Item 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
The following discussion should be read in conjunction with our financial
statements and notes to those financial statements, included elsewhere in this prospectus. This discussion contains forward-looking statements
that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated
in these forward-looking statements as a result of various factors, including those set forth under “Risk factors” and elsewhere
in this prospectus.
FORWARD-LOOKING
STATEMENTS:
Certain
statements made in this Report may constitute “forward-looking statements on our current expectations and projections about future
events.” These forward-looking statements involve known or unknown risks, uncertainties and other factors that may cause our actual
results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied
by the forward-looking statements. In some cases you can identify forward-looking statements by some words such as “may,”
“should,” “potential,” “continue,” “expects,” “anticipates,” “intends,”
“plans,” “believes,” “estimates,” and similar expressions. These statements are based on our current
beliefs, expectations, and assumptions and are subject to a number of risks and uncertainties. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
These forward-looking statements are made as of the date of this Report, and we assume no obligation to update these forward-looking
statements whether as a result of new information, future events, or otherwise, other than as required by law. In light of these assumptions,
risks, and uncertainties, the forward-looking events discussed in this Report might not occur and actual results and events may vary
significantly from those discussed in the forward-looking statements.
Overview
As
a result of the Merger, we are now seeking a business combination with a private entity whose business would present an opportunity for
our shareholders. No specific assets or businesses have been definitively identified and there is no certainty that any such assets or
business will be identified or that any transactions will be consummated. We may seek investors to purchase our stock to provide us with
working capital to fund our operations. Thereafter, we will seek to establish or acquire businesses or assets with additional funds raised
either via the issuance of shares or debt. There can be no assurance that additional capital will be available to us at all or on acceptable
terms. We may seek to raise the required capital by other means. We may have to issue debt or equity or enter into a strategic arrangement
with a third party. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans,
lines of credit or any other sources. Since we have no such arrangements or plans currently in effect, our inability to raise funds will
have a severe negative impact on our ability to remain a viable company.
We
do not expect to generate any revenues over the next 12 months, unless we are able to enter into a business combination with an operating
company. Our principal business objective for the next 12 months will be to seek, investigate and, if such investigation warrants, engage
in a business combination with a private entity whose business presents an opportunity for our shareholders. During the next 12 months
we anticipate incurring costs related to filing of Exchange Act reports, and possible costs relating to consummating an acquisition or
combination. We believe we will be able to meet these costs through use of funds in our treasury and additional amounts, as necessary,
to be loaned by or invested in us by our stockholders, management or other investors.
We
intend to contract out certain technical and administrative functions on an as-needed basis in order to conduct our operating activities.
Our management team will select and hire these contractors and manage and evaluate their work performance.
We
have no revenues and limited cash on hand. We have sustained losses since inception. We have never declared bankruptcy, been in receivership,
or involved in any kind of legal proceeding.
As
of January 1, 2021, we become a shell company and have limited operating activities since then. The Report of our independent registered
public accountants on our financial statements for the year ended December 31, 2021 states that these conditions, among others, raise
substantial doubt about our ability to continue as a going concern.
11
Results
of Operations
Year
Ended December 31, 2021 Compared to Year Ended December 31, 2020
Revenues.
During the years ended December 31, 2021 and 2020, we did not realize any revenues from operations.
Operating
expenses. For the year ended December 31, 2021, our total operating expenses was $121,788, decreased by $100,819, or 45%,
from $222,607 for the year ended December 31, 2020. This decrease was mainly due to disposal of operations in 2020 and
becoming a shell company since January 1, 2021.
Loss
from operations. As a result of the foregoing, our loss from operations was $121,788 for the year ended December 31, 2021, compared
to $222,607 for the year ended December 31, 2020. This was mainly due to the less operating activities since January 1, 2021. We become
a shell company after we disposed all of our operating entities in 2020.
Income
taxes. Our income tax expenses did not incur for the years ended December 31, 2021 and 2020.
Net
loss. For the year ended December 31, 2021, our net loss was $121,788 compared to $222,859 for the year ended December 31, 2020.
