The following discussion and analysis of financial condition and results of operations should be read in conjunction with our financial statements and related notes included elsewhere in this report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. See "Note Regarding Forward-Looking Statements." Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors discussed in "Risk Factors" and elsewhere in this report.





Overview

Since January 30, 2017, following a change of control, we have been engaged in the business of developing and marketing nutritional products that promote wellness and a healthy lifestyle.

Since the January 30, 2017 change of control our business has involved the purchase of products from three suppliers and the sale of these products to three unrelated customers. One of our suppliers accounted for all of our purchases in the year ended September 30, 2019 and the other two of accounted for all of our purchased in the year ended September 30, 2018. We first sold products during the fourth quarter of the year ended September 30, 2017. In the year ended September 30, 2017, we generated revenues of $510,000 from the sale of Cordycepin and cordyceps powder to one customer, and all of our purchases were from one supplier. During the year ended September 30, 2018, we sold Cordycepin and cordyceps powder and metallothionein MT-3 elizer to two customers. During the year ended September 30, 2019, we sold Cordycepin and cordyceps powder to two customers, who accounted for 94% and 6% of our revenue. All sales during the year ended September 30, 2019 were made in the first quarter of the year, and we did not have any sales during the second, third or fourth quarter of the year. Our second largest customer for the year ended September 30, 2018, which accounted for sales of $3,743,000, or 47% of our revenue, did not make any purchases from us in the year ended September 30, 2019. During the quarter ended December 31, 2019, we expect to report modest sales. Our sales are sales of our product in bulk to companies who use our products as ingredients in their products. We do not sell products in a form for use by consumers although we may, in the future, develop products for use by consumers.

Although our business plan initially contemplated that we would conduct research and development on our own proprietary products based on cordyceps sinensis, to date we have neither commenced such activities nor take any preliminary steps with respect to such activities. We do not presently have the funds necessary for us to engage in such activities, and we cannot assure you that we will be able to commence any research and development activities or that any such activities that we may undertake will be successful.

We require funds for our operations. At September 30, 2019, we had $1,472 in cash and cash equivalents, $1,060,000 of inventory of Cordycepin and cordyceps powder Although we intend to seek to raise funds in the equity market, we cannot assure you as to the availability or terms of any such financing. Because of our financial condition, the 83% decline in revenue year to year, the lack of sales in the second, third and fourth quarters of the year ended September 30, 2019, along with the absence of an active market for our stock and our market capitalization in relation to our financial performance, it may be difficult for us to raise funds in the equity market.





Results of Operations

Years ended September 30, 2019 and 2018

Our revenue for the year ended September 30, 2019 was $1,345,000, cost of revenue was $1,218,600, with a gross profit of $135,400 and a gross margin of 10%., Our revenue for the year ended September 30, 2018 was $8,014,500, cost of revenue was $7,181,100, with a gross profit of $833,400, and a gross margin of 10.4%. We believe that the decrease in revenue resulted from political instability in Hong Kong, which has impacted our customers.

Our operating expenses, consisting of selling, general and administrative expenses, for the year ended September 30, 2019, were $576,953 as compared with $317,850, which was primarily professional fees and consulting fees. The professional fees relate to expenses we incur as a result of our status as a public company.

As a result of the foregoing, we had a net loss of $370,747, or $(0.01) per share (basic and diluted) for the year ended September 30, 2019 as compared with net income of $419,660, or $0.01 per share per share (basic and diluted) for the year ended September 30, 2018.






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Liquidity and Capital Resources

The following table sets forth information relating to our working capital at September 30, 2019 and 2018:





                       September 30,       September 30,
                           2019                2018             Change
Current assets        $     1,069,464     $     1,477,837     $ (408,373 )
Current liabilities   $       195,792     $       240,675     $  (44,883 )
Working capital       $       873,672     $     1,237,162     $ (363,490 )

The decrease in working capital reflects a decrease in inventory purchased and prepaid expenses, a portion of which related to the unamortized value of the common stock issued for consulting services in September 2018.

The following is a summary of the statements of cash flows for the fiscal years ended September 30, 2018 and 2017:





                                                         Year Ended
                                                       September 30,
                                                    2019           2018

Cash provided by (used) in operating activities $ 79,692 $ (140,419 ) Cash provided by investing activities

$       0     $        0

Cash (used in) provided by financing activities $ (79,368 ) $ 104,757 Cash and cash equivalent at end of year

$   1,472     $    1,148

The cash provided by operating activities for the year ended September 30, 2019 reflected the net loss of $370,747, increased primarily by stock-based compensation of $300,089, deferred revenue of $116,000, reductions in inventories and purchase deposit of $86,000 and accounts payable and prepaid expenses of $10,712 and increased by a decrease in adjustment of income tax payable of $73,071 and income tax payable of $19,156., . The cash used in operating activities for the year ended September 30, 2018 reflected our net income of $419,660 reduced primarily by an increase in inventories and purchase deposit to vendor of $665,600 and increased by an increase in income tax payable of $92,227, stock-based compensation of $7,411, accounts payable and accrued expenses of $6,712.

