2023 Q2 Form 10-K Financial Statement

#000168316823004512 Filed on June 29, 2023

View on sec.gov

Income Statement

Concept 2023 Q2 2023 Q1 2023
Revenue $583.00 $1.190K $15.10K
YoY Change -66.61% -99.68% -97.25%
Cost Of Revenue $989.00 -$1.700K $6.650K
YoY Change -19.53% -100.63% -98.49%
Gross Profit -$406.00 $2.890K $8.450K
YoY Change -178.53% -97.2% -92.26%
Gross Profit Margin -69.64% 242.86% 55.96%
Selling, General & Admin $3.062K $47.10K $384.6K
YoY Change -98.65% -83.43% -29.22%
% of Gross Profit 1629.76% 4551.36%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization
YoY Change
% of Gross Profit
Operating Expenses $20.98K $47.10K $384.6K
YoY Change -92.41% -83.43% -29.22%
Operating Profit -$21.39K -$44.21K -$376.1K
YoY Change -92.25% -75.56% -13.36%
Interest Expense -$2.720K -$2.690K -$9.740K
YoY Change 72.15% -49.63% 10.06%
% of Operating Profit
Other Income/Expense, Net -$2.712K -$8.930K -$9.737K
YoY Change -124.61% 10.1%
Pretax Income -$24.10K -$55.82K -$385.9K
YoY Change -90.9% -70.03% -12.89%
Income Tax $0.00 $0.00 $0.00
% Of Pretax Income
Net Earnings -$24.10K -$55.82K -$385.9K
YoY Change -90.9% -70.03% -12.89%
Net Earnings / Revenue -4134.13% -4690.76% -2555.5%
Basic Earnings Per Share $0.00 $0.00
Diluted Earnings Per Share $0.00 $0.00 $0.00
COMMON SHARES
Basic Shares Outstanding 831.3M shares 831.3M shares 831.3M shares
Diluted Shares Outstanding 841.3M shares 831.3M shares

Balance Sheet

Concept 2023 Q2 2023 Q1 2023
SHORT-TERM ASSETS
Cash & Short-Term Investments $280.00 $13.49K $13.49K
YoY Change -99.76% -87.89% -87.89%
Cash & Equivalents $283.00 $13.49K $13.49K
Short-Term Investments
Other Short-Term Assets $0.00 $0.00
YoY Change -100.0% -100.0%
Inventory $715.00 $1.700K $1.700K
Prepaid Expenses
Receivables $0.00 $30.00 $30.00
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $998.00 $15.22K $15.22K
YoY Change -99.16% -87.47% -87.47%
LONG-TERM ASSETS
Property, Plant & Equipment
YoY Change
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets
YoY Change
Total Long-Term Assets $0.00 $0.00 $0.00
YoY Change
TOTAL ASSETS
Total Short-Term Assets $998.00 $15.22K $15.22K
Total Long-Term Assets $0.00 $0.00 $0.00
Total Assets $998.00 $15.22K $15.22K
YoY Change -99.16% -87.47% -87.47%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable
YoY Change
Accrued Expenses $452.7K $540.5K $540.5K
YoY Change -16.58% 92.24% 92.24%
Deferred Revenue
YoY Change
Short-Term Debt $133.6K $133.6K $133.6K
YoY Change 0.0% 0.0% 0.0%
Long-Term Debt Due $84.22K $84.08K $84.08K
YoY Change 9.98%
Total Short-Term Liabilities $847.2K $837.1K $837.1K
YoY Change 3.48% 74.73% 74.73%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00 $0.00
YoY Change -100.0% -100.0%
Other Long-Term Liabilities
YoY Change
Total Long-Term Liabilities $0.00 $0.00 $0.00
YoY Change -100.0% -100.0%
TOTAL LIABILITIES
Total Short-Term Liabilities $847.2K $837.1K $837.1K
Total Long-Term Liabilities $0.00 $0.00 $0.00
Total Liabilities $847.2K $837.1K $837.1K
YoY Change 3.48% 50.65% 50.65%
SHAREHOLDERS EQUITY
Retained Earnings -$1.682M -$1.658M
YoY Change 9.43% 30.34%
Common Stock $831.3K $831.3K
YoY Change 0.0% 0.0%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity -$846.2K -$821.9K -$821.9K
YoY Change
Total Liabilities & Shareholders Equity $998.00 $15.22K $15.22K
YoY Change -99.16% -87.47% -87.47%