The increased loss was primarily due to the increased operating expenses.
Liquidity
and Capital Resources
As
of December 31, 2021, we had current assets of $0, we had liabilities of $107,052, and our working capital deficit was $107,052. We anticipate
that our current liquidity is not sufficient to meet the obligations associated with being a company that is fully reporting with the
SEC.
To
date, we have managed to keep our monthly cash flow requirement low for two reasons. First, our sole officer does not draw a salary at
this time. Second, we have been able to keep our operating expenses to a minimum by operating in space provided at no expense by our
sole officer and director.
We
currently have no external sources of liquidity such as arrangements with credit institutions or off-balance sheet arrangements that
will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital.
Our
financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”),
which contemplates our continuation as a going concern. We have not yet generated any revenue and have incurred losses to date of approximately
$7.4 million. In addition, our current liabilities exceed our current assets by $107,052. These factors raise substantial doubt about
our ability to continue operating as a going concern. Our ability to continue our operations as a going concern, realize the carrying
value of our assets, and discharge our liabilities in the normal course of business is dependent upon our ability to raise capital sufficient
to fund our commitments and ongoing losses, and ultimately generate profitable operations.
Cash
Flows
Operating
Activities
For
the year ended December 31, 2021, net cash used in operating activities was $70,079, related to our net loss of $121,788, reduced by
an increase in other payables of $51,709.
For
the year ended December 31, 2020, net cash used in operating activities was $564,761, related to our net loss from continuing operations
of $222,859 and a cash outflow from our discontinued operations of $382,246, increased by a prepaid legal expense of $15,000 and an increase
in other payables of $25,344.
12
Investing
Activities
For
the year ended December 31, 2021, we reported cash inflow of $119,070 from investing activities due to disposal of our operating subsidiaries.
For the year ended December 31, 2020, we had $79,446 cash outflow from our investing activities from our discontinued operations.
Financing
Activities
For
the year ended December 31, 2021, we reported a cash outflow of $48,991 from our financing activities which was mainly due to distribution
of $119,070 as a special dividend to our minority shareholders and a financial support of $70,079 received from our related party. For
the year ended December 31, 2020, we had $607,077 cash inflow from our financing activities which include $182,515 financial support
received from our related party and $424,562 cash inflow from our discontinued operations.
Recent
Accounting Pronouncements
For
a description of our recent accounting pronouncements, see “Note 2 - Summary of Significant Accounting Policies” of this
Annual Report on Form 10-K.
Critical
Accounting Policies
Our
financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles
(“GAAP”) applied on a consistent basis. The preparation of financial statements in conformity with GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We
regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these
policies is included in the notes to our financial statements. In general, management’s estimates are based on historical experience,
on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and
circumstances. Actual results could differ from those estimates made by management.
The
financial statements have been prepared in conformity GAAP, which contemplates our continuation as a going concern. The Company has no
revenue since January 1, 2020 and has incurred losses to date of approximately $7.4 million. In addition, the Company’s current
liabilities exceed its current assets by $107,052. To date, the Company has primarily funded its operations through advances from former
stockholders, the sale of Common Stock and the loan from Hometown. The Company intends on financing its future development activities
and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing
sources, including term notes until such time that funds provided by operations are sufficient to fund working capital requirements.
These factors raise substantial doubt about the Company’s ability to continue operating as a going concern. The Company’s
ability to continue our operations as a going concern, realize the carrying value of our assets, and discharge our liabilities in the
normal course of business is dependent upon our ability to raise capital sufficient to fund its commitments and ongoing losses, and ultimately
generate profitable operations.
Recently
Issued Accounting Pronouncements
From
time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. We believe that the impact of
recently issued standards that are not yet effective may have an impact on our results of operations and financial position.
Off-Balance
Sheet Arrangements
We
have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources that are material to our stockholders.
13
Contractual
Obligations
We
are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this
item.
