Item 2.01 Completion of Acquisition or Disposition of Assets.

On the Closing Date, the Company consummated the transactions contemplated by the Exchange Agreement, pursuant to which the Company acquired 100% of the issued and outstanding equity shares of WLJM Cayman from the Sellers, in exchange for the issuance in the aggregate of 600,000,000 shares of the Company’s Common Stock to the Sellers (representing approximately 99.8% of the Company’s outstanding common stock upon issuance, and 6% of the total voting power of the Company), resulting in WLJM Cayman becoming the Company’s wholly-owned subsidiary. For federal income tax purposes, it is intended that the Acquisition qualify as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended. The acquisition was accounted for as a recapitalization effected by a share exchange, wherein WLJM Cayman is considered the acquirer for accounting and financial reporting purposes.

As a result of the acquisition of all the issued and outstanding shares of WLJM Cayman, we have now assumed the WLJM Group’s business operations as our own.

The disclosures set forth in Item 1.01 “Entry into a Material Definitive Agreement” are incorporated by reference into this Item 2.01.

FORM 10 DISCLOSURE

As described in Item 1.01 “Entry into a Material Definitive Agreement”, on February 2, 2021, the Company acquired WLJM Cayman in a reverse merger business combination transaction. As the Company was formerly a shell company prior to such acquisition and is now entering into a business combination, other than a business combination with a shell company, as those terms are defined in Rule 12b-2 under the Exchange Act, according to Item 2.01(f) of Form 8-K, the Company is required to disclose the information that would be required if the Company were filing a general form for registration of securities under the Exchange Act on Form 10.

We hereby provide below information that would be included in a Form 10 registration statement.

Description of Business

Business

Business Overview

The Company is a US holding company incorporated in Nevada on February 25, 2004, and operating through the Company’s wholly owned subsidiary Wei Lian Jin Meng Group Limited (“WLJM Cayman”), a company incorporated under the laws of the Cayman Islands on June 30, 2020. The Company’s entire business, including operations, employees, sales and marketing and research and development, are all conducted through its subsidiaries located within the People’s Republic of China (“PRC”).

The following is the organization structure of the Company along with ownership detail of all companies:

WLJM Cayman was incorporated in the Cayman Islands on June 30, 2020. It is 100% owned by Fountain Healthy Aging, Inc. Refer to Item 1.01 “Entry into a Material Definitive Agreement” of this Current Report on Form 8-K for a full description of the acquisition of WLJM Cayman by Fountain Healthy Aging, Inc.

Wei Lian Jin Meng (Hong Kong) Company Limited (“WLJM HK”), was established in the Hong Kong Special Administrative Region (“HKSAR”) of the PRC on August 5, 2020. It is 100% owned by WLJM Cayman.

Jin You Wei Meng (Shenzhen) Consulting Company Limited (“JYWM WFOE”) was established as a wholly foreign-owned enterprise on November 24, 2020, under the laws of the PRC. It is 100% owned by WLJM HK.

Shenzhen Wei Lian Jin Meng Electronic Commerce Limited (“Shenzhen Wei Lian”) was incorporated on October 17, 2017, under the laws of the PRC. It is 100% owned by JYWM WFOE.

Dongguan Dishi Coffee Limited (“Dongguan Dishi”) was incorporated on October 25, 2018, under the laws of the PRC. It is 100% owned by Shenzhen Wei Lian.

Shenzhen Nainiang Coffee Art Museum Limited (“Shenzhen Nainiang”) was incorporated on June 20, 2019, under the laws of the PRC. It is 100% owned by Shenzhen Wei Lian.

The Company, through our subsidiaries, develops, produces, markets and sells “coffee tea” products, which represent drinks made from a mixture of coffee and tea, as well as black coffee products and other coffee products. We sell our products wholesale to retail partners and corporate customers, and we also sell directly to consumers in the PRC via our e-commerce channels. We adopted the “online to offline”, or O2O sales mode (i.e. selling products online and delivering products through offline channels), committing to building the first brand of “coffee tea” culture in the PRC.

Industry and Market Overview

As of the time of filing this Current Report on form 8-K, we sell our products exclusively within the PRC. However, we intend to sell our products into global markets at a later time.

Chinese consumers are already familiar with tea, a traditional Chinese drink. Our “coffee tea” products are aimed at attracting Chinese consumers who are also interested in coffee. Our black coffee products and other coffee products are also targeting coffee consumers in China.

China’s rising urbanization and disposable income have been and are expected to continue to be the main growth engines of its beverage industry, and more and more people in China have begun to consume more coffee products in their daily lives. Given the increased demand from Chinese consumers for coffee, we expect coffee consumption to continue to grow in China, paving the way for niche markets served by our products.

China is home to by far the largest internet and mobile internet population in the world, and this population is expected to continue growing. The widespread usage of the mobile internet and prevalent adoption of mobile payments, as popularized by Alibaba’s AliPay and Tencent’s WeChat Wallet, have paved the way for the development of a technology-driven new retail model in China. Chinese companies use technology in all aspects of their business operations, from customer acquisition to purchase process to supply chain management, allowing them to achieve higher operational efficiency and lower costs.

China is the second largest market for cosmetics and health and nutritional supplements products in the world. The market sizes of cosmetics and health and nutritional supplements in China in 2019 are RMB 459.4 billion (approximately $70.68 billion) and RMB 266 billion (approximately $40.92 billion), respectively. The e-commerce channel has gradually become an important sales channel within the cosmetics and health and nutritional supplements markets in China, representing about 29.8%, and about 33.9% of the total sales of cosmetics and health and nutritional supplements in China in 2019, respectively. 

