. Lin) purchased 65.0% of the Company’s outstanding shares from China Concentric Capital Group for $300,000, pursuant to a Stock Purchase Agreement dated December 21, 2016, which resulted in a change in control of the Company.

On December 12, 2017, pursuant to a Share Exchange Agreement, in consideration for all of the outstanding shares of AiXin (BVI) International Group Co., Ltd. a British Virgin Islands corporation (“AiXin BVI”), the Company issued to Mr. Lin, the sole stockholder of AiXin BVI, shares of common stock then representing 71% of the outstanding of common stock of the Company.

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

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

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

Effective February 1, 2018, the Company changed its name to AiXin Life International, Inc. (“Aixin Life”).

The Company, through its indirectly owned subsidiary, AiXinZhonghong, develops and distributes consumer products by offering a line of nutritional products. The Company sells the products through exhibition events, conferences, and person-to-person marketing. The Company’s business mainly focuses on a proactive approach to its customers such as hosting events for clients, which it believes is ideally suited to marketing its products because sales of nutrition products are strengthened by ongoing personal contact and support, coaching and education of its clients, as to the benefits of a healthy and active lifestyle.

On May 25, 2021, AiXin HK entered into an Equity Transfer Agreement (the “Hotel Purchase Agreement”) with Chengdu Aixin ~~Shangyan~~ Shangyan Hotel Management Co., Ltd (“Aixin Shangyan Hotel”), and its two shareholders Quanzhong Lin and Yirong Shen (“Transferor”). Pursuant to the Hotel Purchase Agreement, Aixin Life purchased 100% ownership of Aixin Shangyan Hotel from Transferor. 80 Eighty percent of the equity of Aixin Shangyan Hotel was owned by Mr. Lin, and the remaining balance was owned by Ms. Shen. Under the terms of the Hotel Purchase Agreement, Aixin Life purchased all of the outstanding equity of Aixin Shangyan Hotel for a purchase price of RMB 7,598,887, or approximately $1.16 million (the “Transfer Price”). The Transfer Price was to be reduced by an amount equal to any amounts paid or distributed by Aixin Shangyan Hotel to the Transferor after December 31, 2020 and increased by an amount equal to any amounts contributed to Aixin Shangyan Hotel by the Transferor after December 31, 2020. The acquisition was completed in July 2021.

On June 2, 2021, AiXin HK entered into an Equity Transfer Agreement (the “Pharmacies Purchase Agreement”) with Chengdu Aixintang Pharmacy Co., Ltd. and certain affiliated entities, each of which operates a pharmacy (together, “Aixintang Pharmacies”) and its three shareholders, Quanzhong Lin, Ting Li and Xiao Ling Li (“Transferor”). Mr. Lin owned in excess of 95% of the outstanding equity of Aixintang Pharmacies. The remaining equity interest was owned by Ting Li and Xiao Ling Li. Pursuant to the Pharmacies Purchase Agreement, AiXin HK purchased all of the outstanding equity of Aixintang Pharmacies for an aggregate purchase price of RMB 34,635,845, or approximately US$5.31 million (the “Transfer Price”). The Transfer Price was to be reduced by an amount equal to any amounts paid or distributed by any of the Aixintang Pharmacies to the Transferor after December 31, 2020 and increased by an amount contributed to any of the Aixintang Pharmacies by the Transferor after such date. The acquisition was completed in September 2021.

On July 19, 2022, AiXin HK entered into an Equity Transfer Agreement with Yunnan Shengshengyuan Technology Co., Ltd, (“Yunnan Shengshengyuan”) and Yun Chen (together, the “Sellers”), the shareholders of Yunnan Runcangsheng Technology Company Ltd. (“Runcangsheng”). Yunnan Shengshengyuan owns in excess of 95% of the outstanding equity of Runcangsheng. The remaining equity interest is owned by Yun Chen. Pursuant to the Transfer Agreement, AiXin HK agreed to purchase all of the outstanding equity of Runcangsheng for an aggregate purchase price of $4,418,095 (RMB 31,557,820), adjusted by $116,802 the amount equal to the initial net worth minus the audited net worth. In addition to transferring their respective equity interest in Runcangsheng, both Sellers agree to forgive any loans Runcangsheng due to them. The acquisition was completed on September 30, 2022.

On February 17, 2023, the Company effected a 1 for 2 reverse stock split. As a result of the reverse split, every two shares of the Company’s issued and outstanding common stock will be automatically combined and converted into one issued and outstanding share of common stock, par value $0.00001 per share. The Company has approximately 24,999,834 shares of outstanding common stock after the effect of reverse stock split and the elimination of fractional shares. All share and earnings per share information has been retroactively adjusted to reflect the reverse stock split.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Consolidation

The accompanying consolidated financial statements are prepared in conformity with U.S. Generally Accepted Accounting Principles (“US GAAP”). The functional currency of AiXinZhonghong, Aixin Shangyan Hotel, Aixintang Pharmacies, and Runcangsheng is the Chinese Renminbi (“RMB”). The accompanying consolidated financial statements are translated from RMB and presented in U.S. dollars (“USD”).

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, AiXin HK, AiXinZhonghong, Aixin Shangyan Hotel, Aixintang Pharmacies, and Runcangsheng. Intercompany transactions and accounts were eliminated in consolidation. These unaudited interim financial statements should be read in conjunction with the annual consolidated financial statements and the accompanying notes contained in our Annual Report on Form 10-K for the year ended December 31, 2023.

Unaudited Interim Financial Information

These unaudited interim financial statements have been prepared in accordance with GAAP for interim financial reporting and the rules and regulations of the Securities and Exchange Commission that permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been made. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2024.

Going Concern

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Company’s ability to operate profitably, to generate cash flows from operations, and to pursue financing arrangements to support its working capital requirements.

9The Company incurred a net loss of $721,708 and net cash outflows from operating activities of $675,948 for the three months ended March 31, 2025, and has a working capital deficit of $6,708,468 as of March 31, 2025. These facts and conditions raise substantial doubt about the Company’s ability to continue as a going concern. From January 1, 2025 through March 31, 2025, the Company’s cash and cash equivalents increased from $62,310 to $63,109 mainly due to an increase in cash inflow from financing activities.

The Company suffered net losses of $546,186 and $438,156 for the three months ended September 30, 2024 and 2023, and $1,326,569 and $1,065,486 for the nine months ended September 30, 2024 and 2023, respectively, and net cash outflow in operating activities of $548,130 and $219,874 for the nine months ended September 30, 2024 and 2023, respectively, and has an accumulated deficit of $18,546,961 as of September 30, 2024. These facts and conditions raise substantial doubt about the Company’s ability to continue as a going concern. From January 1, 2024 through September 30, 2024, the Company’s cash and cash equivalents increased from $443,758 to $568,318 mainly due to an increase in cash inflow from financing activities.

Management believes that it has developed a liquidity plan, summarized below, that, if executed successfully, should provide sufficient liquidity to meet the Company’s obligations as they become due for a reasonable period of time, and allow the development of its core business. The plan includes:

● Gaining positive cash-inflow from operating activities through continuous cost reductions and the sales of higher margin products.

● Raising cash through loans from related parties and potential equity offerings.

While the Company’s management believes that the measures in its liquidity plan including those described above will be adequate to ~~satisfy~~ satisfy its liquidity requirements for the twelve months after the date that these financial statements are issued, there is no assurance that the liquidity plan will be successfully implemented. Failure to successfully implement the liquidity plan may have a material adverse effect on the Company’s business, results of operations and financial position, and may adversely affect its ability to continue as a going concern. These ~~consolidated~~unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded assets or the amounts and classification of liabilities or any other adjustments that might be necessary should the Company be unable to continue as a going concern.

~~Global Uncertainties~~9

~~The~~2. ~~Company’s~~SUMMARY ~~liquidity~~OF ~~may~~SIGNIFICANT beACCOUNTING adversely impacted by various risks and uncertainties, including, but not limited to future and current impacts of global events such as a widespread health crisis, the continuation of the war in the Ukraine or the conflict in Palestine, the outbreak of another conflict or the expansion of the conflict in Palestine to other countries, the ongoing tensions between the United States and China, the Russian Federation and certain countries in the Middle East, increases in inflation, and other risks detailed in the Company’s Annual Report on Form 10-K or other reports filed with the Securities and Exchange Commission.POLICIES

~~While~~Basis ~~the invasion~~ of ~~Ukraine,~~Presentation ~~the conflict in Palestine~~ and responses thereto have not interrupted the Company’s operations, these or future developments which disrupt the international financial markets could make it difficult to access debt and equity capital on attractive terms, if at all, and impact the Company’s ability to fund business activities, including proposed acquisitions.Consolidation

The accompanying unaudited condensed consolidated financial statements are prepared in conformity with U.S. Generally Accepted Accounting Principles (“US GAAP”). The functional currency of AiXinZhonghong, Aixin Shangyan Hotel, Aixintang Pharmacies, and Runcangsheng is the Chinese Renminbi (“RMB”). The accompanying consolidated financial statements are translated from RMB and presented in U.S. dollars (“USD”). Operating results for the three months ended March 31, 2025 are not necessarily indicate of the results that may be expected for the period ending December 31, 2025 or any future period. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on the Form 10-K filed with the SEC on May 7, 2025.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, AiXin HK, AiXinZhonghong, Aixin Shangyan Hotel, Aixintang Pharmacies, and Runcangsheng. Intercompany transactions and accounts were eliminated in consolidation.

Use of Estimates

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

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

Cash and Cash Equivalents

For financial statement purposes, the Company considers all highly liquid investments with an original maturity of three months or less to be cash and cash equivalents. The Company has cash on hand and demand deposits in accounts maintained with state-owned banks within the PRC. Cash in state-owned banks is covered by insurance up to RMB 500,000 ($68,450) per bank.

Restricted Cash

The restricted cash was cash maintained in temporarily frozen bank accounts held by Aixintang Pharmacy and its branches by the court for a judgement against Aixintang Pharmacy (see Note 17 – litigation).

Accounts Receivable

The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, ~~the~~ the bad debt allowance was $8985,~~935~~947 and $8052,~~640~~669, respectively.

The following table summarizes the activity related to the Company’s accounts receivable allowance for doubtful accounts for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024:

	For the nine months ended September 30,
	For the three months ended March 31,
	2024			2023
	2025		2024
Beginning balance	$	8052,~~640~~669	$	$80,640	~~272,550~~
Provision for bad debts		832,~~140~~896		8,027	~~62,100~~
Recoveries/Write offs		-			(72,350	)
Effect of translation		382		(1,380	)
Effect of translation		1,155			(14,547	)
Ending balance	$	85,947	$	87,287
Ending balance	$	89,935		$	247,753

Inventories

Inventories mainly consist of health supplements, drugs, pharmaceutical and nutritional products, food and beverage, hotel supplies and consumables, and raw materials. Inventories are valued at the lower of average cost or market, cost being determined on a moving weighted average method at the end of the month. Management compares the cost of inventories with the net realizable value and an allowance is made for writing down inventories to market value, if lower. The Company recorded ~~reversal of~~ inventory ~~reserve~~ impairment of $~~3,523~~ 209 and ~~provisions~~ ~~for inventory reserve of~~ $89,~~558 for~~405 for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively.

Property and Equipment

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

Office furniture		5 years
Electronic equipment		2-3 years
Machinery		3 years
Leasehold improvements		3 years
Vehicles		5 years

Impairment of Long-Lived Assets

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

Recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by it. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds its fair value. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, there were no significant impairments of its long-lived assets.

Goodwill

The Company evaluates goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. In testing goodwill for impairment, the Company may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment indicates that goodwill impairment is more likely than not, the Company performs a two-step impairment test. The Company tests goodwill for impairment under the two-step impairment test by first comparing the book value of net assets to the fair value of the reporting units. If the fair value is determined to be less than the book value or qualitative factors indicate that it is more likely than not that goodwill is impaired, a second step is performed to compute the amount of impairment as the difference between the estimated fair value of goodwill and the carrying value. The Company estimates the fair value of the reporting units using discounted cash flows. Forecasts of future cash flows are based on our best estimate of future net sales and operating expenses, based primarily on expected category expansion, pricing, market segment share, and general economic conditions. The Company recorded goodwill in the amount of $0 as of September 30, 2024 and December 31, 2023.

Income Taxes

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

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

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

12At March 31, 2025 and December 31, 2024, the Company did not take any uncertain positions that would necessitate recording a tax related liability.

At September 30, 2024 and December 31, 2023, the Company did not take any uncertain positions that would necessitate recording a tax related liability.

Revenue Recognition

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

	●	executed contract(s) with customers that the Company believes is legally enforceable;

	●	identification of performance obligation in the respective contract;

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

	●	allocation of the transaction price to each performance obligation; and

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

The Company’s revenue recognition policies for its various operating segments are as follows:

Direct Sales

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

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

Hotel

Hotel revenues are primarily derived from the rental of rooms, food and beverage sales and other ancillary goods and services, including but not limited to souvenir, parking and conference reservation. Each of these products and services represents a distinct performance obligation and, in exchange for these services, the Company receives fixed amounts based on published rates or negotiated contracts. Payment is due in full at the time when the services are rendered or the goods are provided. Room rental revenue is recognized on a daily basis when rooms are occupied. Food and beverage revenue and other goods and services revenue are recognized when they have been delivered or rendered to the guests as the respective performance obligations are satisfied. All of the hotel’s goods sold in China are subject to the PRC VAT of 6%. This VAT may be offset by VAT paid by the Company on raw materials and other materials purchased in China.