Off
Balance Sheet Items
Under
SEC regulations, we are required to disclose off-balance sheet arrangements that have or are reasonably likely to have a current or future
effect on our financial condition, such as changes in financial condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to investors. An off-balance sheet arrangement means a transaction, agreement or
contractual arrangement to which any entity that is not consolidated with us is a party, under which we have:
● any obligation under certain guarantee contracts,
We
do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations. In the ordinary course
of business, we enter into operating lease commitments, purchase commitments and other contractual obligations. These transactions are
recognized in our financial statements in accordance with generally accepted accounting principles in the United States.
Critical
Accounting Policies
Management’s discussion and analysis of its financial condition
and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally
accepted in the United States. Our financial statements reflect the selection and application of accounting policies which require management
to make significant estimates and judgments. Management bases its estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances.
Actual
results may differ from these estimates under different assumptions or conditions. We believe that the following reflect the more critical
accounting policies that currently affect our financial condition and results of operations.
Basis
of Consolidation
The accompanying financial statements include
Joway Health and its wholly owned subsidiaries and controlled VIEs for the periods prior to the consummation of the Merger as of December
31, 2020. All significant inter-company accounts and transactions have been eliminated in the consolidation.
Pursuant to Accounting Standards Codification Topic 810 “Consolidation”
(“ASC 810”), the Company is required to include the financial statements of its variable interest entities (“VIEs”)
in its financial statements. ASC 810 requires a VIE to be consolidated by a company if that company is subject to a majority of the risk
of loss for the VIE or is entitled to receive a majority of the VIE’s residual returns. VIEs are those entities in which a company,
through contractual arrangements, bears the risk of, and enjoys the rewards normally associated with ownership of the entity, and therefore
the company is the primary beneficiary of the entity.
14
Based
on the various Contractual Agreements prior to the consummation of the Merger as of December 31, 2020, we believe we are able to exercise
control over the VIEs, and to obtain the full economic benefits. We believe that the terms of the exclusive option agreement are currently
exercisable and legally enforceable under PRC laws and regulations. We also believe that the minimum amount of consideration permitted
by the applicable PRC law to exercise the option does not represent a financial barrier or disincentive for us to exercise our rights
under the exclusive option agreement. A simple majority vote of our board of directors is required to pass a resolution to exercise our
rights under the exclusive option agreement, for which consent of the shareholder of VIEs is not required. Therefore, we believe this
gives us the power to direct the activities that most significantly impact VIEs’ economic performance. We believe that our ability
to exercise effective control, together with the consulting service agreements and the equity pledge agreements, give us the rights to
receive substantially all of the economic benefits from VIEs in consideration for the services provided by its wholly owned subsidiaries
in China. Accordingly, as the primary beneficiary of VIEs and in accordance with U.S. GAAP, Joway Shengshi, Joway Technology, Joway Decoration,
and Shengtang Trading, as VIEs of Junhe Consulting, has been consolidated in the Company’s financial statements. Sales from Joway
Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading are included in our total sales, their incomes or losses from operations
are consolidated with ours, and our net income or loss includes net income or loss from Joway Shengshi, Joway Technology, Joway Decoration,
and Shengtang Trading.
Going
Concern
We
incurred net loss of approximately $122,000 for the year ended December 31, 2021. We had accumulated deficit of approximately $7.4 million
as of December 31, 2021. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
The
continuation of us as a going concern through the next twelve months is dependent upon the continued financial support from its stockholders
or external financing. We believe our sole officer and director will provide the additional cash to meet with our obligations as they
become due. While we believe in the viability of its strategy to increase sales volume and in its ability to raise additional funds,
there can be neither no assurances to that effect, nor no assurance that we will be successful in securing sufficient funds to sustain
the operations.
These
conditions raise substantial doubt about our ability to continue as a going concern. These financial statements do not include any adjustments
to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities
that may result from the outcome of these uncertainties. We believe that the actions presently being taken to obtain additional funding
and implement its strategic plan provides the opportunity for the Company to continue as a going concern.
