UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
☒ QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended June 30, 2023
or
☐ TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from ___________ to ___________
Commission
file number 000-26731
HEYU BIOLOGICAL TECHNOLOGY CORPORATION |
(Exact name of registrant as specified in its charter) |
Nevada | | 87-0627910 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
Room 1901, Baotuo Building, 617 Sishui Street, Huli District, Xiamen City, Fujian Province, China | | 361009 |
(Address of principal executive offices) | | (Zip Code) |
(86)
158 5924 0902
(Telephone
number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
None |
|
None |
|
None |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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 ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer, “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| | Emerging growth company | ☐ |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of August 16, 2023, 103,246,600 shares of common stock were issued
and outstanding.
TABLE
OF CONTENTS
FORWARD
LOOKING STATEMENTS
This
quarterly report on Form 10-Q (“Report”), financial statements, and notes to financial statements contain forward-looking
statements that discuss, among other things, future expectations and projections regarding future developments, operations, and financial
conditions. Forward-looking statements may appear throughout this Report and other documents we file with the Securities and Exchange
Commission (the “SEC”), including without limitation, the following section: Part I, Item 2, “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” in this Report.
Forward-looking
statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,”
“intends,” “plans,” “predicts,” “projects,” “will be,” “will continue,”
“may,” “could,” “will likely result,” and similar expressions. These forward-looking statements are
based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ
materially from those reflected in the forward-looking statements. We undertake no obligation to revise or publicly release the results
of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned
not to place undue reliance on such forward-looking statements.
PART
I - FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS
Heyu
Biological Technology Corporation
Consolidated
Balance Sheets
(Unaudited)
| |
June 30, | | |
December 31, | |
| |
2023 | | |
2022 | |
ASSETS | |
| | |
| |
Current Assets | |
| | |
| |
Cash and cash equivalents | |
$ | 6,082 | | |
$ | 11,428 | |
Other receivables, net | |
| 23,015 | | |
| 17,845 | |
Advances to suppliers | |
| 2,989 | | |
| 3,131 | |
Inventory | |
| 367 | | |
| - | |
Total current assets | |
| 32,453 | | |
| 32,404 | |
| |
| | | |
| | |
Non-current Assets | |
| | | |
| | |
Operating lease right-of-use asset | |
| 168,686 | | |
| - | |
Other non-current Asset | |
| 22,500 | | |
| - | |
Total non-current assets | |
| 191,186 | | |
| - | |
| |
| | | |
| | |
Total Assets | |
$ | 223,639 | | |
$ | 32,404 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
Current Liabilities | |
| | | |
| | |
Accounts payable | |
$ | 15,506 | | |
$ | 16,150 | |
Accrued expenses and other payable | |
| 126,163 | | |
| 285,081 | |
Advances from customers | |
| 416,563 | | |
| 434,890 | |
Income tax and other taxes payable | |
| 102 | | |
| 140 | |
Operating lease liability - current portion | |
| 55,418 | | |
| - | |
Related party payables | |
| 1,761,003 | | |
| 1,268,749 | |
Total current liabilities | |
| 2,374,755 | | |
| 2,005,010 | |
| |
| | | |
| | |
Non-current Liabilities | |
| | | |
| | |
Operating lease liability - long term | |
| 92,641 | | |
| - | |
Total Non-current liabilities | |
| 92,641 | | |
| - | |
| |
| | | |
| | |
Total Liabilities | |
$ | 2,467,396 | | |
$ | 2,005,010 | |
| |
| | | |
| | |
Stockholders’ Deficit | |
| | | |
| | |
Common stock ($0.001 par value, 200,000,000 shares authorized, 103,246,600 shares issued and outstanding as of June 30, 2023 and December 31, 2022) | |
| 103,247 | | |
| 103,247 | |
Additional paid-in capital | |
| 18,078,269 | | |
| 18,078,269 | |
Accumulated other comprehensive income | |
| 33,727 | | |
| (52,298 | ) |
Accumulated deficit | |
| (20,227,576 | ) | |
| (19,886,700 | ) |
Stockholders’ equity - HYBT and Subsidiaries | |
| (2,012,333 | ) | |
| (1,757,482 | ) |
Noncontrolling interests in subsidiaries | |
| (231,424 | ) | |
| (215,124 | ) |
Total stockholders’ deficit | |
| (2,243,757 | ) | |
| (1,972,606 | ) |
| |
| | | |
| | |
Total Liabilities and Stockholders’ Deficit | |
$ | 223,639 | | |
$ | 32,404 | |
The
accompanying notes are an integral part of these unaudited consolidated financial statements.