Pharmacy

The Company’s retail drugstores (Aixintang Pharmacies) recognize revenue at the time the customer takes possession of the merchandise. For pharmacy sales, each prescription claim is its own arrangement with the customer and is a performance obligation. Aixintang Pharmacies generally receives payments from customers as it satisfies its performance obligations. Sales of drugs reimbursed by local government medical insurance agencies and receivables from these agencies are recognized when a customer pays for the drugs at a store, the receivables are usually collected within three months, and the Company has not experienced a payment default from any local government medical insurance agency. The Company records a receivable when it has an unconditional right to receive payment and only the passage of time is required before payment is due. Sales revenue represents the invoiced value of goods, net of VAT. Aixintang Pharmacies’ products sold in China are subject to the PRC VAT of 0%-13% as certain pharmacies qualify as small businesses.

Manufacture and Sale

The Company’s subsidiary Runcangsheng recognizes revenue at the time products are shipped as this satisfies its performance obligation. The Company records a receivable for its sales when it has an unconditional right to receive payment and only the passage of time is required before payment is due. Sales revenue represents the invoiced value of goods, net of value-added taxes (“VAT”). All of Runcangsheng’s products sold in China are subject to the PRC VAT of 13% unless it is a qualified small business subject to exemption.

Unearned Revenue

The Company’s unearned revenue primarily consists of advances received from customers for the purchase of products prior to the delivery of goods, and for the rental of hotel rooms prior to the delivery of service. The delivery of products and room rental services is based upon contract terms and customer demand, normally within one year.

Concentration of Credit Risk

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

The Company has cash on hand and demand deposits in accounts maintained with state-owned banks within the PRC. Cash in state-owned banks is covered by insurance up to RMB 500,000 ($7268,~~500~~450) per bank. As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, the Company has uninsured ~~deposits~~ deposits in banks of $~~407,521~~nil ~~and $289,059~~ held in the PRC.

The Company has not experienced any losses in such accounts and believes they are not exposed to any risks on its cash in these bank accounts.

During the three months ended ~~September~~March 3031, ~~2024~~2025, the Company had ~~two~~one ~~customers~~customer that accounted for ~~13%~~ ~~and 11~~45% of its total revenue~~, respectively~~. Net sales for ~~the~~this ~~customers~~ customer amounted to $~~122~~177,~~050 and~~913 ~~$100,735~~ during the three months ended ~~September~~March 3031, ~~2024, respectively~~2025.

During the ~~nine~~three months ended ~~September~~March 3031, 2024, the Company had ~~one~~no customer that accounted for 17over 10% of its total revenue. ~~Net sales for the customer amounted to $530,704 during the nine months ended September 30, 2024.~~

During the three ~~and nine~~ months ended ~~September~~March 3031, ~~2023~~2025, the Company had nothree ~~customer~~major suppliers that accounted for over 10% of its total ~~revenue~~purchases.

~~During the three months ended September 30, 2024, the Company had three major suppliers that accounted for over 10% of its total purchases.~~13

Supplier	Net purchases for the three months ended ~~September~~March 3031, ~~2024~~2025		% of total purchase	~~% of total purchase~~
C	$	219,595			44	%
A	$	88,101		28	%
A		131,264			26	%
B		47,097		15	%
B*		60,401			12	%
C		38,211		12	%

During the ~~nine~~three months ended ~~September~~March 3031, 2024, the Company had ~~three~~one major ~~suppliers~~supplier that accounted for over 10% of its total purchases.

Supplier	Net purchases for the ~~nine~~three months ended ~~September~~March 3031, 2024		% of total purchase	~~% of total purchase~~
A	$	~~315~~44,~~886~~920		12	23%	%
C		289,900			21	%
B*		197,479			14	%

During the three months ended September 30, 2023, the Company had one major supplier that accounted for over 10% of its total purchases.

Supplier		Net purchases for the three months ended September 30, 2023				% of total purchase
C		$	108,776				20	%

During the nine months ended September 30, 2023, the Company had two major suppliers that accounted for over 10% of its total purchases.

Supplier	Net purchases for the nine months ended September 30, 2023		% of total purchase
C	$	216,710		15	%
D		162,980		12	%

* CEO owns this entity with 100% ownership

Leases

The Company determines if an arrangement is a lease at inception under Financial Accounting Standards Board (“FASB”) ASC Topic 842, Right of Use Assets (“ROU”) and lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of its leases do not provide an implicit rate, it uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. ROU assets are adjusted for prepayments and accrued lease payments. ROU assets also reflect any lease payments made prior to commencement and are recorded net of any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease and such options are considered when determining the value of an ROU asset when it is reasonably certain that the Company will exercise such options.

ROU assets are reviewed for impairment when indicators of impairment are present. ROU assets from operating and finance leases are subject to the impairment guidance in ASC 360, Property, Plant, and Equipment, as ROU assets are long-lived nonfinancial assets.

ROU assets are tested for impairment individually or as part of an asset group if the cash flows related to the ROU asset are not ~~independent~~ independent from the cash flows of other assets and liabilities. An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. The Company recognized no impairment of ROU assets as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~ 2024. Operating leases are included in operating lease ROU and operating lease liabilities (current and non-current), on the unaudited condensed consolidated balance sheets.

Statement of Cash Flows

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

Fair Value of Financial Instruments

The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accrued liabilities and accounts payable, approximate their fair value due to their short maturities. FASB ASC Topic 825, “Financial Instruments,” requires disclosure of the fair value of financial instruments held by the Company. ~~The~~Unless ~~carrying~~otherwise ~~amounts~~disclosed, ~~reported~~the infair ~~the~~value ~~consolidated~~of the ~~balance~~Company’s ~~sheets~~cash, ~~for~~accounts receivable, inventories, advances to suppliers, prepaid expenses and other current ~~liabilities~~assets, ~~each~~accounts ~~qualify~~payable, unearned asrevenue ~~financial~~accrued ~~instruments~~expenses and ~~are~~other acurrent ~~reasonable~~liabilities, ~~estimate~~taxes ofpayable ~~their~~and due to related parties, approximate the fair value ~~because~~ of the ~~short~~respective ~~period~~assets ofand ~~time~~liabilities ~~between~~as ~~the origination~~ of ~~such~~March ~~instruments~~31, 2025 and ~~their~~December ~~expected~~31, ~~realization~~2024 ~~and~~based upon the ~~current~~short-term ~~market~~nature ~~rate~~ of the assets and ~~interest~~liabilities.

Fair Value Measurements and Disclosures

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

	●	Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
	●	Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
	●	Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, the Company did not identify any assets and liabilities that are required to be presented on on the balance sheet at fair value.

Foreign Currency Translation and Comprehensive Income (Loss)

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

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

The Company uses FASB ASC Topic 220, “Comprehensive Income”. Comprehensive loss is comprised of net loss and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. Comprehensive income (loss) for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 consisted of net income (loss) and foreign currency translation adjustments.

Translation of amounts from RMB into USD has been made at the following exchange rates as of March 31, 2025 and December 31, 2024 and for the three months ended March 31, 2025 and 2024.

	March 31, 2025		March 31, 2024		December 31, 2024
Period/year-end RMB:USD exchange rate		7.2567		7.2203		7.2993
Period/annual average RMB:USD exchange rate		7.2728		7.1885		7.1957
Exchange rate		7.2728		7.1885		7.1957

Earnings per Share

Basic income (loss) per share is computed on the basis of the weighted average number of common shares outstanding during the period.

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

As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, the Company did not have any potentially dilutive instruments.

1615

Stock-Based Compensation

The Company periodically grants stock options, warrants and awards to employees and non-employees in non-capital raising transactions as compensation for services rendered. The Company accounts for stock-based ~~option,~~compensation ~~stock~~in ~~warrant~~accordance ~~and~~with ~~stock~~ASC ~~award~~Topic ~~grants~~718, ~~to employees based on~~Compensation—Stock ~~the~~Compensation. ~~authoritative~~Under ~~guidance provided by~~ the ~~FASB~~Company’s ~~where~~equity ~~the~~incentive ~~value~~plan, ofstock ~~the~~awards ~~award~~and isother ~~measured~~share-based onpayments ~~the~~are ~~date~~granted ofto ~~grant~~employees, directors, and ~~recognized~~consultants ~~over~~as ~~the vesting~~compensation ~~period. The Company accounts~~ for ~~stock~~services ~~option,~~rendered. ~~stock~~Stock-based ~~warrant~~compensation ~~and~~cost ~~stock~~is ~~award~~measured ~~grants~~on tothe ~~non-employees~~grant indate ~~accordance~~based ~~with the authoritative~~on ~~guidance of~~ the ~~FASB~~fair ~~where the~~ value of the ~~stock~~shares ~~compensation~~awarded and is ~~determined~~recognized ~~based~~as ~~upon~~expense ~~the~~on ~~measurement~~a ~~date~~straight-line atbasis ~~either~~over a) the ~~date~~service ~~at which~~period. aThe ~~performance~~fair ~~commitment~~value isof common ~~reached,~~stock orgranted b)is atdetermined using the ~~date~~closing atmarket ~~which~~price of the ~~necessary~~Company’s ~~performance~~common tostock ~~earn~~on the ~~equity~~grant ~~instruments is complete~~date. Stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the employees and non-employees, option, warrant and award grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date.

Segment Reporting

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

The Company manages its business as four operating segments, direct sales, pharmacy, hotel, and manufacture and sales, all of which are located in the PRC. All of its revenues are derived in the PRC. All long-lived assets are located in PRC.

The following table shows the Company’s operations by business segment for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024.

SCHEDULE OF SEGMENTS INFORMATION

	For the Three Months Ended September 30,
	For the Three Months Ended March 31,
	2024			2023
	2025			2024
Net revenue
Direct sales	$	~~102~~20,~~370~~631		$	~~208~~165,~~699~~749
Pharmacy		~~266~~35,~~664~~966			~~273~~241,~~416~~118
Hotel		~~190~~80,~~861~~706			~~169~~154,~~462~~465
Manufacture and sale		~~376~~261,~~511~~528			~~415~~290,~~342~~227
Total revenues, net	$	~~936~~398,~~406~~831		$	1851,~~066,919~~559
Operating costs and expenses
Direct sales
Cost of goods sold	$	499		$	67,709
Cost of sales	$	5,768		$	19,708
Operating expenses		~~373~~188,~~449~~568			~~421~~372,~~417~~056
Pharmacy
Cost of goods sold		70,739			126,459
Cost of sales		24,051			80,174
Operating expenses		~~104~~84,~~840~~139			~~115~~110,~~006~~870
Hotel
Hotel operating costs		~~360~~270,~~803~~819			~~447~~461,~~419~~079
Operating expenses		6560,~~322~~769			6171,~~859~~877
Manufacture and sale
Cost of goods sold		284,502			315,555
Cost of sales		283,181			227,929
Operating expenses		~~278~~164,~~835~~021			~~246~~129,~~750~~112
Total operating costs and expenses	$	1,~~538~~081,~~989~~316		$	1,~~802~~472,~~174~~805
Income (loss) from operations
Direct sales	$	(~~271~~173,~~578~~705	)	$	(~~280~~226,~~427~~015	)
Pharmacy		91(72,~~085~~224	)		3150,~~951~~074
Hotel		(~~235~~250,~~264~~882	)		(~~339~~378,~~816~~491	)
Manufacture and sale		(~~186~~185,~~826~~674	)		(~~146~~66,~~963~~814	)
Loss from operations	$	(~~602~~682,~~583~~485	)	$	(~~735~~621,~~255~~246	)

1716

The following table shows the Company’s ~~operations~~assets by business segment ~~for~~as ~~the~~of ~~nine~~March ~~months~~31, ~~ended~~2025 ~~September~~and 30December 31, 2024 ~~and 2023~~.

	For the Nine Months Ended September 30,
Segment assets	As of March 31, 2025			As of December 31, 2024
	2024			2023
Direct sales	$	351,049		$	508,005
Net revenue
Pharmacy		377,595			260,937
Direct sales	$	625,132		$	1,064,668
Hotel		1,536,320			1,578,367
Pharmacy		764,495			802,118
Manufacture and sale		1,785,510			2,059,051
Hotel		465,423			892,409
Total assets	$	4,050,474		$	4,406,360
Manufacture and sale		1,265,565			538,494
Total revenues, net	$	3,120,615		$	3,297,689
Operating costs and expenses
Direct sales
Cost of goods sold	$	47,240		$	367,237
Operating expenses		1,163,018			1,249,461
Pharmacy
Cost of goods sold		222,832			446,967
Operating expenses		323,904			361,200
Hotel
Hotel operating costs		1,185,992			1,387,993
Operating expenses		222,029			106,219
Manufacture and sale
Cost of goods sold		893,568			322,207
Operating expenses		554,686			448,398
Total operating costs and expenses	$	4,613,269		$	4,689,682
Income (loss) from operations
Direct sales	$	(585,126	)	$	(552,030	)
Pharmacy		217,759			(6,049	)
Hotel		(942,598	)		(601,803	)
Manufacture and sale		(182,689	)		(232,111	)
Loss from operations	$	(1,492,654	)	$	(1,391,993	)

The following table shows the Company’s assets by business segment as of September 30, 2024 and as of December 31, 2023.