Revenue
Recognition
The
Company recognizes revenue when control of promised goods or services is transferred to the company’s customers, in an amount that
reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
Prior to the Merger Agreement as of December 31, 2020, with respect
to sales of product to both franchisee and non-franchisee customers, the Company transfers control, invoices the customer and recognizes
revenue upon shipment to the customer. Sales prices are based on fixed price lists that are different depending on whether the price list
is for franchisee customers or for non-franchisee customers. Sales, value add and other taxes collected concurrent with revenue-producing
activities are excluded from revenue.
After
the consummation of the Merger as of December 31, 2020, the Company did not report any revenue for the year ended December 31, 2021.
Recent
Accounting Pronouncements
In
December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”),
which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general
principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective
for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The
Company adopted the standard in 2021. Adoption of the standard did not have a significant impact on the Company’s statement of
earnings in 2021.
Other accounting standards that have been issued
or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a
material impact on the Company’s financial statements upon adoption.
15
Item
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not
applicable.
Item 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The
audited financial statements of Joway Health Industries Group Inc. as of December 31, 2021 and 2020 are appended to this Annual Report
beginning on page F-1.
Item 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
Item 9A.
CONTROLS AND PROCEDURES.
Disclosure
Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Exchange
Act that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms
and that such information is accumulated and communicated to our senior management, consisting of Ramon Lata, President, Treasurer
and Secretary (Principal Executive Officer and Principal Financial Officer), as appropriate to allow timely decisions regarding
required disclosure.
We
carried out an evaluation, under the supervision and with the participation of our senior management, consisting of Ramon Lata, President,
Secretary and Treasurer (Principal Executive Officer and Principal Financial Officer) of the effectiveness of the design and operation
of our disclosure controls and procedures as of December 31, 2021. Based on the evaluation of these disclosure controls and procedures,
and in light of the material weaknesses found in our internal controls over financial reporting, Mr. Ramon Lata, President, Treasurer
and Secretary (Principal Executive Officer and Principal Financial Officer) concluded that our disclosure controls and procedures were
not effective.
Management’s
Report on Internal Control Over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over
financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the
supervision of, our principal executive and principal financial officers and effected by our Board, management and other personnel, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and
procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and
dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with accounting principles generally accepted in the United States and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material
effect on the financial statements.
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed,
have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect
to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent
limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to
reduce, though not eliminate, this risk.
16
As
of December 31, 2021, our management, consisting solely of Ramon Lata, President, Treasurer and Secretary (Principal Executive Officer
and Principal Financial Officer), assessed the effectiveness of our internal control over financial reporting based on the criteria for
effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (“COSO”) in 2013 and SEC guidance on conducting such assessments. Based
on that evaluation, we believe that, during the period covered by this report, such internal controls and procedures were not effective
to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in
the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may
be considered to be material weaknesses.
The
matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the
Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee and a lack of independent directors on our
Board, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate
segregation of duties consistent with control objectives; and (3) ineffective controls over period end financial disclosure and reporting
processes. The aforementioned material weaknesses were identified by Mr. Lata, President, Treasurer and Secretary (Principal Executive
Officer and Principal Financial Officer) in connection with the review of our financial statements as of December 31, 2021.
Management
believes that the material weaknesses set forth in items (2) and (3) above did not have an effect on our financial results. However,
management believes that the lack of a functioning audit committee and the lack of independent directors on our Board results in ineffective
oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement
in our financial statements in future periods.
Management’s
Remediation Initiatives
In
an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated,
or plan to initiate, the following series of measures:
Assuming
we are able to secure additional working capital, we will create a position to segregate duties consistent with control objectives and
will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us.
We
also plan to appoint one or more outside directors to our Board who shall be appointed to an audit committee resulting in a fully functioning
audit committee which will undertake the oversight in the establishment and monitoring of required internal controls and procedures such
as reviewing and approving estimates and assumptions made by management.
Management
believes that the appointment of one or more independent directors, who shall be appointed to a fully functioning audit committee, will
remedy the lack of a functioning audit committee and a lack of a majority of independent directors on our Board.
