UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended
or
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to ______
Commission
File Number
(Exact name of registrant as specified in its charter)
| (State or Other Jurisdiction | (I.R.S. Employer | |
| of Incorporation or Organization) | Identification No.) |
(Address of Principal Executive Offices) (Zip Code)
(Registrant’s telephone number, including area code)
N/A(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Not Applicable | Not Applicable |
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.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | 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 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 14, 2026, the registrant had shares of Class A common stock outstanding.
TABLE OF CONTENTS
| 2 |
NOTE ABOUT FORWARD-LOOKING STATEMENTS
Except for historical information, this quarterly report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this quarterly report on Form 10-Q other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this quarterly report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
Unless expressly indicated or the context requires otherwise, the terms “Antiaging,” “company,” “we,” “us,” and “our” in this document refer to Antiaging Quantum Living Inc, a New York corporation.
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PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ANTIAGING QUANTUM LIVING INC.
INDEX TO FINANCIAL STATEMENTS
| 4 |
ANTIAGING QUANTUM LIVING INC.
Condensed Consolidated Balance Sheets
As of June 30, 2026 and March 31, 2026
| June 30, 2026 | March 31, 2026 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventories, net | ||||||||
| Advances to suppliers | ||||||||
| Other receivables and current assets | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Operating lease right of use asset, net | ||||||||
| Total Non-Current Assets | ||||||||
| Total Assets | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Accounts payable - related party | ||||||||
| Other payables | ||||||||
| Due to related parties | ||||||||
| Taxes payable | ||||||||
| Contract liabilities | ||||||||
| Operating lease liabilities - current portion | ||||||||
| Total Current Liabilities | ||||||||
| Non-Current Liabilities | ||||||||
| Operating lease liabilities - non-current | ||||||||
| Long term loans payable | ||||||||
| Total Non-Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| Shareholders’ Equity | ||||||||
| Class A Common stock, par value $ per share; shares authorized; and shares issued and outstanding at June 30, 2026 and March 31, 2026 | ||||||||
| Class B Common stock, par value $ per share; shares authorized; shares issued and outstanding at June 30, 2026 and March 31, 2026 | ||||||||
| Class C Common stock, par value $ per share; shares authorized; shares issued and outstanding at June 30, 2026 and March 31, 2026 | ||||||||
| Class D Common stock, par value $ per share; shares authorized; shares issued and outstanding at June 30, 2026 and March 31, 2026 | ||||||||
| Class E Common stock, par value $ per share; shares authorized; shares issued and outstanding at June 30, 2026 and March 31, 2026 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive (loss) income | ||||||||
| Total Shareholders’ Deficit | ( | ) | ( | ) | ||||
| Total Liabilities and Shareholders’ Deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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ANTIAGING QUANTUM LIVING INC.
Condensed Consolidated Statements of Operations and Comprehensive Income
For the three months ended June 30, 2026 and 2025
Unaudited
| Three months ended | ||||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Revenues, net | $ | $ | ||||||
| Cost of revenues | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Selling and marketing expenses | ||||||||
| General and administrative expenses | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income: | ||||||||
| Interest income | ||||||||
| Other income | ||||||||
| Total other income | ||||||||
| Loss before income tax | ( | ) | ( | ) | ||||
| Income tax expense | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Weighted average shares outstanding | ||||||||
| Basic and diluted | ||||||||
| Loss per share | ||||||||
| Basic and diluted | $ | ) | $ | ) | ||||
| Comprehensive loss: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Other comprehensive loss: | ||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||
| Total comprehensive loss | $ | ( | ) | $ | ( | ) | ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
ANTIAGING QUANTUM LIVING INC.
Condensed Consolidated Statements of Changes in Shareholders’ Deficit
For the three months ended June 30, 2026 and 2025
Unaudited
Class A Common stock | Additional | Accumulated other | ||||||||||||||||||||||
Number of Shares | Amount | Paid-in Capital | Accumulated Deficit | Comprehensive Income (Loss) | Total | |||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||
| Conversion of notes payable to common stock | ||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Foreign currency translation adjustment | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Foreign currency translation adjustment | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 7 |
ANTIAGING QUANTUM LIVING INC.
Condensed Consolidated Statements of Cash Flows
For the three months ended June 30, 2026 and 2025
Unaudited
| Three months ended | ||||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Depreciation and amortization expense | ||||||||
| Amortization of operating lease ROU assets | ||||||||
| Write-off assets | ||||||||
| Changes in assets and liabilities | ||||||||
| Increase in accounts receivable | ( | ) | ( | ) | ||||
| Increase in inventories | ( | ) | ||||||
| Decrease in advances to suppliers | ||||||||
| Increase in prepaid expenses | ( | ) | ||||||
| (Increase) decrease in other receivables and current assets | ( | ) | ||||||
| Increase in customer advances | ||||||||
| (Decrease) increase in accounts payable | ( | ) | ||||||
| Increase in bank overdraft | ||||||||
| Increase (decrease) in accrued expenses and other payables | ( | ) | ||||||
| Increase in taxes payable | ||||||||
| Increase in contract liabilities | ||||||||
| Decrease in operating lease liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of fixed assets | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash flows from financing activities | ||||||||
| Proceeds from borrowings | ||||||||
| Proceeds from related party advances | ||||||||
| Net cash provided by financing activities | ||||||||
| Net increase of cash and cash equivalents | ||||||||
| Effect of foreign currency translation on cash and cash equivalents | ||||||||
| Cash and cash equivalents – beginning | ||||||||
| Cash and cash equivalents – ending | $ | $ | ||||||
| Supplementary cash flow information: | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| Non-cash financing and investing activities: | ||||||||
| Recognized ROU assets through lease liabilities | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 8 |
ANTIAGING QUANTUM LIVING INC
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES
Antiaging
Quantum Living Inc. (the “Company”, “us”, “we” or “our”) was incorporated under the laws
of the State of
On
July 1, 2019, Lansdale Inc, the principal stockholder of the Company (“Seller”) an entity controlled by the Company’s
former President, Mr. Wanjun Xie, entered into a Stock Purchase Agreement (the “Agreement”) with Dazhong 368 Inc, (the “Buyer”),
pursuant to which, a total of shares of Class A common stock of the Company were transferred to the Buyer, representing approximately
On
April 10, 2023, Mr. Barry Wan acquired control of restricted shares of common stock (the “Purchased Shares”) of
the Company, representing approximately
In connection with the transaction, on April 10, 2023, Mr. Dingshan Zhang resigned from all positions he held with the Company. On April 10, 2023, Ms. Jing Wan was appointed by our majority shareholder as our Chief Executive Officer, Chief Financial Officer, President and Director. On June 16, 2023, Mr. Barry Wan consented to act as the new CEO and CFO after Ms. Jing Wan resigned. The Company was renamed as Antiaging Quantum Living Inc on June 14, 2023 by the new management. The Company is an investment holding company; its primary business operations are conducted through its subsidiaries as described below.
