What changed in this filing

/stocks — the workspaceLOADING

Item 5. Market for Registrant’s Common Equity

2021-08-16 compared with 2020-03-31 · 511 added, 585 removed, 30 unchanged (97% of the section changed)

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY

Common Stock has been trading on the Over-the-Counter (OTC) Markets OTCQB under the symbol GTVI since September 11, 2009.

The OTC Markets is a quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter,

or the OTC, equity securities.

securities are not listed or traded on the floor of an organized national or regional stock exchange.

Instead, OTCQB securities

transactions are conducted through a telephone and computer network connecting dealers in stocks.

OTCQB issuers are traditionally

smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.

Range Of Common Stock The market price of our common stock is subject to significant fluctuations

in response to variations in our quarterly operating results, general trends in the market, and other factors, over many of which

we have little or no control.

In addition, broad market fluctuations, as well as general economic, business and political

conditions, may adversely affect the market for our common stock, regardless of our actual or projected performance.

following table shows, for the periods indicated, the high and low bid prices per share of our Common Stock as reported by the

OTC Markets quotation service.

The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions,

and may not represent actual transactions.

First Quarter (January 1 –

Second Quarter (April 1 –

Third Quarter (July 1 –

September 30)

Fourth Quarter (October 1 –

March 22, 2020, the closing bid price of our Common Stock was $0.05.

of Our Common Stock

of December 31, 2019, we had 432 shareholders of record of our common stock, and we believe a greater number of beneficial owners.

The holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders.

Holders of the common stock have no preemptive rights and no right to convert their common stock into any other securities.

are no redemption or sinking fund provisions applicable to the common stock.

we determine to pay dividends on any of our common shares in the future, as a holding company, we will be dependent on receipt

of funds from Junhe Consulting, which in turn would be dependent on the receipt of funds from our variable interest entities,

Joway Shengshi and its subsidiaries.

Payments of dividends by Junhe Consulting to our Company are subject to laws and regulations

in the PRC including the requirement that foreign invested enterprises may only buy, sell and/or remit foreign currencies at those

banks authorized to conduct foreign exchange business.

Further, such remittances would require Junhe Consulting to provide an

application for remittance that includes, in addition to the application form, a foreign registration certificate, board resolution,

capital verification report, audit report on profit and stock bonuses, and a tax certificate.

Additionally,

under applicable PRC regulations, foreign-invested enterprises in the PRC may pay dividends only out of their accumulated profits,

if any, determined in accordance with PRC accounting standards and regulations.

In addition, a foreign-invested enterprise in

the PRC is required to set aside at least 10% of its after-tax profit (determined in accordance with PRC accounting standards)

each year to its general reserves until the accumulative amount of such reserves reach 50% of its registered capital.

These reserves

are not distributable as cash dividends.

have not paid dividends on our common stock and do not anticipate paying such dividends in the foreseeable future.

on dividends from our PRC Operating Entities for our funds and PRC regulations (described above) may limit the amount of funds

distributable to us from our PRC Operating Entities, which will affect our ability to declare any dividends.

Option Grants

date, we have not granted any stock options.

have not granted registration rights to any person.

authorized for issuance under equity compensation plans

2019 and 2018, we have not granted any securities authorized for issuance under equity compensation plans.

Stock Regulations

shares of common stock are subject to the “penny stock”

rules of the Securities Exchange Act of 1934 and various rules

under this Act.

In general terms, “penny stock”

is defined as any equity security that has a market price less than

$5.00 per share, subject to certain exceptions.

The rules provide that any equity security is considered to be a penny stock unless

that security is registered and traded on a national securities exchange meeting specified criteria set by the SEC, issued by

a registered investment company, and excluded from the definition on the basis of price (at least $5.00 per share), or based on

the issuer’s net tangible assets or revenues.

In the last case, the issuer must meet one of the following requirements:

tangible assets must exceed $3,000,000 if the issuer has been in continuous operation for at least three years;

tangible assets must exceed $5,000,000 if the issuer has been in operation for less than three years;

or (iii) the issuer’s

average revenues for each of the past three years must exceed $6,000,000.

in shares of penny stock is subject to additional sales practice requirements for broker-dealers who sell penny stocks to persons

other than established customers and accredited investors.

Accredited investors, in general, include individuals with assets in

excess of $1,000,000 or annual income exceeding $200,000 (or $300,000 together with their spouse), and certain institutional investors.

For transactions covered by these rules, broker-dealers must make a special suitability determination for the purchase of the

security and must have received the purchaser’s written consent to the transaction prior to the purchase.

Additionally, for any

transaction involving a penny stock, the rules require the delivery, prior to the first transaction, of a risk disclosure document

relating to the penny stock.

A broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered

representative, and current quotations for the security.

Finally, monthly statements must be sent disclosing recent price information

for the penny stocks.

These rules may restrict the ability of broker-dealers to trade or maintain a market in our common stock,

to the extent it is penny stock, and may affect the ability of shareholders to sell their shares.

MARKET FOR REGISTRANT’S

COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

There is a limited public

market for our common shares.

Our Common Stock has been trading on the Over-the-Counter (“OTC”) Markets OTCQB under the symbol

“GTVI”

since September 11, 2009.

Trading in stocks quoted on the OTC Markets is often thin and is characterized by wide

fluctuations in trading prices due to many factors that may be unrelated to a company’s operations or business prospects.

assure you that there will be a market in the future for our common stock.

The OTC Markets is a quotation

service that displays real-time quotes, last-sale prices, and volume information in over-the-counter, or the OTC, equity securities, and

may not necessarily represent actual transactions.

OTCQB securities are not listed or traded on the floor of an organized

national or regional stock exchange.

Instead, OTCQB securities transactions are conducted through a telephone and computer network connecting

dealers in stocks.

OTCQB issuers are traditionally smaller companies that do not meet the financial and other listing requirements of

a regional or national stock exchange.

Holders of Our Common Stock

of December 31, 2020, we had 430 shareholders of record of our common stock .

holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders.

of the common stock have no preemptive rights and no right to convert their common stock into any other securities.

There are no redemption

or sinking fund provisions applicable to the common stock.

In January 2021, the Company

distributed an aggregate amount of $119,070 at the price of $0.045 per share to all its shareholders other than Crystal Globe, which represents

2,646,000 shares of our common stock.

Said amount represented the Merger Consideration paid to the Company in connection with the Merger

described in “Item 1.

Entry into a Material Definitive Agreement”

Since the remaining 17,408,000 shares of our common

stock is owned by Crystal Globe, the $0.045 per share payment for the 17,408,000 shares is offset.

Except for above, we have

not paid dividends on our common stock and do not anticipate paying such dividends in the foreseeable future.

The declaration of any future

cash dividends is at the discretion of our Board and depends upon our earnings, if any, our capital requirements and financial position,

our general economic conditions, and other pertinent conditions.

It is our present intention not to pay any cash dividends in the foreseeable

future, but rather to reinvest earnings, if any, in our business operations.

Stock Option Grants

To date, we have not granted

any stock options.

Registration Rights

We have not granted registration

rights to any person.

Recent Sales of Unregistered Securities

Securities authorized for issuance under equity compensation

In 2020 and 2019, we have

not granted any securities authorized for issuance under equity compensation plans.

