NOTE
1 – THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES
The
Company
Heyu Biological Technology Corporation
(the “Company” or “we”) was incorporated in the state of Nevada on May 18, 1987, as Asphalt Associates,
Inc. and changed its name to Pacific WebWorks in January 1999. On July 3, 2018, the Company changed its name to Heyu Biological
Technology Corporation, with a new ticker symbol, HYBT. From 1999 to 2016 the Company engaged in the development and distribution
of web tools software, electronic business storefront hosting, and Internet payment systems for individuals and small to mid-sized
businesses. On February 23, 2016, the Company filed a voluntary petition for bankruptcy in the U.S. Bankruptcy Court for the District
of Utah, and soon afterwards ceased its business activities. On August 19, 2016 the Company proposed a Plan of Liquidation and
on November 28, 2016, the Court entered an order confirming the Plan of Liquidation and establishing a Liquidating Trust. On December
28, 2016, all assets and liabilities of the Company were transferred to the Liquidating Trust. The Company currently has no business
operations.
On March 12, 2018, the Board of Directors
of the Company (the “Board”), with the consent of the majority shareholder, approved a 1-for-464 reverse stock split.
On April 11, 2018, the reverse split became effective.
On April 18, 2018, the Company entered
into a Share Purchase Agreement (the “SPA”) with Mr. Ban Siong Ang (the “Purchaser”) and Mr. Dan Masters
(the “Seller”), pursuant to which the Purchaser acquired 1,021,051,700 shares, representing 98.91% of the issued and
outstanding shares of common stock of the Company (“Common Stock”) from Seller for an aggregate purchase price of $335,000
(“Share Purchase”). As a result of the SPA, the Company accepted the resignation of Dan Masters, as the Company’s
President, Chief Executive Officer, Chief Financial Officer, Secretary and Chairman of the Board of Directors (the “Board”).
This resignation was given in connection with the closing of the Share Purchase and was not the result of any disagreement with
the Company on any matter relating to the Company’s operations, policies, or practices. Additionally, all debt due to Mr.
Masters from the Company was cancelled as of the closing of the Share Purchase and recognized as contributed capital.
On
April 18, 2018, to fill the vacancies created by Mr. Masters’s resignations, Ban Siong Ang and Hung Seng Tan were elected
as the directors of the Company. Mr. Ang was appointed as President, Chief Executive Officer, and Chairman of the Board. Mr. Tan
was appointed as Executive Director of the Company. Ms. Wendy Wei Li was appointed as Chief Financial Officer.
On July 30, 2018, the Company amended its
Articles of Incorporation with the State of Nevada in order to increase its authorized shares of Common Stock from 150,000,000
to 2,000,000,000.
On
September 11, 2018, the Nevada Secretary of State approved the Company’s certificate of amendment to amend its Articles
of Incorporation to effectuate a 100-for-1 forward stock split. The total issued and outstanding shares of Common Stock has been
increased from 10,324,660 to 1,032,466,000 shares, with the par value unchanged at $0.001.
On September 25, 2018, the Financial Industry
Regulatory Authority, Inc. (“FINRA”) announced the Forward Split with an Effective Date of September 25, 2018 and a
Pay Date of September 24, 2018. In connection with the Forward Split, no fractional shares are necessary to be issued, and stockholders
do not need to present certificates for exchange. The Forward Split will be payable directly to each stockholder by the issuance
of shares representing the split differential.
During 2018, the Company established the
following subsidiaries: (1) HP Technology Limited (“HPTL”), a British Virgin Islands business company incorporated
on September 20, 2018 and (2) Heyu Healthcare Technology Limited (“HHTL”), a Hong Kong company incorporated on March
29, 2018. Further, on November 5, 2018, the Company acquired the following subsidiary: Jiashierle (Xiamen) Healthcare Technology
Co., Ltd. (“JSEL”), a limited liability company incorporated under the laws of the People’s Republic of China
(the “PRC”) on November 16, 2017.
Basis
of Presentation
The
consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United
States of America (“GAAP”). The consolidated financial statements include the financial statements of the Company
and its subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation.
