chgh_10q.htm

CHINA HERB GROUP HOLDINGS CORPORATION

(FORMERLY KNOWN AS ISLAND RADIO, INC.)

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

(UNAUDITED)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: March 31, 2014

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number: 333-169397

China Herb Group Holdings Corporation

(Exact name of small business issuer as specified in its charter)

Nevada		333-169397		27-3042462
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification Number)

505 West 8th Avenue, Suite 16

Arizona 85205

(Address of principal executive offices and zip code)

Phone: 1 (480) 525-3241

(Registrant’s telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. YES x NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer, “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES x NO o

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 36,443,119 Shares of Common Stock, as of March 31, 2014.

INDEX

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	24
SIGNATURE		25

ITEM 1. FINANCIAL STATEMENTS

	March 31,			December 31,
	2014			2013

ASSETS
Cash and cash equivalents	$	32,143		$	32,143
TOTAL ASSETS	$	32,143		$	32,143

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

LIABILITIES
Accounts payable	$	450		$	450
Shareholder Loans		77,100			20,000
TOTAL LIABILITIES	$	77,550		$	20,450

STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $.001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding
Common stock, $.001 par value, 75,000,000 shares authorized, 36,443,119 shares issued and outstanding March 31, 2014 and December 31, 2013		36,443			36,443
Additional paid in capital		100,570			99,483
Deficit accumulated during the development stage		(182,420	)		(124,233	)

TOTAL STOCKHOLDERS' EQUITY (DEFICIT)		(45,407	)		11,693

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	32,143		$	32,143

The accompanying notes to the financial statements are an integral part of these statements.

CHINA HERB GROUP HOLDINGS CORPORATION
(FORMERLY KNOWN AS ISLAND RADIO, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)

	Three months ended March 31, 2014			Three months ended March 31, 2013			June 28, 2010 (Inception) to March 31, 2014

Revenues	$	-		$	-		$	-

OPERATING EXPENSES
General and administrative		18,000			-			20,328
Legal fees		1,000			-			97,180
Accounting fees		19,500			3,000			35,500
Transfer agent fees		1,100			-			9,402
Consulting Fees		12,000			-			12,000
Travel		4,500			-			1,500
Website		1,000			-			1,000
Total expenses		57,100			3,000			179,910

Loss from Operations		(57,100	)		(3,000	)		(179,910	)

Other Expenses:
Interest expense		(1,087	)		-			(2,510	)
Total other expense		(1,087	)		-			(2,510	)

Provision for income taxes					-			-

Net Loss	$	(58,187	)	$	(3,000	)	$	(182,420	)

Net loss per common share, basic and diluted	$	-		$	-

Weighted average number of common shares outstanding, basic and diluted		36,443,119			4,300,000

The accompanying notes to the financial statements are an integral part of these statements.

CHINA HERB GROUP HOLDINGS CORPORATION
(FORMERLY KNOWN AS ISLAND RADIO, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOW
(UNAUDITED)

	Three months ended March 31, 2014			Three months ended March 31, 2013			Cumulative from June 28, 2010 to March 31, 2014

OPERATING ACTIVITIES:
Net loss	$	(58,187	)	$	(3,000	)	$	(182,420	)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued in connection with services provided by consultants		-			-			20,000
Imputed interest on related party loan		1,087			-			2,510

Changes in operating assets and liabilities:
Increase (decrease) in accounts payable		-			-			54,665
NET CASH USED IN OPERATING ACTIVITIES		(57,100	)		(3,000	)		(105,245	)

INVESTING ACTIVITIES:
Proceeds from sale of asset (Blue Water common stock)		-			-			13,000
NET CASH PROVIDED BY INVESTING ACTIVITIES		-			-			13,000

FINANCING ACTIVITIES:					-
Proceeds from common stock subscribed		-			-			5,600
Proceeds from loan from officer		57,100			3,000			89,350
Repayment of loan from officer		-			-			(105	)
Repurchase of common stock		-			-			(10,750	)
Proceeds from issuance of common stock		-			-			40,293
NET CASH PROVIDED BY FINANCING ACTIVITIES		57,100			3,000			124,388