AAQL Inc. (“BVI Holding”) was incorporated under the Laws of the British Virgin Islands to function as a holding company responsible for managing all business operations outside of the United States.
AAQL HK Limited (“Hong Kong Holding”) was incorporated under the Laws of Hong Kong as a wholly-owned subsidiary of the BVI Holding. Hong Kong Holding’s primary role is to act as a holding company overseeing business activities exclusively within the Asia-Pacific markets.
Antiaging Doctor Hangzhou Holding LTD (“Dao Ling Doctor Hangzhou”) was incorporated as a wholly-owned subsidiary of Hong Kong Holding on November 13, 2023 under the laws of the People’s Republic of China, with its principal place of business situated in Xiaoshan District, Hangzhou, Zhejiang Province.
Dao Ling Doctor (Zhejiang) Health Management Limited (“Dao Ling Doctor Zhejiang”) was incorporated as a wholly-owned subsidiary of Dao Ling Doctor Hangzhou on November 30, 2023 under the laws of the People’s Republic of China, with its principal place of business situated in Hangzhou, Zhejiang Province.
Dao Ling Doctor (Huzhou) Health Management Limited (“Dao Ling Doctor Huzhou”) was incorporated as a wholly-owned subsidiary of Dao Ling Doctor Hangzhou on December 6, 2023 under the laws of the People’s Republic of China, with its principal place of business situated in Huzhou, Zhejiang Province.
Anti-Aging Care LLC (“Anti-Aging Care”) was incorporated as a wholly-owned subsidiary of Antiaging Quantum Living Inc. on October 21, 2024 under the laws of New York.
The Company’s current business operations primarily focus on the supply and distribution of proprietary health and beauty products and the provision of offline physical therapy and related health services. During the fiscal year ended March 31, 2026, the Company initiated a strategic transition away from third-party agency and technical platform operations. Pursuant to board authorization in June 2025, the Company ceased its online platform technical operation support and maintenance services in staggered phases, concluding in September 2025 and January 2026.
The Company views this transition as a strategic pivot intended to enhance its brand value and establish long-term control over its product supply chain. The transition has materially affected, and is expected to continue to affect, the Company’s revenue composition and the comparability of its historical results of operations to future periods.
Antiaging Quantum Living Inc. and its subsidiaries are collectively referred to as the “Company”.
| 9 |
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and include the assets, liabilities, revenues, expenses and cash flows of all subsidiaries. All significant inter-company transactions and balances between the Company and its subsidiaries are eliminated upon consolidation.
In the opinion of management, the unaudited interim condensed financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. However, the results of operations included in such financial statements may not necessary be indicative of annual results.
The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2026 filed with the Securities and Exchange Commission (“SEC”) on July 14, 2026.
Use of Estimates
The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”).
The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results may differ from those estimates and assumptions.
Significant estimates and assumptions made by management include, but are not limited to, the recognition of revenue (including the portfolio approach used for estimating the proportional performance and breakage of multi-session service packages), the allowance for expected credit losses, the valuation of lease right-of-use assets and lease liabilities, and the valuation allowance for deferred tax assets.
Functional and presentation currency
The functional currency of the Company is the currency of the primary economic environment in which the Company operates which is Chinese Yuan (“RMB”). The RMB is not freely convertible into the US dollar and may be subject to PRC currency restrictions for payments, including the distributions of dividends or retained earnings to the Company by its subsidiaries or its variable interest entities.
Transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at the end of the reporting periods. Exchange differences arising on the settlement of monetary items and on translation of monetary items at period-end are included in income statement of the period.
| 10 |
For the purpose of presenting these financial statements, the Company’s assets and liabilities are expressed in US$ at the exchange rate on the balance sheet date, stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rate during the period. The resulting translation adjustments are reported under accumulated other comprehensive income (loss) in the stockholder’s equity (deficits) section of the balance sheets.
Exchange rate used for the translation as follows:
| US$ to RMB | Period End | Average | ||||||
| June 30, 2026 | ||||||||
| March 31, 2026 | ||||||||
| June 30, 2025 | ||||||||
Cash and Cash Equivalents
Cash and cash equivalents include cash in banks, bank deposits, and highly liquid investments with maturities of three months or less at the date of origination.
Accounts receivable, net
The Company records accounts receivable at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on aging data, historical collection experience, customer specific facts and economic conditions. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.
Inventories, net
Inventories consist of finished goods and are stated at the lower of cost or net realizable value. Cost is determined using the weighted average cost method. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company reviews the carrying value of inventory for obsolescence or slow-moving items periodically.
Advances to Suppliers
The Company occasionally makes advance payments to suppliers, contractors, and service providers to secure future deliveries of goods or completion of services. These advances are recorded as assets on the balance sheet and are reclassified to the appropriate expense or asset account (such as inventory, property and equipment, or repairs and maintenance) when the related goods are received or the services are rendered. These advances may include, but are not limited to, payments for inventory goods to be sold, deposits for services, or prepayments for capital improvements.
The Company periodically reviews the recoverability of advances to suppliers and establishes allowances for potential losses when necessary.
Other receivables and current assets
Other receivables and current assets consist primarily of prepaid expenses, advances, and refundable security deposits. These items are recorded at their original transaction amounts and are not discounted as the impact of discounting is not material to the consolidated financial statements. The Company evaluates the collectability of other receivables on a regular basis and establishes allowances for estimated credit losses, if necessary, in accordance with ASC 326.
| 11 |
Impairment of Other Assets
The Company has adopted Accounting Standards Codification subtopic 340-10, Other Assets (“ASC 340-10”). ASC 340-10 requires that prepaid expenses, deferred costs, and other capitalized expenditures be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates these assets for impairment periodically, or more frequently if events and circumstances warrant. Indicators of impairment may include contract cancellations, supplier bankruptcy, significant adverse changes in expected future benefits, or other factors reducing the asset’s recoverability.
The Company assesses recoverability based on the expected future benefits associated with the asset. If it is determined that the carrying value is no longer recoverable, the asset is written down to its net realizable value or zero if no recovery is expected. Impairment losses, if any, are recorded in the income statement as a charge to expense.
Impairment loss on advances to suppliers was $ for the three months ended June 30, 2026 and 2025, respectively.