Cashflow Statement

Concept 2023 Q2 2023 Q1 2023
OPERATING ACTIVITIES
Net Income -$24.10K -$55.82K -$385.9K
YoY Change -90.9% -70.03% -12.89%
Depreciation, Depletion And Amortization
YoY Change
Cash From Operating Activities -$45.93K -$22.87K -$118.2K
YoY Change -2162.51% -133.25% -31.28%
INVESTING ACTIVITIES
Capital Expenditures
YoY Change
Acquisitions
YoY Change
Other Investing Activities
YoY Change
Cash From Investing Activities
YoY Change
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities $32.86K 100.0 22.25K
YoY Change 2053.15% -97.19% -89.46%
NET CHANGE
Cash From Operating Activities -$45.93K -22.87K -118.2K
Cash From Investing Activities
Cash From Financing Activities $32.86K 100.0 22.25K
Net Change In Cash -$13.21K -22.77K -95.99K
YoY Change -457.37% -131.48% -346.0%
FREE CASH FLOW
Cash From Operating Activities -$45.93K -$22.87K -$118.2K
Capital Expenditures
Free Cash Flow
YoY Change

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<p id="xdx_808_eus-gaap--NatureOfOperations_zi4KbCIcUIT5" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>1. <span id="xdx_825_zg7kfXE3V349">DESCRIPTION OF BUSINESS AND ORGANIZATION</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">DH Enchantment, Inc.   (the “Company”) was incorporated in the State of Nevada on July 9, 2004 under the name Amerivestors, Inc. On March 3, 2009, the Company changed its name to Gust Engineering &amp; Speed Productions, Inc. and on February 1, 2011, the Company changed its name to Energy Management International, Inc. On August 11, 2021, the Company changed its name to DH Enchantment, Inc.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Currently, the Company through its subsidiaries, mainly engages with the sale and distribution of COVID-19 rapid antigen tester set. This business was commenced its operation in Hong Kong since October 2020.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 26, 2021, the Company consummated the Share Exchange Transaction (the “Share Exchange”) among DH Investment Group Limited (“DHIG”) and its shareholders. The Company acquired all of the issued and outstanding shares of DHIG from DHIG’s shareholders, in exchange for 100,000 shares of Series B preferred stock, at par value of $0.001. Upon completion of the Share Exchange, DHIG became a <span id="xdx_906_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_dp_c20210726__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--DHEnchantmentMember_zHHqFA8REb" title="Ownership percentage">100</span>% owned subsidiary of the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Prior to the Share Exchange, the Company was considered as a shell company due to its nominal assets and limited operation. The transaction will be treated as a recapitalization of the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Upon the Share Exchange between the Company and DHIC on July 26, 2021, is a merger of entities under common control that Miss Sally Kin Yi LO is the common director and shareholder of both the Company and DHIG. Under the guidance in ASC 805 for transactions between entities under common control, the assets, liabilities and results of operations, are recognized at their carrying amounts on the date of the Share Exchange, which required retrospective combination of the Company and DHIG for all periods presented.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 29, 2021, the Company authorized and approved the amendment and restatement of our Articles of Incorporation to: (i) change our name to DH Enchantment Inc.; and (ii) amend the powers, rights and designation of the Series A Convertible Preferred Stock as more fully set forth below; and (iii) effectuate a <span id="xdx_907_eus-gaap--StockholdersEquityReverseStockSplit_c20210628__20210629_z8XKbXw4Pvxd" title="Reverse stock split, description">5:1 reverse split</span>, all of which are subject to final authorization by FINRA. The Company also approved the designation of <span id="xdx_90C_eus-gaap--PreferredStockSharesAuthorized_iI_c20210629__us-gaap--StatementClassOfStockAxis__custom--SeriesBConvertiblePreferredStockMember_zHwQu9UE5KX2" title="Preferred stock, shares authorized">10,000,000</span> shares of Series B Convertible Preferred Stock which took effect immediately.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">After the amendment, holders of the Series A Convertible Preferred Stock will not be: (i) entitled to receive dividends or other distributions; (ii) vote on matters submitted to a vote of the stockholders; and (iii) able to convert the Series A Convertible Preferred Stock into common stock or any other securities of the corporation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On August 16, 2021, the Company effected a <span id="xdx_909_eus-gaap--StockholdersEquityReverseStockSplit_c20210815__20210816_zDf4eLs4qEo6" title="Reverse stock split, description">5 for 1 reverse split</span> of its issued and outstanding shares of common stock. Except for shares authorized, all references to number of shares and per share information have been retroactively adjusted to reflect such split.