NET CHANGE IN CASH		-			-			32,143
Cash, beginning of period		32,143			-			-

Cash, end of period	$	32,143		$	-		$	32,143

Non-cash investing and financing activities:
Issuance of common shares to directors	$	-		$	-		$	4,000
Issuance of common shares for common stock subscribed		-			-			5,600
Restricted securities exchanged for accounts payable		-			-			7,000
Forgiveness of loan from officer		-			-			12,145
Forgiveness of accounts payable		-			-			40,060
Forgiveness of loan from shareholder		-			-			7,155
Issuance of common shares for restricted securities received		-			-			20,000

SUPPLEMENTAL DISCLOSURES:
Interest paid	$	-		$	-		$	-
Income taxes paid	$	-		$	-		$	-

The accompanying notes to the financial statements are an integral part of these statements.

CHINA HERB GROUP HOLDINGS CORPORATION

FORMERLY KNOWN AS “ISLAND RADIO, INC.”

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2014

(UNAUDITED)

NOTE 1 – Organization

China Herb Group Holdings Corporation (“Company”) is a development stage company with minimal operations. The Company was incorporated under the name “Island Radio, Inc” under the laws of the State of Nevada on June 28, 2010. Our plan is to become a successful global medical and spa products and services Company within an industry that has been on a rocket trajectory, with $78 billion in revenues in 2013. The fastest growing market segment has been the Orient based spas.

NOTE 2 – Summary of Significant Accounting Policies

Unaudited Interim Financial Information

The accompanying Balance Sheets as of March 31, 2014 and December 31, 2013, Statements of Operations for the three months ended March 31, 2014 and for the three months ended March 31, 2013 and cumulative from June 28, 2010 (Inception) to March 31, 2014, and the Statements of Cash Flows for the three months ended March 31, 2014 and 2013, and cumulative from June 28, 2010 (Inception) to March 31, 2014, are unaudited. These unaudited interim financial statements have been prepared in accordance with accounting principles accepted in the United States of America (“GAAP”). In the opinion of the company’s management, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements and included all adjustments necessary for the fair presentation of the Company’s statement of financial position at March 31, 2014 and its results of operations and its cash flows for the period ended March 31, 2014 and cumulative from June 28, 2010 (inception) to March 31, 2014. The results for the period ended March 31, 2014 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2014.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (US GAAP) for financial information and in accordance with the Securities and Exchange Commission’s (SEC) Regulation S-X. They reflect all adjustments which are, in the opinion of the Company’s management, necessary for a fair presentation of the financial position and operating results as of and for the three months ended March 31, 2014, and 2013, and cumulative from June 28, 2010 (inception) to March 31, 2014.

Use of Estimates

The accompanying financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment. Actual results may vary from these estimates.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. As of March 31, 2014, and December 31, 2013 the Company had no cash equivalents.

Investments

The Company accounts for its marketable securities, which are classified as trading securities, in accordance with generally accepted accounting principles for certain investments in debt and equity securities, which requires that trading securities be carried at fair value. Unrealized gains and losses due to changes in fair value as well as realized gains and losses resulting from sales of securities are reported as Other Income/Expenses in the statement of operations. Fair value of the securities is based upon quoted market prices in active markets or estimated fair value when quoted market prices are not available. The cost basis for realized gains and losses is determined on a specific identification basis. As of March 31, 2014 and December 31, 2013 the Company had no investments.

Fair Value of Financial Instruments

ASC 820, “Fair Value Measurements” and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

As of March 31, 2014 and December 31, 2013 we believe that the recorded values of all of our financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

Description

Level 1

Level 2

Level 3

Total Realized Loss

March 31, 2014

December 31, 2013

Totals

Net Loss per Share Calculation

Basic net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per shares is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. During the three month period ended March 31, 2014 and 2013, and cumulative from June 28, 2010 (inception) to March 31, 2014, the Company had no dilutive financial instruments issued or outstanding.