Penny Stock Regulations

Our shares of common stock

are subject to the “penny stock”

rules of the Securities Exchange Act of 1934 and various rules under this Act.

terms, “penny stock”

is defined as any equity security that has a market price less than $5.00 per share, subject to certain

The rules provide that any equity security is considered to be a penny stock unless that security is registered and traded

on a national securities exchange meeting specified criteria set by the SEC, issued by a registered investment company, and excluded from

the definition on the basis of price (at least $5.00 per share), or based on the issuer’s net tangible assets or revenues.

last case, the issuer must meet one of the following requirements:

(i) net tangible assets must exceed $3,000,000 if the issuer has

been in continuous operation for at least three years;

or (ii) net tangible assets must exceed $5,000,000 if the issuer has been

in operation for less than three years;

or (iii) the issuer’s average revenues for each of the past three years must exceed

Trading in shares of penny

stock is subject to additional sales practice requirements for broker-dealers who sell penny stocks to persons other than established

customers and accredited investors.

Accredited investors, in general, include individuals with assets in excess of $1,000,000 or annual

income exceeding $200,000 (or $300,000 together with their spouse), and certain institutional investors.

For transactions covered by these

rules, broker-dealers must make a special suitability determination for the purchase of the security and must have received the purchaser’s

written consent to the transaction prior to the purchase.

Additionally, for any transaction involving a penny stock, the rules require

the delivery, prior to the first transaction, of a risk disclosure document relating to the penny stock.

A broker-dealer also must disclose

the commissions payable to both the broker-dealer and the registered representative, and current quotations for the security.

monthly statements must be sent disclosing recent price information for the penny stocks.

These rules may restrict the ability of broker-dealers

to trade or maintain a market in our common stock, to the extent it is penny stock, and may affect the ability of shareholders to sell

their shares.

SELECTED FINANCIAL DATA.

are a smaller reporting company as defined by Rule 229.10(f)(1) and are not required to provide information under this item.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

following discussion should be read in conjunction with our consolidated financial statements and notes to those consolidated

financial statements, included elsewhere in this prospectus.

This discussion contains forward-looking statements that involve

risks and uncertainties.

Our actual results and the timing of selected events could differ materially from those anticipated in

these forward-looking statements as a result of various factors, including those set forth under “Risk factors”

We are a smaller Reporting

company as defined by Rule 229.10(f)(1) and are not required to provide information under this item.

MANAGEMENT’S DISCUSSION

AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

The following discussion

should be read in conjunction with our consolidated financial statements and notes to those consolidated financial statements, included

elsewhere in this prospectus.

FORWARD-LOOKING

statements made in this report may constitute “forward-looking statements on our current expectations and projections about

future events.”

These forward-looking statements involve known or unknown risks, uncertainties and other factors that may

cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements

expressed or implied by the forward-looking statements.

In some cases you can identify forward-looking statements by some words

such as “may,”

This discussion contains forward-looking statements that involve risks and uncertainties.

Our actual results

and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various

factors, including those set forth under “Risk factors”

and elsewhere in this prospectus.

FORWARD-LOOKING STATEMENTS:

Certain statements made in

this Report may constitute “forward-looking statements on our current expectations and projections about future events.”

forward-looking statements involve known or unknown risks, uncertainties and other factors that may cause our actual results, performance,

or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking

In some cases you can identify forward-looking statements by some words such as “may,”

“should,”

8 unchanged sentences

and similar expressions.

These statements

are based on our current beliefs, expectations, and assumptions and are subject to a number of risks and uncertainties.

we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,

levels of activity, performance or achievements.

These forward-looking statements are made as of the date of this report, and

we assume no obligation to update these forward-looking statements whether as a result of new information, future events, or otherwise,

other than as required by law.

In light of these assumptions, risks, and uncertainties, the forward-looking events discussed in

this report might not occur and actual results and events may vary significantly from those discussed in the forward-looking statements.

develop, manufacture, market, distribute and sell products, including knit goods, daily healthcare and personal care products,

and wellness house and activated water machine products, that are coated, embedded or filled with tourmaline.

Most of our products,

such as clothing, bedding, and mattresses are purchased as finished products which we then coat and/or infuse with liquid or granular

tourmaline using one or more of our manufacturing techniques.

We conduct all of our operations in Tianjin City, China and distribute

most of our products to 82 franchisees in China as of December 31, 2019.

These statements are based on our current beliefs, expectations, and assumptions and

are subject to a number of risks and uncertainties.

Although we believe that the expectations reflected in the forward-looking statements

are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

These forward-looking statements

are made as of the date of this Report, and we assume no obligation to update these forward-looking statements whether as a result of

new information, future events, or otherwise, other than as required by law.

In light of these assumptions, risks, and uncertainties,

the forward-looking events discussed in this Report might not occur and actual results and events may vary significantly from those discussed

in the forward-looking statements.

We are incorporated in the

state of Nevada.

Prior to the consummation of the Merger as of December 31, 2020, we, through our PRC Operating Entities, were engaged

in the manufacture, distribution and sales of tourmaline-related healthcare products, including knit goods, daily healthcare and personal

care products, and wellness house and activated water machine products, that were coated, embedded or filled with tourmaline.

our products, such as clothing, bedding, and mattresses are purchased as finished products which we then coated and/or infused with liquid

or granular tourmaline using one or more of our manufacturing techniques.

We conducted all of our operations in Tianjin City, China and

distributed most of our products to 49 franchisees in China as of December 31, 2020.

Our franchisees, in turn, sell the products to their

All of our revenues to date have been generated by sales to customers located in the PRC.

in 2009, we develop a franchise network to distribute our healthcare knit goods, daily healthcare products and personal care products.

Through these franchisees, we were able to significantly increase sales of our healthcare knit goods segment and daily healthcare

and personal care segment.

In 2010, we began distributing our wellness house and activated water machine products through our

franchise network.

As of December 31, 2019, we had 82 franchisees compared to 102 as of December 31, 2018.

are a holding company with no material operations of our own.

All of our operations are conducted through Joway Shengshi and its

three subsidiaries, Joway Technology, Joway Decoration and Shengtang Trading.

Joway Shengshi engages in the manufacture and distribution

of tourmaline health-related products such as knit goods, and daily healthcare and personal care products.

Joway Technology and

Joway Decoration engage in the manufacture and distribution of activated water machines and wellness houses.

We utilize our Shengtang

Trading subsidiary to purchase raw materials, which are then sold to Joway Shengshi and Joway Decoration.

a holding company, our ability to pay dividends and other cash distributions to our shareholders depends in part upon dividends

and other distributions paid to us by our PRC subsidiaries.

All of our revenues as of December 31, 2020 have been generated by sales to customers located in the PRC and reported as part

of loss from operations of discontinued component.

Beginning in 2009, we developed

a franchise network to distribute our healthcare knit goods, daily healthcare products and personal care products.

Through these franchisees,

we were able to significantly increase sales of our healthcare knit goods segment and daily healthcare and personal care segment.

we began distributing our wellness house and activated water machine products through our franchise network.

As of December 31, 2020,

we had 49 franchisees compared to 82 as of December 31, 2019.

However, after the consummation of the Merger, we became a shell company

as of December 31, 2020 and maintained no franchisee after then.

We are a holding company with

no material operations of our own.

Prior to the consummation of the Merger as of December 31, 2020, all of our operations were conducted

through Joway Shengshi and its three subsidiaries, Joway Technology, Joway Decoration and Shengtang Trading.