Company Background and Timeline

FHAI was incorporated under the laws of the State of Nevada on February 25, 2004 with the original company name of Celtic Cross Ltd. For unknown reasons, the Company was later abandoned and ceased filings with the Nevada Secretary of State for more than ten years following December 2, 2008. FHAI spent approximately ten years as an inactive, dormant public company. In April 2019, the Eighth Judicial District Court in Clark County, Nevada, appointed Custodian Ventures, LLC (the “Custodian”) as the custodian of the Company. The Custodian brought the Company into active status with the State of Nevada, appointed directors and officers of the Company, and made necessary filings to bring the Company up to date with the alternative reporting standards of the OTC Markets Group. Since April 2019, the Company has not engaged in any business, and has been a shell company.

Our wholly owned subsidiary, WLJM Cayman was incorporated in the Cayman Islands on June 30, 2020. The primary business of WLJM Cayman is to own the business operations located in the PRC and carried out by Shenzhen Wei Lian and its subsidiaries, related to developing, producing, marketing and selling our coffee tea products, our black coffee products and other coffee products.

Restructuring

On February 1, 2021, we entered into a Share Exchange Agreement (the “Exchange Agreement”), with WLJM Cayman and the Sellers. Pursuant to the terms of the Exchange Agreement, the Sellers transferred to the Company all of their shares in WLJM Cayman in exchange for the issuance of 600,000,000 shares of our Common Stock.

Our Services and Products

“Coffee tea” products and black coffee products are our main products, which account for 60% of our sales revenue. We sell “coffee tea” products under the brand name “Dishi” and our black coffee products under the brand name “Angqi Stone.” We also sell some flavored coffee products. We sell our coffee tea, black coffee and other coffee products in the form of pre-packaged powder, and we have the intentions to develop bottled drinks in the future. We also sell freshly brewed coffee tea drinks and other coffee drinks through our subsidiary, Shenzhen Nainiang, which has opened 62 coffee stores across five cities in China.

Our subsidiary, Dongguan Dishi, manufactures and packages our products. One of the major ingredients of our products, a new species of Arabian original species, is sourced from the coffee plantations located in Mangshi and Baoshan, Yunnan Province within the PRC. We have our own production base – a factory with 100000 level dust-free workshop. The entire production process is natural without any addition. The annual output of our manufacturing facilities has reached RMB 2 million.

Our main products, coffee tea products, have the health advantages of both tea and coffee if consumed in moderation. Many studies have shown that coffee and/or tea can help moisten the intestines, burn fat, improve energy levels, boost the immune system, fight off inflammation and even ward off certain diseases.

From January 1, 2020 to September 30, 2020 we have sold coffee products into the Chinese market with a sales revenue of $927,889, and we intend to grow our monthly sales revenue to $300,000 per month as we continue to market and promote our products in the market in future. 

Sales and marketing

We have adopted an “online to offline” sales model. We sell our products via online channels, such as online shopping websites, and we deliver our product through physical channels offline. We own an online retail store named Nainiang Mall at https://houseweb.supperteam.com/ and we also sell products via other shopping websites such as Alibaba-owned Taobao and T-Mall, Jingdong, Pinduoduo and Douyin (the Chinese version of TikTok) as a third-party vendor.

We carry out online sales through our self-developed online mall application Paiyoute which is not only has several sections, such as direct purchase, group shopping, premium product zone, special price zone to attract different consumer groups, but also can integrate offline agents and dealers into online system and conduct overall operation, thus standardized management, intelligent settlement, logistics tracking, member management and so on through it's AI system. In addition, we plan to sell our products on several well-known third party software application platforms, such as Taobao, Tmall, Jingdong, Pinduoduo, Douyin so that the brand and sales volume of products will be further improved.

We increase franchise shops (cafes, wineries) and cooperative shops through distributors to carry out offline sales. We operate entity shops to attract customers and gives a variety of senses of vision, smell and taste that online shopping does not have which can bring a sense of enjoyment of immersing in the environment. Meanwhile, in the process of sales, we guide and recommend customers to scan the QR code to register as menber of our online mall Paiyoute, so as to enhance customers' viscosity and increase their repurchase rate. Through the interaction with customers and on-site promotion, it can promote customers' word-of-mouth and promote sales growth.

We market our products through our own marketing channel. We also market our products by leveraging Shenzhen Nainiang (which owns art galleries and coffee shops) a customer experience center, where we prepare freshly brewed coffee tea drinks and other coffee drinks to customers, and complement our distinctive drinks with a comfortable and appealing environment.

Our Competitive Strengths

Our commitment to quality is uncompromising. We source premium Arabica coffee beans from coffee plantations covering 500,000 mu (approximately 82,368 acres or 129 square miles) in Yunnan Province that are located between 15 degrees north latitude and the Tropic of Cancer—an ideal area for coffee growth. Most of our production area is between 1,000 and 2,000 meters above sea level. The terrain is mainly mountainous and sloping land with large fluctuations, fertile soil, ample sunshine, abundant rainfall, and the day and night temperature difference is large. All of these unique natural conditions make our Arabian coffee beans taste strong but not bitter, fragrant but not strong, and slightly fruity. We believe that such coffee beans are favored by mainstream Chinese coffee consumers.