Property and Equipment
Property and equipment are carried at cost net of accumulated depreciation. Expenditures that improve the functionality of the related asset or extend the useful life are capitalized. When property and equipment is retired or otherwise disposed of, the related gain or loss is included in operating income. Leasehold improvements are depreciated on the straight-line method over the shorter of the remaining lease term or estimated useful life of the asset.
Property and equipment are depreciated on a straight-line basis over the following periods:
| Leasehold improvements | ||||
| Office furniture and equipment |
Intangible assets
Intangible assets are carried at cost, net of accumulated amortization. Expenditures that enhance the functionality or extend the useful life of the intangible asset are capitalized. When intangible assets are retired or otherwise disposed of, the related gain or loss is included in operating income.
Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives. The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.
Intangible assets are amortized on a straight-line basis over the following periods:
| Patent |
| 12 |
Impairment of Long-Lived Assets
The Company has adopted Accounting Standards Codification subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”). ASC 360-10 requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve breakeven operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. ASC 360-10 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less costs to sell.
Impairment
loss on property and equipment was $and $
Customer Advances
The Company records customer advances as liabilities when consideration is received in advance of the transfer of goods. These advances are recognized as revenue when the performance obligations associated with the advance are satisfied. These advances relate to the advance payment for orders of goods placed by the customers.
Leases
The Company adopted FASB Accounting Standards Codification, Topic 842, Leases (“ASC 842”) using the modified retrospective approach, electing the practical expedient that allows the Company not to restate its comparative periods prior to the adoption of the standard on January 1, 2019.
The new leasing standard requires recognition of leases on the balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. The Company’s future minimum based payments used to determine the Company’s lease liabilities mainly include minimum based rent payments. As most of the Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company does not recognize any leases with an initial term of 12 months or less on the balance sheets.
Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur.
Revenue Recognition
Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The Company determines revenue recognition by applying the following steps: 1) identification of the contract, or contracts, with a customer; 2) identification of the performance obligations in the contract; 3) determination of the transaction price; 4) allocation of the transaction price to the performance obligations in the contract; and 5) recognition of revenue when, or as, we satisfy a performance obligation.
| 13 |
Sales of goods
The Company generates revenue from the sale of health and beauty products, dietary supplements, and proprietary branded health foods. Goods are sold directly to consumers through the Company’s mobile application (“App”) and physical retail stores, as well as distributed wholesale to third-party e-commerce platforms and partners. In January 2026, the Company began transitioning its business model to become a primary product supplier of proprietary brands to enhance its control over the health and wellness supply chain.
A formal contract is established when a customer places an order. The Company’s single performance obligation is the delivery of the ordered goods. The transaction price is generally fixed at the time of the order. Revenue is recognized at a point in time when the goods are delivered to (or physically purchased at) retail stores, drop-shipped, and accepted by the customer, as control transfers at that time.
The Company’s policy allows for product returns, which are treated as variable consideration. Provisions for estimated sales returns are assessed and adjusted at the end of each reporting period based on historical return rates and experience, which are generally immaterial. The Company records contract liabilities, such as customer advances, when payments are received prior to the delivery and acceptance of goods.
Offline physical therapy services
The Company provides offline physical therapy and related health services through its physical retail stores. Customers may purchase these services on a single-use (pay-on-demand) basis or through multi-session package deals that are valid for a one-year period. A formal contract is established upon payment.
For single-use services, the Company has a single performance obligation to provide the therapy session. Revenue is recognized at a point in time when the service is rendered to the customer.
For multi-session package deals, the Company has a stand-ready obligation to provide a specified number of therapy sessions over the one-year validity period. While each treatment session represents a distinct performance obligation, the Company utilizes a stand-ready obligation approach for financial reporting purposes during the systems transition period, as precise customer-level session tracking is currently limited. Payments received in advance are initially recorded as contract liabilities (customer advances). These advance payments are non-refundable. Revenue is recognized over time as the services are utilized by the customer.
During the systems transition period for the year ended March 31, 2026, precise customer-level usage tracking was limited. Consequently, management utilized a critical accounting estimate to determine the proportional performance of these obligations based on a sample of available historical usage records applied to cohorts of contracts grouped by payment date. Management applies a constraint to these estimates to ensure it is highly probable that a significant reversal of cumulative revenue recognized will not occur. Revenue is recognized ratably based on this constrained estimate, with any remaining unconstrained balance recognized when the rights legally expire at the end of the one-year period. Changes to these estimation methods could materially impact the timing of revenue recognition.
Online platform technical operation support and maintenance services
Prior to January 2026, the Company provided technical operation support and maintenance services for online platforms, ensuring platform functionality, continuous availability, and technical support for end-users.
Revenue from these services was recognized ratably over each service period as the services were rendered, or upon completion of the service, depending on the nature of the arrangement. Billing frequency varied (e.g., weekly, monthly, quarterly, or upon completion) as specified in the respective contracts. Service fees were determined based on contract terms and structured as fixed fees, milestone-based pricing, or as a percentage of gross transaction value (GTV) generated from the customer’s e-commerce platform. Each billing period or completed service cycle represented a distinct performance obligation, with revenue recognized upon completion and invoicing. The major direct cost of providing these services was wages and salaries. In instances where payments were received in advance, they were recorded as contract liabilities (deferred revenue) until the services were delivered.
Effective January 2026, the Company formally ceased providing these technical operation support and maintenance services. Because these services were supported by highly integrated, centralized corporate resources that have been retained by the Company, the cessation of this service line does not qualify for presentation as a discontinued operation.
Principal vs. Agent Consideration
For each revenue stream, the Company is a principal because it controls the specified goods or services before they are transferred to the customer. As a principal, the Company is primarily responsible for fulfilling the contractual obligations, has discretion in establishing the price, and bears the risk of inventory or service provision until completion; therefore, revenue is recognized on a gross basis for each active revenue stream.
| 14 |
Contract liabilities
The Company records contract liabilities when payments are received from customers, or the Company has an unconditional right to receive payments, prior to the satisfaction of the underlying performance obligations. Contract liabilities primarily consist of customer advances and deferred revenue associated with the following:
| ● | Delivery of goods: Customer advances received prior to the delivery and acceptance of goods. These advances are recognized as revenue upon delivery and acceptance of the goods by customers. | |
| ● | Multi-Session package deals: Payments received in advance of services rendered. These advances are initially recorded as contract liabilities and recognized as revenue as the individual sessions are delivered to the customer, or upon expiration of the one-year term. | |
| ● | Online platform support services: Payments received in advance for online platform technical operation support and maintenance services. These amounts are recorded as deferred revenue and recognized as revenue over the period the support services are delivered. |
Contract liability balances comprised of the following:
June 30, 2026 | March 31, 2026 | |||||||
| Opening balance | $ | $ | ||||||
| Payments received in advance | ||||||||
| Revenues recognized | ( | ) | ( | ) | ||||
| Effect of exchange rate changes | ||||||||
| Ending balance | $ | $ | ||||||
The
Company recognized revenue of $
Selling, General and Administrative Expenses
Selling, general, and administrative expenses primarily consist of costs related to sales and marketing activities, administrative functions, and certain start-up costs.