We
anticipate that these initiatives will be implemented in conjunction with the acquisition of a business.
Changes
in Internal Control over Financial Reporting
On
February 3, 2022, the Company consummated the transactions contemplated by the Stock Purchase Agreement dated as of January 31, 2022
(the “Purchase Agreement”), by and among the Company, Crystal Globe and JHP Holdings, Inc., a Nevada corporation (the “Buyer”),
pursuant to which the Buyer purchased 16,644,820 shares of common stock of the Company from Crystal Globe. The shares represent 83% of
the issued and outstanding shares of the Company on a fully diluted basis. The purchase price for the shares paid by the Buyer was $100,000.
Pursuant to the Purchase Agreement, each of Crystal Globe, the Buyer and Company made customary representations and warranties to each
other. The parties agreed to certain customary post-closing covenants, including those relating to confidentiality, publicity and litigation
support. The Company and Crystal Globe also agreed to certain indemnification provisions as they pertain to the Buyer for breaches or
inaccuracies in their respective representations and warranties or covenants.
In
connection with the acquisition of the 83% by the Buyer, Jinghe Zhang, the sole officer and director of the Company, resigned and the
Buyer appointed Ramon Lata as the new sole officer and director of the Company. The executive officers of the Company are currently located
at 600 South 3rd Street, Las Vegas, Nevada 89101.
17
Item 9B.
OTHER INFORMATION.
None.
Item
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
Not
applicable.
18
PART
III
Item 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Our
Board of Directors
The
Board of Directors is presently composed of one member, Ramon Lata, who was appointed effective as of February 3, 2022. Mr. Lata was
also appointed as the President, Treasurer and Secretary of the Company.
Since
December 2021, Ramon Lata has been a vice president at Wilhelmina International, a model and talent agency. Mr. Lata was a vice president
at Factor Chosen LLC from April 2015 until September 2017, when it was acquired by MP Management. From September 2017 until November
2019, Mr. Lata was a vice president at Select Model LA., until it was acquired by MP Management.
Our
directors hold their position until the next annual meeting of shareholders and until their successors are elected and qualified by our
shareholders, or until earlier death, retirement, resignation or removal.
Involvement
in Certain Legal Proceedings
To
our knowledge, during the last ten years, none of our directors and executive officers (including those of our subsidiaries) has:
Audit
Committee
We
do not presently have an audit committee. Our Board of Directors currently acts as our audit committee.
Compensation
Committee
We
do not presently have a compensation committee. Our Board of Directors currently acts as our compensation committee.
Nominating
Committee
We
do not presently have a nominating committee. Our Board of Directors currently acts as our nominating committee.
19
Code
of Ethics
On
May 11, 2012, our Board of Directors approved a renewed Code of Ethics which is applicable to our officers and senior executives, which
include our Chief Financial Officer, Treasurer and Chief Accounting Officer. This Code embodies our commitment to conduct business in
accordance with the highest ethical standards and applicable laws, rules and regulations. We will provide any person a copy of our Code
of Ethics, without charge, upon written request to the Company’s Secretary. Requests should be addressed in writing to Joway Health
Group Industries Group Inc., attn: Ramon Lata, 600 South 3rd Street, Las Vegas, Nevada 89101.
Our
Executive Officers
Ramon
Lata, who was appointed effective as of February 3, 2022, is our sole officer.
Item 11.
EXECUTIVE COMPENSATION.
Executive
Officer Compensation
The
following is a summary of the compensation we paid to our Chief Executive Officer for the fiscal years ended December 31, 2021 and 2020.
This includes all compensation, including any compensation paid to our Chief Executive Officers by any of our subsidiaries. No executive
officer received compensation in excess of $100,000 in 2021 or 2020.
Summary
Compensation Table
Jinghe
Zhang was the principal executive officer of the Company until February 3, 2022, when Crystal Globe Limited sold 83% of the issued and
outstanding shares to JHP Holdings, Inc.
Mr.