We maintain good relationships with our suppliers, and as of the date of this filing, we have not experienced any material disputes or supply shortages.

We have our own dedicated production base, a coffee factory that was established in October 2018, to process the coffee beans harvested at our plantation in Yunnan Province. Processing the coffee beans includes roasting, grinding, mixing and packaging the beans into our finished products. We employ a natural production process without any additives. With our own production facilities, we can maintain control of the quality of our products and adjust the formula of our products to meet the rapidly changing tastes of our customers. We have designed stringent quality control standards and enforced comprehensive quality control measures covering supplier selection, quality inspection and testing.

We have a professional and experienced senior management team with a proven track record in this industry. By combining our management’s capability in implementing growth strategies and our in-depth knowledge in the beverage industry, our management team is confident that our company is poised to capture potential market opportunities in coffee tea segments and in coffee segments.

We have an independent and experienced research and development (R&D) team dedicated to developing new product offerings. They explore the tastes of the customers, track the market trends, and can help us launch more diversified products in the future. We encourage the reader to refer to the section titled “Intellectual Property” below for a more detailed description of our trademarks and copyrights.

Technology is at the core of our business. With our centralized technology system, we are able to simplify and standardize our operations and quickly process and fulfil customer orders. We leverage big data analytics to analyze our customer behavior and sales data, which enables us to continuously enhance our products and services, implement dynamic pricing and improve customer acquisition. We have obtained a notice of information security level protection evaluation result of level three in Shenzhen, China. 

Growth Strategy

We will continue to expand our sales network to more regions and cities in China, such as Changsha, Guizhou, etc. The expansion of our sales network will enable us to serve more customers and get closer to our customers. We plan to enrich our product offerings by introducing selective new products that are either complementary or similar to our existing offerings and fulfill our target customer needs. We believe that diversifying our product offerings will increase customer purchase frequency and increase our revenue. We will continue to invest in technology, improving our technology infrastructure, promoting our system security and applying new technologies which will further improve our operational efficiency, ensure quality control and improve our customer acquisition.

Research and Development

As Chinese consumer behaviors and preferences constantly evolve, the demands from the end customers are increasingly diversified. We make significant investments in R&D to optimize our existing products and services and to develop new coffee tea products and coffee products so that we can expand our offerings to satisfy the diversifying user demands.

Intellectual Property

We develop and protect our intellectual property portfolio by registering our trademarks, copyrights, and domain names. As of the date of this filing, we own eight registered trademarks with the Trademark Office of the PRC State Administration for Industry & Commerce, ten copyrights with the PRC State Copyright Bureau, and one domain name with the Ministry of Industry and Information Technology.

Our registered trademarks include those registered by our subsidiary, Shenzhen Wei Lian, and listed in the table immediately below:

	Trademark	English Translation	Date of Registration	Valid until	Description of Use
1		Nainiang	February 7, 2020	February 6, 2030	Shown on shops and coffee tea products as a logo
2	红色微联	Red Weilian	April 14, 2020	April 13, 2030	A logo of the company
3	红企金盟	Red Jin Meng	April 14, 2020	April 13, 2030	A logo of the company
4		Nainiang	February 21, 2020	February 20, 2030	Shown on shops and coffee tea products as a logo
5		Xi Xiang Ling	December 21, 2019	December 20, 2029	Shown on products in the future as a logo
6	沐西施浴貂蝉	Mu Xishi Yu Diaochan	March 21, 2020	March 20, 2030	Shown on products in the future
7	昂起石	Angqi Stone	January 28, 2019	January 27, 2029	For black coffee products
8	滴石	Dishi	January 28, 2019	January 27, 2029	For coffee tea products

Our registered copyrights include those registered by our subsidiary, Shenzhen Wei Lian, and listed in the table immediately below:

We entered into standard employee confidentiality agreements with our technology development employees, which provides that the employees own confidentiality obligations in relation to our trade and technology secrets and we own intellectual property rights developed in-house.

Competition

In China, there are many brands of coffee products. Starbucks, for example, is a large coffee brand with a large number of chain stores, which is very popular in China and has a huge sales volume. In terms of brand effect, our competitiveness is weaker than these big brands.

However, our main product "coffee tea" is a mixture of coffee and tea, which is different from the ordinary coffee that can be seen everywhere in the market. This is our competitiveness.

Our competitors may have more financial, technical, marketing and other resources than we do, and may be more experienced and able to devote greater resources to the development, promotion and support of their business. We believe that our ability to compete effectively depends upon many factors, including our R&D, market acceptance of our products, our marketing and selling efforts, and the strength and reputation of our brand. We also experience significant competition for highly skilled personnel, including management, sales personnel and marketing personnel. Our growth strategy depends in part on our ability to retain our existing personnel and add additional highly skilled employees.

Legal Proceedings

We are currently not a party to any legal or administrative proceedings and are not aware of any pending or threatened legal or administrative proceedings against us in all material aspects. We may from time to time become a party to various legal or administrative proceedings arising in the ordinary course of our business.

Employees

We have 58 full-time employees, including ten serving on and assisting the management, two employees in our CEO’s office, two in our technical department, six in our finance department, twelve in our sales and marketing department, seven in our general management office, two in our customer service department, five in our manufacturing department, five in our e-commerce department, five in our brand operation department and one in our foreign trade department. We are compliant with local prevailing wage, contractor licensing and insurance regulations and have good relations with our employees.