Selling expenses include, but are not limited to, sales commissions, advertising costs, shipping and handling expenses, and costs associated with trade shows and promotional events. General and administrative expenses encompass salaries and benefits of employees not directly involved in production, rent, utilities, office supplies, legal and professional fees, other overhead costs, and certain start-up costs.
Start-up costs represent expenses associated with the establishment of new operations, including activities such as market research, product development, and initial marketing efforts.
The Company recognizes these expenses as incurred.
Defined Contribution Plans
The
Company contributes to various government-mandated employee benefit plans in the People’s Republic of China, including pension,
medical, unemployment, and housing provident funds. These contributions are made in accordance with local laws and regulations and are
expensed as incurred. The Company’s obligations under these plans are limited to the amounts required to be contributed. For the
three months ended June 30, 2026 and 2025, the Company contributed approximately $
Income Taxes
The Company records income tax expense using the asset-and-liability method of accounting for deferred income taxes. Under this method, deferred 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 year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance if, based on available evidence, it is more likely than not that the deferred tax assets will not be realized.
| 15 |
When tax returns are filed, it is likely 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 financial statements in the period during which, based on all available evidence, management believes it is more-likely-than-not 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 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 general and administrative expenses in the statements of operations.
The Company computes basic and diluted earnings per share amounts in accordance with ASC Topic 260, Earnings per Share. Basic earnings per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.
As of June 30, 2026 and March 31, 2026, the Company does not have any potentially dilutive instrument.
Contingencies
Certain conditions may exist as of the date the financial statements are issued, which could result in a loss to the Company which will be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, and such assessment inherently involves judgment. In assessing loss contingencies arising from legal proceedings pending against the Company or unasserted claims that may rise from such proceedings, the Company’s management evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.
If the assessment of a contingency indicates it is probable a material loss will be incurred and the amount of the loss can be reasonably estimated, then the estimated loss is accrued in the Company’s financial statements. If the assessment indicates a material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed.
Fair Value Measurements
Fair value accounting establishes a framework for measuring fair value and expands disclosure about fair value measurements. Fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:
| ● | 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 assets or liabilities, either directly or indirectly, for substantially the full term of the financial instruments. | |
| ● | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. |
| 16 |
The Company’s financial instruments consisted of cash, accounts receivables, accounts payable, contract liabilities and loan from shareholders. The estimated fair value of those balances approximates the carrying amount due to the short maturity of these instruments.
Credit Losses on Financial Instruments
The Company recognizes credit losses on financial instruments in accordance with Accounting Standards Codification (ASC) Topic 326, Financial Instruments – Credit Losses. The Company uses the Current Expected Credit Losses (CECL) model to estimate credit losses on financial assets measured at amortized cost, as well as certain off-balance sheet credit exposures.
Under the CECL model, the estimation of credit losses involves significant judgment and estimation uncertainty. Management exercises its judgment based on historical loss experience, current economic conditions, and reasonable and supportable forecasts. Changes in these factors could have a material impact on the estimated credit losses.
Segment Reporting
The Company follows the management approach for segment reporting in accordance with ASC 280, Segment Reporting. This approach is based on the way management organizes segments within the Company for making operating decisions and assessing performance. The Company’s Chief Executive Officer has been identified as the Chief Operating Decision Maker (“CODM”). As the Company’s underlying operations and cost structures are highly integrated, the CODM evaluates performance and allocates resources based on consolidated financial information. Accordingly, the Company has determined that it operates as a single reportable segment. Further details regarding the Company’s segment reporting are provided in Note 13.
Recent Accounting Pronouncements
Accounting Standards Update (“ASU”) 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software modernizes the accounting for internal-use software by removing the requirement to identify discrete project development stages (such as the preliminary and application-development stages) and instead focuses on whether (1) management has authorized and committed to funding the project, (2) it is probable the project will be completed and the software will be used to perform its intended function, and (3) the entity has considered whether significant uncertainty exists in the development activities. The amendments are effective for fiscal years beginning after December 15, 2027, and for interim periods within those fiscal years. Early adoption is permitted. Entities may apply the amendments prospectively, retrospectively, or using a modified-prospective approach. The Company is currently evaluating the impact of ASU 2025-06 on its consolidated financial statements and related disclosures. The adoption is expected to primarily affect the timing of capitalizing certain software-development costs and may result in modifications to internal controls over capitalization judgments and related disclosures.
ASU 2025-05, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets introduces a practical expedient for measuring expected credit losses on current accounts receivable and current contract assets arising from contracts with customers under Topic 606. Under the expedient, entities may assume that conditions existing at the balance sheet date will remain unchanged over the asset’s remaining life when estimating expected credit losses. In addition, entities other than public business entities may elect, as an accounting policy, to consider subsequent cash collections that occur after the balance sheet date but before issuance of the financial statements when estimating expected credit losses. The amendments are effective for fiscal years beginning after December 15, 2025, and for interim periods within those fiscal years. Early adoption is permitted, and the guidance is to be applied prospectively. The Company is currently evaluating the impact of ASU 2025-05 and does not expect the adoption to have a material impact on its consolidated financial statements. The Company expects to apply the practical expedient for qualifying current receivables and contract assets upon adoption.
ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Customer Share-Based Payment Awards, clarifies how entities account for share-based consideration payable to a customer. The ASU requires customer awards with vesting conditions tied to purchases to be treated as performance conditions, eliminates the forfeiture policy election, and states that the variable consideration constraint under ASC 606 does not apply to these awards. The standard is effective for annual periods beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its financial statements.
| 17 |
ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Accounting Acquirer in a Business Combination Involving a Variable Interest Entity, clarifies that when a business that is a VIE is acquired primarily with equity interests, the determination of the accounting acquirer should follow ASC 805 rather than defaulting to the primary beneficiary under ASC 810. The standard is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect a material impact upon adoption.
ASU 2025-02, Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122, removes the guidance previously provided under SAB 121 and codified in ASC 405-S99. The amendment reflects the SEC’s rescission of SAB 121 and clarifies that custodians of crypto-assets should assess loss contingencies under ASC 450-20. This update is effective retrospectively for public business entities for annual periods beginning after December 15, 2024. The Company does not expect the adoption of this standard to have a material impact on its financial statements.