Cash used in financing activities reflects advances from elated parties of $106,969 less payments made to related parties of $186,337. Cash provided by financing activities for the year ended September 30, 2018 represented net advances from related parties of $104,757.

There were no non-cash investing or financing activities in the year ended September 30, 2019 or 2018.





Going Concern

Our financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. At September 30, 2019, we have limited cash, had limited gross profit, which was significantly less than our operating expenses, and we incurred a loss from our operations for the year ended September 30, 2019. We can give no assurance as to its ability to generate revenue or operate profitably. If we cannot generate revenue from our products we may not be able to continue in our business. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. Although we intend to fund operations through increased sales of our products and equity financing arrangements. However, because of the lack of sales during the last three quarters of the year ended September 30, 2019, our loss for the year ended September 30, 2019 and the absence of any active trading market for our common stock, our financial condition and our lack of an operating history, we may not be able to raise funds for capital expenditures, working capital and other cash requirements.






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Critical Accounting Policies and Estimates





Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.





Cash and Cash Equivalents

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. We had $1,472 and $1,148 in cash and cash equivalents at September 30, 2019 and 2018, respectively.





Inventories

Inventories consist primarily of finished goods. Inventories are valued at the lower of cost or net realizable value. We determine cost on the basis of first-in, first-out methods. We periodically review inventories for obsolescence and any inventories identified as obsolete are written down or written off. Although we believe that the assumptions we use to estimate inventory write-downs are reasonable, future changes in these assumptions could provide a significantly different result. No inventory markdown was recorded for the years ended September 30, 2019 and 2018.

Net Income (Loss) Per Share of Common Stock

We adopted ASC Topic 260, "Earnings per Share" which requires presentation of basic earnings per share on the face of the statements of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic earnings per share computation. Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants unless the result would be antidilutive. There were no potentially dilutive shares of common stock outstanding for the years ended September 30, 2019 and 2018.

Concentrations of Credit Risk

Our financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables that we will likely incur in the near future. We place our cash and cash equivalents with financial institutions of high credit worthiness. At times, our cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits.





Stock-Based Compensation

We recognize compensation expense for stock-based compensation in accordance with ASC Topic 718. For employee stock-based awards, we calculate the fair value of the award on the date of grant using the Black-Scholes method for stock options and the quoted price of our common stock for unrestricted shares, and the expense is recognized over the service period for awards expected to vest. Share-based payments to consultants, service providers and other non-employees are accounted for in accordance with ASC Topic 718, ASC Topic 505, "Equity Payments to Non-Employees" or other applicable authoritative guidance. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent that actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. We consider many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience.






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Income Taxes

We use the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on differences between financial reporting and the tax basis of assets, liabilities, the carry forward of operating losses and tax credits, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized.





Related Parties

We follow ASC 850, "Related Party Disclosures," for the identification of related parties and disclosure of related party transactions.





Revenue Recognition

We recognize revenue from the sale of products and services in accordance with ASC 605, "Revenue Recognition." We recognize revenue only when all of the following criteria have been met:

i) Persuasive evidence for an agreement exists;

ii) Service has been provided;

iii) The fee is fixed or determinable; and,

iv) Collection is reasonably assured.

We recognize revenue when our products are delivered to customers in accordance with the written sales terms.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under this guidance, lessees will be required to recognize on the balance sheet a lease liability and a right-of-use asset for all leases, with the exception of short-term leases. The lease liability represents the lessee's obligation to make lease payments arising from a lease, and will be measured as the present value of the lease payments. The right-of-use asset represents the lessee's right to use a specified asset for the lease term, and will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee's initial direct costs. The standard also requires a lessee to recognize a single lease cost allocated over the lease term, generally on a straight-line basis. The new guidance is effective for fiscal years beginning after December 15, 2018. ASU 2016-02 is required to be applied using the modified retrospective approach for all leases existing as of the effective date and provides for certain practical expedients. Early adoption is permitted. The Company is currently evaluating the effects that the adoption of ASU 2016-02 will have on the Company's financial statements.

The Company has reviewed all other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial statements.

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