The accompanying notes are an integral part
of these consolidated financial statements.
The accompanying notes are an integral part
of these consolidated financial statements.
The accompanying notes are an integral part
of these condensed consolidated financial statements
The accompanying notes are an integral part
of these consolidated financial statements.
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
NOTE 1 – THE COMPANY AND SIGNIFICANT
ACCOUNTING POLICIES
Heyu Biological Technology Corporation (the “Company”)
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 (the “Share Purchase Agreement”), pursuant to which Mr. Ang acquired 1,021,051,700
shares, representing 98.91% of the issued and outstanding shares of common stock of the Company (“Common Stock”), from
Mr. Masters for an aggregate purchase price of $335,000 (the “Share Purchase”). As a result of the Share Purchase,
Dan Masters resigned from his positions at the Company as the President, Chief Executive Officer, Chief Financial Officer, Secretary
and Chairman of the Board. This resignation took place 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’ resignation, 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 3, 2018, the Company changed its name to Heyu Biological
Technology Corporation and applied for a new ticker symbol “HYBT”.
During 2018, the Company established the following subsidiaries:
(1) HP Technology Limited, a British Virgin Islands business company incorporated on September 20, 2018, and (2) Heyu Healthcare
Technology Limited, a Hong Kong company incorporated on March 29, 2018. 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.
On January 17, 2019, JSEL 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. Mr. Xu
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”). JSEL received 60% of the outstanding equity interest of Kangzi from Mr. Xu
for the purpose of developing a joint venture in selling medical equipment. It was Mr. Xu and JSEL’s intention that
JSEL would fund the operations of Kangzi in proportion to JSEL’s equity interest in Kangzi. At the time of the share
transfer, Kangzi owned no assets and conducted no business operation.
In March 2019, the Company entered into a raspberry purchase agreement
and a raspberry juice processing agreement with Luoyang Ditiantai Agricultural Development Co., Ltd. (“Ditiantai”).
Pursuant to the agreements, the Company would purchase six tons of raspberry from Ditiantai, which would be processed by Ditiantai
into raspberry juice and deliver to the Company. The Company would then sell 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.
Since the beginning of 2019, Mr. Xu has led the core research and
development team of Kangzi to develop and manufacture a new medical product, the Submillimeter Wave (Terahertz) Quantized Space
Therapy Chamber (the “Chamber”). Utilizing submillimeter waves, the Chamber is a medical equipment designed to treat
cancer through cold nuclear fusion caused by cosmic ray muons in an enclosed chamber. We believe that exposure to an appropriate
amount of submillimeter waves would accelerate the generation of a large number of cosmic ray muons inside the human body and that
such cosmic ray muons could further facilitate cold nuclear fusion, which could reverse the cancer by converting selenium into
nickel inside cells.
Our team consists of researchers
who have years of extensive experience in medicine and physics. The lead scientist of the team, Mr. Xu, had extensive professional
experience in the aforementioned fields and has served as the deputy chief engineer of the New Energy Base of the National Defense-Science
and Technology Commission in 1995, the chairman and chief scientist of Shanghai Guangcon New Energy Technology Co., Ltd. from 2011
to 2019, and the director of Shanghai Hengbian New Energy Research Institute from 2003 to 2008. In 2012, Mr. Xu received the “Harmony-Person
of the Year in China” award at the “2011 Harmony China Annual Summit” in Beijing. He was recognized as “Leaping
China: One of the Most Influential People of the Year in 2011” by China International Economic and Technical Cooperation
Promotion Association, China Elite Culture Promotion Association, and China Outstanding Chinese Merchants Association. Mr. Xu also
received the “2013 China Economic Outstanding Contribution Award” from the Organizing Committee of Boau Forum on Asian
SME Development.
Pursuant to the terms of the share transfer agreement entered into
by JSEL and Kangzi on January 17, 2019, JSEL has the right to monitor and manage all aspects of operation of Kangzi, including
its research and development activities relating to the Chamber. As the development of the Chamber enters its final stage, JSEL
started accepting pre-orders for the Chamber in September 2019.
The outbreak of the novel coronavirus, commonly
referred to as “COVID-19”, first found in mainland China, then in Asia and eventually throughout the world, has significantly
affected business and manufacturing activities within China, including travel restrictions, widespread mandatory quarantines, and
suspension of business activities within China. These measures may cause severe business disruptions to our customers and suppliers,
and may also lead to postponement of payment from these parties. Accordingly, our business, results of operations and financial
condition may be adversely affected. We suspended our business operation in early February 2020 due to government mandates. We
partially recovered our business operation on February 17, 2020, and we fully resumed our business operations on March 1, 2020.