ASU 2025-01, Presentation of Financial Statements (Topic 220): Clarifying the Effective Date of Disaggregation of Income Statement Expenses, confirms the effective date of ASU 2024-03 for public business entities. The guidance requires disaggregated expense information in the income statement and is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after that date. Early adoption is permitted. The Company is currently evaluating the impact of this standard.
Management does not believe that other recently issued but not yet adopted accounting pronouncements will have a material impact on the Company’s financial position, results of operations, or cash flows.
NOTE 3 – GOING CONCERN
The
Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement
of liabilities and commitments in the normal course of business. The Company has incurred net loss of $
Management’s plan to alleviate the substantial doubt about the Company’s ability to continue as a going concern include attempting to improve its business profitability, its ability to generate sufficient cash flow from its operations to meet its operating needs on a timely basis, obtain additional working capital funds from the majority shareholder and President of the Company to eliminate inefficiencies in order to meet its anticipated cash requirements. However, there can be no assurance that these plans and arrangements will be sufficient to fund the Company’s ongoing capital expenditures and other requirements.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.
NOTE 4 – ACCOUNTS RECEIVABLE, NET
Accounts receivable, net comprised of the following:
June 30, 2026 | March 31, 2026 | |||||||
| Accounts receivable | $ | $ | ||||||
| Less: Allowance for credit loss | ||||||||
| Total, net | $ | $ | ||||||
There
was
| 18 |
NOTE 5 – INVENTORIES, NET
Inventories, net comprised of the following:
June 30, 2026 | March 31, 2026 | |||||||
| Finished goods | $ | $ | ||||||
| Finished goods in transit | ||||||||
| Less: Obsolete/write-down inventory | ( | ) | ( | ) | ||||
| Total, net | $ | $ | ||||||
Write-downs of inventories were $and $ for the three months ended June 30, 2026 and 2025, respectively.
NOTE 6 – OTHER RECEIVABLES AND CURRENT ASSETS
Other receivables and current assets, net comprised of the following:
June 30, 2026 | March 31, 2026 | |||||||
| Other receivables and prepayments | $ | $ | ||||||
| Security deposits | ||||||||
| Taxes recoverable | ||||||||
| Less: Allowance for credit loss | ||||||||
| Total, net | $ | $ | ||||||
There
was
NOTE 7 – PROPERTY AND EQUIPMENT, NET
Property and equipment, net comprised of the following:
June 30, 2026 | March 31, 2026 | |||||||
| At Cost: | ||||||||
| Leasehold improvements | $ | $ | ||||||
| Office furniture and equipment | ||||||||
| Total cost | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Total, net | $ | $ | ||||||
Depreciation
expenses were $
Impairment
losses were $ and $
The Company did not dispose of any fixed assets for the three months ended June 30, 2026 and 2025, respectively. Accordingly, no gain or loss on disposal of fixed assets was recognized.
| 19 |
NOTE 8 – INTANGIBLE ASSET, NET
Intangible asset, net comprised of the following:
June 30, 2026 | March 31, 2026 | |||||||
| At Cost: | ||||||||
| Patent | $ | $ | ||||||
| Total cost | ||||||||
| Less: Accumulated amortization | ( | ) | ( | ) | ||||
| Total, net | $ | $ | ||||||
Amortization
expenses were $
The amortization expenses for the succeeding five years as follows:
| For the year ending March 31, | |||||
| 2027 (9 months remaining) | $ | ||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| 2031 | |||||
| Thereafter | |||||
| Total | $ | ||||
NOTE 9 – LOANS PAYABLE AND NOTES PAYABLE
Promissory Notes and Related Party Assignments
On
December 31, 2024, the Company entered into promissory note agreements amending the terms of certain existing loan arrangements with
a third-party outstanding balance of CNY
On March 24, 2025, the Company borrowed CNY (approximately $) from another unrelated third party pursuant to a loan agreement. The loan was unsecured, non-interest-bearing, and had a stated maturity date of .
On
March 31, 2025, the Company entered into a tripartite debt assignment agreement (the “Tripartite Debt Assignment Agreement”)
with a related party (Mr. Barry Wan), and the unrelated third-party lender mentioned above, pursuant to which the CNY
Debt Assignment and Conversion
On
November 25, 2025, the Company cancelled the Tripartite Debt Assignment Agreement, and entered into new assignment and amendment agreements
specifically for the CNY
Immediately
upon the effectiveness of the amendments, the total principal of $
The
CNY
Promissory Notes Payable and Loans Payable – Third Parties
The Company entered into two loan agreements with a third party for a principal amount of CNY in April 2026 and CNY in May 2026. These loans are unsecured, non-interest-bearing, and have maturity dates of March 31, 2029, and May 14, 2029, respectively.
On March 24, 2025, the Company borrowed CNY (approximately $) from a third party pursuant to a loan agreement. The loan was unsecured, non-interest-bearing, and had a stated maturity date of . The Company repaid CNY during the three months ended June 30, 2026, and the outstanding balance of the loan was CNY as of June 30, 2026 (compared to CNY as of March 31, 2026).
As
of June 30, 2026 and March 31, 2026, the Company had long-term notes and loans payable to third parties of $
| 20 |
NOTE 10 – RELATED PARTY TRANSACTIONS
Due to related parties
Due to related parties comprised of the following:
June 30, 2026 | March 31, 2026 | |||||||
| Barry Wan (“Mr. Wan”) | $ | $ | ||||||
| Total | $ | $ | ||||||
Amounts due to related parties were unsecured, non-interest-bearing, and due on demand.
Advances from Mr. Wan
The
Company received advances from Mr. Wan, the Company’s President, for working capital purposes from time to time. The outstanding
amounts due to Mr. Wan were $
On
December 31, 2024, the Company formalized a promissory note agreement with Mr. Wan in the principal amount of $
Debt Assignment to Mr. Wan
On
March 31, 2025, the Company entered into a Tripartite Debt Assignment Agreement (“TDAA”) with Mr. Barry Wan (a related party)
and the unrelated third-party original lender, pursuant to which the CNY
Subsequently,
on November 25, 2025, the Company cancelled the TDAA and entered into new assignment and amendment agreements with respect to the outstanding
promissory notes (under “November Debt Assignment Agreements”), pursuant to which the notes were assigned to third-party
assignees and amended to provide for the automatic conversion of the outstanding principal amounts into shares of the Company’s
Class A common stock at a fixed conversion price. Immediately upon the effectiveness of the amendments, the outstanding promissory notes
were automatically converted into equity. The CNY
Advances from Tairan Baohe Insurance Sales Co., Ltd. (“Tairan”)
During
the year ended March 31, 2025, the Company borrowed funds from Tairan Baohe Insurance Sales Co., Ltd. (“Tairan”), an entity
in which Mr. Wan’s spouse is a shareholder, for working capital purposes. The loan was unsecured, non-interest-bearing, and due
on demand. On December 31, 2024, the Company formalized a promissory note agreement in the principal amount of CNY
On March 24, 2025, the Company repaid the full outstanding balance to Tairan. As a result, there were no amounts due to Tairan since then.
| 21 |
Advances from New Lite Ventures LLC (“New Lite”)
During the year ended March 31, 2025, the Company borrowed funds from New Lite Ventures LLC (“New Lite”), an entity controlled by Mr. Wan, for working capital purposes. The advances were unsecured, non-interest-bearing, and due on demand.