Joway Shengshi engaged in

the manufacture and distribution of tourmaline health-related products such as knit goods, and daily healthcare and personal care products.

Joway Technology and Joway Decoration engaged in the manufacture and distribution of activated water machines and wellness houses.

utilized our Shengtang Trading subsidiary to purchase raw materials, which were then sold to Joway Shengshi and Joway Decoration.

As a holding company, our

ability to pay dividends and other cash distributions to our shareholders prior to the consummation of the Merger depended in part upon

dividends and other distributions paid to us by our PRC subsidiaries.

The amount of dividends paid by our PRC subsidiaries to us primarily

depends on the service fees paid to our PRC subsidiaries from Joway Shengshi and its subsidiaries, and, to a lesser degree, our

PRC subsidiaries’

depended on the service fees paid to our PRC subsidiaries from Joway Shengshi and its subsidiaries, and, to a lesser degree, our PRC subsidiaries’

retained earnings.

Conducting our operations through contractual arrangements with Joway Shengshi and

its subsidiaries has a risk that we may lose the power to direct the activities that most significantly affect the economic performance

of Joway Shengshi and its subsidiaries, which may result in our being unable to consolidate their financial results with our results

and may impair our access to their cash flow from operations and thereby reduce our liquidity.

Factors Affecting our Results of Operations and Existing Trends

of Raw Materials

powder and textiles are the most important raw materials used in the production of our products.

The price of tourmaline powder

remained stable in 2019.

The average price of textiles that we purchased and the average sales prices of our products were stable

in fiscal year 2019and 2018.

We expect the price of textiles to remain stable in 2019.

We closely monitor textile prices and have

several alternative sources of supply.

in production capacity

order to capture additional market share for our products and take advantage of increased demand in the PRC, we have expanded

our production capacity over the past several years, including the completion of our manufacturing plant in Tianjin and purchase

of new equipment.

In order to take advantage of anticipated growth in our industry in the PRC, we plan to continue to expand our

production capacity in the future, although we do not yet have a specific timeframe for this expansion.

Increased capacity has

had, and could continue to have, a significant effect on our results of operations, by allowing us to produce and sell more products

to generate higher revenues and profits.

of the Chinese economy

operate our manufacturing facilities in China and derive all of our revenues from sales to customers in China.

As such, economic

conditions in China affect virtually all aspects of our operations, including the demand for our products, the availability and

prices of our raw materials and our other expenses.

According to the National Bureau of Statistics, China’s gross domestic

product in 2019 declined to 6.1% compared with 6.6% in 2018.

of being a public company

to the Share Exchange, we were a privately-held company.

We expect that compliance with our obligations as a U.S.

public company

will require significant management time and significantly increase our general and administrative expenses, including insurance,

legal and financial compliance costs.

currency translation

financial statements are expressed in U.S.

dollars but the functional currency of our operating subsidiaries is in RMB.

results of operations are translated at average exchange rates during the relevant financial reporting periods, assets and liabilities

Conducting our operations through contractual arrangements with Joway Shengshi and its subsidiaries had a risk that

we may lose the power to direct the activities that most significantly affect the economic performance of Joway Shengshi and its subsidiaries,

which may result in our being unable to consolidate their financial results with our results and may impair our access to their cash flow

from operations and thereby reduce our liquidity.

On November 20, 2020, Joway

Health entered into a Merger Agreement with Dynamic Elite, Crystal Globe and Merger Sub.

The Merger Agreement provides that, upon the

terms and subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub will be merged with and into Dynamic Elite

(the “Merger”), with Dynamic Elite continuing as the surviving corporation as a wholly-owned subsidiary of Crystal Globe.

The special committee of the Board of Directors of the Company unanimously approved the Merger Agreement and the transactions contemplated

Pursuant to the terms of the

Merger Agreement dated November 20, 2020, as of December 31, 2020, the Effective Time of the Merger, the 10,000 ordinary shares of common

stock of Dynamic Elite issued and outstanding immediately which were held by the Company, were cancelled.

In accordance with the Merger

Agreement, Crystal Globe has offered to pay cash consideration of $0.045 per share for the outstanding shares of the common stock of the

Company as Merger Consideration.

As of November 20, 2020, the Company had 20,054,000 shares of common stock outstanding.

The Company is obligated to

distribute the Merger Consideration to its shareholders in an amount equal to such shareholder’s proportionate share of the Merger

Consideration based on such shareholders’

percentage of the outstanding common stock of the Company In January 2021, the Company

distributed an aggregate amount of $119,070 at $0.045 per share to its shareholders other than Crystal Globe, which represents 2,646,000

shares of our common stock.

Said amount represented the Merger Consideration paid to the Company in connection with the Merger.

the remaining 17,408,000 shares of our common stock is owned by Crystal Globe, the $0.045 per share payment for the 17,408,000 shares

As a result of the consummation

of the Merger, we became a shell company as of December 31, 2020.

Going Concern Uncertainties

The accompanying consolidated

financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization

of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

As reflected in the accompanying

consolidated financial statements, for the years ended December 31, 2020 and 2019, we incurred net losses of $2.3 million and $1.2 million,

respectively.

In addition, we reported cash out flow of $0.2 million and $0.1 million from our continuing operating activities for the

years ended December 31, 2020 and 2019, respectively.

As of December 31, 2020, we had an accumulated deficit of $7.2 million.

believes these factors raise substantial doubt about our ability to continue as a going concern for the next twelve months.

The continuation of our company

as a going concern through the next twelve months is dependent upon (1) the continued financial support from our stockholders or external

Management believes that our existing stockholders will provide the additional cash to meet our obligations as they become

due, and (2) that it will be able to implement its business plan to expand our company’s operations and generate sufficient revenues

to meet its obligations.

These conditions raise substantial

doubt about our company’s ability to continue as a going concern.

These financial statements do not include any adjustments to reflect

the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may

result from the outcome of these uncertainties.

Management believes that the actions presently being taken to obtain additional funding

and implement its strategic plan provides the opportunity for our company to continue as a going concern.

Important Factors Affecting our Results of Operations and Existing

Price of Raw Materials

Prior to the consummation

of the Merger as of December 31, 2020, tourmaline powder and textiles are the most important raw materials used in the production of our

The price of tourmaline powder remained stable in 2020.

The average price of textiles that we purchased and the average sales

prices of our products were stable in fiscal year 2020 and 2019.

Growth of the Chinese economy

Prior to the consummation

of the Merger, we operated our manufacturing facilities in China and derived all of our revenues from sales to customers in China.

such, economic conditions in China affected virtually all aspects of our operations, including the demand for our products, the availability

and prices of our raw materials and our other expenses.

According to the National Bureau of Statistics, China’s gross domestic product

in 2020 declined to 2.3% compared with 6.1% in 2019.

Costs of being a public company

We expect that compliance

with our obligations as a U.S.

public company will require significant management time and significantly increase our general and administrative

expenses, including insurance, legal and financial compliance costs.

Foreign currency translation

Our financial statements are

expressed in U.S.

dollars but the functional currency of our operating subsidiaries prior to the consummation of the Merger is in

Our results of operations are translated at average exchange rates during the relevant financial Reporting periods, assets and liabilities

are translated at the unified exchange rate at the end of these periods and equity is translated at historical exchange rates.