We enter into standard employment contracts with our full-time employees. In addition to salaries and benefits, we provide performance-based bonuses or commission-based compensation to certain employees. As required by PRC law, we participate in various employee social security plans that are organized by municipal and provincial governments for our employees.

We maintain a good working relationship with our employees, and as of the date of this filing, we have not experienced any material labor disputes in the past. None of our employees are represented by labor unions.

Corporation Information

Our principal executive offices are located at Room 601, Bldg. E, No. 1, Huabao Fubao China Street, Futian District, Shenzhen City, Guangdong Province, People’s Republic of China 518000. Our telephone number at this address is +86 185 6676 1769.

Government Regulation

Food Safety Law

In accordance with the Food Safety Law of the PRC, or the Food Safety Law, as effective on June 1, 2009 and most recently amended on December 29, 2018, the PRC State Counsel implements a licensing system for food production and trading. A person who engages in food production, food selling or catering services shall obtain the license in accordance with the Food Safety Law.

The Food Safety Law sets out, as penalties for violation, various legal liabilities in the form of warnings, orders to rectify, confiscations of illegal gains, confiscations of utensils, equipment, raw materials and other articles used for illegal production and operation, fines, recalls and destructions of food in violation of laws and regulations, orders to suspend production and/or operation, revocations of production and/or operation license, and even criminal punishment. The Implementation Rules of the Food Safety Law, as effective on July 20, 2009 and amended on February 6, 2016, further specify the detailed measures to be taken and conformed to by food producers and business operators in order to ensure food safety as well as the penalties that shall be imposed should these required measures not be implemented.

Food Production Licensing

On June 1, 2010, China Food and Drug Administration promulgated the Administrative Measures for Food Production Licensing, which was amended from time to time and most recently on March 1, 2020. According to the Administrative Measures for Food Production Licensing, a food production license shall be obtained in accordance with the law to engage in food production services within China. The principle of one license for one enterprise shall apply to the licensing for food producer. Food and drug administrative authorities shall implement classified licensing for food production according to food producers’ types of operation, types of food products involved, and the degree of risk of their production projects.

The issuance date of a food production license is the date when the decision on granting the license is made, and the license is valid for five years. Food producers shall hang or place their food production license originals in prominent places of their sites. Where the licensing items which are indicated on a food production license change, the food producer shall, within ten business days after the changes take place, apply to the food and drug administrative authority which originally issued the license for alteration of the production license. Those who fail to obtain a food production license and engage in food production activities shall be punished by the local food and drug administrative authorities at or above the county level that the authorities shall confiscate their illegal income, the food illegally produced or dealt in, and the tools, equipment, raw materials, and other items used for illegal production or operation; and impose a fine of not less than RMB50,000 but not more than RMB100,000 on them if the goods value of the food illegally produced or dealt in is less than RMB10,000 or a fine of not less than 10 times but not more than 20 times the goods value if the goods value is RMB10,000 or more.

Customer Rights Protection

The PRC Customer Rights and Interests Protection Law, or Customer Protection Law, as amended on October 25, 2013 and effective on March 15, 2014, sets out the obligations of business operators and the rights and interests of the customers. Pursuant to this law, business operators must guarantee that the commodities they sell satisfy the requirements for personal or property safety, provide customers with authentic information about the commodities, and guarantee the quality, function, usage and term of validity of the commodities. Failure to comply with the Customer Protection Law may subject business operators to civil liabilities such as refunding purchase prices, exchange of commodities, repairing, ceasing damages, compensation, and restoring reputation, and even subject the business operators or the responsible individuals to criminal penalties if business operators commit crimes by infringing the legitimate rights and interests of customers.

E-Commerce

The Standing Committee of the National People’s Congress of PRC enacted the PRC E-Commerce Law on August 31, 2018, which became effective on January 1, 2019. Under the PRC E-Commerce Law, e-commerce refers to operating activities of selling goods or providing services through the internet or other information networks. The PRC E-Commerce Law generally applies to: (i) platform operators, which refer to legal persons or unincorporated organizations that provide network places of business, transaction matching, information release and other services to enable the transaction parties to carry out independent transaction activities; (ii) operators on the platform, which refer to e-commerce operators that sell goods or provide services to customers through e-commerce platforms; and (iii) other e-commerce operators that sell goods or provide services through self-established websites or other network services. The PRC E-commerce Law also provides rules in relation to e-commerce contracts, dispute settlements, e-commerce development as well as legal liabilities involved in e-commerce.

Intellectual Property Rights

Pursuant to the Trademark Law of the PRC, as amended in 2013, the right to exclusive use of a registered trademark shall be limited to trademarks which have been approved for registration and to goods for which the use of such trademark has been approved. The period of validity of a registered trademark shall be ten years, counted from the day the registration is approved. According to this law, using a trademark that is identical to or similar to a registered trademark in connection with the same or similar goods without the authorization of the owner of the registered trademark constitutes an infringement of the exclusive right to use a registered trademark. The infringer shall, in accordance with the regulations, undertake to cease the infringement, take remedial action, and pay damages, etc.

Risk Factors

Risks Related to Our Business and Industry

Limited Operating History

After the Company was restored to active status in 2019 after being abandoned for about 10 years, we have been a shell company and have limited operating history and minimal revenues or earnings from operations. We will, in all likelihood, sustain operating expenses without corresponding revenues, at least for the foreseeable future. We can make no assurances that we will be able to generate sufficient revenue to continue operations.