Due to the continuous and rapid development of the COVID-19 outbreak, which was categorized as a pandemic by the World Health Organization
on March 11, 2020, the extent of the negative impact of COVID-19 outbreak on our business is currently uncertain.
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.
The condensed consolidated financial statements
of the Company as of and for the three ended March 31, 2020 and 2019 are unaudited. In the opinion of management, all adjustments
(including normal recurring adjustments) that have been made are necessary to fairly present the financial position of the Company
as of March 31, 2020, the results of its operations for the three months ended March 31, 2020 and 2019, and its cash flows for
the three months ended March 31, 2020 and 2019. Operating results for the interim periods presented are not necessarily indicative
of the results to be expected for a full fiscal year. The balance sheet as of December 31, 2019 has been derived from the Company’s
audited financial statements included in the Form 10-K for the year ended December 31, 2019.
The statements and related notes have been
prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly,
certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have
been omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the financial
statements and other information included in the Company’s Annual Report on Form 10-K as filed with the SEC for the fiscal
year ended December 31, 2019.
As of March 31, 2020, the details of the consolidating subsidiaries
are as follows:
Name of Company
|
|
Place of
incorporation
|
|
Attributable
equity
interest %
|
|
HP Technology Limited
|
|
British Virgin Islands
|
|
|
100
|
%
|
|
|
|
|
|
|
|
Heyu Healthcare Technology Limited
|
|
Hong Kong
|
|
|
100
|
%
|
|
|
|
|
|
|
|
JSEL
|
|
The PRC
|
|
|
100
|
%
|
|
|
|
|
|
|
|
Kangzi
|
|
The PRC
|
|
|
60
|
%
|
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.
Accounts receivable and allowance for
doubtful accounts
Accounts receivable are stated at the historical
carrying amount net of allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts which reflects
its best estimate of amounts that potentially will not be collected. The Company determines the allowance for doubtful accounts
taking into consideration various factors, including but not limited to historical collection experience and credit-worthiness of
the debtors, as well as the age of the individual receivables balance. Additionally, the Company makes specific bad debt provisions
based on any specific knowledge the Company has acquired that might indicate that an account is uncollectible. The facts and circumstances
of each account may require the Company to use substantial judgment in assessing its collectability.
Inventories
Inventories consist of finished goods,
work in process, and raw materials. Inventories are stated at the lower of cost or market value. The Company applies the weighted
average cost method to its inventory.
Leases
The Company adopted Accounting Standards
Update No. 2016-02, Leases (Topic 842) (ASU 2016-02), as amended, which supersedes the lease accounting guidance under
Topic 840, and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use
(ROU) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows
arising from leasing arrangements.
Operating leases are included in operating
lease right-of-use (“ROU”) assets and short-term and long-term lease liabilities in our consolidated balance sheets.
Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our consolidated
balance sheets.
ROU assets represent the Company’s
right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease
payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present
value of lease payments over the lease term. As most of the leases do not provide an implicit rate, we use the industry incremental
borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use
the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease
incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise
that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Adoption of the standard resulted in the
initial recognition of $215,298 of ROU assets and $215,298 of lease liabilities on our consolidated balance sheet related to office
space lease commitment on September 1, 2019.
ASU 2016-02 requires that public companies
use a secured incremental browning rate for the present value of lease payments when the rate implicit in the contract is not readily
determinable. We determine a secured rate on a quarterly basis and update the weighted average discount rate accordingly. Lease
terms and discount rate follow.
|
|
September 1,
2019
|
|
Weighted Average Remaining Lease Term(Year)
|
|
|
3
|
|
Weighted Average Discount Rate
|
|
|
4.75
|
%
|
The approximate future minimum lease payments
under operating leases as:
|
|
Operating Leases
|
|
Fiscal 2019
|
|
|
25,409
|
|
Fiscal 2020
|
|
|
77,074
|
|
Fiscal 2021
|
|
|
79,615
|
|
Fiscal 2022
|
|
|
54,206
|
|
Total Lease payments
|
|
|
236,304
|
|
Less Imputed interest
|
|
|
21,005
|
|
Present value of lease liabilities
|
|
$
|
215,298
|
|
Foreign Currency
For fiscal year 2020, 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 quarter ended March 31, 2020 and 2019
|
|
As of
|
|
|
|
March 31,
2020
|
|
|
December 31,
2019
|
|
RMB: US$ exchange rate
|
|
|
7.0876
|
|
|
|
6.9798
|
|
|
|
Three months ended
March 31,
|
|
|
|
2020
|
|
|
2019
|
|
RMB: US$ exchange rate
|
|
|
6.9798
|
|
|
|
6.8618
|
|
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 had 2,000,000,000 shares of
authorized common stock, par value $0.001 per share, with 1,032,466,000 shares issued and outstanding as of March 31, 2020, and
December 31, 2019.