Income Taxes

The Company accounts for income taxes pursuant to FASB ASC 740, Income Taxes. Under FASB ASC 740-10-25, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.

The Company maintains a valuation allowance with respect to deferred tax assets. China Herb Group Holdings Corporation establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under the Federal tax laws.

Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about its ability to realize the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.

Fiscal Year

The Company elected December 31st for its fiscal year end.

NOTE 3 – Development Stage Activities and Going Concern

The Company is in the development stage and has minimal operations, and as such has devoted most of its efforts since its inception to developing its business plan, issuing common stock, attempting to raise capital, establishing its accounting systems and other administrative functions.

As of March 31, 2014, we had $32,143 cash or cash equivalents proceeded from issuance of common shares in the escrow account. We presently are exploring other such sources of funding. Without limiting our available options, future equity financings will most likely be through the sale of additional shares of our common stock. It is possible that we could also offer warrants, options and/or rights in conjunction with any future issuances of our common stock. However, we can give no assurance that financing will be available to us, and if available to us, in amounts or on terms acceptable to us. If we cannot secure adequate financing, we may be forced to cease operations and you will lose your entire investment.

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United State of America, which contemplate continuation of the Company as a going concern. The Company has not established a source of revenues sufficient to cover its operating costs, and as such, has incurred an operating loss since its inception. Further, as of March 31, 2014, the Company had an accumulated deficit during development stage of ($182,420). These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments or classifications that may result from the possible inability of the Company to continue as a going concern.

NOTE 4 – Share Exchange and Subsequent Sale of Blue Water Restaurant Group, Inc. Common Stock Holdings

On March 29, 2011 we entered into a Share Exchange Agreement with Blue Water Restaurant Group, Inc. (“Blue Water”), a Nevada corporation planning a going public initiative and starting a chain of restaurants in St. Maarten, Dutch West Indies. Under the terms of the agreement we issued Blue Water 2,000,000 shares of our restricted common stock in exchange for 2,000,000 restricted shares of Blue Water common stock, $0.001 par value. These shares were valued at $20,000, or $0.01 a share.

Blue Water registered 1,300,000 of our total holdings of 2,000,000 shares of their common stock in a SEC Registration Statement on Form S-1 that was declared effective on September 8, 2011. Subsequently, we sold these 1,300,000 registered shares without restrictions to 36 different individuals at a price of $0.01 per share, or $13,000 in total. Our remaining 700,000 shares were transferred to Taurus Financial Partners, LLC (“Taurus”) in exchange for a $7,000 reduction in our outstanding accounts payable. All of the cash proceeds from the sale of our Blue Water shares were paid to Taurus to reduce our outstanding accounts payable to them. As of March 31, 2014 we had no remaining accounts payable due to Taurus and had no remaining holdings in Blue Water.

NOTE 5 – Notes Payable to Officer and Shareholders

As of December 31, 2011 we had notes payable to our former officer and director, Nina Edstrom, aggregating $12,145, which includes $10,750 she loaned the Company to repurchase and cancel 1,075,000 shares of its common stock.

Ms. Edstrom voluntarily forgave these outstanding debts on March 1, 2012 which was recorded in the financial statements as additional paid-in capital. Additionally, these debts had accrued total $559 in imputed interest that was recorded in the financial statements as additional paid-in capital.

On June 27, 2012, Taurus Financial Partners, LLC, as a shareholder of the Company, forgave $40,060 of outstanding accounts payable that the Company owed, which was recorded as due to related party.

During the year ended December 31, 2013, Chin Yung Kong, the director and shareholder of the Company, paid $20,000 for the Company’s expense. These payments were classified as due to related party. Imputed interest of $864 was recorded for the year ended December 31, 2013.

During the quarter ended March 31, 2013, Chin Yung Kong, the director and shareholder of the Company, paid $3,000 for the Company’s expense. These payments were classified as due to related party.

During the quarter ended March 31, 2014, Qiuping Lu, President, CEO, director and shareholder of the Company, paid $57,100 for the Company’s expense. These payments were classified as due to related party. Imputed interest of $1,087 was recorded for the period ended March 31, 2014.