Adjustments resulting from the process of translating the local currency financial statements into U.S.

dollars are included in

determining comprehensive income.

of Selected Income Statement Items

We generate revenue from sales of our Healthcare Knit Goods Series, Daily Healthcare and Personal Care Series and Wellness

House and Activated Water Machine Series.

of goods sold.

Cost of goods sold consists of costs directly attributable to production, including the cost of raw materials,

salaries for staff engaged in production activity, electricity, depreciation, packing materials, and related expenses.

Our total operating expenses consist of sales and marketing expenses and general and administrative expenses.

Sales and marketing expenses consist primarily of employee remuneration and traveling expenses from our marketing department,

transportation expenses and advertising expenses.

General and administrative expenses consist primarily of employee remuneration

from administrative departments, payroll taxes and benefits, general office expenses and depreciation.

Our other loss consists primarily of other loss from sales of obsolete equipment, bank service fee and interest income.

According to the revised Enterprise Income Tax Law effective as of January 1, 2008, our income tax rate is 25%.

Joway Health Industries Group Inc.

was established under the laws of the State of Nevada and is subject to U.S.

federal income

tax and Nevada annual reporting requirements.

of Operations

following table sets forth certain information regarding our results of operations.

the year ended

COST OF REVENUES

resulting from the process of translating the local currency financial statements into U.S.

dollars are included in determining comprehensive

Description of Selected Income Statement Items

Operating expenses.

total operating expenses consist of audit fee, attorney fee and general and administrative expenses.

General and administrative expenses

consist primarily of employee remuneration from directors and general office expenses.

other loss consists primarily of other loss from bank service fee.

Income taxes.

Company was established under the laws of the State of Nevada and is subject to U.S.

federal income tax and Nevada Annual Reporting requirements.

Results of Operations

The following table sets forth

certain information regarding our results of operations.

For the year ended

OPERATING EXPENSES

LOSS FROM OPERATIONS

1 unchanged sentence

LOSS BEFORE INCOME TAXES

$ (1,237,941 )

$ (1,522,147 )

2019 and 2018, we operated in three reportable business segments:

(1) Healthcare Knit Goods, (2) Daily Healthcare and Personal

Care Products and (3) Wellness House and Activated Water Machine Products.

The following table sets forth the contributions

of each reportable business segment in dollars and as a percent of revenue:

the year ended December 31, 2019

COST OF REVENUES

OPERATING EXPENSES

LOSS FROM OPERATIONS

$ (1,165,672 )

the year ended December 31, 2018

COST OF REVENUES

NET LOSS FROM CONTINUING OPERATIONS

Year Ended December 31, 2020 Compared to December

Operating expenses.

ended December 31, 2020, our total operating expenses was $222,607, increased by $104,161, or 87.9%, from $118,446 for the year ended

December 31, 2019.

This increase was mainly due to the increase of attorney fee, as a result of the Merger.

Loss from operations.

$ (1,487,967 )

Ended December 31, 2019 Compared to December 31, 2018

For the year ended December 31, 2019, revenue was $609,174 compared to $1,669,317 for the year ended December 31, 2018, a

decrease of $1,060,143, or 63.5%.

This decrease was mainly due to the downturn of the health care industry in

from healthcare knit goods segment decreased by $168,231, or 70.9% to $69,088 for the year ended December 31, 2019 from $237,319

for the year ended December 31, 2018.

This decrease was primarily due to the decrease in sales of our mattress products, which

are our best-selling products and were most affected by market fluctuations.

from daily healthcare and personal care products decreased by $288,273, or 57.7% to $211,154 for the year ended December 31, 2019

from $499,427 for the year ended December 31, 2018.

The sales of most of our daily healthcare and personal care products decreased

in 2019, which were affected by industry downturn.

from wellness houses and activated water machines decreased by $603,639 or 64.7% to $328,932 for the year ended December 31, 2019

from $932,571 for the year ended December 31, 2018.

This was mainly due to the decrease in sales of our wellness house.

of goods sold.

For the year ended December 31, 2019, cost of goods sold was $295,705 compared

to $733,157 for the year ended December 31, 2018, a decrease of $437,452, or 59.7%.

This decrease was mainly due to the decrease

of goods sold for healthcare knit goods segment decreased to $29,138 for the year ended December 31, 2019 from $82,447 for the

year ended December 31, 2018.

This decrease was mainly due to the decrease in the cost of our mattress products as a result of

the decrease in sales.

of goods sold for the daily healthcare and personal care segment decreased to $94,766 for the year ended December 31, 2019 from

$215,572 for the year ended December 31, 2018.

This decrease was in line with the decreased of sales.

of goods sold for wellness house and activated water machine segment decreased to $171,801 for the year ended December 31, 2019

from $435,138 for the year ended December 31, 2018.

This decrease was mainly due to the decrease in cost of our wellness house.

Our gross profit decreased by $622,691 or 66.5% to $313,469 for the year ended December

31, 2019, compared to $936,160 for the year ended December 31, 2018.

This decrease was mainly due to the decrease in sales.

gross margin decreased from 56.1% for the year ended December 31, 2018 to 51.5% for the year ended December 31, 2019.

This decrease

was mainly due to the decrease in gross margin in our healthcare knit goods segment and wellness house and activated water machine

Gross profit for the

healthcare knit goods segment decreased by $114,922 or 74.2% to $39,950 for the year ended December 31, 2019 compared to $154,872

for the year ended December 31, 2018.

This decrease was due to the decrease in gross profit of our mattress products, as a result

of the decrease in sales.

The gross margin of our healthcare knit goods segment decreased from 65.3% for the year ended December

31, 2018 to 57.8% for the year ended December 31, 2019.

It was mainly due to that the lower output of our healthcare knit goods

caused the higher cost rate and lower gross margin.

profit of daily healthcare and personal care segment decreased by $167,467 or 59% to $116,388 for the year ended December 31,

2019, compared to $283,855 for the year ended December 31, 2018.

This decrease was primarily due to the decrease in sales.

margin of daily healthcare and personal care segment slightly decreased from 56.8% for the year ended December 31, 2018 to 55.1%

for the year ended December 31, 2019.

profit of the wellness house and activated water machine segment decreased by $340,302 or 68.4% to $157,131 for the year ended

December 31, 2019, compared to $497,433 for the year ended December 31, 2018.

This decrease was mainly due to the decreased gross

profit in our construction of the wellness house.

The gross margin of our wellness house and activated water machine segment decreased

from 53.3% for the year ended December 31, 2018 to 47.8% for the year ended December 31, 2019.

This decrease was mainly due to

the less gross profit of our newly designed wellness house.

Our total operating expenses consist of sales and marketing expenses and general

and administrative expenses.

Our total operating expenses decreased by $944,986, or 39%, from $2,424,127 for the year ended

December 31, 2018 to $1,479,141 for the year ended December 31, 2019.

This decrease was mainly due to the decrease of

conference expenses, travel expenses and salary.

Operating expenses for healthcare knit goods segment decreased by $167,882

or 48.5% to $178,448 for the year ended December 31, 2019 from $346,330 for the year ended December 31, 2018.

expenses for daily healthcare and personal care segment decreased by $215,254 or 29.4% to $516,419 for the year ended

December 31, 2019 from $731,673 for the year ended December 31, 2018.