Earnings (loss) per share
Basic net income (loss) per share of common
stock attributable to common stockholders is calculated by dividing net income (loss) attributable to common stockholders by the
weighted-average shares of common stock outstanding for the period. Potentially dilutive shares, which are based on the weighted-average
shares of common stock underlying outstanding stock-based awards, warrants, options, or convertible debt using the treasury stock
method or the if-converted method, as applicable, are included when calculating diluted net income (loss) per share of common stock
attributable to common stockholders when their effect is dilutive.
Potential dilutive securities are excluded
from the calculation of diluted EPS in loss periods as their effect would be antidilutive.
As of March 31, 2020 and 2019, there were no potentially
dilutive shares.
|
|
For the Three Months Ended
March 31,
|
|
|
|
2020
|
|
|
2019
|
|
Statement of Operations Summary Information:
|
|
|
|
|
|
|
Net loss
|
|
($
|
94,391
|
)
|
|
($
|
147,797
|
)
|
Weighted-average common shares outstanding - basic and diluted
|
|
|
1,032,466,000
|
|
|
|
1,045,789,061
|
|
Net loss per share, basic and diluted
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
NOTE 2 – GOING CONCERN
During the quarter ended March 31, 2020,
the Company had been unable to generate cash flows sufficient to support its operations despite of Kangzi’s business operation
and had been dependent on related party advances from the current controlling shareholder. In addition, the Company had experienced
recurring net losses, and had an accumulated deficit of $18,995,325 and working capital deficit of $888,820 as of March 31, 2020.
These factors raise 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.
In
light of the impacts of the COVID-19 outbreak, if we are required to operate in a challenging economic environment in China,
or incur unanticipated capital expenditures, or decide to accelerate growth, we may need additional financing. As of March
31, 2020, we had borrowed a loan from a shareholder for working capital purposes. The loan is unsecured, non-interest bearing
and payable on demand. As of March 31, 2020, we have borrowed from such shareholder a total of $855,340 for working capital
purposes. We cannot guarantee, however, that additional financing, if required, would be available on favorable terms, if at
all. Such financing may include the use of additional debt or the sale of the Company’s equity interests. Any financing
which involves the sale of the Company’s equity interests or instruments that are convertible into the Company’s
equity interests could result in immediate and possibly significant dilution to our existing shareholders.
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 will 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
March 31,
2020
|
|
|
As of
December 31,
2019
|
|
|
|
|
|
|
|
|
Bank Deposits-China & HK
|
|
|
22,546
|
|
|
|
95,522
|
|
|
|
$
|
22,546
|
|
|
$
|
95,522
|
|
NOTE 4 – OTHER RECEIVABLE
Other receivable consists of the following:
|
|
As of
March 31,
2020
|
|
|
As of
December 31,
2019
|
|
|
|
|
|
|
|
|
Rental and POS machine deposits
|
|
|
13,998
|
|
|
|
14,241
|
|
Others
|
|
|
43,282
|
|
|
|
61,494
|
|
Less: Allowance for doubtful accounts
|
|
|
-
|
|
|
|
(24,499
|
)
|
|
|
$
|
57,280
|
|
|
$
|
51,236
|
|
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 of the date of this report, the Company
has terminated the agreements related to Shanzhiling Acquisition; therefore, the related balance in the amount of $24,499 has been
written off during the quarter ended March 31, 2019.
Management periodically reviews account
balance. If any indication occurs, the allowance for doubtful debts would be recognized. No such allowance has been recognized
during the quarter ended March 31, 2020.
NOTE 5 – ADVANCES TO SUPPLIERS
Advances to suppliers consists of the following:
|
|
As of
March 31,
2020
|
|
|
As of
December 31,
2019
|
|
|
|
|
|
|
|
|
Purchases of scientific research equipment
|
|
|
6,095
|
|
|
|
48,344
|
|
|
|
$
|
6,095
|
|
|
$
|
48,344
|
|
NOTE 6 – INVENTORY
Inventory consists of the following:
|
|
As of
March 31,
2020
|
|
|
As of
December 31,
2019
|
|
|
|
|
|
|
|
|
Working in process
|
|
|
416,887
|
|
|
|
421,533
|
|
Inventories - raw materials
|
|
|
60,105
|
|
|
|
-
|
|
|
|
$
|
476,992
|
|
|
$
|
421,533
|
|
No impairment was provided for the inventories
as of March 31, 2020.
NOTE 7 – OPERATING LEASE RIGHT-OF-USE
ASSET AND LIABILITIES
As of September 1, 2019, the Company entered
in lease agreement for the office space, the right-of-use asset is recognized as following:
|
|
As of
March 31,
2020
|
|
|
As of
December 31,
2019
|
|
|
|
|
|
|
|
|
Operating lease right-of-use asset
|
|
|
176,512
|
|
|
|
202,976
|
|
|
|
$
|
176,512
|
|
|
$
|
202,976
|
|
Operating lease liability consist both current and noncurrent
component as the following:
|
|
As of
March 31,
2020
|
|
|
As of
December 31,
2019
|
|
|
|
|
|
|
|
|
Operating lease liability - current portion
|
|
|
(31,917
|
)
|
|
|
(31,017
|
)
|
Operating lease liability
|
|
|
(146,088
|
)
|
|
|
(172,610
|
)
|
|
|
$
|
(178,005
|
)
|
|
$
|
(203,627
|
)
|
ASU 2016-02 requires that public companies
use a secured incremental browning rate for the present value of lease payments when the rate implicit in the contract is not readily
determinable. We determine a secured rate on a quarterly basis and update the weighted average discount rate accordingly. Lease
terms and discount rate follow.
|
|
September 1,
2019
|
|
Weighted Average Remaining Lease Term(Year)
|
|
|
3
|
|
Weighted Average Discount Rate
|
|
|
4.75
|
%
|
The approximate future minimum lease payments
under operating leases as:
|
|
Operating Leases
|
|
|
|
|
|
Fiscal 2020
|
|
|
68,356
|
|
Fiscal 2021
|
|
|
74,161
|
|
Fiscal 2022
|
|
|
52,101
|
|
Total Lease payments
|
|
|
194,618
|
|
Less Imputed interest
|
|
|
17,717
|
|
Present value of lease liabilities
|
|
$
|
176,901
|
|
NOTE 8 – ADVANCES FROM CUSTOMERS
|
|
As of
March 31,
2020
|
|
|
As of
December 31,
2019
|
|
|
|
|
|
|
|
|
Advances from customers(1)
|
|
|
437,384
|
|
|
|
430,616
|
|
|
|
$
|
437,384
|
|
|
$
|
430,616
|
|
|
(1)
|
On October 15 2019, JSEL
entered into a clinical cooperation agreement (the “Clinical Cooperation Agreement”) with Shenzhen Saikun Biotechnology
Co., Ltd. (“Saikun”). Pursuant to the Clinical Cooperation Agreement, Saikun agreed to pay JSEL 5.5 million RMB as
the total preordering payment. 1.5 million RMB and 1.5 million RMB were delivered to JSEL respectively on September 7 and September
27, 2019. The parties are working on the timing for payment of the remaining 2.5 million RMB due under the Clinical Cooperation
Agreement. In exchange, JSEL is obligated to purchase all the components of a Chamber from Kangzi, fully assemble it, and conduct
a clinical trial with Saikun, third-party hospital partners, and patients using the Chamber. Specifically, after receiving the
full amount of payment from Saikun, JSEL shall transport the Chamber to its preferred location, properly install it, and conduct
a clinical trial that lasts at least one month.
|
NOTE 9 – ACCRUED EXPENSES AND OTHER
PAYABLES
Accrued expenses and other payables consist of the following:
|
|
As of
March 31,
2020
|
|
|
As of
December 31,
2019
|
|
Accrued payroll
|
|
|
51,294
|
|
|
|
30,674
|
|
Other Payables
|
|
|
84,356
|
|
|
|
80,700
|
|
|
|
$
|
135,650
|
|
|
$
|
111,374
|
|
Accrued payroll includes all company employee
payroll liabilities as of March 31, 2020, and other payables contains employee reimbursements.
Operating lease liability consist both current and noncurrent
component as the following:
|
|
As of
March 31,
2020
|
|
|
As of
December 31,
2019
|
|
Operating lease liability - current portion
|
|
|
(31,917.00
|
)
|
|
|
(31,017.00
|
)
|
Operating lease liability
|
|
|
(146,088.00
|
)
|
|
|
(172,610.00
|
)
|
|
|
$
|
(178,005.00
|
)
|
|
$
|
(203,627.00
|
)
|
NOTE 10 – RELATED PARTY TRANSACTIONS
As of March 31, 2020, and December 31,
2019, the Company owed related parties $855,340 and $874,749, respectively. As the Company has just started business activities
in March 2019, all expenses incurred during this reporting period are paid by a shareholder, who is also a director of the Company. Expenses mainly included auditing,
consulting and legal advisory expenses, government registration expenses, and payrolls.
A director of the Company provides the
property for the use by the Company without charge.
NOTE 11 – EQUITY
The Company had not recorded any equity
transactions during the three months ended March 31, 2020.
The Company recorded the following equity
transactions during the year ended December 31, 2019:
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.
NOTE 12 – 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 has been conducting and plans
to continue to conduct its major operations in the PRC through JSEL 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.