NOTE 6 – Common Stock

The total number of common shares authorized that may be issued by the Company is 75,000,000 shares with a par value of $0.001 per share.

During the period June 28, 2010 (inception) to December 31, 2011 the Company issued an aggregate of 9,375,000 shares as follows:

●	4,000,000 shares to its directors as Founder’s Shares;

●	2,000,000 shares to a consultant for total consideration of $20,000, or $0.01 per share, based on the value of the services performed;

●	1,375,000 shares in exchange for aggregate cash consideration of $13,750, or $0.01 per share;

●

2,000,000 shares in exchange for 2,000,000 shares of restricted common stock in Blue Water Restaurant Group, Inc. (“Blue Water”), a Nevada corporation, presently undertaking a going public initiative. This investment was valued at $20,000, or $0.01 per share, based on the most recent private transaction price of Blue Water common stock, which was $0.01 per share. In addition, Blue Water registered 1,300,000 of our shares of its common stock for unrestricted resale in a SEC Registration Statement on Form S-1 which was declared “effective” on September 8, 2011.

On September 19, 2011 the Company repurchased 1,075,000 shares of its common stock, which were subsequently cancelled. These shares were purchased for $10,750, or $0.01 a share. This purchase was financed by a non-interest bearing demand loan from our sole officer and director, Nina Edstrom. During 2012 this note had accrued $272 in imputed interest that was recorded in the financial statements as additional paid-in capital.

On October 13, 2011, two shareholders returned to the Company an aggregate of 4,000,000 shares of restricted common stock. These shares were subsequently cancelled.

On August 30, 2013, the Company issued 125,000 shares of common stock to a group of 6 individuals for the price of $0.001 per share. Total proceeds $125.

On November 20, 2013, the Company issued 16,018,119 shares of common stock to a group of 35 individuals for the price of $0.001 per share. Total proceeds $16,018.

On November 21, 2013, the Company issued 16,000,000 shares of common stock to 3 existing majority shareholders for the price of $0.001 per share. Total proceeds $16,000.

As of March 31, 2014, the Company had 36,443,119 shares of its common stock issued and outstanding.

NOTE 7– Preferred Stock

The total number of preferred shares authorized that may be issued by the Company is 5,000,000 shares with a par value of $0.001 per share.

As of March 31, 2014, the Company had no shares of its preferred stock issued and outstanding.

NOTE 8 – Related Party Transactions

From June 28, 2010 (inception) through June 27, 2012, the Company operated out of office space that was provided to us by our former president and chief executive officer, Eric Boyer, free of charge.

As of December 31, 2011 we had notes payable to our sole officer and director, Nina Edstrom, aggregating $12,145, which includes $10,750 she loaned the Company to repurchase and cancel 1,075,000 shares of its common stock.

Ms. Edstrom voluntarily forgave these outstanding debts on March 1, 2012 which was recorded in the financial statements as additional paid-in capital.

On June 27, 2012, Taurus Financial Partners, LLC, as a shareholder of the Company, forgave the $40,060 total outstanding account payables that the Company owed to it. As of March 31, 2014, there is note payable of $77,100.

During the year ended December 31, 2013, Chin Yung Kong, the director and shareholder of the Company, paid $20,000 for the Company’s expense. These payments were classified as due to related party. Due on demand, no interest. Imputed interest of $864 was recorded for the year ended December 31, 2014.

NOTE 9 – Lease

For the quarter ended March 31, 2014 and cumulative from June 28, 2010 (inception) to March 31, 2014, the Company’s rent expense was the cost of the office. From February 2014 the company opened an office at 505 West Avenue, Suite 16, Mesa AZ 85210 at a rent expense of $1,500 per month. The rent includes utilities and property taxes. This is the beginning of operating activities, market research for possible acquisitions and plans for expansion. The Company is subleasing the space from H&P Medical Research, Inc. The sublease expires on April 1, 2015.