Operating expenses for wellness house and activated

water machine segment decreased by $561,850 or 41.7% to $784,274 for the year ended December 31, 2019 from $1,346,124 for the

year ended December 31, 2018.

from operations.

As a result of the foregoing, our loss from operations was $1,165,672 for the

year ended December 31, 2019, compared to $1,487,967 for the year ended December 31, 2018.

This was mainly due to the decrease

in operating expenses.

of the foregoing, our loss from operations was $222,607 for the year ended December 31, 2020, compared to $118,446 for the year ended

December 31, 2019.

This was mainly due to the increase in operating expenses.

Income taxes.

Our income tax expenses did not incur for the years ended December 31, 2019 and 2018.

For the year ended December 31, 2019, our net loss was $1,237,941 compared to $1,522,147

for the year ended December 31, 2018.

The decreased loss was primarily due to the significantly reduced operating expenses.

enter into franchising agreements to develop retail outlets for our products.

The agreements provide that franchisees will sell

our products exclusively.

In exchange we provide them with geographic exclusivity, discounted products, training and supports.

The agreements also require franchisees to adhere to certain standards of product merchandising, promotion and presentment.

agreements do not require the franchisees to purchase any minimum levels of product, but do require that they make at least one

purchase during each year.

The agreements are generally for terms of three years and are renewable at the mutual agreement of

both parties.

The Agreements are cancelable at our discretion if franchisees violate the terms of the agreements.

following is a breakdown of revenue between franchise and non-franchise customers:

ended December 31,

Sales to franchise customers

Sales to non-franchise customers

Change in franchise outlets:

Number of franchise outlets open at beginning of the

Number of franchise outlets opened during the year

Number of franchise outlets closed during the year

Number of franchise outlets open at the end of the year

and Capital Resources

cash at the beginning of the year ended December 31, 2019 was $118,996 and decreased to $99,979 by the end of the year, a decrease

The decrease at our cash level was due to cash flow out from our operating activities.

We had negative working capital

of $841,325 at December 31, 2019, a decrease of $868,019 from $26,694 at December 31, 2018.

cash flow information summary is as follows:

For the year ended December 31,

Our income tax expenses

did not incur for the years ended December 31, 2020 and 2019.

Net loss from continuing operations.

the year ended December 31, 2020, our net loss was $222,859 compared to $118,583 for the year ended December 31, 2019.

The increased loss

was primarily due to the increased operating expenses.

Operating loss from discontinued operations.

As of December 31, 2020, we sold all of our subsidiaries and VIEs to Crystal Globe, one of our major shareholders.

With a result,

operating results from our subsidiaries and VIEs during the years ended December 31, 2020 and 2019 were reported as part of loss from

operations of our discontinued component.

For the year ended December 31, 2020, revenue

from our discontinued operations was $225,419 compared to $609,174 for the year ended December 31, 2019, a decrease of $383,755, or 63%.

This decrease was mainly due to the downturn of the health care industry in China.

For the year ended December 31, 2020, cost of

goods sold from our discontinued operations was $117,632 compared to $295,705 for the year ended December 31, 2019, a decrease of $178,073,

This decrease was mainly due to the decrease in sales.

Liquidity and Capital Resources

We do not have cash at the beginning and the end

of the year ended December 31, 2020.

Our cash flow information summary is as follows:

For the year ended

Net cash provided by (used in):

2 unchanged sentences

Financing activities

Cash Used in Operating Activities

cash used in operating activities was $772,117 for the year ended December 31, 2019 compared to $887,423 for the year ended December

This was mainly due to a decrease of $284,206 in net loss.

the year of 2019, cash was mainly used to cover the loss of $1,237,941.

This was primarily offset by $406,849 of non-cash depreciation

expense, a decrease of $62,604 of advances to suppliers.

the year of 2018, cash was mainly used to cover the loss of $1,522,147.

This was primarily offset by $426,788 of non-cash depreciation

expense, an increase of $78,226 of contract liabilities and an increase of $68,822 of accounts payable.

Cash Used in Investing Activities

cash used in investing activities was $89,472 for the year ended December 31, 2019, compared to $3,789 for the year ended

December 31, 2018.

In 2019, we expended $89,472 on purchase of an advanced production equipment and office equipment.

2018, we expended $7,465 on purchase of office equipment.

Cash Provided by Financing Activities

cash provided by financing activities was $836,529 for the year ended December 31, 2019, compared to $514,948 for the year ended

December 31, 2018.

May 7, 2007, one of our operating subsidiaries, Joway Shengshi entered into an agreement with Shenyang Joway pursuant to

which Joway Shengshi and Shenyang Joway agreed to provide each other with interest-free, unsecured advances for working

On May 10, 2007, one of our subsidiaries, Joway Technology and Shenyang Joway entered into an agreement pursuant to

which Joway Technology and Shenyang Joway agreed to provide each other with interest-free, unsecured advances for working

Pursuant to these agreements, Shenyang Joway advanced an aggregate of $912,645 to Joway Shengshi and Joway

Technology through December 31, 2018.

During the years of 2019 and 2018, were paid $118,458 and received $116,219 of these

advances, respectively.

As of December 31, 2019, the total unpaid principal balance due to Shenyang Joway for advances was

Shenyang Joway was cancelled in 2019.

May 10, 2007, one of our operating subsidiaries, Joway Shengshi entered into a cash advance agreement with Mr.

Jinghe Zhang, our

President, Chief Executive Officer and director.

Pursuant to the agreement, Mr.

Jinghe Zhang agreed to advance operating capital

to Joway Shengshi.

These advances are interest free, unsecured and are repayable upon demand.

During the period beginning May

17, 2007 (inception of Joway Shengshi) through December 31, 2019, Joway Shengshi received cash advances in the aggregate principal

amount of $6,113,326 from Jinghe Zhang of which $4,632,811 has been repaid.

During the years of 2019 and 2018, we received $954,987

and $398,729 of these advances, respectively.

As of December 31, 2019, the total unpaid principal balance due to Mr.

for advances was $1,480,515.

is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and

otherwise operate on an ongoing basis.

On December 31, 2019 our cash and cash equivalents balance was $99,979 as compared to

$118,996 on December 31, 2018.

funds are located in large, reputable financial institutions as follows:

Cash in Industrial and Commercial Bank of China

Cash in Agricultural Bank of China

Total of Cash

of our revenues are earned by Joway Shengshi, our PRC controlled consolidated affiliate and subsidiaries.

PRC regulations restrict

the ability to make dividends and other payments to its offshore parent company.

PRC legal restrictions permit payments of dividends

only out of accumulated after-tax profits, if any, determined in accordance with PRC accounting standards and regulations.

PRC subsidiaries are also required under PRC laws and regulations to allocate at least 10% of its annual after-tax profits determined

in accordance with PRC GAAP to a statutory general reserve fund until the amount of said fund reaches 50% of its registered capital.

Allocations to this statutory reserve fund can only be used for specific purposes and are not transferable to us in the form of

loans, advances or cash dividends.

Any limitations on the ability of our PRC subsidiary to transfer funds could materially and

adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends

and otherwise fund and conduct our business.

Elite, a Hong Kong corporation and Junhe Consulting, a WFOE, is a bridge to transfer funds inside and outside the PRC.

three ways for foreign cash to be transferred into Chinese subsidiaries:

Capital funds:

At the establishment of the WFOE, in accordance with the provisions of PRC Foreign-Owned Enterprise Law, funds

were injected as capital by Dynamic Elite into its wholly foreign owned enterprise established in mainland China, Junhe Consulting.