On
December 31, 2024, the Company formalized a promissory note agreement with New Lite in the principal amount of $
NOTE 11 – INCOME TAX
The Company has not recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the period presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not.
United States
Hong Kong
Companies
incorporated in Hong Kong are subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements
adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is
PRC
Effective
on January 1, 2008, the PRC Enterprise Income Tax Law, EIT Law, and Implementing Rules impose a unified enterprise income tax rate of
Income Taxes Paid
For the three months ended June 30, 2026, the Company paid income taxes of $ in China and $ in United States; and did not pay any income taxes domestically or in foreign jurisdictions for the three months ended June 30, 2025
The following table summarizes the taxable income (loss) before income taxes by jurisdiction:
Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| United States | $ | ( | ) | $ | ( | ) | ||
| Hong Kong | ||||||||
| China | ( | ) | ||||||
| Total | $ | ( | ) | $ | ( | ) | ||
| 22 |
The following table summarizes a reconciliation of income tax expense for operations, calculated at the statutory income tax rate to total income tax expense (benefit):
Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Loss before income taxes | $ | ( | ) | $ | ( | ) | ||
| U.S. federal tax benefits ( | ( | ) | ( | ) | ||||
| State tax benefit, net of federal benefits | ( | ) | ( | ) | ||||
| PRC tax expenses (benefits) ( | ( | ) | ||||||
| Hong Kong tax benefits ( | ||||||||
| Income tax benefits at statutory rate | ( | ) | ( | ) | ||||
| Foreign tax rate differential | ||||||||
| Change in valuation allowance | ||||||||
| Other | ||||||||
| Provision for income taxes expenses | $ | $ | ||||||
| Effective tax rate | % | % | ||||||
NOTE 12 – SHAREHOLDERS’ EQUITY
The Company is authorized to issued shares of Class A common stock, Class B common stock, Class C common stock, Class D common stock, and Class E common stock; all with a par value of $ per share.
As of June 30, 2026, the Company had shares of Class A common stock issued and outstanding, and shares of Class B, Class C, Class D, or Class E common stock were issued or outstanding.
On June 6, 2024, the Company amended its article with New York State to increase the authorized shares of common stock of the Company from thirty million () shares of common stock, par value $per share, to six billion () shares of common stock, par value $per share (the “Authorized Capital Increase”). Upon the effectiveness of the authorized shares increase, the shares of common stock will be categorized as follows: Class A shares, Class B shares, Class C shares, Class D shares, and Class E shares.
During the year ended March 31, 2026, the Company issued shares of Class A common stock upon the automatic conversion of promissory notes in accordance with the assignment and amendment agreements described in Note 9.
| 23 |
NOTE 13 – SEGMENT REPORTING
Segment Identification and Chief Operating Decision Maker
The Company operates and is managed as a single reportable segment. The Company has identified its Chief Executive Officer as the Chief Operating Decision Maker (“CODM”). The CODM evaluates performance and allocates resources based on the Company’s consolidated financial information, specifically utilizing consolidated net loss to make operating decisions. While the Company’s revenue streams across health and beauty products, technical support, and physical therapy which are distinct, the underlying operations, shared resources, and cost structures utilized to generate these revenues are highly integrated across the entire Company. Consequently, the CODM does not evaluate performance or allocate resources based on discrete financial information for the individual product or service lines.
In evaluating the Company’s single operating segment’s performance, the CODM is regularly provided with certain significant consolidated expenses. These primarily consist of cost of revenues, selling and marketing expenses, and general and administrative expenses. These costs represent significant segment expenses and are reported directly on the consolidated statements of operations. Other segment items include interest income, other income, and income tax expense.
Disaggregation of revenues
The Company disaggregates its revenue by major revenue streams, as the Company believes this disaggregation best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors.
Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Sales of goods (Health and beauty products) | $ | $ | ||||||
| Technical operation support and maintenance services | ||||||||
| Offline physical therapy services | ( | ) | ||||||
| Total | $ | $ | ||||||
Geographic Information
The Company’s revenues from external customers are attributed to geographic areas based on the location of the customer. Geographic information regarding the Company’s long-lived assets, which specifically consists primarily of property, plant, and equipment, and right-of-use assets, is based on physical location.
Revenue disaggregated by geographic area based on the location of the customers is as follows:
Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| United States | $ | $ | ||||||
| China | ||||||||
| Total | $ | $ | ||||||
Long-lived assets by geographic area based on physical location is as follows:
June 30, 2026 | March 31, 2026 | |||||||
| United States | $ | $ | ||||||
| China | ||||||||
| Total, net | $ | $ | ||||||
| 24 |
NOTE 14 – LEASES
The Company has various operating leases for its office space and retail space.
On
April 1, 2026,
Operating lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate the present value is incremental borrowing rate or, if available, the rate implicit in the lease. The Company determines the incremental borrowing rate for each leases based primarily on its lease term.
Certain lease agreements may include renewal options that are exercisable at the Company’s discretion. The Company includes renewal periods in the lease term when it is reasonably certain that the renewal option will be exercised. For leases where the renewal is not reasonably certain, the extension options are excluded from the measurement of lease liabilities and right-of-use assets. The lease term used reflects only the non-cancellable period and any renewal options that the Company is reasonably certain to exercise.