Ramon Lata, our current principal executive officer and principal financial and accounting officer, is serving in such capacity without
compensation.
Option
Plan
There
were no stock options and no common shares set aside for any stock option plan as of December 31, 2021.
Aggregated
Option Exercises and Fiscal Year-End Option Value Table
There
were no stock options exercised during the fiscal year ended December 31, 2021, by the executive officer named in the Executive Compensation
Table.
Long-Term
Incentive Plan (“LTIP”) Awards Table
There
were no awards made to a named executive officer in the last completed fiscal year under any LTIP.
20
Director
Compensation
The
following is a summary of the compensation we paid to our directors for the fiscal year ended December 31, 2021.
Director
Compensation
Jinghe Zhang $ — — — — — $
Haibo Fan $ — — — — — $
Jun Pang $ — — — — — $
As
of April 29, 2021, Jun Pang and Haibo Fan resigned as independent directors of the Company.
Mr.
Ramon Lata, our current sole director, is serving in such capacity without compensation.
Item 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The
following table sets forth information regarding beneficial ownership of our common stock as of March 29, 2022 (i) by each person
who is known by us to beneficially own more than 5% of our common stock; (ii) by each of our officers and directors; and (iii) by
all of our officers and directors as a group. Unless otherwise indicated, the address of each listed stockholder is c/o Joway Health
Industries Group, Inc., 600 South 3rd Street, Las Vegas, Nevada 89101.
In
determining beneficial ownership of our common stock as of a given date, the number of shares shown includes shares of common stock which
may be acquired on exercise of warrants or options or conversion of convertible securities within 60 days of that date. In determining
the percent of common stock owned by a person or entity on March 29, 2022, (a) the numerator is the number of shares of the class
beneficially owned by such person or entity, including shares which may be acquired within 60 days on exercise of warrants or options
and conversion of convertible securities, and (b) the denominator is the sum of (i) the total shares of common stock outstanding
on March 29, 2022, and (ii) the total number of shares that the beneficial owner may acquire upon conversion of the preferred and
on exercise of the warrants and options, subject to limitations on conversion and exercise. Unless otherwise stated, each beneficial
owner has sole power to vote and dispose of its shares.
The
number of shares issued and outstanding as of March 29, 2022 was 20,054,000.
Owner of More than 5% of Class
Director and Executive Officers
All directors and executive officers (1 persons) 16,644,820 83 %
21
Item 13.
CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
The
following are transactions for the last two completed fiscal years and any currently proposed transaction, in which the registrant was
or is to be a participant and the amount involved exceeds the less of $120,000 or one percent of the average of the registrant’s
total assets at December 31, 2021 and 2020, and in which any of the following persons had or will have a direct or indirect material
interest.
● Any director or executive officer;
Transaction
with Crystal Globe
On
November 20, 2020, we entered into a Merger Agreement (the “Merger Agreement”) with Crystal Globe Limited, a British Virgin
Islands company which is a majority shareholder of Joway and the other parties signatory thereto. See “Business-Recent Events-
Entry into a Material Definitive Agreement”. Upon completion of the transactions contemplated by the Merger Agreement, Crystal
Globe acquired all our business in consideration for $119,070 in cash (the “Merger Consideration”). The Company has distributed
the Merger Consideration to its shareholders (other than Crystal Globe) in an amount equal to such shareholder’s proportionate
share of the Merger Consideration based on such shareholders’ percentage of the outstanding common stock of the Company.
Transactions
with Jinghe Zhang
During
the years ended December 31, 2021 and 2020, we received financial supports of $66,235 and $182,515 from our former CEO and chairman,
Mr. Jinghe Zhang. The loans due to him are for our daily operating activities without interest charge and due on demand.
On
April 28, 2021, the Company entered into an agreement with Mr. Jinghe Zhang to release the Company from $295,928 of indebtedness owed
to him. As of December 31, 2021 and 2020, the total unpaid principal balance due to Mr. Jinghe Zhang for advances was $3,999 and $233,693,
respectively.