Raised capital - acquisition:

if the Company raised sufficient capital, it could transfer the capital to Joway Shengshi by causing

Dynamic Elite to apply to the Chinese Ministry of Commerce (MOFCOM) for approval of an acquisition of Joway Shengshi.

approve such an acquisition only after a lengthy review process, and only if it determined that the price paid by Dynamic Elite

for Joway Shengshi represented a commercially fair price.

Raised capital - joint venture:

If the Company obtained capital that was less than the purchase price for Joway Shengshi deemed

acceptable by MOFCOM, Dynamic Elite could still inject the funds into Joway Shengshi by complying with the provisions of the PRC

Sino-Foreign Equity Joint Venture Law.

To accomplish this capital transfer, we would be required to apply to the Chinese government

for approval to convert Joway Shengshi into an equity joint venture, in which Dynamic Elite would be its equity joint venture.

If approved, Dynamic Elite would then own a portion of the equity in Joway Shengshi and the VIE agreements between Joway Shengshi

and Junhe Consulting (WFOE) would be modified accordingly to reduce the portion of net income payable by Joway Shengshi to Junhe

have no current plans for the Company to fund Joway Shengshi, and expect the VIE structure to remain in place for the foreseeable

to Consulting Services Agreement between Junhe Consulting (WFOE) and Joway Shengshi, 100% of the net income of Joway Shengshi

will be paid to Junhe Consulting as a service fee, and in turn Junhe Consulting will in compliance with the provisions of PRC

Foreign-Owned Enterprise Law, transfer this income to Dynamic Elite (HK company) for the purpose of profit distribution.

transfer procedures is designed to comply with PRC regulations.

As a result, there will be no government regulations which will

impact our transactions to transfer cash within our corporate structure.

However, when the funds are transferred to outside the

PRC, all transferred amounts will be reported to the national tax bureau to examine whether the local and national taxes have

been fully paid by Joway Shengshi and Junhe Consulting.

PLANT AND EQUIPMENT

plant and equipment consisted of the following:

Operating Equipment

Office furniture and equipment

accumulated depreciation

Property, plant and equipment, net

expense for the years ended December 31, 2019 and 2018 amounted to $406,849 and $426,788, respectively.

to the laws and regulations of the PRC, annual income of the Company’s PRC subsidiaries are required to be partly

allocated to the statutory reserves funds after the payment of the PRC income taxes.

The allocation to the statutory reserves

funds should be at least 10% of after tax income until the reserves reach 50% of the entities’

registered capital or

members’

The reserve funds are not transferable to the Company in the form of cash dividends, loans or

Thus, the reserve funds are not available for distribution except in liquidation.

For each fiscal year of 2019 and

2018, we did not allocate any after-tax income to the statutory reserves.

Balance Sheet Items

SEC regulations, we are required to disclose off-balance sheet arrangements that have or are reasonably likely to have a current

or future effect on our financial condition, such as changes in financial condition, revenues or expenses, results of operations,

liquidity, capital expenditures or capital resources that are material to investors.

An off-balance sheet arrangement means a

transaction, agreement or contractual arrangement to which any entity that is not consolidated with us is a party, under which

Net Cash Used in Operating Activities

Net cash used in operating activities was $564,761

for the year ended December 31, 2020, which included cash used in the discontinued operations of $382,246, compared to $772,117 for the

year ended December 31, 2019, which included cash used in the discontinued operations of $664,534.

This was mainly due to an increase

of $104,276 in net loss from our continuing operations.

For the year of 2020, cash was mainly used to

cover the loss from continuing operations of $222,859.

For the year of 2019, cash was mainly used to

cover the loss from continuing operations of $118,583.

Net Cash Used in Investing Activities

Net cash used in investing activities was $79,446

for the year ended December 31, 2020, compared to $89,472 for the year ended December 31, 2019.

No cash provided by (used in) our continuing

operations for the years ended December 31, 2020 and 2019.

The net cash out flow from our investing activities in 2020 and 2019 was from

our discontinued operations.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was

$607,077 for the year ended December 31, 2020, which included cash provided by the discontinued operations of $424,562, compared to $836,529

for the year ended December 31, 2019, which included cash provided by the discontinued operations of $728,946.

Since the Company has no cash, Mr.

Jinghe Zhang,

our President, Chief Executive Officer and director, agreed to advance operating capital to the Company.

During the years of 2020 and

2019, we received $158,930 and $55,625, respectively, of these advances.

As of December 31, 2020, the total unpaid principal balance due

Jinghe Zhang for advances was $233,693.

Joway Shengshi, a company of the discontinued

operations, was owned 99% of the equity interest by Mr.

Jinghe Zhang.

During the years of 2020 and 2019, we received $23,585 and $51,958

of advances from Joway Shengshi, respectively.

As of December 31, 2020, the total unpaid principal balance due to Joway Shengshi for advances

was $459,853.

Off Balance Sheet Items

Under SEC regulations, we

are required to disclose off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial

condition, such as changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital

resources that are material to investors.

An off-balance sheet arrangement means a transaction, agreement or contractual arrangement to

which any entity that is not consolidated with us is a party, under which we have:

obligation under certain guarantee contracts,

retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit,

liquidity or market risk support to that entity for such assets,

obligation under a contract that would be accounted for as a derivative instrument, except that it is both indexed to our

stock and classified in shareholder equity in our statement of financial position, and

obligation arising out of a material variable interest held by us in an unconsolidated entity that provides financing, liquidity,

market risk or credit risk support to us, or engages in leasing, hedging or research and development services with us.

do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations.

In the ordinary

course of business, we enter into operating lease commitments, purchase commitments and other contractual obligations.

These transactions

are recognized in our financial statements in accordance with generally accepted accounting principles in the United States.

Accounting Policies

Management’s

discussion and analysis of its financial condition and results of operations are based upon our consolidated financial statements,

which have been prepared in accordance with accounting principles generally accepted in the United States.

Our financial statements

reflect the selection and application of accounting policies which require management to make significant estimates and judgments.

Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under

the circumstances.

results may differ from these estimates under different assumptions or conditions.

We believe that the following reflect the more

critical accounting policies that currently affect our financial condition and results of operations.

of Consolidation

accompanying consolidated financial statements include Joway Health and its wholly owned subsidiaries and controlled VIEs.

significant inter-company accounts and transactions have been eliminated in the consolidation.

to Accounting Standards Codification Topic 810 “Consolidation”

(“ASC 810”), the Company is required to

include in its consolidated financial statements the financial statements of its variable interest entities (“VIEs”).

ASC 810 requires a VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE

or is entitled to receive a majority of the VIE’s residual returns.

VIEs are those entities in which a company, through

contractual arrangements, bears the risk of, and enjoys the rewards normally associated with ownership of the entity, and therefore

the company is the primary beneficiary of the entity.

on the various Contractual Agreements, we believe we are able to exercise control over the VIEs, and to obtain the full economic

We believe that the terms of the exclusive option agreement are currently exercisable and legally enforceable under

PRC laws and regulations.

We also believe that the minimum amount of consideration permitted by the applicable PRC law to exercise

the option does not represent a financial barrier or disincentive for us to exercise our rights under the exclusive option agreement.