Segment assets	As of September 30, 2024		As of December 31, 2023
Direct sales	$	382,317	$	270,932
Pharmacy		487,041		425,546
Hotel		2,149,991		1,654,165
Manufacture and sale		2,629,227		2,491,715
Total assets	$	5,648,576	$	4,842,358

New Accounting Pronouncements

InRecently ~~November~~Adopted ~~2023,~~Accounting the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). The amendments in ASU 2023-07 improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker (CODM). In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. ASU 2023-07 will be effective for annual reporting periods beginning after December 15, 2023, and interim periods within annual reporting periods beginning after December 15, 2024. Early adoption is permitted. The adoption of ASU 2023-01 did not have a material impact on the Company’s consolidated financial statement presentation or disclosures.Standards

In ~~December~~November 2023, the FASB, issued ASU ~~No.~~ 2023-0907, ~~Income~~Segment ~~Taxes~~Reporting (Topic ~~740~~280): Improvements to ~~Income~~Reportable ~~Tax~~Segment Disclosures. (“The amendments in this ASU ~~2023-09~~require disclosures, on an annual and interim basis, of significant expenses that are regularly provided to the chief operating officer decision maker (“CODM”), as well as the aggregate amount of other segment items included in the reported measure ~~which~~of segment profit or loss. The ASU requires ~~disclosures~~that a public entity disclose the title and position of ~~incremental~~the ~~income~~CODM ~~tax~~and ~~information~~an ~~within~~explanation of how the ~~rate~~CODM ~~reconciliation~~uses ~~and~~the ~~expanded~~reported ~~disclosures~~measure(s) of ~~income~~segment ~~taxes paid,~~profit ~~among~~or ~~other~~loss ~~disclosure~~in ~~requirements.~~assessing ~~This~~segment ~~ASU~~performance and deciding how to allocate resources. Public entities will be ~~effective~~required ~~for~~to provide all annual ~~reporting~~disclosures ~~periods~~currently ~~beginning~~required ~~after~~by ~~December~~Topic 15280 in interim periods, ~~2024.~~and entities with ~~Early~~a ~~adoption~~single isreportable ~~permitted~~segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280. This ASU ~~2023-09~~is ~~will~~effective befor ~~applied~~fiscal onyears abeginning ~~prospective~~after ~~basis~~December ~~with~~15, ~~the~~2023, ~~option~~and tointerim ~~apply~~period ~~the~~within ~~standard~~fiscal ~~retrospectively.~~years beginning after December 15, 2024, with early adoption permitted. The Company’s ~~management~~adopted ~~does~~the ~~not~~ASU ~~believe~~during ~~that~~ the ~~adoption~~year ofended ~~ASU~~December ~~2023-09~~31, ~~will~~2024. The adoption did not have a material impact on the ~~Company’s consolidated~~ financial ~~statement presentation or disclosures~~statements.

Recently Issued But Not Yet Adopted Accounting Pronouncements

ln December 2023, the FASB issued Accounting Standards Update No.2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3)income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its unaudited condensed consolidated financial statements and related disclosures.

On November 4, 2024, the FASB issued an ASU No. 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024 03”) to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions (such as cost of sales; selling, general, and administrative expenses; and research and development). The amendments in the ASU require disclosure in the notes to financial statements of specified information about certain costs and expenses. The amendments require that at each interim and annual reporting period an entity: 1.Disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed in (a)–(e). 2. Include certain amounts that are already required to be disclosed under current generally accepted accounting principles in the same tabular disclosure as the other disaggregation requirements. 3. Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. 4) Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. In January 2025, the FASB issued ASU No. 2025-01, Clarifying the Effective Date (“ASU 2025-01”). The amendments, as clarified by ASU 2025-01, are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this ASU should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of the ASU or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its consolidated financial statement presentation or disclosures.

In January 2025, the FASB issued ASU 2025-01 Income Statement-Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). The FASB issued ASU 2024-03 on November 4, 2024-03 states that the amendments are effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Following the issuance of ASU 2024-03, the FASB was asked to clarify the initial effective date for entities that do not have an annual reporting period that ends on December 31 (referred to as non-calendar year-end entities). Because of how the effective date guidance was written, a non-calendar year-end entity may have concluded that it would be required to initially adopt the disclosure requirements in ASU 2024-03 in an interim reporting period, rather than in annual reporting period. The FASB’s intent in the basis for conclusions of ASU 2024-03 is clear that all public business entities should initially adopt the disclosure requirements in the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that the adoption of ASU 2025-01 will have on its consolidated financial statement presentation or disclosures.

The Company’s management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures.

3. OTHER RECEIVABLES AND PREPAID EXPENSES

Other receivables and prepaid expenses consisted of the following at ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024:

	September 30, 2024		December 31, 2023
	March 31, 2025		December 31, 2024
Deposits	$	4254,~~514~~814	$	848,~~978~~678
Prepaid expenses, including related party (see Note 13)		235,791		128,378
Prepaid expenses		4,040		6,702
Employees’ social insurance		718,~~959~~353		818,~~667~~350
Others		3977,~~331~~233		2454,~~808~~182
Total	$	~~325~~154,~~595~~440	$	~~170~~127,~~831~~912
Long-term prepaid expenses	$	3,650	$	4,051

4. ADVANCES TO SUPPLIERS

The Company had advances to suppliers of $3545,~~466~~092 and $~~152~~37,~~563~~247 as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, respectively. Advances to suppliers primarily include prepayments for products and equipment expected to be delivered subsequent to balance sheet dates. Due to their short-term nature, advances to suppliers are usually satisfied within 12 months.

5. INVENTORIES

Inventories consisted of the following at ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024:

SCHEDULE OF INVENTORIES

	September 30, 2024		December 31, 2023
	March 31, 2025		December 31, 2024
Raw material	$	~~228~~196,~~860~~557	$	~~114~~260,~~005~~024
Drugs, pharmaceutical and nutritional products		~~310~~301,~~160~~547		~~324~~293,~~588~~159
Food and beverage, hotel supplies and consumables		6041,~~872~~937		8140,~~969~~156
Total	$	~~599~~540,~~892~~041	$	~~520~~593,~~562~~339
Less: reserve for inventory		7689,~~781~~422		7989,~~464~~349
Total inventories, net	$	~~523~~450,~~111~~619	$	~~441~~503,~~098~~990

6. PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following at ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024:

SCHEDULE OF PROPERTY AND EQUIPMENT

	September 30, 2024			December 31, 2023
	March 31, 2025			December 31, 2024
Vehicles	$	~~457~~442,~~928~~841		$	~~451~~440,~~381~~256
Office furniture		62,393			80,612
Office equipment		78,933			99,170
Electronic equipment		30,914			25,899
Machinery equipment		1,458,439			1,429,230
Machinery		1,566,078			1,314,902
Leasehold improvements		1,117,709			1,129,681
Leasehold improvements		1,142,626			1,125,581
Total		3,097,922			3,098,337
Other		12,137			11,997
Property and equipment, gross		3,097,922			3,098,337
Total		3,272,076			3,010,372
Less: Accumulated depreciation		(1,687,876	)		(1,605,012	)
Property and equipment, gross		3,272,076			3,010,372
Property and equipment, net	$	1,410,046		$	1,493,325
Less: Accumulated depreciation		(1,627,465	)		(1,330,697	)
Property and equipment, net	$	1,644,611		$	1,679,675

Depreciation expense for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 was $9791,~~205~~843 and $~~114~~105,~~300~~842, respectively.

~~Depreciation expense for the nine months ended September 30, 2024 and 2023 was $297,161 and $307,209, respectively.~~19

7. INTANGIBLE ASSETS, NET

Intangible asset consisted of the following at ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024:

SCHEDULE OF INTANGIBLE ASSET

	September 30, 2024			December 31, 2023
	March 31, 2025			December 31, 2024
Software	$	158,~~514~~069		$	125,~~516~~919
Less: Accumulated amortization		(103,~~370~~962	)		(81,~~599~~405	)
Intangible asset, net	$	54,~~144~~107		$	34,~~917~~514

Amortization expense for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 was $~~756~~433 and $~~387~~457, respectively. At March 31, 2025, estimated amortization expense for each of the next five years is as follows: $1,733, $953, $892, $529 and $nil.

Amortization expense for the nine months ended September 30, 2024 and 2023 was $1,628 and $905, respectively.

8. TAXES PAYABLE

Taxes payable consisted of the following at ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024:

SCHEDULE OF TAX PAYABLE

	September 30, 2024		December 31, 2023
	March 31, 2025		December 31, 2024
Value-added	$	6431,~~476~~585	$	657,~~439~~647
Income		3029,~~389~~387		29,~~998~~216
City construction		~~4,838~~314		14,~~423~~703
Education		~~3,487~~254		13,~~024~~367
Other		811,~~162~~024		109,~~365~~012
Taxes payable	$	~~111~~72,~~352~~564	$	49103,~~249~~945

9. ACCRUED LIABILITIES AND OTHER PAYABLES

Accrued liabilities and other payables consisted of the following at ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024:

	September 30, 2024		December 31, 2023
	March 31, 2025		December 31, 2024
Accrued employees’ social insurance	$	~~161~~124,~~732~~926	$	~~231~~161,~~983~~342
Accrued payroll and commission		~~617~~769,~~581~~458		~~308~~746,~~768~~183
Construction payable		1,~~235~~124,~~265~~508		1,~~229~~124,~~775~~230
Payable for equipment purchase		3,411		30,307
Accrued professional fees		168,899		342,568
Accrued professional fees		312,483		250,505
Other payables		230,184		204,859
Deposit		10,989		10,986
Total	$	2,417,975	$	2,579,182
Other payables		42,935		100,742
Total	$	2,384,396	$	2,163,066

10. GOVERNMENT GRANT

On December 1, 2021, ~~The~~the Company and Luquan Yizu Miaozu Autonomous County People’s Government (“the People’s Government”) entered a cooperation agreement with a term of 10 years. According to the agreement, the People’s Government was to contribute RMB 8,000,000 ($1,194,400) as a one-time payment to the Company for deep processing of Chinese herbs. The Company can retain the contributed amount at the end of the cooperation term if it passes the performance assessment by the People’s Government; otherwise, it will ~~return~~ return the full proceeds received plus a 20% penalty. As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, the Company received $~~934~~522,~~066~~668 and $~~923~~733,~~238~~721 from the People’s Government. The Company plans to return the funds to the People’s Government asbecause it is not the full ~~amount~~ amount the Peoples’ Government promised to contribute. For the three months ended March 31, 2025 and 2024, the Company returned $214,884 and $nil to the Peoples’ Government.

11. ~~LOAN FROM THIRD PARTIES~~LEASE

AsAiXinZhonghong ofleases ~~September~~its ~~30,~~office. ~~2024~~The ~~and~~lease ~~December~~has ~~31,~~a ~~2023,~~remaining ~~the~~lease ~~Company~~term ~~had advances from unrelated third parties~~ of ~~Aixin~~approximately ~~Shangyan Hotel in an aggregate amount $85,499 and $84,508, respectively~~3.15 ~~There was no written agreement, and these loans are payable on demand and bear no interest~~years.

12Aixin Shangyan Hotel leases its hotel premises under an operating lease arrangement. The leases have remaining lease terms of approximately ~~LEASE~~1.05 to 9.05 years.

~~AiXinZhonghong~~Aixintang ~~leases~~Pharmacies ~~its~~lease ~~office.~~retail ~~The~~pharmacy stores under operating lease ~~has~~arrangements, awith remaining lease ~~term~~terms of ~~approximately~~0.05 3to 1.6645 years.

~~Aixin~~Runcangsheng ~~Shangyan Hotel~~ leases its ~~hotel~~office ~~premises~~ under an operating lease arrangement. The ~~leases~~lease ~~have~~was ~~remaining~~expired as of December 31, 2023. In January 2024, the lease was ~~terms~~renewed with an expiration date of ~~approximately~~December 131, 2024.59 The lease was renewed for another year to ~~9.55~~December ~~years~~31, 2025.

~~Aixintang Pharmacies lease retail pharmacy stores under operating lease arrangements, with remaining lease terms of 0.21 to 1.92 years.~~20

Runcangsheng leases its office under an operating lease arrangement. The lease was expired as of December 31, 2023. In January 2024, the lease was renewed with an expiration date of December 31, 2024.