NOTE 10 – Recent Accounting Pronouncements

In July 2013, FASB issued ASU No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." The provisions of ASU No. 2013-11 require an entity to present an unrecognized tax benefit, or portion thereof, in the statement of financial position as a reduction to a deferred tax asset for a net operating loss carryforward or a tax credit carryforward, with certain exceptions related to availability. ASU No. 2013-11 is effective for interim and annual reporting periods beginning after December 15, 2013. The adoption of ASU No. 2013-11 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:

Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and

Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.

The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.

In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.

In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.

Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial statements.

NOTE 11– Subsequent Events

On April 4, 2014 the company entered in consulting agreements with Dr Kiril Pandelisev and Yan Lawrence. Under this agreement Dr Pandelisev and Ms. Lawrence will assist the company to Coordinate the Remedy the Company’s filings to date, help establish an office for the Company at 505 West 8th Avenue, Ste 16, Mesa, Arizona 85210, Assist and Coordinate the process needed the Company to be ready for trading, Assist and Coordinate the process needed the Company to be ready for merger, Assist and Coordinate the process needed the merging companies to be restructured, audited and ready for merger, Assist and Coordinate the process needed the Company to merge with one or more entities from China and USA, Coordinate the preparation and filing post merger S-1 registration for secondary IPO suitable to guarantee the Company’s plans for expansion and growth, Consult on the growth of the new company and its subsidiaries in China and USA.

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and has determined there are no additional events to disclose.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We are a development stage corporation with limited operations and are not currently generating any revenues from our business operations. Our independent registered public accounting firm has issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next 12 months. We do not anticipate generating significant revenues until we are able to open or acquire the initial wellness and spa centers. Accordingly, we must raise additional cash from sources other than operations.

We presently are exploring other such sources of funding, including raising funds through a second public offering, a private placement of securities, or loans. If we are unable to raise this additional funding, we will either have to suspend operations until we do raise the cash or cease operations entirely.

The following discussion should be read in conjunction with our Financial Statements and the notes thereto and the other information included in this Annual Report as filed with the SEC on Form 10-K.

Limited Operating History; Need for Additional Capital

There is limited historical financial information about us upon which to base an evaluation of our performance. We are in the start-up stage of operations and have yet to generate any revenues. We cannot guarantee that we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns, such as increases in marketing costs, increases in administration expenditures associated with daily operations, increases in accounting and audit fees, and increases in legal fees related to filings and regulatory compliance.

To become profitable and competitive, we have to successfully develop and sell wellness and spa products and services. We anticipate relying on equity sales of our common stock in order to continue to fund our business operations until we are able to generate sufficient revenues to cover our operating expenses, which may never happen. Issuances of additional shares will result in dilution to our then existing stockholders.

There is no assurance that we will be able to make any additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities. We may also rely on loans from our directors. However, there are no assurances that our directors will provide us with any additional funds.

Currently, we do not have any arrangements for additional financing. We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop, or expand our operations. Equity financing could result in additional dilution to existing shareholders.

Status as a Shell Company

As of March 31, 2014, because we have R&D operations, we are considered to be a shell company under the Securities Exchange Act of 1934, as amended. Because we are not considered a shell company, the securities sold in previous offerings can only be resold through (i) registration under the Securities Act of 1933, as amended (“Securities Act”), (ii) Section 4(1) of the Securities Act, if available, for non-affiliates, or (iii) by meeting the conditions of Rule 144(i) of the Securities Act.

Results of Operations

The Three Months Ended March 31, 2014 and 2013

Revenues. As of March 31, 2014, we have not generated any revenues and remain a development stage company.

Net Loss. We had a net loss of $58,187 for the quarter ended March 31, 2014 compared to a net loss of $3,000 for the quarter ended March 31, 2013. This represents an increase in net loss of $55,187. Our net loss was attributable to complying with our ongoing SEC reporting requirements, which have consisted primarily of legal and accounting fees.