Our revenue may decline for any number of possible reasons and some of them are beyond our control, including decreasing customer spending, increasing competition, declining growth of China’s coffee/tea industry or China’s food and beverage sector in general, or changes in government policies or general economic conditions.

Our estimates of capital, personnel, equipment, and facilities required for our proposed operations are based on certain other existing businesses operating under projected business conditions and plans. We believe that our estimates are reasonable, but it is not possible to determine the accuracy of such estimates at this point. In formulating our business plan, we have relied on the judgment of our officers and directors and their experience in developing businesses. We can make no assurances that we will be able to obtain sufficient financing or implement successfully the business plan we have devised. Further, even with sufficient financing, there can be no assurance that we will be able to operate our business on a profitable basis. We can make no assurances that our projected business plan will be realized or that any of our assumptions will prove to be correct.

Limited Liability

Our Articles of Incorporation and Bylaws generally provide that the liability of our officers and directors will be eliminated to the fullest extent allowed under law for their acts on behalf of our Company.

Business Management

We will continue to encounter challenges in implementing our managerial, operating and financial strategies. The major challenges in managing our business include, among other things:

All efforts to address the challenges of our business require significant managerial, financial and human resources. We cannot assure you that we will be able to execute managerial, operating and financial strategies. If we are not able to manage our business or execute our strategies effectively, our revenue will decline and our business and prospects may be materially and adversely affected.

Many factors that are out of our control, including macroeconomic and regulatory environment, could also adversely affect our operation. Any of these challenges listed above or described elsewhere in this Risk Factors section may render us unsuccessful in profitably operating our business and could adversely impact our business, financial condition and/or results of operations.

Uncertain Government Regulation

Our business will be subject to extensive regulation. In addition, we may be adversely affected as a result of new or revised legislation or regulations imposed by the PRC Food and Drug Administration, the SEC or other governmental regulatory authorities or self-regulatory organizations that supervise the markets. We also may be adversely affected by changes in the interpretation or enforcement of existing laws and rules by these governmental authorities and self-regulatory organizations.

Substantially all our assets are in the PRC, and all our revenue comes from PRC sources. Accordingly, our results of operations, financial position and prospects are subject to a significant degree to the economic, political and legal developments of the PRC.

We rely on a limited number of third-party suppliers and service providers to provide products and services to us or to our customers, and the loss or misconduct of any of these suppliers or service providers would negatively impact our business.

We have a limited number of suppliers for our raw materials and logistics service. In 2019 and 2020, we purchased our coffee beans mainly from one supplier and our tea leaves mainly from one supplier. We also cooperate with three different delivery service providers from warehouses to our customers. 

Our reliance on suppliers (including suppliers of raw materials and logistics providers) and commodity markets to secure raw materials and components used in our products exposes us to volatility in the prices and availability of these materials. A disruption in deliveries from our suppliers, supplier capacity constraints, supplier production disruptions, supplier quality issues, closing or bankruptcy of our suppliers, price increases, or decreased availability of raw materials or commodities, could have a material adverse effect on our ability to meet our commitments to customers or increase our operating costs. We believe that our supply management and production practices are based on an appropriate balancing of the foreseeable risks and the costs of alternative practices. Nonetheless, price increases, supplier capacity constraints, supplier production disruptions or the unavailability of some raw materials may have a material adverse effect on our competitive position, results of operations, cash flows or financial condition.

Furthermore, our current agreements with our suppliers generally do not prohibit them from working with our competitors. Our competitors may be more effective in providing incentives to our suppliers to prioritize on their orders in case of short supply. We cannot assure you that we would be able to find replacement suppliers on commercially reasonable terms or a timely basis.

In addition, our reputation and operation may be harmed by illegal or unsatisfactory actions taken by suppliers and service providers that are outside of our control. In the event that we become subject to claims caused by actions taken by our suppliers or service providers, we may attempt to seek compensation from the relevant suppliers or service providers. However, such compensation may be limited. If no claim can be asserted against a supplier or service provider, or amounts that we claim cannot be fully recovered from the supplier or service provider, we may be required to bear such losses and compensation at our own costs. This could have a material and adverse effect on our business, financial condition and results of operations.

Economic Conditions

Our business will be materially affected by conditions in the financial markets and economic conditions or events in the PRC and throughout the world that are outside our control, including, without limitation, changes in interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws (including laws relating to taxation), trade barriers, commodity prices, currency exchange rates, and controls and national and international political circumstances (including wars, terrorist acts, or security operations). These factors may affect the level and volatility of securities prices and the liquidity and the value of investments, and we may not be able to or may choose not to manage our exposure to these market conditions and/or other events. In the event of a market downturn, our businesses could be adversely affected in different ways.

China’s food and beverage market in general is affected by macro-economic factors, including changes in international, national, regional and local economic conditions, employment levels, customer demand and discretionary spending. Any deterioration of economy, decrease in disposable customer income and fear of a recession may lead to a reduction of customer demand, which could materially and adversely affect our business, financial condition and results of operations.

Quality and safety of our products

The quality and safety of our products are critical to our success. Maintaining consistent product quality depends on the effectiveness of our quality control system, which in turn depends on a number of factors, including the design of our quality control system, employee training to ensure that our employees adhere to our quality control policies and procedures and the effectiveness of monitoring our quality control system. There can be no assurance that our quality control system will always prove to be effective.