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline">Description of subsidiaries</span></p> <table cellpadding="0" cellspacing="0" id="xdx_881_ecustom--DescriptionOfSubsidiariesTableTextBlock_zPncflNPsWz" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse" summary="xdx: Disclosure - DESCRIPTION OF BUSINESS AND ORGANIZATION (Details)"> <tr style="vertical-align: top"> <td> <span id="xdx_8B9_zmGE0uT0mULk" style="display: none">Schedule of description of subsidiaries</span></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1pt solid; width: 20%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name</span></td> <td style="width: 1%"> </td> <td style="border-bottom: black 1pt solid; width: 18%"> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Place of incorporation</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">and kind of</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">legal entity</p></td> <td style="width: 1%"> </td> <td style="border-bottom: black 1pt solid; width: 21%"> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Principal activities</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">and place of operation</p></td> <td style="width: 1%"> </td> <td style="border-bottom: black 1pt solid; width: 27%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Particulars of registered/ paid up share capital</span></td> <td style="width: 1%"> </td> <td style="border-bottom: black 1pt solid; width: 10%"> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Effective</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">interest held</p></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td></tr> <tr style="vertical-align: top; background-color: rgb(238,238,238)"> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_901_ecustom--NameOfSubsidiary_c20220401__20230331__dei--LegalEntityAxis__custom--DHInvestmentGroupLimitedMember" title="Name of subsidiary">DH Investment Group Limited (“DHIG”)</span></span></td> <td> </td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_903_ecustom--PlaceOfIncorporation_c20220401__20230331__dei--LegalEntityAxis__custom--DHInvestmentGroupLimitedMember" title="Place of incorporation">British Virgin Islands</span></span></td> <td> </td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_902_ecustom--PrincipalActivities_c20220401__20230331__dei--LegalEntityAxis__custom--DHInvestmentGroupLimitedMember" title="Principal activities">Investment holding</span></span></td> <td> </td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_905_ecustom--ShareCapital_c20220401__20230331__dei--LegalEntityAxis__custom--DHInvestmentGroupLimitedMember" title="Share capital">100 ordinary shares at par value of US$1</span></span></td> <td> </td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_902_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_dp_c20230331__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--DHInvestmentGroupLimitedMember_zTbiMWCrrbMb" title="Ownership percentage">100</span>%</span></td></tr> <tr style="vertical-align: top; background-color: White"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: top; background-color: rgb(238,238,238)"> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_90D_ecustom--NameOfSubsidiary_c20220401__20230331__dei--LegalEntityAxis__custom--HoShunYiLimitedMember" title="Name of subsidiary">Ho Shun Yi Limited (“HSYL”)</span></span></td> <td> </td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_90C_ecustom--PlaceOfIncorporation_c20220401__20230331__dei--LegalEntityAxis__custom--HoShunYiLimitedMember" title="Place of incorporation">Hong Kong</span></span></td> <td> </td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_906_ecustom--PrincipalActivities_c20220401__20230331__dei--LegalEntityAxis__custom--HoShunYiLimitedMember" title="Principal activities">Sale and distribution of COVID-19 rapid antigen tester set</span></span></td> <td> </td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_905_ecustom--ShareCapital_c20220401__20230331__dei--LegalEntityAxis__custom--HoShunYiLimitedMember" title="Share capital">10,000 ordinary shares for HK$10,000</span></span></td> <td> </td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_906_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_dp_c20230331__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--HoShunYiLimitedMember_zs85Xl4Qd2ni" title="Ownership percentage">100</span>%</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company and its subsidiaries are hereinafter referred to as (the “Company”).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
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