A simple majority vote of our board of directors is required to pass a resolution to exercise our rights under the exclusive option

agreement, for which consent of the shareholder of VIEs is not required.

Therefore, we believe this gives us the power to direct

the activities that most significantly impact VIEs’

economic performance.

T We believe that our ability to exercise effective

control, together with the consulting service agreements and the equity pledge agreements, give us the rights to receive substantially

all of the economic benefits from VIEs in consideration for the services provided by its wholly owned subsidiaries in China.

as the primary beneficiary of VIEs and in accordance with U.S.

GAAP, Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang

Trading, as VIEs of Junhe Consulting, has been consolidated in the Company’s financial statements.

Sales from Joway Shengshi,

Joway Technology, Joway Decoration, and Shengtang Trading are included in our total sales, their incomes or losses from operations

are consolidated with ours, and our net income or loss includes net income or loss from Joway Shengshi, Joway Technology, Joway

Decoration, and Shengtang Trading.

We incurred net loss

of $1.24 million for the year ended December 31, 2019, resulting from the business slowdown in China.

We had accumulated deficit

of $5.26 million as of December 31, 2019.

These conditions raise substantial doubt about the Company’s ability to continue

as a going concern.

continuation of us as a going concern through the next twelve months is dependent upon the continued financial support from its

stockholders or external financing.

We believe the existing stockholders will provide the additional cash to meet with our obligations

as they become due.

While we believe in the viability of its strategy to increase sales volume and in its ability to raise additional

funds, there can be neither no assurances to that effect, nor no assurance that we will be successful in securing sufficient funds

to sustain the operations.

In addition, the impact of COVID-19 on the Chinese economy may negatively affect our business in the

conditions raise substantial doubt about our ability to continue as a going concern.

These financial statements do not include

any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications

of liabilities that may result from the outcome of these uncertainties.

We believe that the actions presently being taken to obtain

additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern.

The Company recognizes

revenue when control of promised goods or services is transferred to the company’s customers, in an amount that reflects

the consideration the Company expects to be entitled to in exchange for those goods or services.

With respect to sales of product to both franchisee and non-franchisee

customers, the Company transfers control, invoices the customer and recognizes revenue upon shipment to the customer.

are based on fixed price lists that are different depending on whether the price list is for franchisee customers or for non-franchisee

Sales, value add and other taxes collected concurrent with revenue-producing activities are excluded from revenue.

receivable are carried at net realizable value.

We provide reserves for potential credit losses on accounts receivable.

reviews the composition of the accounts receivable and analyzes historical bad debts, customer concentrations, customers’

credit worthiness, currents economic trends and changes in customer’s payment patterns to evaluate the adequacy of these

are stated at the lower of cost, as determined by the specific identification method on contract level (For each individual contract,

inventories cost flow are determined by weighted-average method), or the net realizable value, which is determined on selling

prices less any further costs expected to be incurred for completion and disposal.

Management regularly evaluates the composition

of its inventories to identify slow-moving and obsolete inventories to determine whether a valuation allowance is required.

Plant, and Equipment

plant and equipment are stated at cost less accumulated depreciation, and include expenditures that substantially increase the

useful lives of existing assets.

is computed using the straight-line method over the estimated useful lives of the assets.

Estimated useful lives are as follows:

Operating Equipment

Office furniture and equipment

cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or

loss is included in the consolidated statements of income and other comprehensive income.

Maintenance, repairs and minor renewals

are charged directly to expenses as incurred.

Significant renewals and betterment to buildings and equipment are capitalized.

Leasehold improvements are depreciated over the lesser of the useful life or the life of the lease.

Accounting Pronouncements

January 2017, the Financial Accounting Standards Board (FASB) issued ASU No.

2017-04, Simplifying the Test for Goodwill Impairment.

The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation.

impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying

amount of goodwill.

The guidance should be adopted on a prospective basis for the annual or any interim goodwill impairment tests

beginning after December 15, 2019.

Early adoption is permitted for interim or annual goodwill impairment tests performed on testing

dates after January 1, 2017.

The Company is currently evaluating the impact of adopting this standard on its consolidated financial

June 2018, the FASB issued ASU 2018-07, “Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based Payment

Accounting,”

which simplifies the accounting for share-based payments granted to nonemployees for goods and services and

aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees.

ASU 2018-07 becomes effective for the Company on January 1, 2019.

retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity

or market risk support to that entity for such assets,

obligation under a contract that would be accounted for as a derivative instrument, except that it is both indexed to our stock and classified

in shareholder equity in our statement of financial position, and

obligation arising out of a material variable interest held by us in an unconsolidated entity that provides financing, liquidity, market

risk or credit risk support to us, or engages in leasing, hedging or research and development services with us.

We do not have any off-balance

sheet arrangements that we are required to disclose pursuant to these regulations.

In the ordinary course of business, we enter into operating

lease commitments, purchase commitments and other contractual obligations.

These transactions are recognized in our financial statements

in accordance with generally accepted accounting principles in the United States.

Critical Accounting Policies

Management’s discussion

and analysis of its financial condition and results of operations are based upon our consolidated financial statements, which have been

prepared in accordance with accounting principles generally accepted in the United States.

Our financial statements reflect the selection

and application of accounting policies which require management to make significant estimates and judgments.

Management bases its estimates

on historical experience and on various other assumptions that are believed to be reasonable under the circumstances.

Actual results may differ

from these estimates under different assumptions or conditions.

We believe that the following reflect the more critical accounting policies

that currently affect our financial condition and results of operations.

Going Concern

The accompanying consolidated

financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization

of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

As reflected in the accompanying

consolidated financial statements, for the years ended December 31, 2020 and 2019, we incurred net losses of $2.3 million and $1.2 million,

respectively.

In addition, we reported cash out flow of $0.2 million and $0.1 million from our continuing operating activities for the

years ended December 31, 2020 and 2019, respectively.

As of December 31, 2020, we had an accumulated deficit of $7.2 million.

believes these factors raise substantial doubt about our ability to continue as a going concern for the next twelve months.

The continuation of our company

as a going concern through the next twelve months is dependent upon (1) the continued financial support from our stockholders or external

Management believes that our existing stockholders will provide the additional cash to meet our obligations as they become

due, and (2) that it will be able to implement its business plan to expand our company’s operations and generate sufficient revenues

to meet its obligations.

These conditions raise substantial

doubt about our company’s ability to continue as a going concern.

These financial statements do not include any adjustments to reflect

the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may

result from the outcome of these uncertainties.

Management believes that the actions presently being taken to obtain additional funding

and implement its strategic plan provides the opportunity for our company to continue as a going concern.

Basis of Presentation

The accompanying consolidated

financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US

GAAP”).

The Company’s functional currency is the Chinese Renminbi (“RMB”);

however, the accompanying consolidated

financial statements have been translated and presented in United States Dollars (“USD”).

All significant inter-company transactions

and balances have been eliminated.

The consolidated financial statements include all adjustments that, in the opinion of management, are

necessary to make the financial statements not misleading.

Use of Estimates

The preparation of the consolidated

financial statements is in conformity with generally accepted accounting principles in the United States of America, which require management

to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities

at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.

makes these estimates using the best information available at the time the estimates are made.

Actual results could differ from those

Reclassification

Certain prior year balances

were reclassified to conform to the current year’s presentation with consideration of reflecting all of the Company’s subsidiaries

and VIEs as discontinued operations.

