ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking
Statements
Statements
made in this Quarterly Report which are not purely historical are forward-looking statements with respect to the goals, plan objectives,
intentions, expectations, financial condition, results of operations, future performance and our business, including, without
limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words “may,”
“would,” “could,” “should,” “expects,” “projects,” “anticipates,”
“believes,” “estimates,” “plans,” “intends,” “targets” or similar
expressions.
Forward-looking
statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause
actual results to differ materially from those set forth in the forward-looking statements, including the following: general economic
or industry conditions, nationally and/or in the communities in which we may conduct business, changes in the interest rate environment,
legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting
principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive,
governmental, regulatory and technical factors affecting our current or potential business and related matters.
Accordingly,
results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only
as of the date they are made. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements
to reflect events or circumstances occurring after the date of such statements.
Overview
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. 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.
On
April 18, 2018, the Company entered into a Share Purchase Agreement with Mr. Ban Siong Ang and Mr. Dan Masters, pursuant to which
Mr. Ang acquired 1,021,051,700 shares, representing 98.91% of the issued and outstanding shares of Common Stock from Mr. Masters
for an aggregate purchase price of $335,000. As a result of the Share Purchase Agreement, the Company accepted the resignation
of Mr. 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
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 of the
Company. Mr. Tan was appointed as Executive Director of the Company. Ms. Wendy Wei Li was appointed as Chief Financial Officer.
On
July 3, 2018, the Company changed its name to Heyu Biological Technology Corporation, with a new ticker symbol, HYBT.
On January 17, 2019, JSEL, entered into the
Share Transfer Agreement with Mr. Xu, whereby JSEL received 60% of the outstanding equity interest of Kangzi from Mr. Xu for the
purpose of developing a joint venture in the business of selling medical equipment. It was the parties’ intention that JSEL
would fund the operations of Kangzi in proportion to its equity interest in Kangzi. At the time of the share transfer, Kangzi
owned no assets and conducted no business operation of its own.
On
March 15, 2019, the Company, with the approval of the Board, entered into a Share Cancellation Agreement (the “Share Cancellation
Agreement”) with Mr. Ban Siong Ang, the President, Chief Executive Officer, and Chairman of the Board of the Company. Pursuant
to the Share Cancellation Agreement, the Company and Mr. Ang agreed to cancel 109,006,861 shares of Common Stock previously issued
to Mr. Ang.
In
March 2019, the Company entered into a Raspberry Purchase Agreement and a Raspberry Juice Processing Agreement with Ditiantai.
Pursuant to these two agreements, the Company purchased six tons of raspberry from Ditiantai, which were processed by Ditiantai
into raspberry juice and delivered to the Company. The Company then sold the raspberry juice to a corporate buyer and five individual
buyers. The Company, however, does not plan to engage in the business of selling raspberry juice in the long term, and is still
identifying and considering its operational direction.
Liquidity
and Capital Resources
As
of March 31, 2019, we had assets of $140,813, which consisted of $98,493 in cash, $24,499 in other receivables, and $17,821 as
inventory; we had liabilities of $425,615, which consisted of $19,136 in accounts payable, $4 in taxes payable, and $406,475 in
related party payables; we had an accumulated deficit of $18,469,185. As of December 31, 2018, we had assets of $58,879 and liabilities
of $296,115 and our accumulated deficit totaled $18,421,319. Additionally, as the Company started its operation in mid-March 2019,
related parties paid expenses totaling $127,011 to vendors for accounting, auditing, consulting, SEC filing services, and all
other operating expenses.
Results
of Operations
Following
the Liquidation on December 28, 2016, we became a shell company without any significant assets or operations.
We started operations in March 2019, and
had no revenues or operations for the same period in 2018. Our revenues during the three months ended March 31, 2019, were $21,932,
and the cost of revenue was $12,873, as compared to nil and nil for the same three months period ended March 31, 2018, respectively.
The increase in revenues and cost of revenue was due to our sale of raspberry juice in March 2019. We had incurred selling expenses
of $1,393 and administrative expenses of $56,162 during the three months ended March 31, 2019, as compared to selling expenses
of nil and administrative expenses of $8,910 for the same period in 2018, respectively. The increase in the expenditure was mainly
due to employee wages and salary expenses, auditing, and other day-to-day operation related expenses. We will, in all likelihood,
incur operating expenses without sufficient revenues, as we identify and determine the operational direction of the Company. We
will depend upon our officers and directors to make loans to the Company to meet any costs that may occur. All such advances will
be interest-free loans or equity contributions.
Going
Concern
The
accompanying financial statements are presented on a going concern basis. The Company’s financial condition raises substantial
doubt about the Company’s ability to continue as a going concern. As of March 31, 2019, the Company had an accumulated deficit
of $18,469,185 and a net loss of $48,492 for the three months ended March 31, 2019. It is relying on advances from its officer
and director to meet its limited operating expenses.
Off-Balance
Sheet Arrangements
We
do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues, or expenses, results of operations, liquidity, capital expenditures, or capital
resources that is material to investors.
ITEM
4. CONTROLS AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
Management
has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation,
our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures
were not effective as a result of a material weakness primarily related to a lack of a sufficient number of personnel with appropriate
training and experience in accounting principles generally accepted in the United States of America, or GAAP. We are currently
in the process of evaluating the steps necessary to remediate this material weakness.
Changes
in Internal Control Over Financial Reporting
There
was no change in our internal control over financial reporting that occurred during the quarterly period ended March 31, 2019,
that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
We
believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives
of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within any company have been detected.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may become involved
in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent
uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business. We are currently
not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect
on our business, financial condition or operating results.
ITEM 1A. RISK FACTORS
Smaller reporting companies are not required
to provide the information required by this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no unregistered sales of equity securities during the
period covered by this report on Form 10-Q.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. – EXHIBITS
(1)
|
Filed as an exhibit to the Company’s Registration Statement on Form 10-12G, as filed with the SEC on July 16, 1999, and incorporated herein by this reference.
|
(2)
|
Filed as an exhibit to the Company’s Form 8-K, as filed with the SEC on July 6, 2018, and incorporated herein by reference.
|
(3)
|
Filed as an exhibit to the Company’s Form 8-K, as filed with the SEC on August 3, 2018, and incorporated herein by reference.
|
(4)
|
Filed as an exhibit to the Company’s Form 8-K, as filed with the SEC on September 14, 2018, and incorporated herein by reference.
|
(5)
|
Filed as an exhibit to the Company’s Registration Statement on Form 10-12G, as filed with the SEC on July 16, 1999, and incorporated herein by this reference.
|
(6)
|
Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on November 13, 2018, and incorporated herein by this reference.
|
(7)
|
Filed as an exhibit to the Company’s
Form 8-K, as filed with the SEC on March 21, 2019, and incorporated herein by reference.
|
*
|
Filed herewith.
|
**
|
In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibits 32.1 and 32.2 herewith are deemed to accompany this Form 10-Q and will not be deemed filed for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act.
|