Balance sheet information related to the Company’s leases is presented below:

SCHEDULE OF OPERATING LEASE LIABILITIES

	September 30, 2024		December 31, 2023
	March 31, 2025		December 31, 2024
Operating Leases
Operating lease right-of-use assets	$	21,~~022~~388,~~758~~179	$	1,~~576~~450,~~814~~762
Operating lease liabilities – current	$	~~136~~175,~~001~~872	$	~~864~~108,~~519~~282
Operating lease liability – non-current		1,~~794~~128,~~500~~318		~~789~~1,~~489~~213,892
Total operating lease liabilities	$	1,~~930~~304,~~501~~190	$	1,~~654~~322,~~008~~174

The following provides details of the Company’s lease expenses:

SCHEDULE OF OPERATING LEASE EXPENSES

	2024		2023
	2025		2024
	Three Months Ended September 30,
	Three Months Ended March 31,
	2024		2023
	2025		2024
Operating lease expenses	$	~~104~~70,~~372~~941	$	~~200~~233,~~716~~070

	2024		2023
	Nine Months Ended September 30,
	2024		2023
Operating lease expenses	$	439,723	$	618,085

Other information related to leases is presented below:

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2024			2023
	2025			2024
Cash Paid for Amounts Included In Measurement of Liabilities:
Operating cash flows from operating leases	$	~~607~~25,~~312~~694		$	~~500~~325,~~056~~498
Weighted Average Remaining Lease Term:
Operating leases		8.6450 years			18.2690 years
Weighted Average Discount Rate:
Operating leases		4.8875	%		4.7584	%

Maturities of lease liabilities were as follows:

For the year ending December 31:
For the year ending March 31:
2024 (excluding the nine months ended September 30, 2024)	$	68,999
2026	$	221,379
2025		233,875
2027		177,749
2026		274,518
2028		165,364
2027		236,548
2029		159,458
2028		231,561
2030		165,364
Thereafter		1719,~~379,825~~887
Total lease payments		21,~~425~~609,~~326~~201
Less: imputed interest		(~~494~~305,~~825~~011	)
Total lease liabilities		1,~~930~~304,~~501~~190
Less: current portion		(~~136~~175,~~001~~872	)
Lease liabilities – non-current portion	$	1,~~794~~128,~~500~~318

~~13. RELATED PARTY TRANSACTIONS~~21

~~Accounts~~12. ~~receivable~~RELATED –PARTY ~~related party~~TRANSACTIONS

Accounts receivable – related parties

Accounts receivable – related party consisted of the following as of the periods indicated:

	September 30, 2024		December 31, 2023
	March 31, 2025		December 31, 2024
Chengdu WenJiang Aixin Nanjiang Pharmacy Co., Ltd.	$	-	$	2,451
Chengdu Heshengyuan Pharmacy Co., Ltd.	$	99	$	-
Chengdu Lisheng Huiren Tang Pharmacy Co., Ltd.		147,983		4,309
Chengdu Lisheng Huiren Pharmacy Co., Ltd.		145,956		144,331
Chengdu Fuxiang Tang Pharmacy Co., Ltd.		-		2,028
Chengdu Cigu Foshou Pharmacy Co., Ltd.		22		22
Chengdu Wenjiang district Heneng hupu Pharmacy Co., Ltd		-		2,028
Sichuan Aixintang Xinfu Pharmacy Chain Co., Ltd.		24,136		22,632
Sichuan Aixintang Xinfu Pharmacy Chain Co., Ltd		20,235		-
Sichuan Yunxitang Pharmacy Co., Ltd.		847		868
Shengcaofeng Health Industry (Yunnan) Co., Ltd.		~~35,903~~-		-137,010
Xiaoyan Zhou		3,654		32,493
Chengdu Aixin International Travel Service Co., Ltd.		223,914		210,224
Chengdu Aixin International Travel Service Co., Ltd		53,451		43,083
Total	$	394,974	$	515,087
Total	$	261,226	$	86,392
Accounts receivable - related party	$	394,974	$	515,087
Accounts receivable - related party	$	261,226	$	86,392

The related party entities listed above are controlled by Mr. Quanzhong Lin (the Chairman, CEO and major shareholder of Aixin Life), except for Shengcaofeng Health Industry (Yunnan) Co., Ltd, which is owned by Huiliang Jiao, the Company’s Director. Xiaoyan Zhou is the wife of Huiliang Jiao, the Company’s Director.

22Accounts payable – related parties

Sales revenue – related party

Sales revenue – related party consisted of the following for the periods indicated:

SCHEDULE OF SALES REVENUE RELATED PARTY

	2024		2023
	Three Months Ended September 30,
	2024		2023
Chengdu Aixin International Travel Service Co., Ltd	$	5,682	$	41,598
Shengcaofeng Health Industry (Yunnan) Co., Ltd		30,977		-
Total	$	36,659	$	41,598
Sales revenue	$	36,659	$	41,598

	2024		2023
	Nine Months Ended September 30,
	2024		2023
Sichuan Aixintang Xinfu Pharmacy Chain Co., Ltd	$	19,943	$	-
Chengdu Aixin International Travel Service Co., Ltd		19,293		65,653
Shengcaofeng Health Industry (Yunnan) Co., Ltd		30,977		-
Total	$	70,213	$	65,653
Sales revenue	$	70,213	$	65,653

Purchase – related party

Purchase – related party consisted of the following for the periods indicated:

SCHEDULE OF RELATED PARTY PURCHASE

	2024		2023
	Three Months Ended September 30,
	2024		2023
Sichuan Aixintang Xinfu Pharmacy Chain Co., Ltd	$	60,401	$	-

	2024		2023
	Nine Months Ended September 30,
	2024		2023
Sichuan Aixintang Xinfu Pharmacy Chain Co., Ltd	$	197,479	$	-
Related party purchase	$	197,479	$	-

The related party entities listed above are controlled by Mr. Quanzhong Lin (the Chairman, CEO and major shareholder of Aixin Life).

Operating expenses – related party

Operating expenses – related party consisted of the following for the periods indicated:

SCHEDULE OF OPERATING EXPENSES RELATED PARTY

	2024		2023
	Three Months Ended September 30,
	2024		2023
Chengdu Aixin International Travel Service Co., Ltd	$	40,919	$	41,620

	2024		2023
	Nine Months Ended September 30,
	2024		2023
Chengdu Aixin International Travel Service Co., Ltd	$	100,214	$	64,734
Operating Expenses - related party	$	100,214	$	64,734

The related party entity listed above is controlled by Mr. Quanzhong Lin (the Chairman, CEO and major shareholder of Aixin Life).

Prepaid expense – related party

Prepaid expense – related party consisted of the following as of the periods indicated:

SCHEDULE OF PREPAID EXPENSES AND ACCOUNTS PAYABLE RELATED PARTY

		September 30, 2024				December 31, 2023
Chengdu Aixin International Travel Service Co., Ltd		$	223,639			$	120,483

The related party entity listed above is controlled by Mr. Quanzhong Lin (the Chairman, CEO and major shareholder of Aixin Life).

Accounts payable – related party

Accounts payable – related party consisted of the following as of the periods indicated:

		September 30, 2024				December 31, 2023
Sichuan Aixintang Xinfu Pharmacy Chain Co., Ltd.		$	-			$	1,776

The related party entity listed above is controlled by Mr. Quanzhong Lin (the Chairman, CEO and major shareholder of Aixin Life).

	March 31, 2025		December 31, 2024
Sichuan Aixintang Xinfu Pharmacy Chain Co., Ltd.	$	52,955	$	75,474
Shengcaofeng Health Industry (Yunnan) Co., Ltd.		28,760		1,206
Sichuan Yunxitang Pharmacy Co., Ltd.		384		370
Chengdu Heshengyuan Pharmacy Co., Ltd.		2,770		1,529
Chengdu Cigu Foshou Pharmacy Co., Ltd.		4,127		4,349
Total	$	88,996	$	82,928

23The related party entities listed above are controlled by Mr. Quanzhong Lin (the Chairman, CEO and major shareholder of Aixin Life), except for Shengcaofeng Health Industry (Yunnan) Co., Ltd, which is owned by Huiliang Jiao, the Company’s Director. Xiaoyan Zhou is the wife of Huiliang Jiao, the Company’s Director.

Due from related parties

Due from related parties consisted of the following as of the periods indicated:

SCHEDULE OF RELATED PARTY TRANSACTIONS

	September 30, 2024		December 31, 2023
	March 31, 2025		December 31, 2024
Chengdu WenJiang Aixin Nanjiang Pharmacy Co., Ltd.	$	~~570~~551	$	~~563~~547
Chengdu Fuxiang Tang Pharmacy Co., Ltd.		85		85
Chengdu Fuxiangtang Pharmacy Co., Ltd.		83		82
Chengdu Zhiweibing Pharmacy Co., Ltd.		1,758		1,738
Chengdu Wenjiang District Heneng Hupu Pharmacy Co., Ltd.		689		685
Chengdu Wenjiang district Heneng hupu Pharmacy Co., Ltd		712		704
Sichuan Aixintang Xinfu Pharmacy Chain Co., Ltd.		258		-
Sichuan Aixin Investment Co. Ltd		9,419		9,310
Chengdu Cigu Foshou Pharmacy Co., Ltd.		74		-
Sichuan Yunxi Tang Pharmacy Co., Ltd		501		-
Sichuan Aixin Investment Co. Ltd.		276		274
Huiliang Jiao		50,977		-
Chengdu Lisheng Huiren Pharmacy Co., Ltd.		129		1,132
Total	$	64,022	$	12,400
Xiaoyan Zhou		2,067		2,055
Due from related parties	$	64,022	$	12,400
Huiliang Jiao		-		49,009
Total	$	4,127	$	53,784
Due from related parties	$	4,127	$	53,784

Due to related parties

Due to related parties consisted of the following as of the periods indicated:

	September 30, 2024		December 31, 2023
	March 31, 2025		December 31, 2024
Quanzhong Lin	$	13,~~921~~695,~~274~~079	$	12,~~051~~952,~~429~~403
Yirong Shen		88,349		87,325
Huiliang Jiao		117,446		-
Xiaoyan Zhou		6,412		-
Mianyang Aixin Cunshan Pharmacy Co. Ltd.		138		121
Yunnan Shengcaofeng Biotechnology Co., Ltd		1,254		-
Sichuan Aixintang Xinfu Pharmacy Chain Co., Ltd.		471		-
Huiliang Jiao		-		82,152
Chengdu Aixin International Travel Service Co., Ltd.		4,977		4,948
Chengdu Cigu Foshou Pharmacy		2,139		-
Total	$	3,818,111	$	2,957,472
Tianfeng Li		-		780
Due to related parties	$	3,818,111	$	2,957,472
Mianyang Aixin Cunshan Pharmacy Co. Ltd		-		112
Sichuan Aixintang Xinfu Pharmacy Chain Co., Ltd		67,876		-
Chengdu Aixin International travel service Co, Ltd		5,147		5,087
Chengdu Heshengyuan Pharmacy Co. Ltd		1,364		-
Total	$	2,093,815	$	1,226,885
Due to related parties	$	2,093,815	$	1,226,885

The amounts due from related parties and due to related parties described above were for working capital purposes, payable on demand, and bear no interest. The related party entities listed above are controlled by Mr. Quanzhong Lin (the Chairman, CEO and major shareholder of Aixin Life), except for Yunnan Shengcaofeng Biotechnology Co., Ltd (“Shengcaofeng”), which is owned by Huiliang Jiao, the Company’s Director. Yirong Shen was a major shareholder of Aixin Shangyan Hotel prior to the closing of Hotel Purchase Agreement, and she serves as the supervisor of Aixin Shangyan Hotel. Mr. Huiliang Jiao is a Director of the Company. Xiaoyan Zhou is the wife of Huiliang Jiao. ~~Tianfeng Li is the CFO of Aixin Life.~~

Office leases

In May 2014, the Company entered a lease with its major shareholder for an office. The lease term was for three years expiring in May 2017 with an option to renew. The monthly rent was RMB 5,000 ($704). The Company was required to prepay each year’s annual rent on the 15th of May of each year. The Company renewed the lease until May 28, 2028 with monthly rent of RMB 5,000 ($704), payable quarterly. The future annual minimum lease payments at September 30, 2024 are $2,082, $8,328, $8,328, $8,328, and $3,470 for each of the years ended December 31, 2024, 2025, 2026, 2027, and 2028, respectively.

Runcangsheng has an office lease with Xiaoyan Zhou, wife of Huiliang Jiao, the Company’s Director. The initial term was from March 2020 to February 2023 with a monthly rent of RMB 3,000 ($414). Runcangsheng renewed the lease until February 28, 2026 with monthly rent of RMB 5,000 ($690). In July 2023, Xiaoyan Zhou entered into an agreement with Runcangsheng to increase the monthly rent for 2022 by RMB 2,000 and to change the lease expiration date to December 31, 2023. The lease was converted to an annual contract starting from January 1, 2024.

2413. INCOME TAXES

14The Company was incorporated in the United States of America (“USA”) and has operations in one tax jurisdiction, i.e. the PRC. ~~INCOME~~The ~~TAXES~~Company generated substantially all of its sales from its operations in the PRC for the three months ended March 31, 2025 and 2024, and recorded an income tax provision for each of the periods.

The Company was incorporated in the United States of America (“USA”) and has operations in one tax jurisdiction, i.e. the PRC. The Company generated substantially all of its sales from its operations in the PRC for the three and nine months ended September 30, 2024 and 2023, and recorded an income tax provision for each of the periods.

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

Uncertain Tax Positions

Interest associated with unrecognized tax benefits are classified as income tax, and penalties are classified in selling, general and administrative expenses in the statements of operations. For the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, the Company had no unrecognized tax benefits and related interest and penalties expenses. Currently, the Company is not subject to examination by major tax jurisdictions.

1514. STOCKHOLDERS’ EQUITY

The Company is authorized to issue 20,000,000 shares ~~of blank check~~ preferred stock at $0.001 par value per share and 500,000,000 shares of common stock at $.00001 par value per share.

Pursuant to resolutions adopted by the Board of Directors and the holders of a majority of the outstanding shares of common stock of AiXin Life International, Inc. on January 6, 2023, the Company filed an amendment to its Articles of Incorporation with respect to a proposed 1 for 2 “reverse” split of its common stock (the “Amendment”). Completion of the proposed reverse stock split was to be effected on a date determined by the Board of Directors only upon receipt of notice from the Financial Industry Regulatory Authority (“FINRA”) that it would process the proposed reverse stock split. The Company received notice from FINRA and its common stock began trading on a post-split basis on February 17, 2023.

As a result of the reverse split, every two shares of the Company’s issued and outstanding common stock were automatically combined and converted into one issued and outstanding share of common stock. The Company has approximately 24,999,834 shares of outstanding common stock after giving effect to the reverse stock split and the elimination of fractional shares.

All share and earnings per share information has been retroactively adjusted to reflect the reverse stock split.

As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, the Company had 24,999,834 common shares issued and outstanding, after reverse stock split adjustment.

Stock Awards Issued for Services

On October 22, 2019, the Company granted and issued 18,750 shares to its employees and contractors under its 2019 Equity Incentive Plan. The stock awards were valued at $337,500 based on the post-split closing price of $18 on the grant date.

On October 24, 2019, the Company granted and issued 275,000 shares to its employees and contractors under its 2019 Equity Incentive Plan. The stock awards were valued at $1,520,200 based on the post-split closing price of $5.528 on the grant date. There were no shares remain unissued under its 2019 Equity Incentive Plan.