In addition, the quality of the products provided by our suppliers is subject to factors beyond our control, including the effectiveness and the efficiency of their quality control system. There can be no assurance that our suppliers may always be able to adopt appropriate quality control systems and meet our stringent quality control requirements in respect of the products they provide. Any failure of our suppliers to provide satisfactory products or services could harm our reputation and adversely impact our operations. We may be unable to receive sufficient compensation from suppliers for the losses caused by them.

If customers become ill from food-borne illnesses, tampering, adulteration, contamination, mislabeling or other food safety issues, we could be forced to temporarily close our business and/or be involved in related disputes or legal proceedings. In addition, instances of food safety issues, even those not involving us or our suppliers, could, by resulting in negative publicity about us. A decrease in customer confidence in the safety and quality of our products or any food safety issues could materially harm our business and results of operations.

Implications of Being an Emerging Growth Company

As a company with less than $1,070,000,000 billion in annual gross revenue during its last fiscal year, we qualify as an “emerging growth company” as defined in the JOBS Act. For as long as a company is deemed to be an emerging growth company, it may take advantage of specified reduced reporting and other regulatory requirements that are generally unavailable to other public companies. These provisions include:

An emerging growth company is also exempt from Section 404(b) of the Sarbanes Oxley Act, which requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting. Similarly, as a Smaller Reporting Company we are exempt from Section 404(b) of the Sarbanes-Oxley Act and our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting until such time as we cease being a Smaller Reporting Company.

As an emerging growth company, we are exempt from Section 14A (a) and (b) of the Exchange Act which require stockholder approval of executive compensation and golden parachutes.

Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We would cease to be an emerging growth company upon the earliest of:

Rising Competition May Materially Affect Our Operation and Financial Conditions

We operate in a highly competitive field. Our products are not proprietary, and therefore, we are unable to prevent competitors from copying our products and sell similar products. Competitors may succeed by developing products that are more attractive to customers that would render our products non-competitive. Any of these actions by our competitors could adversely affect our sales. In addition, our competitors may have more financial, technical, marketing and other resources than we do and may be more experienced and able to devote greater resources to the development, promotion and support of their business.

Furthermore, China’s beverage industry, especially the coffee segments, is subject to the entry of new and well-funded competitors.

An increase in competition could result in material selling price reductions or loss of our market share, which could have an adverse material impact on our operation and financial conditions.

We may not be able to quickly identify new market opportunities, respond to the industry trends and adapt to customer preferences.

The growth of China’s beverage industry is affected by customer taste, preferences, perceptions and spending patterns. Since we have generated, and expect to continue to generate a considerable amount of our revenues from the sale of coffee tea products and black coffee products, a shift in customer preferences away from coffee, the changes of spending pattern adversely affecting consumption of coffee, or the decrease or slow-growth of coffee consumption in China would harm our business, more than if our revenues were generated from more diversified products.

We have devoted significant resources to launch and promote new products. However, our new products may not be favored by customers or commercially successful, which will make our financial results suffer.

Negative Publicity May Harm Our Reputation and Have A Material Adverse Effect On Our Business And Operating Results.

Negative publicity involving us, our products, our customers or our management may materially and adversely harm our business. We cannot assure you that we will be able to defuse negative publicity about us, our management and/or our products to the satisfaction of our investors and customers. Such negative publicity, especially when it is directly addressed against us, may also require us to engage in defensive media campaigns. This may cause us to increase our marketing expenses and divert our management’s attention and may adversely impact our business and results of operations.

The Continuing and Collaborative Efforts Of Our Senior Management And Key Employees Are Crucial To Our Success, And Our Business May Be Harmed If We Were To Lose Their Services.

We depend on the continued contributions of our senior management, especially the executive officers listed in “Management” section of this report, and other key employees, many of whom are difficult to replace. The loss of the services of any of our executive officers or other key employees could materially harm our business. Competition for qualified talent in the market is intense. Our future success is dependent on our ability to attract a significant number of qualified employees and retain existing key employees. If we are unable to do so, our business and growth may be materially and adversely affected. Our need to significantly increase the number of our qualified employees and retain key employees may cause us to materially increase compensation-related costs.

Intellectual Property Rights.

We rely on a combination of copyright, trademark, and trade secret laws and restrictions on disclosure to protect our intellectual property rights. Despite our efforts to protect our proprietary rights, third parties may attempt to copy or otherwise obtain and use our intellectual property or seek court declarations that they do not infringe upon our intellectual property rights. Monitoring unauthorized use of our intellectual property is difficult and costly, and we cannot be certain that the steps we have taken will prevent misappropriation of our intellectual property. From time to time, we may have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of our resources.

In addition, we cannot be certain that our operations or any aspects of our business do not or will not infringe upon or otherwise violate intellectual property rights held by third parties. We have not but in the future may be, subject to legal proceedings and claims relating to the intellectual property rights of others. If we are found to have violated the intellectual property rights of others, we may be subject to liability for our infringement activities or may be prohibited from using such intellectual property, and we may incur licensing fees or be forced to develop alternatives of our own. We may also incur significant expenses, and may be forced to divert management’s time and other resources from our business and operations to defend against these infringement claims, regardless of their merits.

Requisite Approvals, Licenses or Permits Applicable To Our Business

In accordance with the relevant laws and regulations in jurisdictions in which we operate, we are required to maintain various approvals, licenses and permits to operate our business, including but not limited to business license, food production license, environmental impact assessment filing and fire safety inspection. These approvals, licenses and permits are obtained upon satisfactory compliance with, among other things, the applicable laws and regulations.