As of December 31, 2018, the details of
the consolidating subsidiaries are as follows:
|
|
Place of
|
|
Attributable
|
|
Name of Company
|
|
incorporation
|
|
equity interest %
|
|
HP Technology Limited (“HPTL”)
|
|
British Virgin Islands
|
|
|
100
|
%
|
|
|
|
|
|
|
|
Heyu Healthcare Technology Limited (“HHTL”)
|
|
Hong Kong
|
|
|
100
|
%
|
|
|
|
|
|
|
|
Jiashierle (Xiamen) Healthcare Technology Co., Ltd. (“JSEL”)
|
|
P.R.C.
|
|
|
100
|
%
|
Use
of Estimates
The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the amounts reported in the consolidated financial statements and accompanying notes. Management believes that the estimates used
in preparing the financial statements are reasonable and prudent; however, actual results could differ from these estimates. Significant
estimates include the allowance for doubtful accounts, impairment assessments of goodwill, valuation of deferred tax assets, rebilling
collections and certain accrued liabilities such as contingent liabilities.
Cash
Equivalents
The Company considers all highly liquid
debt instruments purchased with a maturity period of three months or less to be cash or cash equivalents. The carrying amounts
reported in the accompanying unaudited condensed consolidated balance sheets for cash and cash equivalents approximate their fair
value. All of the Company’s cash that is held in bank accounts in the PRC and Hong Kong is not protected by Federal Deposit
Insurance Corporation (“FDIC”) insurance or any other similar insurance in the PRC, or Hong Kong.
Foreign
Currency
Beginning in 2018, the Company’s
principal country of operations is the PRC. The accompanying consolidated financial statements are presented in US$. The functional
currency of the Company is US$, and the functional currency of the Company’s subsidiaries is RMB. The consolidated financial
statements are translated into US$ from RMB at year-end exchange rates as to assets and liabilities and average exchange rates
as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.
The resulting translation adjustments are recorded as a component of shareholders’ equity included in other comprehensive
income. Gains and losses from foreign currency transactions are included in profit or loss. There were no gains and losses from
foreign currency transactions during the years ended December 31, 2018 and 2017.
|
|
As
of December 31, 2018
|
|
|
Average
of Year Ended December 31, 2018
|
|
RMB: US$ exchange rate
|
|
|
6.8764
|
|
|
|
6.6146
|
|
HKD: US$ exchange rate
|
|
|
7.8312
|
|
|
|
7.8370
|
|
The
RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions.
No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation.
General
and administrative costs
General
and administrative expenses include personnel expenses for executive, finance, and internal support personnel. In addition, general
and administrative expenses include fees for bad debt costs, professional legal and accounting services, insurance, office space,
banking and merchant fees, and other overhead-related costs.
Income
Taxes
The Company accounts for income taxes pursuant
to ASC Topic 740, Income Taxes. Income taxes are provided on an asset and liability approach for financial accounting and reporting
of income taxes. Any tax paid by subsidiaries during the year is recorded. Current tax is based on the profit or loss from ordinary
activities adjusted for items that are non-assessable or disallowable for income tax purpose and is calculated using tax rates
that have been enacted or substantively enacted at the balance sheet date. ASC Topic 740 also requires the recognition of deferred
tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets
and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry-forwards. ASC Topic
740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets.
Realization of deferred tax assets, including those related to the U.S. net operating loss carry-forwards, are dependent upon future
earnings, if any, of which the timing and amount are uncertain.
The Company adopted ASC Topic 740-10-05,
Income Tax, which provides guidance for recognizing and measuring uncertain tax positions, it prescribes a threshold condition
that a tax position must meet for any of the benefits of the uncertain tax position to be recognized in the financial statements.
It also provides accounting guidance on derecognizing, classification and disclosure of these uncertain tax positions.
The Company’s policy on classification
of all interest and penalties related to unrecognized income tax positions, if any, is to present them as a component of income
tax expense.
Capital
Structure
The
Company currently has 2,000,000,000 shares authorized of $0.001 par value common stock, with 1,141,472,861 shares issued and outstanding
as of December 31, 2018, and 32,466,000 shares issued and outstanding as of December 31, 2017.
Earnings
(loss) per share
Basic net income (loss) per share of common
stock attributable to common stockholders is calculated by dividing net income (loss) attributable to common stockholders by the
weighted-average shares of common stock outstanding for the period. Potentially dilutive shares, which are based on the weighted-average
shares of common stock underlying outstanding stock-based awards, warrants, options, or convertible debt using the treasury stock
method or the if-converted method, as applicable, are included when calculating diluted net income (loss) per share of common stock
attributable to common stockholders when their effect is dilutive.
Potential dilutive securities are excluded
from the calculation of diluted EPS in loss periods as their effect would be anti-dilutive.