Operating
lease expenses were $
The components of lease expense and supplemental cash flow information related to leases for the period are as follows:
Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Lease cost | ||||||||
| Operating lease cost | $ | $ | ||||||
| Other Information | ||||||||
| Cash paid for amounts included in the measurement of lease liabilities | $ | $ | ||||||
| Weighted average remaining lease term – operating leases (in years) | ||||||||
| Average discount rate – operating lease | % | % | ||||||
The supplemental balance sheet information related to leases is as follows:
June 30, 2026 | March 31, 2026 | |||||||
| Operating leases | ||||||||
| Right-of-use assets | $ | $ | ||||||
| Operating lease liabilities | $ | $ | ||||||
| 25 |
The undiscounted future minimum lease payment schedule as follows:
| For the year ending March 31, | ||||
| 2027 (9 months remaining) | $ | |||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031 | ||||
| Thereafter | ||||
| Total undiscounted lease payments | ||||
| Less: interest | ( | ) | ||
| Total lease liabilities | $ | |||
NOTE 15 – RISKS, COMMITMENTS AND CONTINGENCIES
Litigations and claims
To the best of the Company’s knowledge and based on information available as of June 30, 2026, the Company is not involved in any material claims or legal actions arising from the ordinary course of business. However, the Company is exposed to various risks and uncertainties that could potentially result in litigation or claims in the future. The Company continuously evaluates these contingencies and will adjust its disclosures as necessary.
Concentration Risks
For
the three months ended June 30, 2026, the Company derived
For
the three months ended June 30, 2025,
The Company is economically dependent on limited customer and supplier, and the loss of its relationship with the customer and supplier could have a material adverse effect on its financial condition, results of operations, and cash flows.
NOTE 16 – SUBSEQUENT EVENTS
The Company evaluated all events and transactions that occurred after June 30, 2026 through the date the financial statements were issued. During this period, the Company did not identify any material recognized subsequent events that require adjustment to the accompanying financial statements.
| 26 |
Item 1.01. Recent Developments
On November 25, 2025, the Company entered into a series of assignment and amendment agreements with respect to its outstanding promissory notes. Pursuant to these agreements, the promissory notes were assigned to third-party assignees and amended to provide for the automatic conversion of the outstanding principal amounts into shares of the Company’s Class A common stock at a fixed conversion price. Immediately upon the effectiveness of the amendments, the outstanding promissory notes were automatically converted into equity.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This Quarterly Report on Form 10-Q contains forward-looking statements, particularly those identified with the words, “anticipates,” “believes,” “expects,” “plans,” “intends,” “objectives,” and similar expressions. These statements reflect management’s best judgment based on factors known at the time of such statements. The reader may find discussions containing such forward-looking statements in the material set forth under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” generally, and specifically therein under the captions “Liquidity and Capital Resources” as well as elsewhere in this Quarterly Report on Form 10-Q. Actual events or results may differ materially from those discussed herein. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guarantee, or warranty is to be inferred from those forward-looking statements. The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements.
Overview
Antiaging Quantum Living Inc. (FKA: Achison Inc.) (the “Company”, “us”, “we” or “our”) was incorporated under the laws of the State of New York on December 29, 2014.
During the fiscal year ended March 31, 2026, the Company initiated a strategic transition to shift its core business model away from third-party agency and technical platform operations to focus exclusively on the supply and distribution of proprietary brand health products and therapy services. Pursuant to board authorization in June 2025, the Company ceased its online platform technical operation support and maintenance services in staggered phases, concluding in September 2025 and January 2026.
We view this transition as a vital strategic pivot to enhance our brand value and establish long-term control over our product supply chain. However, this shift materially impacts our near-term consolidated financial results and the comparability of our historical financial statements to future periods.
During the fiscal year ended March 31, 2026, the Company initiated a strategic transition to shift its core business model away from third-party agency and technical platform operations to focus exclusively on the supply and distribution of proprietary brand health products and therapy services. Pursuant to board authorization in June 2025, the Company ceased its online platform technical operation support and maintenance services in staggered phases, concluding in September 2025 and January 2026.
We view this transition as a vital strategic pivot to enhance our brand value and establish long-term control over our product supply chain. However, this shift materially impacts our near-term consolidated financial results and the comparability of our historical financial statements to future periods.
| 27 |
Results of Operation for the three months ended June 30, 2026 and 2025
| 2026 | 2025 | $ Changed | % Changed | |||||||||||||
| Revenue | 730,117 | 291,438 | 438,679 | 150.52 | % | |||||||||||
| Cost of revenues | 417,227 | 56,706 | 360,521 | 635.77 | % | |||||||||||
| Gross profit | 312,890 | 234,732 | 78,158 | 33.30 | % | |||||||||||
| Gross margin | 42.85 | % | 80.54 | % | (37.69 | )% | ||||||||||
| Selling, general and administrative expenses | 635,966 | 372,935 | 263,031 | 70.53 | % | |||||||||||
| Loss from operations | (323,076 | ) | (138,203 | ) | (184,873 | ) | 133.77 | % | ||||||||
| Other income (loss) | 4,567 | 10,831 | (6,264 | ) | (57.83 | )% | ||||||||||
| Income tax expenses | - | 6,000 | (6,000 | ) | (100.00 | )% | ||||||||||
| Net loss | (318,509 | ) | (133,372 | ) | (185,137 | ) | 138,.81 | % | ||||||||
During the three months ended June 30, 2026 and 2025, the Company generated revenues of $730,117 and $291,438, respectively, representing an increase of $438,679. This overall increase, as well as the complete shift in revenue mix, is a direct result of our previously disclosed strategic transition. For the three months ended June 30, 2025, our revenue consisted entirely of legacy online platform services. In the current year period ended June 30, 2026, those legacy services were completely phased out, and our revenue was generated entirely from our new core business model: proprietary health/beauty products ($743,969) and therapy services ($(13,852).
Cost of revenues was $417,227 and $56,706 for the three months ended June 30, 2026 and 2025, respectively. Gross profit increased to $312,890 (gross margin of 42.85%) for the three months ended June 30, 2026, as compared to gross profit of $234,732 (gross margin of 80.54%) for three months ended June 30, 2025. However, gross margin decreased from 80.54% to 42.9% primarily because of our strategic transition away from high-margin online platform services to the sale of physical health and beauty products which the direct costs are associated with purchased inventory from our suppliers.
The Company incurred operating expenses of $635,966 and $372,935 for the three months ended June 30, 2026 and 2025, respectively. Operating expenses generally consists of rent and facility expenses, wages and salaries, legal and professional fees. The increase in operating expenses was mainly due to the increase in rental and facility costs.
For the three months ended June 30, 2026, the Company had interest income of $39 and subsidy income of $4,528, as compared to the three months ended June 30, 2025, the Company received renovation subsidy of $10,810 in addition to interest income of $21.
For the three months ended June 30, 2026, our net loss was $318,509 compared to a net loss of $133,372 for the three months ended June 30, 2025. The increase in net loss is mainly due to the increased operating expenses.