There can be no assurance that we will be able to obtain, renew and/or convert all of the approvals, licenses and permits required for our existing business operations upon their expiration in a timely manner or at all, which could adversely affect our business operations.

Adverse public or medical opinion about the health effects of our products may harm our business.

Our products contain caffeine, fructic acid, crude fiber, linolenic acid and other active compounds, the health effects of which are not fully understood. The excessive consumption of these compounds may result in adverse health effects and have caused increasing public awareness. For example, a number of research studies conclude or suggest that excessive consumption of caffeine may lead to increased heart rate, nausea and vomiting, restlessness and anxiety, depression, headaches, tremors, sleeplessness and other adverse health effects. Unfavorable reports on the health effects of caffeine or other compounds of our products could significantly reduce the sales of our products. Also, we could become subject to litigation relating to the existence of such compounds in our products; any such litigation could be costly and could divert management attention.

We Face Risks Related to Health Epidemics and Natural Disasters.

Our business could be adversely affected by the effects of epidemics. In recent years, there have been breakouts of epidemics globally. Our business operations could be disrupted if one of our employees is suspected of having COVID-19, H1N1 flu, avian flu or another epidemic, since it could require our employees to be quarantined and/or our offices to be disinfected. In addition, our results of operations could be adversely affected to the extent that the outbreak harms the global economy in general and the marketing industry in particular.

We have no business liability or disruption insurance, which could expose us to significant costs and business disruption.

We have no business liability or disruption insurance to cover our operations. Any uninsured risks may result in substantial costs and the diversion of resources, which could adversely affect our results of operations and financial condition.

Risks Associated with Doing Business in the PRC

We Derive All of Our Sales from The PRC.

Almost all of our sales are generated from China. We anticipate that sales of our products in China will continue to represent most, if not all, of our total sales in the near future. Any significant decline in the condition of the PRC economy could adversely affect consumer demand of our products, among other things, which in turn would have a material adverse effect on our business and financial condition.

Future Inflation in China May Inhibit Our Activity to Conduct Business in China.

In recent years, the Chinese economy has experienced periods of rapid expansion and high rates of inflation. During the past ten years, the rate of inflation in China has been as high as 20.7% and as low as -2.2%. These factors have led to the adoption by the Chinese government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth and contain inflation. High inflation may in the future cause the Chinese government to impose controls on credit and/or prices, or to take other action, which could inhibit economic activity in China, and thereby harm the market for our products.

Fluctuations in Exchange Rates Could Adversely Affect Our Business and The Value Of Our Securities.

The value of the Chinese Yuan (CNY or RMB) against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in China’s political and economic conditions and foreign exchange policies. On July 21, 2005, the PRC government changed its decade-old policy of pegging the value of the RMB to the U.S. dollar. Under the revised policy, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. Following the removal of the U.S. dollar peg, the RMB appreciated more than 20% against the U.S. dollar over the following three years. Since July 2008, however, the RMB has traded within a narrow range against the U.S. dollar. It is difficult to predict how long the current situation may last and when and how the RMB exchange rates may change going forward.

Our revenues and costs are mostly denominated in RMB, while a significant portion of our financial assets are denominated in U.S. dollars. At the holding company level, we rely entirely on dividends and other fees paid to us by our subsidiaries and consolidated affiliated entities in China. Any significant revaluation of RMB may materially and adversely affect our cash flows, revenues, earnings and financial position. For example, an appreciation of RMB against the U.S. dollar would make any new RMB denominated investments or expenditure more costly to us, to the extent that we need to convert U.S. dollars into RMB for such purposes. An appreciation of RMB against the U.S. dollar would also result in foreign currency translation losses for financial reporting purposes when we translate our U.S. dollar denominated financial assets into RMB, as RMB is our reporting currency. Conversely, a significant depreciation of the RMB against the U.S. dollar may significantly reduce the U.S. dollar equivalent of our earnings, which in turn could adversely affect the price of our common stock.

Risks Related to the Market for our Stock

The OTC and Share Value

Our Common Stock trades over the counter, which may deprive stockholders of the full value of their shares. Our stock is quoted via the Over-The-Counter (“OTC”) Pink Sheets under the ticker symbol “FHAI”. Therefore, our Common Stock is expected to have fewer market makers, lower trading volumes, and larger spreads between bid and asked prices than securities listed on an exchange such as the New York Stock Exchange or the NASDAQ Stock Market. These factors may result in higher price volatility and less market liquidity for our Common Stock.

Low Market Price

A low market price would severely limit the potential market for our Common Stock. Our Common Stock is expected to trade at a price substantially below $5.00 per share, subjecting trading in the stock to certain Commission rules requiring additional disclosures by broker-dealers. These rules generally apply to any non-NASDAQ equity security that has a market price share of less than $5.00 per share, subject to certain exceptions (a “penny stock”). Such rules require the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and institutional or wealthy investors. For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to the sale. The broker-dealer also must disclose the commissions payable to the broker-dealer, current bid and offer quotations for the penny stock and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Such information must be provided to the customer orally or in writing before or with the written confirmation of trade sent to the customer. Monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. The additional burdens imposed upon broker-dealers by such requirements could discourage broker-dealers from effecting transactions in our Common Stock.