The stock awards will vest over five (5) years from the grant date, and the grantee will forfeit a portion of the shares granted (“Shares Granted”) if the grantee is no longer employed by or contracted with the Company. Specifically, the grantee will forfeit 80% of Shares Granted if no longer employed by or contracted with the Company on the date that is one year from the grant date, forfeit 60% of Shares Granted if no longer employed by or contracted with the Company on the date that is two years from the grant date, forfeit 40% of Shares Granted if no longer employed by or contracted with the Company on the date that is three years from the grant date, and forfeit 20% of Shares Granted if no longer employed by or contracted with the Company on the date that is four years from the grant date. Effective on the 5^th year from the grant date, none of the shares will be subject to forfeiture.

25For the three Months ended March 31, 2025 and 2024, stock-based compensation expenses were $nil and $92,885, respectively.

For the three months ended September 30, 2024 and 2023, stock-based compensation expenses were $92,885 and $92,885, respectively. For the nine months ended September 30, 2024 and 2023, stock-based compensation expenses were $278,655 and $278,655, respectively. As of September 30, 2024, unrecognized compensation expenses related to these stock awards are $22,472. These expenses are expected to be recognized over 0.07 years.

Capital Contribution

During the year ended December 31, 2023, the Company received capital contributions in the aggregate amount of $145,300 from Yunnan Shengshengyuan and Yun Chen, the former shareholders of Runcangsheng (see Note 1), who remained as related parties of the Company after the completion of acquisition of Runcangsheng.

1615. STATUTORY RESERVES

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

Surplus reserve fund

The Company is required to transfer 10% of its net income, as determined under PRC accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the Company’s registered capital. During the three ~~and nine~~ months ended ~~September~~ 30March 31, 2025 ~~2024~~ and ~~2023~~2024, the Company made $0 and $0 contribution to statutory reserve fund.

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

Common welfare fund

Common welfare fund is a voluntary fund to which the Company can elect to transfer 5% to 10% of its net income, as determined under PRC accounting rules and regulations. The Company did not make any contribution to this fund during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~ 2025 and ~~2023~~2024.

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

1716. OPERATING CONTINGENCIES

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

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

2617. SUBSEQUENT EVENT

Litigation

The Company is, from time to time, involved in litigation incidental to the conduct of its business regarding merchandise sold, employment matters, and litigation regarding intellectual property rights.

In October 2020, Jian Yiao (the “Plaintiff”) filed a complaint against Chengdu Aixintang Pharmacy Co., Ltd. (“Aixintang Pharmacy”, or the “Defendant”) in Zhangjiagang People’s Court in Jiangsu Province. The complaint alleges that Jian Yiao is entitled to $392,305 (RMB 2,500,000) from Aixintang Pharmacy for not fulfilling the contractual obligation of a purchase agreement entered in March 2020 (the “Purchase Agreement”). Aixintang Pharmacy claimed that the Purchase Agreement was falsely entered by an employee through forged documents, and that Aixintang Pharmacy did not enter the Purchase Agreement. The Court determined that Aixintang Pharmacy breached the Purchase Agreement by not delivering the products ordered and ordered Aixintang Pharmacy to pay $392,305 (RMB 2,500,000) to the Plaintiff. In December 2020, Aixintang Pharmacy filed a motion of appeal in the Jiangsu Suzhou Intermediate People’s Court against the determination reached from the first trial.

In February 2021, the judge in the Jiangsu Suzhou Intermediate People’s Court denied the Defendant’s motion and upheld the judgment from the first trial. In March 2021, Aixintang Pharmacy filed another motion of re-trial to the Jiangsu High People’s Court on the basis that the Purchase Agreement was forged, the motion was accepted by Jiangsu High People’s Court in July 2021. In September 2022, the Court rejected the Defendant’s motion and upheld the judgment rendered in the second trial.

On August 30, 2024, Zhangjiagang People’s Court in Jiangsu Province issued a Notice of Case Closure, stating the Judgement for this case was fully executed and the plaintiff has received the full execution amount as of August 30, 2024.

In November 2021, the Company and Mr. Quanzhong Lin agreed that Mr. Lin shall assume any losses arising from this legal proceeding. As such, the Company did not accrue contingent losses from this legal proceeding as of September 30, 2024.

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

18. SUBSEQUENT EVENT

The Company follows the guidance in FASB ASC 855-10 for the disclosure of subsequent events. The Company evaluated subsequent events through the date the financial statements were issued and determined the Company has no material subsequent events.

2725

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

The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes to those statements included elsewhere in this Form 10-Q and with the audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024 (the “~~2023~~2024 Form 10-K”). ~~This~~In ~~discussion~~addition to historical information, the following discussion contains forward-looking statements ~~that~~subject ~~involve~~to risks and uncertainties. Where possible, we have tried to identify these forward-looking statements by using words such as “anticipate,” “believe,” “intends,” or similar expressions. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. You should specifically consider the various risk factors identified in in our ~~2023~~2024 Form 10-K, that could cause actual results to differ materially from those anticipated in these forward-looking statements.

Overview

In December 2017, we completed a “reverse” acquisition whereby we acquired all of the outstanding shares of AiXin (BVI) International Group Co., Ltd. a British Virgin Islands corporation (“AiXin BVI”). As a result, AiXin BVI became our wholly-owned subsidiary, and through AiXin BVI we now own all of the outstanding shares of HK AiXin International Group Co., Limited, a Hong Kong limited company (“AiXin HK”), which in turn owns all of the outstanding shares of Chengdu AiXinZhongHong Biological Technology Co., Ltd., a Chinese limited company (“AiXinZhongHong”), which began distributing nutritional products in 2013.

In September 2021, we completed the acquisition of nine pharmacies located in Chengdu by acquiring the entities which owned the pharmacies for an aggregate purchase price of RMB 34,635,845, or approximately US$5.31 million. We currently operate pharmacies at 26 locations, including 18 locations operated pursuant to a single chain license.

~~Pursuant~~On ~~to an Equity Transfer Agreement (the “Transfer Agreement”), on~~ September 30, 2022, we acquired all of the outstanding equity of Yunnan Runcangsheng Technology Co., Ltd (“Runcangsheng”) for RMB 31,557,820 (approximately USD$4.4 million), reduced by $116,802 the excess of the estimated net worth of Runcangsheng over its audited net worth as of December 31, 2021. In addition to transferring their respective equity interest in Runcangsheng, both Sellers agreed to forgive any loans due to them from Runcangsheng. Runcangsheng was established in April 2020, and is headquartered in Luquan Yi and Miao Autonomous County, Kunming City, Yunnan Province.

Runcangsheng operates a 13,000 square meter production facility, which houses R&D centers, extraction facilities, preparation workshops and a warehouse. Runcangsheng has more than 30 sub brands and is focused on promoting a healthy lifestyle through the use of foods believed to promote well-being, health foods, modernized versions of traditional Chinese medical products and plant extracts. Runcangsheng cultivates many of the raw materials used in its products, compounds the materials into easy to transport and use pre-packaged foods and distributes the products at the wholesale level. As life-styles in China evolve, work pressures increase and the ingestion of meats and other western style foods increases, Runcangsheng seeks to design and market products intended to combat the increase in obesity, hypertension, insomnia and physical ailments associated with such changes. The acquisition of Runcangsheng will enable us to operate as a vertically integrated company, capable of formulating the kinds of health foods and other nutritional products and supplements suitable for our clients and marketing those products through our distribution channels.

In addition to our acquisitions in the health and nutritional sector, in July 2021, we completed the acquisition of ~~Aixin Shangyan Hotel through which we owned and operated~~ a hotel located in the Jinniu District, Chengdu City, by acquiring the entity which operated the hotel. Effective March 31, 2024, we terminated our lease for this ~~the Shangyan Hotel~~hotel. In the termination agreement we and the landlord agreed to release each other from any claims and the landlord agreed to return the security deposit.

On February 6, 2024, we entered into a lease with respect to a hotel located in Bandzhuyuan Town, Xindu District, Chengdu City. The term of the lease commenced February 29, 2024 and expires April 15, 2034. The Lease grants us the right to occupy various areas within the hotel, covering approximately 18,000 square meters, including the first-floor lobby, external shops (subject to the rights of the current occupants), the second and third floors, portions of the fourth floor including the restaurant and tea shop, and the fifth through eighteenth floors comprised mainly of guest rooms, underground and ground-level parking lots, and all hotel facilities and equipment. References to hotel revenues and operating costs below are with respect to the hotel we previously occupied in the Jinniu District of Chengdu.

We intend to look for additional opportunities to profit from the growing healthcare market in China. Though currently we are not party to any agreements, we will explore, among other opportunities, expanding our product line through internal research and acquiring complementary products from third parties, acquiring additional pharmacies and other retail outlets and operating nursing homes and possibly clinics which provide medical care to clients.

Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, our ability to operate profitably, to generate cash flows from operations, and to pursue financing arrangements to support its working capital requirements.

We incurred a net loss of $721,708 and net cash outflow from operating activities of $675,948 for the three months ended March 31, 2025, and have a working capital deficit of $6,708,468 as of March 31, 2025. These facts and conditions raise substantial doubt about our ability to continue as a going concern. From January 1, 2025 through March 31, 2025, our cash and cash equivalents increased from $62,310 to $63,109 mainly due to an increase in cash inflow from investing activities but remain well below the amounts necessary to maintain our operations.

We believe that we have developed a liquidity plan, summarized below, that, if executed successfully, should provide sufficient liquidity to meet our obligations as they become due for a reasonable period of time, and allow the development of our core business. The plan includes:

● Gaining positive cash-inflow from operating activities through continuous cost reductions and the sales of higher margin products.

● Raising cash through loans from related parties and potential equity offerings.

While our management believes that the measures in our liquidity plan including those described above will be adequate to satisfy our liquidity requirements for the twelve months after the date of the financial statements contained in this Report are issued, there is no assurance that the liquidity plan will be successfully implemented. Failure to successfully implement the liquidity plan may have a material adverse effect on our business, results of operations and financial position, and may adversely affect our ability to continue as a going concern. The consolidated financial statements included in this Report do not include any adjustments related to the recoverability and classification of recorded assets or the amounts and classification of liabilities or any other adjustments that might be necessary should the Company be unable to continue as a going concern.

Our Business

We are focused on providing health and wellness products to the growing middle class in China. We currently develop, manufacture, market and sell premium-quality healthcare, nutritional products and wellness supplements, including herbs and greens, traditional Chinese remedies, functional products, such as weight management tools, probiotics, foods and drinks. We offer products manufactured by us and those purchased from third parties through a diversified, omni-channel business model which generates revenues through retail and wholesale product sales, through company-owned pharmacies, direct marketing and e-commerce. Our marketing approach emphasizes proactively approaching customers such as by hosting marketing events for clients, which we believe is ideally suited to marketing the products we offer because sales of healthcare, nutritional products and supplements are strengthened by ongoing personal contact and support, coaching and education among the Company and our clients towards how to achieve a healthy and active lifestyle.

We believe the competitive strengths that will enable us to grow in the health and wellness market include our ability to design and manufacture products that are responsive to consumers’ needs as the life style of China’s middle class evolves, our coordinated omni-channel distribution network where we enable consumers to obtain the information they need to improve their lifestyle on our website, at our pharmacies and through individual meetings with our team members.

Our ability to operate profitably and generate positive cash flow will be determined by our ability to attract a large and loyal customer base and provide the information and products they need cost effectively. Our revenue will largely be determined by our ability to achieve and maintain a strong brand name and company image, the volume of products we sell and the prices we can charge for such products, which will require that we compete effectively. Our costs will largely be determined by the cost of raw materials and acquired inventory, the labor used to design and manufacture products, and the costs incurred to deliver these products to the consumer.

We intend to build a reputation as a provider of premium health and wellness products that seeks to improve our customers health and well-being. Our objective is to offer a broad and deep mix of products for consumers interested in living well, whether they are looking to treat a health-related issue or simply maintain their overall wellness. Our premium, value-added offerings include both proprietary products developed and manufactured by us as well as products acquired from or sold on behalf of third parties. We believe our range of products and ability to develop new products, combined with the customer support and service we offer, differentiate us and allow us to effectively compete against food, drug and mass channel players, specialty stores, independent vitamin, supplement and natural food shops and online retailers. There is no assurance that we will achieve our business objectives.

Results of Operations

Three Months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024

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

	Three Months Ended September 30,
	Three Months Ended March 31,
	2024						2023
	2025						2024
	$			% of Revenue			$			% of Revenue
Revenue	$	~~936~~398,~~406~~831			100	%	$	1851,~~066,919~~559			100	%
Operating costs and expenses		1,~~538~~081,~~989~~316			~~164~~271	%		1,~~802~~472,~~174~~805			~~169~~173	%
Loss from operations		(~~602~~682,~~583~~485	)		(64171	)%		(~~735~~621,~~255~~246	)		(6973	)%
Non-operating income, net		56,398			6	%		297,614			28	%
Non-operating income (expense), net		(38,402	)		(10	)%		17,646			2	%
Loss before income tax		(~~545~~720,~~185~~887	)		(58181	)%		(~~437~~603,~~641~~600	)		(4171	)%
Income tax expense		1821			-	%		~~515~~-			~~0.05~~-	%
Net loss	$	(~~546~~721,~~186~~708	)		(58181	)%	$	(~~438~~603,~~156~~600	)		(4171	)%

29The following table shows the Company’s operations by business segment for the three months ended March 31, 2025 and 2024.

The following table shows our operations by business segment for the three months ended September 30, 2024 and 2023.