Historically, the delivery of our technical and platform services did not utilize dedicated, standalone operational teams or separate infrastructure. Instead, these services were supported by highly integrated, centralized corporate resources, including shared administrative personnel, centralized accounting and sales teams, and shared server infrastructure.
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Following the cessation of the technical services in fiscal year ended March 31, 2026, the Company has retained these shared personnel and infrastructural resources in their entirety. We have repurposed these assets to support the expansion and scaling of our continuing proprietary health products and therapy service lines. Consequently, while our consolidated revenues will materially decrease in the near term due to the loss of the technical service revenue, our general and administrative (G&A) expenses and overall operating cost structure will not experience a proportional decrease.
Because these centralized resources have been retained and absorbed by our continuing operations, and should expect near-term margin compression as our retained organizational overhead is now supported by a smaller, albeit strategically refocused, revenue base.
Equity and Capital Resources
As of June 30, 2026, we had an accumulated deficit of $2,565,867 and working capital deficit of $477,410, compared to accumulated deficit of $2,247,358 and a working capital deficit of $459,038 as of March 31, 2026. The increase in the working capital was primarily driven by a $712,859 increase in accounts receivables.
Historically, the Company has financed its operations and alleviated working capital deficiencies primarily through advances from a principal shareholder and director. While there is no formal written commitment or binding agreement in place, the shareholder has historically provided necessary funding and has indicated the intent to continue providing financial support to fund the Company’s operations and meet its obligations as they become due.
Promissory Notes and November 2025 Assignments and Amendments
During fiscal 2025 and continuing into fiscal 2026, the Company funded a portion of its operations through the issuance of several promissory notes to multiple lenders. These included: (i) a note issued to Barry Wan in the principal amount of $428,789.50; (ii) a note issued to New Lite Ventures LLC in the principal amount of $29,571.00; (iii) two notes originally issued by the Company’s PRC subsidiaries, Antiaging Doctor Hangzhou Holding Ltd. and Dao Ling Doctor (Zhejiang) Health Management Limited, to Hemeihui E-Commerce Co., Ltd., in the principal amounts of $538,568.00 and $287,174.00, respectively; and (iv) a note issued to Tairan Baohe Insurance Sales Co., Ltd. in the principal amount of $383,598.00. The Tairan Baohe note was subsequently repaid in full and is no longer outstanding.
On November 25, 2025, the Company entered into four separate Assignment and Amendment of Promissory Note agreements with respect to the outstanding notes other than the repaid Tairan Baohe note. Under these agreements, each applicable noteholder assigned its rights and interests in the notes to either Atlantic Equity Holdings Inc. or Empire Street Capital Inc., and the notes were amended to provide for the automatic conversion of the outstanding principal balances into shares of the Company’s Class A Common Stock at a fixed conversion price of $0.30 per share. No additional proceeds were received by the Company in connection with these amendments, assignments, or conversions. Upon the issuance of the conversion shares, the applicable notes were deemed fully satisfied and extinguished.
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The Company’s net loss was partially offset by non-cash expenses which primarily included $10,291 in depreciation and amortization, and $54,176 in amortization related to right-of-use (ROU) assets associated with leased office and retail spaces and leasehold improvements. Operating cash activities was further impacted by an increase of $121,528 in inventories, increase in accounts receivable of $712,859, and a $74,686 decrease in advances to suppliers, which were partially offset by a $63,763 decrease in accounts payables and a $342,224 decrease in operating lease liabilities, resulting in net cash used in operating activities of $471,684 for the three months ended June 30, 2026.
During the three months ended June 30, 2026 and 2025, the Company purchased fixed assets and intangible assets totaling $nil and $1,089, respectively.
During the three months ended June 30, 2026 and 2025, the Company received advances of $nil and $220,000 from related parties for working capital purposes, which shareholders are prepared to provide additional funding as needed. The Company also borrowed $573,126 and $nil from an unrelated third party during the three months ended June 30, 2026 and 2025, respectively.
As of June 30, 2026, we held approximately $608,100 in cash and cash equivalents. Our liabilities are primarily funded by shareholder loans and unrelated parties’ loans, which do not require immediate repayment. Operations are continuing as usual, and management is committed to implementing expense control measures in the near term to support liquidity.
Going Concern Assessment
The Company demonstrates adverse conditions that raise substantial doubt about the Company’s ability to continue as a going concern. These adverse conditions are negative financial trends, specifically cash outflow from operating activities, operating losses, accumulated deficit and other adverse key financial ratios.
Management’s plan to alleviate the substantial doubt about the Company’s ability to continue as a going concern include attempts to consummate a business combination and to generate sufficient cash flow from its operations to meet its operating needs on a timely basis; as well as to obtain additional working capital funds as loans from the majority shareholder and the President of the Company.
The unaudited condensed and consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.
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Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Critical Accounting Policies
The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires making estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
The critical accounting policies are discussed in further detail in the notes to the unaudited financial statements appearing elsewhere in this 10-Q report. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company” we are not required to provide this information under this item pursuant to Regulation S-K.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed with an objective of ensuring that information required to be disclosed in our periodic reports filed with the Securities and Exchange Commission, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission. Disclosure controls are also designed with an objective of ensuring that such information is accumulated and communicated to our management, including our chief executive officer, in order to allow timely consideration regarding required disclosures.
The evaluation of our disclosure controls by our principal executive officer included a review of the controls’ objectives and design, the operation of the controls, and the effect of the controls on the information presented in this Annual Report. Based on our management’s evaluation, our Chief Executive Officer, have concluded that as of such date, our disclosure controls were not, in design and operation, effective at a reasonable assurance level due to the material weaknesses in internal control over financial reporting. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Also, projections of any evaluation of the disclosure controls and procedures to future periods are subject to the risk that the disclosure controls and procedures may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that there were material weakness in our internal controls over Financial reporting as of June 30, 2025 and they were therefore not as effective as they could be to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. The material weakness in our controls and procedure were lack of US GAAP knowledge and segregation duties. Management does not believe that any of these material weaknesses materially affected the results and accuracy of its financial statements. However, in view of this discovery of such weaknesses, management has begun a review to improve them.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under the Exchange Act that occurred during the quarter ended June 30, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 1A. Risk Factors.
As a “smaller reporting company”, we are not required to provide this information under this item pursuant to Regulation S-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None
Item 6. Exhibits
** Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| ANTIAGING QUANTUM LIVING INC | |
| Date: August 14, 2026 | /s/ Barry Wan |
| Barry Wan, Chief Executive Officer | |
| Date: August 14, 2026 | /s/ Barry Wan |
| Barry Wan, Chief Financial Officer |
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