Lack of Market and State Blue Sky Laws

Investors may have difficulty in reselling their shares due to the lack of market or state Blue Sky laws. The holders of our shares of Common Stock and persons who desire to purchase them in any trading market that might develop in the future should be aware that there may be significant state law restrictions upon the ability of investors to resell our shares. Accordingly, even if we are successful in having the shares available for trading on the OTC, investors should consider any secondary market for our securities to be a limited one. We intend to seek coverage and publication of information regarding our Company in an accepted publication which permits a “manual exemption.” This manual exemption permits a security to be distributed in a particular state without being registered if the company issuing the security has a listing for that security in a securities manual recognized by the state. However, it is not enough for the security to be listed in a recognized manual. The listing entry must contain (1) the names of issuers, officers, and directors, (2) an issuer’s balance sheet, and (3) a profit and loss statement for either the fiscal year preceding the balance sheet or for the most recent fiscal year of operations. We may not be able to secure a listing containing all of this information. Furthermore, the manual exemption is a non-issuer exemption restricted to secondary trading transactions, making it unavailable for issuers selling newly issued securities. Most of the accepted manuals are those published in Standard and Poor’s, Moody’s Investor Service, Fitch’s Investment Service, and Best’s Insurance Reports, and many states expressly recognize these manuals. A smaller number of states declare that they “recognize securities manuals” but do not specify the recognized manuals. The following states do not have any provisions and therefore do not expressly recognize the manual exemption: Alabama, Georgia, Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont, and Wisconsin.

Penny Stock Regulations

We will be subject to penny stock regulations and restrictions and you may have difficulty selling shares of our Common Stock. The Commission has adopted regulations which generally define so-called “penny stocks” to be an equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. We anticipate that our Common Stock will become a “penny stock”, and we will become subject to Rule 15g-9 under the Exchange Act, or the “Penny Stock Rule”. This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers. For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in the secondary market.

For any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in a penny stock, of a disclosure schedule prepared by the Commission relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.

We do not anticipate that our Common Stock will qualify for exemption from the Penny Stock Rule. In any event, even if our Common Stock were exempt from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the Commission the authority to restrict any person from participating in a distribution of penny stock, if the Commission finds that such a restriction would be in the public interest.

Rule 144 Risks

Sales of our Common Stock under Rule 144 could reduce the price of our stock. Issued and outstanding shares of our Common Stock which Rule 144 of the Securities Act defines as restricted securities will be subject to the resale restrictions of Rule 144, should we hereinafter cease being deemed a “shell company”. In general, persons holding restricted securities, including affiliates, must hold their shares for a period of at least six months, may not sell more than 1.0% of the total issued and outstanding shares in any 90-day period, and must resell the shares in an unsolicited brokerage transaction at the market price. The availability for sale of substantial amounts of Common Stock under Rule 144 could reduce prevailing market prices for our securities.

No Audit or Compensation Committee

Because we do not have an audit or compensation committee, stockholders will have to rely on our entire Board of Directors, none of which are independent, to perform these functions. We do not have an audit or compensation committee comprised of independent directors. Indeed, we do not have any audit or compensation committee. These functions are performed by our Board of Directors as a whole. No members of our Board of Directors are independent directors. Thus, there is a potential conflict in that Board members who are also part of management will participate in discussions concerning management compensation and audit issues that may affect management decisions.

Security Laws Exposure

We are subject to compliance with securities laws, which exposes us to potential liabilities, including potential rescission rights. We may offer to sell our shares of our Common Stock to investors pursuant to certain exemptions from the registration requirements of the Securities Act, as well as those of various state securities laws. The basis for relying on such exemptions is factual; that is, the applicability of such exemptions depends upon our conduct and that of those persons contacting prospective investors and making the offering. We may not seek any legal opinion to the effect that any such offering would be exempt from registration under any federal or state law. Instead, we may elect to relay upon the operative facts as the basis for such exemption, including information provided by investor themselves.

If any such offering did not qualify for such exemption, an investor would have the right to rescind its purchase of the securities if it so desired. It is possible that if an investor should seek rescission, such investor would succeed. A similar situation prevails under state law in those states where the securities may be offered without registration in reliance on the partial pre-emption from the registration or qualification provisions of such state statutes under the National Securities Markets Improvement Act of 1996. If investors were successful in seeking rescission, we would face severe financial demands that could adversely affect our business and operations. Additionally, if we did not in fact qualify for the exemptions upon which we have relied, we may become subject to significant fines and penalties imposed by the Commission and state securities agencies.

No Cash Dividends

Because we do not intend to pay any cash dividends on our Common Stock, our stockholders will not be able to receive a return on their shares unless they sell them. We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on shares of our Common Stock in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. There is no assurance that stockholders will be able to sell shares of our Common Stock when desired.

Delayed Adoption of Accounting Standards

We have delayed the adoption of certain accounting standards through an opt-in right for emerging growth companies. We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the Jobs Act, which allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

SELECTED CONSOLIDATED FINANCIAL DATA

You should read the summary financial data set forth below in conjunction with “Management’s Discussion and Analysis of Financial Condition or Plan of Operations.” The financial data of WLJM Cayman for the two fiscal years ended December 31, 2019 and 2018, and for the nine-month periods ended September 30, 2020 and 2019, are derived from the audited consolidated financial statements and the notes appearing in Item 9.01(a) “Financial Statements of Businesses Acquired” of this Current Report on Form 8-K. The financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”). The historical results are not necessarily indicative of the results to be expected for any future period.