None of these reclassifications had an impact on reported financial position or cash flows for any

of the periods presented.

Basis of Consolidation

For the periods prior to the

sale of Dynamic Elite, its subsidiaries, and controlled VIEs, the Company consolidated financial statements include Dynamic Elite, its

wholly owned subsidiaries, and controlled VIEs.

All significant inter-company accounts and transactions have been eliminated in the consolidation.

Foreign Currencies Translation

Transactions denominated in

currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates

of the transaction.

Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the

functional currency using the applicable exchange rates at the balance sheet dates.

The resulting exchange differences are recorded in

the statement of operations.

The reporting currency of our company is the United States Dollar (“US$”).

Our subsidiaries in

the PRC maintain their books and records in their local currency, the Renminbi Yuan (“RMB”), which is the functional currency

as it is the primary currency of the economic environment in which these entities operate.

In general, for consolidation

purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with

ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date.

Revenues and expenses

are translated at average rates prevailing during the period.

The gains and losses resulting from translation of financial statements

of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’

Other Comprehensive Income

Other comprehensive income

is defined as the change in equity during the period from transactions and other events, excluding the changes resulting from investments

by owners and distributions to owners.

Other comprehensive income is not included in the computation of income tax expense or benefit.

Accumulated other comprehensive income represents the accumulated balance of foreign currency translation adjustments.

Fair Value of Financial Instruments

Financial Accounting Standards

Board (“FASB”) Accounting Standards Codification (“ASC”) 820 (formerly Statement of Financial Accounting Standard

(“SFAS”) No.

157 Fair Value Measurements) establishes a three-tier fair value hierarchy, which prioritizes the inputs used

in measuring fair value as the following:

Level 1—defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;

Level 2—defined as inputs other than quoted prices in active markets that are either directly or indirectly observable;

Level 3—defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The carrying amounts reported

in the balance sheets for cash, accounts receivable, other receivable, accounts payable, other payable, and amounts due from related parties

generally approximate their fair market values based on the short-term maturity of these instruments.

ASC 825-10 “Financial Instruments”

allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option).

value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs.

If the fair value

option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent

reporting date.

The Company did not elect to apply the fair value option to any outstanding instruments.

Revenue Recognition

The Company recognizes revenue

when control of promised goods or services is transferred to the company’s customers, in an amount that reflects the consideration

the Company expects to be entitled to in exchange for those goods or services.

Prior to the Merger Agreement,

with respect to sales of product to both franchisee and non-franchisee customers, the Company transfers control, invoices the customer

and recognizes revenue upon shipment to the customer.

Sales prices are based on fixed price lists that are different depending on whether

the price list is for franchisee customers or for non-franchisee customers.

Sales, value add and other taxes collected concurrent with

revenue-producing activities are excluded from revenue.

The Company accounts for income

taxes in accordance with FASB ASC 740 “Income Taxes”

(formerly SFAS No.

109 Accounting for Income Taxes) , which is

an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences

of events that have been recognized in the Company’s financial statements or tax returns.

ASC 740 additionally requires the establishment

of a valuation allowance to reflect the likelihood of realization of deferred tax assets.

Realization of deferred tax assets is dependent

upon future earnings, if any, of which the timing and amount are uncertain.

According to ASC 740, the

evaluation of a tax position is a two-step process.

The first step is to determine whether it is more likely than not that a tax position

will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that

The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit

to be recognized in the financial statements.

A tax position is measured at the largest amount of benefit that is greater than 50% likelihood

of being realized upon ultimate settlement.

Tax positions that previously failed to meet the more-likely-than-not recognition threshold

should be recognized in the first subsequent period in which the threshold is met.

Previously recognized tax positions that no longer

meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold

is no longer met.

ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods,

disclosures, and transition.

Basic and Diluted Earnings per Share

The Company reports earnings

per share in accordance with FASB ASC 260 “Earnings per share”.

The Company’s basic earnings per share are computed

using the weighted average number of shares outstanding for the periods presented.

Diluted earnings per share are computed based on the

assumption that any dilutive options or warrants were converted or exercised.

Dilution is computed by applying the treasury stock method.

Under this method, the Company’s outstanding stock warrants are assumed to be exercised, and funds thus obtained were assumed to

be used to purchase common stock at the average market price during the period.

There were no dilutive instruments outstanding during

the years ended December 31, 2020 and 2019.

Recent Accounting Pronouncements

In June 2016, the FASB issued

2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial

assets held at the Reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

This replaces

the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost.

This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

Early application

will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018.

The Company has completed its assessment of the new standard as of December 31, 2019 and concluded that the adoption will not have a material

impact on its consolidated financial statements.

In August 2018, the FASB issued

Accounting Standard Update (“ASU”) No.

2018-13, Fair Value Measurement (Topic 820), which modifies the disclosure requirements

on fair value measurements in Topic 820, Fair Value Measurement, including, among other changes, the consideration of costs and benefits

when evaluating disclosure requirements.

For public companies, the amendments are effective for annual reporting periods beginning after

December 15, 2019, including interim periods within those annual periods.

Early adoption is permitted.

The adoption of this accounting

pronouncement is not expected to have an impact on the Company’s consolidated financial statements.

February 2016, the FASB issued ASU No.

2016-02, Leases (Topic 842).

The standard outlined a comprehensive lease accounting

model that superseded the previous lease guidance and required lessees to recognize lease liabilities and corresponding right-of-use

assets for all leases with lease terms greater than 12 months.

The guidance also changed the definition of a lease and expanded

the disclosure requirements of lease arrangements.

The Company adopted the standard on December 15, 2019.

Adoption of the standard

did not have a significant impact on the Company’s consolidated statement of earnings in 2019.

June 2016, the FASB issued ASU No.

2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure

all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions,

and reasonable and supportable forecasts.

This replaces the existing incurred loss model and is applicable to the measurement

of credit losses on financial assets measured at amortized cost.

This guidance is effective for fiscal years, and interim periods

within those fiscal years, beginning after December 15, 2019.

Early application will be permitted for all entities for fiscal

years, and interim periods within those fiscal years, beginning after December 15, 2018.

The Company has completed its assessment

of the new standard as of December 31, 2019 and concluded that the adoption will not have a material impact on its consolidated

financial statements.

recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified

Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present

or future consolidated financial statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company is currently assessing

the impact that adopting this new accounting guidance will have on the Company’s financial statements and footnote disclosures.

In December 2019, the FASB

issued ASU No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended

to simplify various aspects related to accounting for income taxes.

ASU 2019-12 removes certain exceptions to the general principles in

Topic 740 and also clarifies and amends existing guidance to improve consistent application.

This guidance is effective for fiscal years,

and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted.

The Company is currently

evaluating the impact of this standard on its consolidated financial statements and related disclosures.

Other accounting standards

that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not

expected to have a material impact on the Company’s consolidated financial statements upon adoption.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

Not applicable.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

audited financial statements of Joway Health Industries Group Inc.

as of December 31, 2019 and 2018 are appended to this report

beginning on page F-1.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

The audited financial statements

of Joway Health Industries Group Inc.

as of December 31, 2020 and 2019 are appended to this Annual Report beginning on page F-1.

CHANGES IN AND DISAGREEMENTS WITH

ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity