About China Health Industries Holdings

China Health Industries Holdings, Inc. engages in the manufacturing and sale of health products. The company’s principal business operations are conducted through its wholly-owned subsidiaries, Humankind (Harbin Humankind Biology Technology Co., Limited) and HLJ Huimeijia (Heilongjiang Huimeijia Pharmaceutical Co., Ltd.). The company has three reportable operating segments: Humankind, HLJ Huimeijia, and Others. The company owns a GMP-certified plant and production facilities and has the capacity to produce 21 different NMPA-approved medicines, 14 NMPA-approved health supplement products and 10 hemp derivative products in soft capsule, hard capsule, tablet, granule, oral liquid forms. These products address the needs of some key sectors in China, including the feminine, geriatric, and children’s markets. HLJ Huimeijia engages in the manufacture and distribution of tincture, ointments, rubber paste, including hormones, topical solution, suppositories, enemas, oral liquids, and liniment, including traditional Chinese medicine extractions. HLJ Huimeijia is a ‘high and new technology’ enterprise that provides the most comprehensive types of topical medical products in Heilongjiang Province, a northeastern province of China. For the year ended June 30, 2023 (fiscal year 2023), the company sells its products to end customers through its own sales personnel, as well as the company’s sales agents, operating primarily in Heilongjiang Province, where most of the company’s revenues are generated. Humankind is using existing materials to research and develop new products. Humankind decided to transform the primary business to CBD extractive project, because the government intended to support the company research in CBD aspect. Products The company is licensed to sell its products, including the company’s medical drugs, only in the PRC. Hemp Derivative Products The company has developed the following products that are derived from hemp and obtained business license to manufacture and sell these products. The company has begun to sell these products since May 2018. Hemp Seed Beer, Hemp Oil, Hemp Protein Powder, Hemp Polypeptide and Collagen Peptide are sold through Humankind. Other products are sold through HLJ Huimeijia. Health Products The company’s ‘QunLe’ brand Sailuozhi soft capsule, a supplement made from frog oil, soybean isoflavone, procyanidine (made from grape seeds) and vitamin E, is for freckle removal and skin moisture. ‘QunLe’ brand Sailuozhi soft capsulechanged name to ‘QunLe’ brand Frog Oil, Soybean Isoflavone and Vitamin E Soft Capsul, register number is G20070356, which expired on April 6, 2026. On May 12, 2010, the company received a patent for this product (Patent No. 200610010394.4) under the name ‘Run Chao’ (which has since been changed to ‘QunLe’) with the National Bureau of Intellectual Property. Pursuant to a technology transfer agreement dated October 12, 2007 (the ‘2007 Technology Transfer Agreement’), the company purchased a health product known as ‘Kindlink’ brand propolis and black ant capsule made from propolis, black ant, acanthopanax and astragalus root from Beijing Jindelikang Bio-Technology Co., Ltd (‘Jindelikang’). The change of the ownership has been approved by the NMPA. This product is intended to boost one’s immunity. The certification number issued by the NMPA on August 20, 2004, for the license to manufacture the product is GuoShiJianZi G20040906. The company has no continuing obligations under the 2007 Technology Transfer Agreement. Pursuant to a technology transfer agreement dated January 18, 2013 (the ‘2013 Technology Transfer Agreement’), the company purchased 12 health products from Guangzhou Aoda Biology Beauty Healthy Technology Co., Ltd, a non-affiliated party. These twelve products are the following: Dr. Xiao Brand Honeysuckle Pearl Capsule (Guo Shi Jian Zi G20100656), which is designed to be effective in acne removal; Dr. Xiao Brand Multivitamin Tablet (Guo Shi Jian Zi G20080176), which is a multivitamin and mineral supplement; Dr. Xiao Brand Zhengdian Capsule (Guo Shi Jian Zi 20070261), which is designed to be effective in relieving eyestrain; Dr. Xiao Brand Shengui Capsule (Guo Shi Jian Zi G20080297), which is designed to be effective in increasing bone density; Dr. Xiao Brand Multivitamin Tablet (Woman) (Guo Shi Jian Zi G20070338), which is an iron and multivitamin supplement; Dr. Xiao Brand Shikong Soft Capsule (Guo Shi Jian Zi 20080096), which is designed to be effective in improving memory; Dr. Xiao Brand Huangjingdanggui Tablet (Guo Shi Jian Zi G20080201), which is designed to be effective in improving nutritional anemia and chloasma; Dr. Xiao Brand Xingxing Soft Capsule (Guo Shi Jian Zi G20080080), which is designed to be effective in improving memory; Dr. Xiao Brand Vitamin A Fish Oil Soft Capsule (Guo Shi Jian Zi G20080406), which is designed to be effective in relieving eyestrain; Dr. Xiao Brand Colon Cleanser Granules (Guo Shi Jian Zi G20060061), which is designed to be effective in relaxing