	For the Three Months Ended March 31,
	2025			2024
Net revenue
Direct Sales	$	20,631		$	165,749
Pharmacy		35,966			241,118
Hotel		80,706			154,465
Manufacture and sale		261,528			290,227
Total revenues, net	$	398,831		$	851,559

Operating costs and expenses
Direct Sales
Cost of sales	$	5,768		$	19,708
Operating expenses		188,568			372,056
Pharmacy
Cost of sales		24,051			80,174
Operating expenses		84,139			110,870
Hotel
Hotel operating costs		270,819			461,079
Operating expenses		60,769			71,877
Manufacture and sale
Cost of sales		283,181			227,929
Operating expenses		164,021			129,112
Total operating costs and expenses	$	1,081,316		$	1,472,805

Income (loss) from operations
Direct Sales	$	(173,705	)	$	(226,015	)
Pharmacy		(72,224	)		50,074
Hotel		(250,882	)		(378,491	)
Manufacture and sale		(185,674	)		(66,814	)
Loss from operations	$	(682,485	)	$	(621,246	)

	For the Three Months Ended September 30,
	2024			2023
Net revenue
Direct sales	$	102,370		$	208,699
Pharmacy		266,664			273,416
Hotel		190,861			169,462
Manufacture and sale		376,511			415,342
Total revenues, net	$	936,406		$	1,066,919
Operating costs and expenses
Direct Sales
Cost of goods sold	$	499		$	67,709
Operating expenses		373,449			421,417
Pharmacy
Cost of goods sold		70,739			126,459
Operating expenses		104,840			115,006
Hotel
Hotel operating costs		360,803			447,419
Operating expenses		65,322			61,859
Manufacture and sale
Cost of goods sold		284,502			315,555
Operating expenses		278,835			246,750
Total operating costs and expenses	$	1,538,989		$	1,802,174
Income (loss) from operations
Direct Sales	$	(271,578	)	$	(280,427	)
Pharmacy		91,085			31,951
Hotel		(235,264	)		(339,816	)
Manufacture and sale		(186,826	)		(146,963	)
Loss from operations	$	(602,583	)	$	(735,255	)

Revenue

Revenue was $~~936~~398,~~406~~831 in the three months ended ~~September~~March 3031, ~~2024~~2025, compared to $1851,~~066,919~~559 in ~~the same period of 2023~~2024, a decrease of $~~130~~452,~~513~~ 728 or 1253%. ~~The~~For ~~decrease~~the inthree ~~revenue~~months ended ~~was~~March ~~mainly~~31, ~~due~~2025, towe ~~decreases~~had ~~in direct sales of our nutritional products~~$318,125 ~~pharmacy~~in ~~sales,~~product ~~and~~revenues a decrease in ~~revenues~~of $378,969 from ~~manufacture~~2024 ~~and~~in ~~sale segment~~ which weproduct ~~refer~~revenues towere ~~as “Runcangsheng”~~$697,094. ~~which was partly offset by an increase~~Of ~~in revenue from~~ our ~~hotel~~product ~~sector.~~revenues ~~For~~in ~~the three months ended September 30~~2025, ~~2024~~$20,631 wewere ~~had~~from ~~$745~~direct sales,~~545~~ ina ~~product~~decrease ~~revenues (~~of ~~which,~~ $~~102~~145,~~370~~118 ~~were~~or 88% from ~~direct sales~~2024, $~~266~~35,~~664~~966 were from sales at our pharmacies, ~~and~~a decrease of $~~376~~205,~~511~~152 or 85% from ~~Runcangsheng)~~2024, and ~~hotel revenue of~~ $~~190~~261,~~861. For~~528 ~~the~~from ~~three~~sales ~~months~~by ~~ended~~manufacture ~~September~~and 30sales, ~~2023,~~a wedecrease ~~had~~of $~~897~~28,~~457~~699 inor ~~product~~10% ~~revenues~~from 2024. ~~(of~~In ~~which~~2025, ~~$208,699~~we ~~were~~had ~~from~~hotel ~~direct~~revenue ~~sales,~~of $~~273~~80,~~416 were~~706, ~~from~~a ~~sales~~decrease atof ~~our pharmacies~~$73,759 ~~and~~or ~~$415,342~~48% from ~~sales by Runcangsheng) and hotel revenue of $169,462~~2024.

Direct Sales

Our direct products sales revenue was $~~102~~20,~~370~~631 for the three months ended ~~September~~March 3031, ~~2024~~2025, compared with $~~208~~165,~~699~~749 in the same period of ~~2023~~2024, ~~representing~~ representing a decrease of $~~106~~145,~~329~~118 or 5188%. Our direct sales revenue as a percentage of our total revenue was 115% for ~~the three months ended September 30~~2025, ~~2024,~~ compared to 20 19% for ~~the same period of 2023~~2024. The decrease in direct sales revenue was mainly due to the ~~overall~~ economic downturn ~~in China~~ as marketing and ~~promotion~~promotional ~~became~~activities became more challenging compared to last year. ~~Additionally, due to reduced quantities of certain popular products available from our suppliers resulting from increased raw material costs, we had to adjust our product mix.~~

Pharmacy

Our ~~pharmacy~~pharmacies revenue was $~~266~~35,~~664~~966 for the three months ended ~~September~~March 3031, ~~2024~~2025, compared with $~~273~~241,~~416~~118 in the same period of ~~2023~~2024, representing a decrease of $6205,~~752~~152 or 285%. Our pharmacy revenue as a percentage of our total revenue was 289% for ~~the three months ended September 30~~2025, ~~2024,~~ compared to 2628% for ~~the same period of 2023~~2024. The decrease in revenue was mainly due to the ~~overall~~ economic downturn inas ~~China and the inability of~~ marketing and promotional activities ~~for~~did ~~supplements~~not ~~and~~generate ~~other~~anticipated ~~health~~revenues, as ~~products~~well toas ~~generate~~the ~~revenue~~convenience ~~comparable~~of online shopping leading to ~~those of~~decreased ~~prior~~sales ~~years~~in physical stores.

Hotel

Our hotel revenue was $~~190~~80,~~861~~706 for the three months ended ~~September~~March 3031, ~~2024~~2025, compared with $~~169~~154,~~462~~465 for the same period of ~~2023~~2024, representing a andecrease ~~increase~~ of $2173,~~399~~759 or 1348%. Our hotel revenue as a percentage of our total revenue was 20% for ~~the three months ended September 30~~2025, ~~2024,~~ compared to 1618% for ~~the same period of 2023~~2024. ~~The~~Our hotel ~~increase in~~ revenue ~~was~~decreased ~~primarily~~by $73,759 due to the ~~decrease~~economic ofdownturn and the ~~hotel~~slowdown ~~room~~in ~~rates~~the ~~for~~catering ~~attracting more customers~~industry.

~~Runcangsheng~~Manufacture and sales

~~Sales~~Our ~~revenues generated from~~ manufacture and sales byrevenues ~~Runucangsheng~~ were $~~376~~261,~~511~~528 for the three months ended ~~September~~March 3031, ~~2024~~2025, compared with $~~415~~290,~~342~~227 for the same period of ~~2023~~ 2024, representing a decrease of $3828,~~831~~699 or 910%. ~~Runcangsheng’s~~Our manufacture and sales revenue as a percentage of ~~our~~ total revenue was 4066% for the three months ended ~~September~~March 3031, ~~2024~~2025, compared to 3934% for the same period of ~~2023~~2024. The decrease in manufacture and sales revenue was mainly due to the ~~overall~~ economic downturn ~~in China~~ as marketing and ~~promotion~~promotional ~~became~~activities become more challenging compared to last year.

Operating Costs and Expenses

Cost of ~~Goods Sold~~Sales

Cost of ~~goods~~sales ~~sold~~ was $~~355~~312,~~740~~999 for the three months ended ~~September~~March 3031, ~~2024~~2025, compared to $~~509~~327,~~723~~811 for ~~the same period of 2023~~2024, a decrease of $~~153~~14,~~983~~812 or 305%. The decrease in cost of ~~goods~~sales ~~sold~~ was attributable to the decrease in ~~Runcangsheng’s business, decreased direct~~ sales ~~and decrease in pharmacy revenues~~.

Direct sales

The cost of ~~goods~~sales ~~sold~~ for our direct sales was $~~499~~5,768 for ~~the three months ended September 30~~2025, ~~2024,~~ compared with $6719,~~709~~708 for ~~the same period of 2023~~2024, representing a decrease of $6713,~~210~~940 or 9971%. The cost of ~~goods~~sales ~~sold~~ for ~~our~~ direct sales as a percentage of our direct sales ~~revenue~~ was 028% for the three months ended ~~September~~March 3031, ~~2024~~2025, compared to 3212% for the same period of ~~2023~~2024. The decrease in cost of ~~goods sold~~sales was primarily driven by ~~decreased~~the decrease in sales. ~~and~~Additionally, during the ~~elimination~~three months inended ~~2024~~March of31, 2025, we sold a ~~commission~~large ~~program~~proportion ~~for~~of ~~our~~low ~~sales~~profit ~~personnel~~margin products compared to the same period in 2024.

Pharmacy

The cost of ~~goods~~sales ~~sold~~ at our pharmacies was $7024,~~739~~051 for ~~the three months ended September 30~~2025, ~~2024,~~ compared with $~~126~~80,~~459~~174 for ~~the same period of 2023~~2024, representing a decrease of $5556,~~720~~123 or 4470%. The cost of ~~goods~~sales ~~sold~~ at our pharmacies as a percentage of pharmacy product sales was 2767% for the three months ended ~~September~~March 3031, ~~2024~~2025, compared to 4633% for the same period of ~~2023~~2024. The decrease in cost of ~~goods~~sales ~~sold~~ was mainly due to ~~our~~the ~~coordination~~decrease ofin ~~activities~~sales. atMoreover, ~~our~~certain ~~pharmacies~~promotional activities, such as ~~the~~price ~~implementation~~discounts, ofcaused ~~bulk~~an ~~inventory~~increase ~~purchasing which reduced our purchasing costs; and cost reduction measures undertaken~~ in ~~September~~percentage ~~2023,~~of ~~including reviewing~~ our ~~list~~revenues ofrepresented ~~vendors~~by ~~and~~the ~~replacing those~~cost ~~vendors~~of ~~with~~goods ~~higher cost products~~sold.

~~Runcangsheng~~Manufacture and Sale

The cost of ~~goods~~sales ~~sold~~at ~~for~~our ~~Runcangsheng~~manufacture and sales segment was $~~284~~283,~~502~~181 for ~~the three months ended September 30~~2025, ~~2024,~~ compared with $~~315~~227,~~555~~929 for ~~the same period of 2023~~2024, representing aan ~~decrease~~increase of $3155,~~053~~252 or 1024%. The cost of ~~goods~~sales ~~sold~~for our manufacture and sale segment as a percentage of sales ~~by Runcangsheng~~ was 76108% for ~~the three months ended September 30~~2025, ~~2024,~~ compared to 7679% for ~~the same period of 2023~~ 2024. The primary reason for the ~~decrease~~increase in cost of ~~goods~~sales ~~sold~~ was that fixed and constant costs such as rents and depreciation expense remained same while our manufacture activities decreased due to the ~~decrease~~Chinese ofNew ~~sales~~Year holiday, which led to increased unit cost.

Hotel Operating Costs

Hotel operating costs were $~~360~~270,~~803~~819 and $~~447~~461,~~419~~079 for ~~the~~ three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively, representing a decrease of $86190,~~616~~ 260 or 1941%. For ~~the~~2025, ~~three~~our ~~months~~hotel ~~ended~~revenue ~~September~~decreased ~~30,~~compared to 2024. However, ~~our~~due ~~hotel~~to ~~cost~~the ~~decreased~~fixed ~~compared~~operating tocosts, ~~the~~our ~~same~~overall ~~period~~expenses did not decrease in ~~2023~~proportion ~~due~~with to our decreased ~~payroll cost~~revenue.

Operating Expenses

Operating expenses were $~~822~~497,~~446~~498 for the three months ended ~~September~~March 3031, ~~2024~~2025, compared to $~~845~~683,~~032~~915 for ~~the same period of 2023~~2024, a decrease of $22186,~~586~~418 or 327%. The decrease in operating expenses was mainly due to the decreased ~~operating~~stock-based ~~expenses~~compensation atexpense, ~~our~~decreased ~~direct~~depreciation ~~sales~~expense ~~sector~~ and ~~pharmacies sectors, which was partly offset increase~~decreased intravel ~~operating expenses reported by our hotel and Runcangsheng sectors~~expense.

Loss from Operations

Loss from operations was $~~602~~682,~~583~~485 in the three months ended ~~September~~March 3031, ~~2024~~2025, compared to $~~735~~621,~~255~~246 in ~~the same period of 2023~~2024, aan ~~decrease~~increase of $~~136~~61,~~672~~239 or 1810%. The increase ~~decrease~~ in our loss from operations for ~~the~~2025 ~~third quarter of 2024~~ was ~~primarily~~ due to the ~~decrease~~increased inlosses ~~the loss~~ in our ~~hotel~~pharmacy segment of approximately $~~104~~122,~~552, the~~298 ~~decrease~~and in ~~the loss in~~ our ~~direct~~manufacture and sales segment of ~~approximately~~ $8118,~~849~~860, ~~and~~partially ~~increased~~offset ~~profits~~by ~~attribute~~decreased losses in ~~our~~direct ~~pharmacy~~sales ~~revenue~~of by $5952,~~134, which~~310 isand ~~partially~~e ~~offset~~in byour ~~increased~~hotel ~~loss from Runcangsheng~~ segment of by $39127,~~863~~609.