As of December 31, 2018 and 2017, there
were no potentially dilutive shares.
|
|
Year ended December 31,
|
|
|
|
2018
|
|
|
2017
|
|
Statement of Operations Summary Information:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(247,777
|
)
|
|
$
|
(54,113
|
)
|
Weighted-average common shares outstanding - basic and diluted
|
|
|
758,974,259
|
|
|
|
32,266,000
|
|
Net loss per share, basic and diluted
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
NOTE
2 – GOING CONCERN
During the year ended December 31, 2018,
the Company has been unable to generate cash flows sufficient to support its operations and has been dependent on related party
advances from the current controlling shareholder. In addition, the Company has experienced recurring net losses, and has an accumulated
deficit of $18,421,319, and working capital deficit of $237,236 as of December 31, 2018. These factors raise substantial doubt
about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments
related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that
may result should the Company be unable to continue as a going concern.
There can be no assurance that sufficient
funds required during the next year or thereafter will be generated from any future operations or that funds will be available
from external sources such as debt or equity financings or other potential sources. If the Company is unable to raise capital from
external sources when required, there would be a material adverse effect on its business. Furthermore, there can be no assurance
that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive
effect on the Company’s existing stockholders. Management is now seeking an operating company with which to merge or acquire.
In the foreseeable future, the Company will rely on related parties such as its controlling shareholder, to provide advances to
funds general corporate purposes and any potential acquisitions of profitable investments. There is no assurance, however, that
the Company will achieve its objectives or goals.
NOTE
3 – CASH AND CASH EQUIVALENTS
Cash
and cash equivalents consist of the following:
|
|
As
of December 31,
2018
|
|
|
As
of
December 31,
2017
|
|
|
|
|
|
|
|
|
Bank
Deposits-China & HK
|
|
$
|
37,555
|
|
|
$
|
-
|
|
|
|
$
|
37,555
|
|
|
$
|
-
|
|
NOTE
4 – OTHER RECEIVABLE
Other
receivable consists of the following:
|
|
As
of December 31,
2018
|
|
|
As
of
December 31,
2017
|
|
|
|
|
|
|
|
|
|
|
Fujian Shanzhiling Biological Technology
Co., Ltd.
|
|
$
|
21,324
|
|
|
$
|
-
|
|
On
October 8, 2018, the Company entered into a non-binding letter of intent with Fujian Shanzhiling Biological Technology Co., Ltd.
(the “Acquirer”), a Chinese biotechnology product manufacturing corporation, whereby the Acquirer agreed to acquire
51% of the outstanding capital of the Company subject to certain adjustment provisions (the “Shanzhiling Acquisition”).
As the date of this Report, the Company has not entered into any definitive agreements related to the Shanzhiling Acquisition,
Other receivable contains payments made on behalf of the acquirer during fiscal year ended December 31, 2018.
NOTE
5 – ACCRUED EXPENSES AND OTHER PAYABLES
Accrued
expenses and other payables consist of the following:
|
|
As
of December 31,
2018
|
|
|
As
of December 31,
2017
|
|
|
|
|
|
|
|
|
Accrued payroll
|
|
|
7,589
|
|
|
|
-
|
|
Other Payables
|
|
|
9,039
|
|
|
|
12,813
|
|
|
|
$
|
16,628
|
|
|
$
|
12,813
|
|
Accrued
payroll includes all company employee payroll liabilities as of December 31, 2018, and other payables contains employee reimbursements.
NOTE
6 – RELATED PARTY TRANSACTIONS
During
the year ended December 31, 2017, the Company’s prior President paid $41,300 on behalf of the Company to vendors for accounting,
auditing, and SEC filing services required to complete the annual and quarterly reports of the Company which had been delayed
because of the Company’s bankruptcy. As such, a related party payable was recorded in the amount of $41,300 as of December
31, 2017, which is non-interest bearing and due on demand.
Prior
to the SPA of April 18, 2018, the outstanding amount of $62,087 due to the prior related party was reduced by $10,000 related
to the issuance of 1,000,000,000 shares on April 13, 2018. The remaining balance of $52,087 was cancelled as a result of the SPA
dated April 18, 2018 and was recorded as contributed capital.
Following the SPA in April 2018, the Company
has no actual operations, but has set up corporate structure and subsidiary companies. Expenses occurred during this period mainly
include auditing, consulting, and legal advisory expenses, government registration expenses, and payrolls for administrations.
A related party paid for all expenses on behalf of the Company totaling $279,464 for the year ended December 31, 2018. As such,
a related party payable was recorded in the amount of $279,464 as of December 31, 2018 which is non-interest bearing and due on
demand.
A director of the Company provides the property for the use by the Company without charge.
NOTE
7 – EQUITY
On
June 19, 2017, the Company amended its Articles of Incorporation to increase its authorized common shares from 50,000,000 to 150,000,000.