Transactions
with Joway Shengshi
Joway
Shengshi was one of the Company’s subsidiaries but has been sold via the Merger Agreement on December 31, 2020. Mr. Jinghe Zhang
owns 99% of the equity interest in Joway Shengshi. For the years ended December 31, 2021 and 2020, we received $3,844 and $0 of advances
from Joway Shengshi, respectively, for our daily operating activities.
On
April 28, 2021, Joway Shengshi released the Company from $463,698 of indebtedness owed to it. As of December 31, 2021 and 2020, the total
unpaid principal balance due to Joway Shengshi was $0.
22
Other
Related Party Transactions
Except
as disclosed above, no executive officer, director or any member of these individuals’ immediate families, any corporation or organization
with whom any of these individuals is an affiliate or any trust or estate in which any of these individuals serve as a trustee or in
a similar capacity or has a substantial beneficial interest in is or has been indebted to us at any time since the beginning of our last
fiscal year.
Procedures
for Approval of Related Party Transactions
Our
Director Board is charged with reviewing and approving all potential related party transactions. All such related party transactions
must then be reported under applicable SEC rules. We have not adopted other procedures for review, or standards for approval, of such
transactions, but instead review them on a case-by-case basis.
Item 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES.
Audit
Fees
For
each fiscal year of 2021 and 2020, we incurred aggregate fees and expenses of $10,000 and $79,000, respectively, from HHC for works completed
for our annual audits and quarterly reviews.
Audit-Related
Expenses
Audit-related
expenses for 2021 and 2020 were $0, respectively.
Tax
Fees
We
incurred aggregate fees and expenses of $0 for each fiscal year of 2021 and 2020, respectively.
All
Other Fees
We
incurred other fees of $0 for each fiscal year of 2021 and 2020.
Policy
on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors
Since
we did not have a formal audit committee, our board of directors served as our audit committee. We have not adopted pre-approval policies
and procedures with respect to our accountants in 2020. All of the services provided and fees charged by our independent registered accounting
firms in 2021 were approved by the board of directors.
Our
Board of Directors has reviewed and discussed with HHC, our audited financial statements contained in this Annual Report on Form 10-K
for the 2021 and 2020 fiscal years. The Board of Directors also has discussed with HHC, the matters required to be discussed pursuant
to SAS No. 61 (Codification of Statements on Auditing Standards, AU Section 380), which includes, among other items, matters related
to the conduct of the audit of our financial statements.
Our
Board of Directors has received and reviewed the written disclosures and the letter from HHC required by Independence Standards Board
Standard No.1 (Independence Discussions with Audit Committees), and has discussed with HHC its independence from our company.
Our
Board of Directors has considered whether the provision of services other than audit services is compatible with maintaining auditor
independence. Based on the review and discussions referred to above, the Board of Directors determined that the audited financial statements
be included in our Annual Report on Form 10-K for our 2021 and 2020 fiscal years for filing with the SEC.
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Item 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
Exhibit Number Description
3.1 Articles of Incorporation(1)
4.2 Description of Capital Stock
14.1 Code of Ethics(4)
21.1 List of Subsidiaries*
101.INS Inline XBRL Instance Document.
101.SCH Inline XBRL Taxonomy Extension Schema Document.
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.
ITEM
16. FORM 10–K SUMMARY
None.
24
Signatures
Pursuant
to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Date:
March 29, 2022
JOWAY HEALTH INDUSTRIES GROUP INC.
By: /s/ Ramon Lata
Ramon Lata
Pursuant
to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this Report to be signed
on its behalf of the registrant and in the capacities and on the dates indicated.
/s/ Ramon Lata President and Chief Executive Officer March 29, 2022
25
Report of Independent Registered Public Accounting
Firm
To the shareholders and the Board of Directors of
Joway Health Industries Group Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets
of Joway Health Industries Group Inc. (the Company) as of December 31, 2021 and 2020, and the related statements of operations
and other comprehensive loss, stockholders’ equity, and cash flows for each of the years in the two year period ended December 31,