Non-operating Income (Loss)

Non-operating ~~income~~loss was $5638,~~398~~402 for the three months ended ~~September~~March 3031, ~~2024~~2025, compared to ~~$297,614~~non-operating ~~for~~income ~~the~~of ~~three months ended September 30~~$17,646 ~~2023~~for 2024. For the three months ended ~~September~~March 3031, ~~2024~~2025, we had interest ~~income~~expense of $~~214~~5,097 and other ~~income~~expenses of $5633,~~712, partly offset by other expenses of $528~~305. For the three months ended ~~September~~March 3031, ~~2023~~2024, we had interest income of $~~135~~114 and other income of $~~297~~18,~~614~~802, partly offset by other expenses of $~~135~~1,270.

Income Tax Expense

Income tax expense was $1821 and $~~515~~nil for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively, aincrease ~~decrease~~ of $~~514~~821 or 100% ~~for the three months ended September 30, 2024 compared with the same period of 2023~~.

Net Loss

Our net loss for the three months ended ~~September 30~~March 31, ~~2024~~2025 was $~~546~~721,~~186~~708, compared to a net loss of $~~438~~603,~~156~~600 for ~~the same period of 2023~~2024, an increase of $~~108~~118,~~030~~ 108 or 2520%. The increase in our net loss was mainly due to decreased sales and decreased other income, which was partly offset by decreased operating ~~cost~~costs and expenses ~~as explained above~~.

32Liquidity, Capital Resources

~~Nine~~During ~~Months~~the three months ended ~~September~~March 3031, ~~2024~~2025, we used $675,948 in operations. As of March 31, 2025, cash and ~~2023~~cash equivalents were $63,109, compared to $62,310 as of December 31, 2024. At March 31, 2025, we had a working capital deficit of $6,708,468.

The following ~~table~~is ~~sets~~a ~~forth~~summary ~~the~~of ~~results~~cash ofprovided ~~our operations~~by ~~for~~or ~~the~~used ~~periods~~in ~~indicated~~each asof athe ~~percentage~~indicated types of ~~net~~activities ~~revenue,~~during ~~certain~~the ~~columns~~three ~~may~~months ~~not~~ended ~~add~~March ~~due~~31, 2025 toand ~~rounding:~~2024, respectively.

	Nine Months Ended September 30,
	March 31, 2025			March 31, 2024
	2024						2023
Net cash used in operating activities	$	(675,948	)	$	(461,451	)
	$			% of Revenue			$			% of Revenue
Net cash used in investing activities	$	-		$	(41,053	)
Revenue	$	3,120,615			100	%	$	3,297,689			100	%
Net cash provided by financing activities	$	676,398		$	383,802
Operating costs and expenses		4,613,269			148	%		4,689,682			142	%
Loss from operations		(1,492,654	)		(48	)%		(1,391,993	)		(42	)%
Non-operating income, net		166,612			5	%		332,386			10	%
Loss before income tax		(1,326,042	)		(42	)%		(1,059,607	)		(32	)%
Income tax expense		527			-	%		5,879			0.2	%
Net loss	$	(1,326,569	)		(43	)%	$	(1,065,486	)		(32	)%

The following table shows the Company’s operations by business segment for the nine months ended September 30, 2024 and 2023.

	For the Nine Months Ended September 30,
	2024			2023
Net revenue
Direct Sales	$	625,132		$	1,064,668
Pharmacy		764,495			802,118
Hotel		465,423			892,409
Manufacture and sale		1,265,565			538,494
Total revenues, net	$	3,120,615		$	3,297,689
Operating costs and expenses
Direct Sales
Cost of goods sold	$	47,240		$	367,237
Operating expenses		1,163,018			1,249,461
Pharmacy
Cost of goods sold		222,832			446,967
Operating expenses		323,904			361,200
Hotel
Hotel operating costs		1,185,992			1,387,993
Operating expenses		222,029			106,219
Manufacture and sale
Cost of goods sold		893,568			322,207
Operating expenses		554,686			448,398
Total operating costs and expenses	$	4,613,269		$	4,689,682
Income (loss) from operations
Direct Sales	$	(585,126	)	$	(552,030	)
Pharmacy		217,759			(6,049	)
Hotel		(942,598	)		(601,803	)
Manufacture and sale		(182,689	)		(232,111	)
Loss from operations	$	(1,492,654	)	$	(1,391,993	)

Revenue

Revenue was $3,120,615 in the nine months ended September 30, 2024, compared to $3,297,689 in the same period of 2023, a decrease of $177,074 or 5%. The decrease in revenue was mainly due to decreases in direct sales of our nutritional products and pharmacy sales, and a decrease in our hotel segment, which was partly offset by an increase in revenues from Runcangsheng. For the nine months ended September 30, 2024, we had $2,655,192 in product revenues (of which $625,132 were from direct sales, $764,495 were from sales at our pharmacies and $1,265,565 from sales by Runcangsheng) and hotel revenue of $465,423. For the nine months ended September 30, 2023, we had $2,405,280 in product revenues (of which $1,064,668 were from direct sales, $802,118 were from sales at our pharmacies and $538,494 from sales by Runcangsheng) and hotel revenue of $892,409.

Direct Sales

Our direct sales revenue was $625,132 for the nine months ended September 30, 2024, compared with $1,064,668 in the same period of 2023, representing a decrease of $439,536 or 41%. Our direct sales revenue as a percentage of our total revenue was 20% for the nine months ended September 30, 2024, compared to 32% for the same period of 2023. The decrease in revenue was mainly due to the economic downturn as marketing and promotional activities become more challenging compared to last year. Additionally, due to reduced supplies of certain popular products, we had to adjust our product mix in 2024.

Pharmacy

Our pharmacy revenue was $764,495 for the nine months ended September 30, 2024, compared with $802,118 in the same period of 2023, representing a decrease of $37,623 or 5%. Our pharmacy revenue as a percentage of our total revenue was 24% for the nine months ended September 30, 2024, compared to 24% for the same period of 2023. The decrease in revenue was mainly due to the economic downturn as marketing and promotional activities did not generate anticipated revenues.

Hotel

Our hotel revenue was $465,423 for the nine months ended September 30, 2024, compared with $892,409 for the same period of 2023, representing a decrease of $426,986 or 48%. Our hotel revenue as a percentage of our total revenue was 15% for the nine months ended September 30, 2024, compared to 27% for the same period of 2023. The decrease in revenue was primarily due to the Company relocating its hotel and the need to complete leasehold improvements before opening at our new location.

Runcangsheng

Our manufacture and sales revenues at Runcangsheng were $1,265,565 for the nine months ended September 30, 2024, compared with $538,494 for the same period of 2023, representing an increase of $727,071 or 135%. Runcangsheng’s revenue as a percentage of our total revenue was 41% for the nine months ended September 30, 2024, compared to 16% for the same period of 2023. The increase in Runcangsheng’s sales was mainly driven by participation in more shows, which raised our visibility and consequently boosted sales; and attendance by more vendors, corporate and individual major customers to our internal shows, which expanded our sales channels, and the addition of new salespeople and increased consumer demand for Chinese herbal products during the Chinese New Year.

Operating Costs and Expenses

Cost of Goods Sold

Cost of goods sold was $1,163,640 for the nine months ended September 30, 2024, compared to $1,136,411 for the same period of 2023, an increase of $27,229 or 2%. The increase in cost of goods sold was attributable to the increase in Runcangsheng’s business which was partly offset by decreased sales from our direct sales and pharmacy segments.

Direct sales

The cost of goods sold for our direct sales was $47,240 for the nine months ended September 30, 2024, compared with $367,237 for the same period of 2023, representing a decrease of $319,997 or 87%. The cost of goods sold for our direct sales as a percentage of sales was 8% for the nine months ended September 30, 2024, compared to 34% for the same period of 2023. The decrease in cost of goods sold was primarily driven by the decrease of sales and the elimination in 2024 of a commission program for our sales personnel.

Pharmacy

The cost of goods sold at our pharmacies was $222,832 for the nine months ended September 30, 2024, compared with $446,967 for the same period of 2023, representing a decrease of $224,135 or 50%. The cost of goods sold at our pharmacies as a percentage of pharmacy product sales was 29% for the nine months ended September 30, 2024, compared to 56% for the same period of 2023. The decrease in cost of goods sold was mainly due to our coordination of activities at our pharmacies, such as the implementation of bulk inventory purchasing which reduced our purchasing costs; and cost reduction measures undertaken in September 2023, including reviewing our list of vendors and replacing those vendors with higher cost products.

Runcangsheng

The cost of goods sold for Runcangsheng was $893,568 for the nine months ended September 30, 2024, compared with $322,207 for the same period of 2023, representing an increase of $571,361 or 177%. The cost of goods sold as a percentage of sales by Runcangsheng was 71% for the nine months ended September 30, 2024, compared to 60% for the same period of 2023. The primary reason for the increase in cost of goods sold was the significant increase of sales.

Hotel Operating Costs

Hotel operating costs were $1,185,992 and $1,387,993 for the nine months ended 30, 2024 and 2023, respectively, representing a decrease of $202,001 or 15%. For the nine months ended September 30, 2024, our hotel revenue significantly decreased compared to the same period in 2023. However, due to the fixed operating costs, our overall expenses did not decrease substantially.

Operating Expenses

Operating expenses were $2,263,637 for the nine months ended September 30, 2024, compared to $2,165,278 for the same period of 2023, an increase of $98,359 or 5%. The increase in operating expenses was mainly due to the increase in operating expenses reported by our hotel and Runcangsheng segments, which was partly offset by decreased operating expenses at our pharmacy and direct sales segments.

Loss from Operations

Loss from operations was $1,492,654 in the nine months ended September 30, 2024, compared to $1,391,993 in the same period of 2023, an increase of $100,661 or 7%. The increase in our loss from operations for the nine months ended September 30, 2024 was primarily due to the increase in the loss in our hotel segment of approximately $340,795, partially offset by decreased loss in Runcangsheng, direct sales and pharmacy segments.

Non-operating Income

Non-operating income was $166,612 for the nine months ended September 30, 2024, compared to $332,386 for the nine months ended September 30, 2023. For the nine months ended September 30, 2024, we had interest income of $525 and other income of $170,900 mainly government grant income of $134,069, partly offset by other expenses of $4,813. For the nine months ended September 30, 2023, we had interest income of $692 and other income $336,716, partly offset by other expenses of $5,022.

Income Tax Expense

Income tax expense was $527 and $5,879 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $5,352 or 91% for the nine months ended September 30, 2024 compared with the same period of 2023.

Net Loss

Our net loss for the nine months ended September 30, 2024 was $1,326,569, compared to a net loss of $1,065,486 for the same period of 2023, an increase of $261,083 or 25%. The increase in our net loss was mainly due to decreased sales and decreased other income, and our hotel where the operating loss increased by nearly $340,795 due to the Company relocating its hotel to a new location and additional costs and expenses incurred for hotel improvement and renovation before opening to the public.

Liquidity and Capital Resources

During the nine months ended September 30, 2024, we used $548,130 in operations. As of September 30, 2024, cash and cash equivalents were $568,318, compared to $443,758 (excluding $23,208 of restricted cash) as of December 31, 2023. At September 30, 2024, we had a working capital deficit of $4,885,121 compared to $4,467,006 at December 31, 2023.

The following is a summary of cash provided by or used in each of the indicated types of activities during the nine months ended September 30, 2024 and 2023, respectively.

	September 30, 2024			September 30, 2023
Net cash used in operating activities	$	(548,130	)	$	(219,874	)
Net cash used in investing activities	$	(247,699	)	$	(218,556	)
Net cash provided by financing activities	$	889,295		$	347,449

Net cash used in operating activities

For the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, net cash used in operating activities was $~~548~~675,~~130~~948. This reflects our net loss of $1721,~~326~~708,~~569,~~ adjusted by non-cash related expenses including depreciation and amortization expense of $~~298~~92,~~789~~276, a bad debt expense of $832,~~140~~896, an inventory impairment ~~reversal~~ of $3209,~~523,~~ operating lease expenses of ~~$439,723, loss on disposal~~ of ~~fixed assets of~~ $170,~~145~~941, ~~government grant income of $124,177~~ and ~~stock-based compensation of $278,655, and~~ then decreased by ~~changes~~a net change in working capital of $~~120~~150,~~313~~562. The cash outflow from changes in working capital items mainly resulted from ~~increases~~ an increase in ~~other~~accounts receivables of $10,798, an increase in other receivables and prepaid expenses of $5425,~~053~~705, an increase in ~~related~~advances ~~party~~to ~~receivables~~suppliers of $~~169~~7,~~443~~609, ana ~~increase~~decrease in ~~prepaid~~accounts ~~expenses to~~payable ~~related party~~ of $9960,~~197~~073, a andecrease ~~increase~~ in ~~inventory~~taxes payable of $7131,~~359~~920, ana ~~increase~~decrease in ~~accounts~~accrued ~~receivable~~liabilities and other payables of $32175,~~283~~913, and payments of lease ~~liabilities~~ liabilities of $~~607~~25,~~312~~694, partly offset by cash inflows from ~~advances~~accounts toreceivable ~~suppliers~~from related party of $~~116~~122,~~119~~865, ~~cash~~a ~~inflows~~reduction in from ~~security~~inventory ~~deposit~~ of $8355,~~152~~996, ~~cash~~a ~~inflows~~reduction ~~from~~in ~~accrued~~security ~~liabilities~~deposits ~~and other payables~~ of $~~214~~423,~~480,~~ ~~cash~~increases ~~inflows~~in ~~from~~unearned ~~taxes~~revenue ~~payable~~ of $592,~~984~~297, ~~cash~~and ~~inflows~~an ~~from~~increase ~~accounts payable~~in ~~(net of~~ accounts payable to related parties) of $~~233~~5,~~747, and cash inflows from unearned revenue of $205,852~~569.