On
June 20, 2017, the Company’s control was purchased from the bankruptcy trustee for $25,000 and the Company issued 21,551,724
shares of its common stock to its prior President. No proceeds were received by the Company for the issuance of shares.
On
March 12, 2018, the Board of Directors, with the consent of the majority shareholder, voted for a 1-for-464 reverse stock split.
On April 11, 2018 the reverse split became effective.
On
April 13, 2018, 1,000,000,000 shares were issued to a prior related party as a repayment of debt.
On
April 18, 2018, the Company entered into a Share Purchase Agreement (the “SPA”) with Mr. Ban Siong Ang (the “Purchaser”)
and Mr. Dan Masters (the “Seller”), pursuant to which the Purchaser acquired 1,021,051,700 shares, representing 98.91%
of the issued and outstanding shares of common stock of the Company (“Common Stock”) from Seller for an aggregate
purchase price of $335,000 (“Share Purchase”). As a result of the SPA, the Company accepted the resignation of Dan
Masters, as the Company’s President, Chief Executive Officer, Chief Financial Officer, Secretary and Chairman of the Board.
This resignation was given in connection with the closing of the Share Purchase and was not the result of any disagreement with
the Company on any matter relating to the Company’s operations, policies, or practices. Additionally, all debt due to Mr.
Masters from the Company was cancelled as of the closing of the Share Purchase and recognized as contributed capital.
On
July 3, 2018, the Company changed its name to Heyu Biological Technology Corporation, with a new ticker symbol, HYBT.
On July 30, 2018, the Company amended its
Articles of Incorporation with the State of Nevada in order to increase its authorized shares of Common Stock from 150,000,000
to 2,000,000,000.
On
September 11, 2018, the Nevada Secretary of State approved the Company’s certificate of amendment to amend its Articles
of Incorporation to effectuate a 100-for-1 forward stock split. The total issued and outstanding shares of Common Stock has been
increased from 10,324,660 to 1,032,466,000 shares, with the par value unchanged at $0.001.
In October 2018, the controlling stockholder
of the Company, Mr. Ban Siong Ang, entered into a series of share transfer agreements (the “Share Transfer Agreements”)
with certain buyers (the “Buyers”). Pursuant to the Share Transfer Agreements, an aggregate of 109,006,861 shares
of Common Stock were issued to the Buyers, but the cancellation of the 109,006,861 shares of Common Stock held by Mr. Ang was
still in process as of December 31, 2018. The cancellation of those shares held by Mr. Ang was subsequently completed on March
20, 2019, pursuant to a Share Cancellation Agreement dated March 15, 2019, by and between the Company and Mr. Ang.
Unless otherwise indicated, all common
share amounts and per share amounts in the financial statements and disclosures have been presented giving effect to the 1-for-464
reverse split that became effective on April 11, 2018, and the 100-for-1 forward stock split that became effective on September
11, 2018.
NOTE
8 – INCOME TAXES
The
Company is subject to U.S. Federal tax laws. The Company has not recognized an income tax benefit for its operating losses in
the United States because the Company does not expect to commence active operations in the United States.
Heyu
Healthcare Technology Limited was incorporated in Hong Kong and is subject to Hong Kong profits tax at a tax rate of 16.5%. Since
Heyu Healthcare Technology Limited had no taxable income during the reporting period, it has not paid Hong Kong profits taxes.
Heyu Healthcare Technology Limited has not recognized an income tax benefit for its operating losses in Hong Kong because the
Company does not expect to commence active operations in Hong Kong.
The
Company plans to conduct its major operations in the PRC through Jiashierle (Xiamen) Healthcare Technology Co., Ltd., and in accordance
with the relevant tax laws and regulations. The corporate income tax rate in China is 25%. The Company has not paid PRC profits
taxes, since it had no taxable income during the reporting period.
NOTE
9 – SUBSEQUENT EVENTS
On January 17, 2019, Jiashierle
(Xiamen) Healthcare Technology Co., Ltd. (“JSEL”), a wholly-owned subsidiary of the Company and a limited
liability company incorporated under the laws of the People’s Republic of China (the “PRC”) on November 16,
2017, entered into a Share Transfer Agreement (the “Share Transfer Agreement”) with Mr. Yu Xu (“Mr.
Xu”), an individual with an address at No. 68 Chengde South Road, Qingpu District, Huaian City, Jiangsu Province, the
PRC, and who owned 90% of the equity interests of Shanghai Kangzi Medical Technology Co., Ltd., a limited liability company
organized under the laws of the PRC (“Kangzi”), whereby Mr. Xu transferred 60% of the equity interests of Kangzi
to JSEL as a gift. Kangzi owns no assets and conducts no business operation of its own.
F-13