bowels and promoting the discharge of lead; Dr. Xiao Brand Jianli Soft Capsule (Guo Shi Jian Zi G20050710), which is designed to be effective in increasing immunity and relieving physical fatigue; and LB Brand Xinpin Capsule (Guo Shi Jian Zi G20050770), which is designed to be effective in dispelling chloasma. The major supplier of raw materials for the company’s products who exceeded 10% of its total purchases in the fiscal year 2023 were Harbin Delunbao Beer Co., Ltd. Medical Drugs HLJ Huimeijia has 21 products with approval numbers issued by the NMPA. Distribution Most of the company’s products are sold to sales agents. In the fiscal year of 2023, the company’s sales network covered Heilongjiang provinces or cities. E-business The company is in the process of building the infrastructure to conduct its business over the internet. A B2C e-business call and sales center has been established and will become an integral part of the company’s distribution channel in the future. The company has employed graduates from Tsinghua University, Harbin Industry University and Harbin Engineering University to develop the ERP (Enterprise Resource Planning), CRM (Customer Relationship Management) and Office Automation software (‘OA Software’) for the company’s e-business. The OA Software has been used in the company’s daily operation. The company plans to sell its products via internet in the fiscal year of 2024. Customers The company sells most of its products to sales agents, who are its customers. The sales agents sell the products to the end users. The company’s customers who contributed more than 10% of its consolidated revenues during the fiscal year 2023 were Harbin Magic Nature Technology Co., Ltd and Ruiping Ji. Business Plan The plans designed to meet the company’s manufacturing, marketing and profit targets include: Manufacturing: Improving the manufacturing techniques and staff training; guaranteeing high quality material supply; strengthening the working procedure controls; (d)implementing GMP to ensure a compliance standard in the food and medical industries; and ensuring that all employees have adequate training in health regulations. Marketing: Adopt an effective marketing strategy to utilize direct distribution of products to chain stores nationwide; build business alliances with well-known enterprises to create private label brands; and expand the marketing of the company’s products beyond the traditional methods. Product Distribution: Enlarge the company’s sales and marketing force while developing new markets; strengthen the distribution channel by developing promotion strategies and participating in trade shows; develop 3-5 new products to market each year; and develop new markets through innovation and research. Sales and Marketing The company plans to open more chain stores throughout the PRC. After establishing a sufficient number of stores, the company plans to develop a 24-hour delivery system for the company’s B2C e-business. Intellectual Property The company received a patent (200610010394.4) for its ‘Qunle’ brand Sailuozhi soft capsule from the National Bureau of Intellectual Property. The company had initially applied for and used the trade name of ‘RunChao’ soft capsules, but the trade name was changed to ‘Qunle’, and the change was approved by the National Bureau of Intellectual Property. The expiration date for ‘Qunle’ is May 12, 2030. Pursuant to a Technology Transfer Agreement dated October 12, 2007 (‘Kindlink Technology Transfer Agreement’), the company purchased the technology, manufacturing, and trademark rights to the health product known as ‘Kindlink’ brand propolis and black ant capsule made from propolis, black ant, acanthopanax, astragalus root from Jindelikang. The change of the ownership was approved by the NMPA. This product is consumed to boost one’s immunity. The certification number issued by the NMPA on August 20, 2004, to permit the manufacture of the product is GuoShiJianZi G20040906. The company has no continuing obligations under the Kindlink Technology Transfer Agreement. As of June 30, 2023, the company had registered 14 trademarks. Regulations The laws governing the company’s business are as follows: Drug administration law of the PRC enacted August 27, 2019; Healthcare registration and administration law, enacted January 7, 2005; Measures for the Administration of Pharmaceutical Trade License, enacted January 4, 2004; Measures for the Supervision Over and Administration of Pharmaceutical Production, enacted May 8, 2004; Food Safety Law of the PRC, enacted June 1, 2009; Regulation on the Implementation of the Food Safety Law of the PRC, enacted July 20, 2009; Regional regulation: Heilongjiang Regional Medicinal Materials Resource Protection Bylaw, enacted January 8, 2005; Good Manufacturing Practice (GMP) Amendment, enacted January 17, 2011; Hemp Industry 3-year Special Action Plan of Heilongjiang Province (2018-2020); and Hemp Legislation of Heilongjiang Province in May 2017. History China Health Industries Holdings, Inc. was founded in 1996.