For the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024, net cash used in operating activities was $~~219~~461,~~874~~451. This reflects our net loss of $1603,~~065~~600,~~486, adjusted~~ adjusted by non-cash related expenses including depreciation and amortization expense of $~~308~~106,~~114~~299, a ~~change in deferred tax of $1,481, a~~ bad debt ~~reversal~~expense of $108,~~250~~027, an inventory impairment of $89,~~558~~405, operating lease expenses of $~~618~~233,~~085,~~070 ~~government grant income $284,321~~ and stock-based compensation of $~~278~~92,~~655~~885, and then decreased by changes in working capital of $74307,~~710~~537. The cash outflow from changes in working capital mainly resulted from increases in other receivables and prepaid expense, ~~including related parties~~ of $~~116~~20,~~468~~080, an increase in ~~inventory~~accounts receivable of $~~186~~38,~~658~~491, inan ~~accounts~~increase ~~payable~~in ~~from~~ related party receivables of $~~162~~100,~~768~~603, ~~and~~an increase in ~~accrued~~advance ~~liabilities~~to ~~and~~suppliers ~~other payables~~of $39,498, an increase in inventory of $~~136~~35,~~638~~192, and payments of lease liabilities of $~~500~~325,~~056~~498, partly offset by cash inflows from ~~accounts~~accrued ~~receivable,~~liabilities ~~including from~~and ~~related~~other ~~parties~~payables ~~in the amount~~ of $~~301~~124,~~626~~299, ~~cash inflows~~ from ~~advances~~taxes topayable ~~suppliers~~ of $~~133~~32,~~520~~823, ~~cash inflows~~ from accounts payable (net of accounts ~~$233,112,~~payable ~~cash~~to ~~inflow~~related ~~from~~parties) ~~unearned revenue~~ of $~~347~~15,~~347~~774, and ~~taxes~~from ~~payable~~ unearned revenue of $1278,~~273~~999.

Net cash used in investing activities

For the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, net cash used in investing activities was $~~247,699~~nil and $~~218~~41,~~556~~053, respectively. For the ~~nine~~ three months ended ~~September~~March 3031, 2024, net cash used in investing activities including $~~245~~41,~~009~~053 for the purchase of fixed assets~~, a $2,778 purchase of an intangible asset which was partly offset by cash received on disposal of fixed assets of $88~~. For the nine months ended September 30, 2023, net cash used in investing activities was $218,556 included $212,607 for the purchase of fixed assets, $2,608 for the purchase of intangible assets, and $3,341 cash disposed of at the termination of a non-operating subsidiary.

3631

Net cash provided by financing activities

For the ~~nine~~three months ended ~~September~~March 3031, 2025 and 2024, net cash provided by financing activities was $676,398 and $383,802, respectively. For the three months ended March 31, 2025, net cash provided by financing activities was the result of proceeds from advances from related parties of $~~765~~1,~~118~~421,841, which was partly offset by repayments of loans due related parties of $530,559 and ~~proceeds~~repayment ~~from~~of a government grant of $~~124~~214,~~177~~884. For the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024, net cash provided by financing activities ~~were~~was the result of ~~capital contributions of $142,200 and~~ proceeds from ~~government~~advances from ~~grant~~related parties of $~~284~~555,~~321,~~991 which was partly offset by ~~payments~~repayment ~~made~~to ~~against advances from~~ related parties of $79172,~~072~~189.

WeRuncangsheng generated a $1218,~~326,569~~435 loss for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025. It is likely that Runcangsheng will require additional capital to to achieve its short-term operational goals and long-range business plans. Further, we may need additional capital to maintain our other businesses. We may also have to raise additional financing as our working capital requirements are expected to increase in line with the growth of our business. In the past we have funded our operations through proceeds from private placements of equity and advances from our principal shareholder. Should we require capital to fund our business, we intend to finance our business by raising additional capital or, when available, borrowing additional funds. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders and could cause the price of our common stock to decrease. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

We are subject to all of the substantial risks inherent in the development of a new business enterprise within an extremely competitive ~~industry.~~ industries. Due to the absence of a long-standing operating history and the emerging nature of the markets in which we compete, we anticipate ~~operating~~ operating losses until we can successfully implement our business strategy. Our revenue model is new and evolving, and we cannot be certain ~~that~~ that it will be successful. The potential profitability of our business model is unproven. We may never achieve profitable operations. ~~Our~~ Our future operating results depend on many factors, including demand for our products, the level of competition, and the ability of ~~our~~ our officers to manage our business and growth. As a result of the emerging nature of the market in which we compete, we may incur operating losses until such time as we can develop a substantial and stable revenue base. Additional development expenses may delay or negatively impact our ability to generate profits. Accordingly, we cannot assure you that our business model will be successful or that we can sustain revenue growth, achieve or sustain profitability, or continue as a going concern.

Our ability to obtain funds through the issuance of debt or equity is dependent upon the state of the financial markets at such time as we may seek to raise funds. The state of the capital market markets may be adversely impacted by various risks and uncertainties, including, but not limited to future and current impacts of global events such as ~~COVID-19~~pandemics, the war in the Ukraine, ~~and~~ the conflict in Palestine, shifts in international alliances and actions by certain governments, such as the imposition of tariffs, and the responses of other governments thereto, increases in inflation and other risks detailed herein.

Impact of Inflation

Our results of operations may be affected by inflation, particularly rising prices for products and other operating costs if we cannot pass such increases along to our customers in the form of higher prices for our products and services. Generally, we are not party to long term contracts and our inventory turns multiple times per year and we anticipate that we will be able to increase prices on products to reflect increases in the cost of inventory.

Contractual Obligations

We have no long-term fixed contractual obligations or commitments other than leases that are disclosed in ~~Note 12 in~~ the notes to our consolidated financial statements.

Contingencies

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

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

~~Significant~~Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported net sales and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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

Basis of Presentation

The accompanying financial statements are prepared in conformity with U.S. Generally Accepted Accounting Principles (“US GAAP”). The functional currency of AiXinZhongHong, Aixin Shangyan Hotel, Aixintang Pharmacies, and Runcangsheng is the Chinese Renminbi (“RMB”). The accompanying financial statements are translated from RMB and presented in U.S. dollars (“USD”).

Use of Estimates

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

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

Accounts Receivable

We maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, the bad debt allowance was $8985,~~935 and~~947 and $8052,~~640~~669, respectively.

Revenue Recognition

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

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

	●	identification of performance obligation in the respective contract;

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

	●	allocation of the transaction price to each performance obligation; and

	●	recognition of revenue only when we satisfy each performance obligation.

Our revenue recognition policies for our operating segments are as follows:

Direct Sales

Our revenue from direct sales of products is recognized when goods are delivered to the customer and no other obligation exists. We do not provide unconditional return or other concessions to customers. Our sales policy allows for the return of unopened products for cash after deducting certain service and transaction fees. As an alternative to returning a product, customers may request an exchange for products with the same value.

Direct sales revenue represents the invoiced value of goods, net of value-added taxes (“VAT”). All of our products sold in China are subject to the PRC VAT of 13% of the gross sales price since April 1, 2019. This VAT may be offset by VAT paid by for raw materials and other materials purchased in China. We record VAT payables and VAT receivables net of payments in the financial statements. The VAT tax return is filed offsetting the payables against the receivables. Sales and purchases are recorded net of VAT collected and paid as we act as an agent for the government.

Pharmacy

Our retail drugstores recognize revenue at the time the customer takes possession of the merchandise. For pharmacy sales, each prescription claim is its own arrangement with the customer and is a performance obligation. We generally receive payment from pharmacy customers we satisfy our performance obligations. We record a receivable when we have an unconditional right to receive payment and only the passage of time is required before payment is due. Sales revenue represents the invoiced value of goods, net of VAT. The products sold in our pharmacies are subject to the VAT of 0%-13% as certain pharmacies qualify for small business exemption.

~~Runcangsheng~~Manufacture and Sale

The Company’s subsidiary Runcangsheng recognizes revenue at the time products are shipped as this satisfies its performance obligation. The Company records a receivable for the sales when it has an unconditional right to receive payment and only the passage of time is required before payment is due. Sales revenue represents the invoiced value of goods, net of VAT. All of the Company’s products sold in China are subject to the PRC VAT of 13% unless it is a qualified small business subject to exemption.

Hotel

Hotel revenues are primarily derived from the rental of rooms, food and beverage sales and other ancillary goods and services, including but not limited to souvenir, parking and conference reservations. Each of these products and services represents a distinct performance obligation and, in exchange for these services, we receive fixed amounts based on published rates or negotiated contracts. Payment is due in full at the time when the services are rendered or the goods are provided. Room rental revenue is recognized on a daily basis when rooms are occupied. Food and beverage revenue and other goods and services revenue are recognized when they have been delivered or rendered to the guests as the respective performance obligations are satisfied. All of the hotel’s goods sold in China are subject to the PRC VAT of 6%. This VAT may be offset by VAT paid by on raw materials and other materials purchased in China.

39Income Taxes—Valuation of Deferred Tax Assets

Deferred tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets arise because of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as from net operating losses and tax credits. We evaluate the recoverability of deferred tax assets by assessing all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed. A valuation allowance is established if it is more likely than not that all or a portion of deferred tax assets will not be realized. The determination of whether a valuation allowance should be established, as well as the amount of allowance, requires significant judgment and estimates, including estimates of future earnings. Accordingly, the valuation of our net deferred tax assets is a critical accounting estimate. In evaluating the realizability of our net deferred tax assets, we perform an assessment each reporting period of both positive and negative evidence. As of December 31, 2024, we maintained a full valuation allowance against our net deferred tax assets resulting from net operating loss carryforwards. We determined it was more likely than not that our deferred tax assets would not be realized.

Recoverability of Long-Lived Assets

We evaluate the recoverability of long-lived assets, whenever events or changes in circumstances indicate that the carrying value of such an asset may not be recoverable. We group and evaluate these long-lived assets for impairment at the lowest level at which individual cash flows can be identified. If indicators of impairment are present, we first compare the carrying amount of the asset group to the estimated future cash flows associated with the asset group (undiscounted). If the estimated future cash flows used in this analysis are less than the carrying amount of the asset group, an impairment loss calculation is prepared. The impairment loss calculation compares the carrying amount of the asset group to the asset group’s estimated future cash flows (discounted). If required, an impairment loss is recorded for the portion of the asset group’s carrying value that exceeds the asset group’s estimated future cash flows (discounted).

The long-lived asset impairment loss calculation contains uncertainty since management must use judgment to estimate each asset group’s future sales, profitability and cash flows. When preparing these estimates, we consider historical results and current operating trends and consolidates sales, profitability and cash flow results and forecasts. These estimates can be affected by a number of factors including general economic and regulatory conditions, and the continued efforts of competitors to gain market share and consumer spending patterns.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

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

AnAt March 31, 2025, an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) of the Exchange Act ~~as of September 30, 2024,~~ was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based on their evaluation of our disclosure controls and procedures, they concluded that at ~~September~~March 3031, ~~2024~~2025, such disclosure controls and procedures were not effective. This was due to our limited resources, including the absence of a financial staff with accounting and financial expertise and deficiencies in the design or operation of our internal control over financial reporting that adversely affected our disclosure controls and that may be considered to be “material weaknesses.”

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

Changes in Internal Control over Financial Reporting

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

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

There is no pending litigation to which we are presently a party or to which our property is subject which is likely to have a material impact on our financial condition and management is not aware of any facts which are likely to result in such a litigation in the future.

Item 1A. Risk Factors

Reference is made to the risks and uncertainties disclosed in Item 1A (“Risk Factors”) of our ~~2023~~2024 Form 10-K ~~and in the “Risk Factors” section in our registration Statement on Form S-1~~, ~~as amended on July 25, 2023 (the “Registration Statement”),~~ which are incorporated by reference into this report. Prospective investors are encouraged to consider the risks described in the ~~2023~~ 2024 Form 10-K, ~~the Registration Statement,~~ Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this report and other information publicly disclosed or contained in documents we file with the Securities and Exchange Commission before purchasing our securities.

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

During the quarter ended March 31, 2025, we did not have any sales of equity securities in transactions that were not registered under the Securities Act of 1933, as amended, that have not been previously reported in a report filed pursuant to the Exchange Act.

Item 3. Defaults Upon Senior Securities

None.

Item 5. Other Information

None

Item 6. Exhibits

Exhibit No.		Description
3.1		Articles of Incorporation (incorporated by reference to the Company’s Annual Report on Form 10-KSB for the fiscal year ended May 31, 2006 as filed with the SEC on March 7, 2007).
3.2		Articles of Amendment to Articles of Incorporation (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on June 3, 2008).
3.3		Articles of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.3 the Company’s Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2017 as filed with the SEC on January 16, 2019).
3.4		Bylaws of the Registrant (incorporated by reference to Exhibit 3.6 to Amendment to Form S-1 filed with the SEC on January 17, 2023).
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14 or Rule 15d-14 of Securities Exchange Act of 1934.
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14 or Rule 15d-14 of Securities Exchange Act of 1934.
32.1		Certification of Chief Executive Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
32.2		Certification of Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema
101.CAL		Inline XBRL Taxonomy Extension Calculation
101.DEF		Inline XBRL Taxonomy Extension Definition
101.LAB		Inline XBRL Taxonomy Extension Label
101.PRE		Inline XBRL Taxonomy Extension Presentation
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

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

	AIXIN LIFE INTERNATIONAL, INC.
Dated: December 27, 2024	By:	/s/ Quanzhong Lin
Dated: June 27, 2025	By:	/s/ Quanzhong Lin
		Quanzhong Lin
		President and Chief Executive Officer
		(Principal Executive Officer)

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Filing Compare · AiXin Life International, Inc.