Operating Expenses. Our total operating expenses for the quarter ended March 31, 2014 were $57,100 compared to $3,000 for the quarter ended March 31, 2013. This represents an increase in operating expenses of $54,100. Our operating expenses were entirely related to complying with our ongoing SEC reporting requirements, which have consisted primarily of legal and accounting fees.

Other income (expenses). During the period ended March 31, 2014 we recorded $1,087 in imputed interest expenses related to a note outstanding related to due to related party balance. The accrued imputed interest was recorded in Company’s financial statements under additional paid-in capital. The interest expense for the quarter ended March 31, 2013 was $0.

Cumulative During the Development Stage – June 28, 2010 (inception) through March 31, 2014

For ease of reading we refer to the period of June 28, 2010 (inception) through March 31, 2014 as the “Developmental Period”.

Revenues. We have not generated any revenues during the Developmental Period.

Net Loss. We have incurred a net loss of $184,420 during the Developmental Period. This net loss was primarily attributable to organizational costs related to our formation, an offering of our common stock, and complying with our ongoing SEC reporting requirements. These expenses have consisted primarily of legal, accounting, and outside consulting fees.

Operating Expenses. Our total operating expenses for the Developmental Period were $179,910. These operating expenses were primarily attributable to organizational costs related to our formation, an early offering of our common stock, and complying with our ongoing SEC reporting requirements. These expenses have consisted primarily of legal, accounting, and outside consulting fees.

Other income (expenses). During the Development Period we recorded $2,510 in imputed interest expenses related to a note outstanding related to due to related party balance. The accrued imputed interest was recorded in Company’s financial statements under additional paid-in capital.

Total Stockholders’ Equity. Our stockholders’ equity was $45,407 as of March 31, 2014.

Accounts Payable and Accrued Expenses. As of March 31, 2014, Company shows accounts payable or other outstanding liabilities of $77,550 consisting of $450 payable and $77,100 shareholder loans.

Liquidity and Capital Resources

As of March 31, 2014, we had $77,550 in liabilities.

We expect to incur continued losses over the remainder of the fiscal year ending December 31, 2014, possibly even longer. As of March 31, 2014, we had $32,143 cash or cash equivalents proceeded from issuance of common shares in the escrow account.

We presently are exploring other such sources of funding. Without limiting our available options, future equity financings will most likely be through the sale of additional shares of our common stock. It is possible that we could also offer warrants, options and/or rights in conjunction with any future issuances of our common stock. However, we can give no assurance that financing will be available to us, and if available to us, in amounts or on terms acceptable to us. If we cannot secure adequate financing, we may be forced to cease operations and you will lose your entire investment.

Going Concern Consideration

Our independent registered public accounting firm has issued a going concern opinion in their audit report dated April 9, 2014, which can be found in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on April 9, 2014. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next 12 months. Our financial statements found within this Quarterly Report on Form 10-Q and the aforementioned Annual Report on Form 10-K contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

Off –Balance Sheet Operations

As of March 31, 2014, we had no off-balance sheet activities or operations.

CRITICAL ACCOUNTING POLICIES

The accompanying financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (US GAAP) for financial information and in accordance with the Securities and Exchange Commission’s (SEC) Regulation S-X. They reflect all adjustments which are, in the opinion of Company’s management, necessary for a fair presentation of the financial position and operating results as of March 31, 2014 and for the period June 28, 2010 (inception) to March 31, 2014.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting periods. Because of the use of estimates inherent in the financial reporting process, actual results may differ significantly from those estimates.

Cash and Cash Equivalents

Fair Value of Financial Instruments

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Net Loss per Share Calculation

Basic net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per shares is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. During the period June 28, 2010 (inception) to March 31, 2014 we had no dilutive financial instruments issued or outstanding.

Revenue Recognition

For the period June 28, 2010 (inception) to March 31, 2014, we did not realize any revenue.

Income Taxes

We account for income taxes pursuant to FASB ASC 740, Income Taxes. Under FASB ASC 740-10-25, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.

We maintain a valuation allowance with respect to deferred tax assets. Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.

Changes in circumstances, such as Company generating taxable income, could cause a change in judgment about its ability to realize the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.

Recently Issued Accounting Pronouncements

Contractual Obligations

As of March 31, 2014 and 2013 Company had only the space sublease obligations. Rent expense of $1,500 per month includes utilities and property taxes.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures.

As of the end of the period covered by this report, we conducted an evaluation under the supervision and with the participation of our chief executive officer and principal accounting officer of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act).

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial tatements will not be presented or detected on a timely basis.

Based on management’s assessment, we have concluded that, as of March 31, 2014, our disclosure controls and procedures were not effective in timely alerting management to the material information relating to us required to be included in our annual and interim filings with the SEC.

Our chief executive officer and principal financial officer have concluded that our disclosure controls and procedures had the following material weaknesses:

We were unable to maintain any segregation of duties within our financial operations due to our reliance on limited personnel in the finance function. While this control deficiency did not result in any audit adjustments to our interim or annual financial statements, it could have resulted in a material misstatement that might have been prevented or detected by a segregation of duties;

We lack sufficient resources to perform the internal audit function and does not have an Audit Committee;

We do not have an independent Board of Directors, nor do we have a board member designated as an independent financial expert to Company. As a result, there may be lack of independent oversight of the management team, lack of independent review of our operating and financial results, and lack of independent review of disclosures made by Company; and

Documentation of all proper accounting procedures is not yet complete.

These weaknesses were identified in our Annual Report filed with the SEC on Form 10-K and our quarterly report filed with SEC on Form 10-Q. These weaknesses have existed since our inception on June 28, 2010 and, as of March 31, 2014, have not been remedied.

To the extent reasonably possible given our limited resources, we intend to take measures to cure the aforementioned material weaknesses, including, but not limited to, the following:

Considering the engagement of consultants to assist in ensuring that accounting policies and procedures are consistent across the organization and that we have adequate control over financial statement disclosures;

Hiring additional qualified financial personnel, including a Chief Financial Officer, on a full-time basis;

Expanding our current board of directors to include additional independent individuals willing to perform directorial functions; and

Increasing our workforce in preparation for exiting the development stage and commencing revenue producing operations.

Since the recited remedial actions will require that we hire or engage additional personnel, these material weaknesses may not be overcome in the near-term due to our limited financial resources. Until such remedial actions can be realized, we will continue to rely on the limited advice of outside professionals and consultants.

Changes in Controls and Procedures

There have been no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

No officer, director, or persons nominated for these positions, and no promoter or significant employee of our corporation has been involved in legal proceedings that would be material to an evaluation of our management. We are not aware of any pending or threatened legal proceedings involving the Company.

During the past ten (10) years, none of our directors and officers has been the subject of the following events:

Any bankruptcy petitions within two (2) years prior to that time;

Any conviction in a criminal proceeding or being subject to a pending criminal proceeding;

An order, judgment, or decree, not subsequently reversed, suspended or vacated, or any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting Ms. Edstrom’s involvement in any type of business, securities or banking activities; and

Found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Future Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

ITEM 1A. RISK FACTORS

Not required for Smaller Reporting Company.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On August 30, 2013, the Company issued 125,000 shares of common stock to a group of 6 individuals for the price of $0.001 per share. The issuance of these shares is pursuant to the exemption from registration provided by Section 4(2) of the Securities Act of 1933.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

(a) Exhibits

31.1 *	Section 302 Certificate of Chief Executive Officer and Chief Financial Officer

32.1 *	Section 906 Certificate of Chief Executive Officer and Chief Financial Officer

101.INS **	XBRL Instance Document

101.SCH **	XBRL Taxonomy Extension Schema Document

101.CAL **	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF **	XBRL Taxonomy Extension Definition Linkbase Document

101.LAB **	XBRL Taxonomy Extension Label Linkbase Document

101.PRE **	XBRL Taxonomy Extension Presentation Linkbase Document

_____________

* filed herewith

**XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	China Herb Group Holdings Corporation
	(Registrant)

Date: June 3, 2014	By:	/s/ Qiuping Lu
		Qiuping Lu President, Director, CEO, CFO