Heyu
Biological Technology Corporation
Consolidated
Statements of Operations and Comprehensive Income
(Unaudited)
| |
For the six months ended June 30, | |
| |
2023 | | |
2022 | |
Revenue net | |
$ | 16,432 | | |
$ | 29,522 | |
| |
| | | |
| | |
Revenue– from third party, net | |
$ | 6,430 | | |
$ | - | |
Revenue – related parties, net | |
$ | 10,002 | | |
$ | 29,522 | |
| |
| | | |
| | |
Cost of Revenue | |
| 1,928 | | |
| 9,807 | |
| |
| | | |
| | |
Cost of Revenue – from third party, net | |
$ | 781 | | |
$ | - | |
Cost of Revenue – related parties, net | |
$ | 1,147 | | |
$ | 9,807 | |
| |
| | | |
| | |
Gross Profit | |
| 14,504 | | |
| 19,715 | |
| |
| | | |
| | |
Operating expenses | |
| | | |
| | |
Selling expenses | |
| - | | |
| 178 | |
Administrative expenses | |
| 355,591 | | |
| 164,928 | |
Interest expense (income) | |
| (16 | ) | |
| - | |
Total operating expenses | |
| 355,575 | | |
| 165,106 | |
| |
| | | |
| | |
Loss on operations | |
| (341,071 | ) | |
| (145,391 | ) |
| |
| | | |
| | |
Impairment loss | |
| - | | |
| - | |
Other Income (Expenses) | |
| 196 | | |
| 85 | |
| |
| | | |
| | |
Loss on operations before income taxes | |
| (340,876 | ) | |
| (145,306 | ) |
| |
| | | |
| | |
Income tax expense | |
| - | | |
| - | |
| |
| | | |
| | |
Net Loss | |
$ | (340,876 | ) | |
$ | (145,306 | ) |
Loss attributable to noncontrolling interests | |
| | | |
| - | |
Net loss attributable to HYBT shareholders | |
| (340,876 | ) | |
| (145,306 | ) |
| |
| | | |
| | |
Other Comprehensive Income | |
| | | |
| | |
Foreign currency translation adjustment | |
| 69,725 | | |
| 46,308 | |
Total Comprehensive Loss | |
$ | (271,151 | ) | |
$ | (98,998 | ) |
Total comprehensive loss attributable to noncontrolling interests | |
| (16,300 | ) | |
| (34,195 | ) |
Total comprehensive loss attributable to HYBT shareholders | |
| (254,851 | ) | |
| (64,803 | ) |
| |
| | | |
| | |
Net loss per share - basic and diluted | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
| |
| | | |
| | |
Weighted average shares - basic and diluted | |
| 103,246,600 | | |
| 103,246,600 | |
The
accompanying notes are an integral part of these unaudited consolidated financial statements.
Heyu
Biological Technology Corporation
Consolidated
Statements of Cash Flows
(Unaudited)
| |
For the six months ended June 30, | |
| |
2023 | | |
2022 | |
| |
| | |
| |
CASH FLOWS FROM OPERATING ACTIVITIES | |
| | |
| |
Net Loss | |
$ | (340,876 | ) | |
$ | (145,306 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
Impairment | |
| | | |
| | |
Change in assets and liabilities | |
| | | |
| | |
Accounts receivable | |
| - | | |
| - | |
Other receivables, net | |
| (5,170 | ) | |
| - | |
Advances to suppliers | |
| 142 | | |
| - | |
Inventory | |
| (367 | ) | |
| - | |
Operating lease right-of-use asset | |
| (168,686 | ) | |
| 42,837 | |
Other non-current Asset | |
| (22,500 | ) | |
| - | |
Accounts payable and accrued liabilities | |
| (644 | ) | |
| (777 | ) |
Accrued expenses and other payable | |
| (158,918 | ) | |
| 99,649 | |
Advances from customers | |
| (18,327 | ) | |
| - | |
Income tax and other taxes payable | |
| (38 | ) | |
| - | |
Lease liability | |
| 148,059 | | |
| (44,287 | ) |
Net cash used from operating activities | |
| (567,325 | ) | |
| (47,884 | ) |
| |
| | | |
| | |
CASH FLOWS FROM INVESTING ACTIVITIES | |
| - | | |
| - | |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES | |
| | | |
| | |
Proceeds from related party lending | |
| 492,254 | | |
| 4,941 | |
Net cash used in financing activities | |
| 492,254 | | |
| 4,941 | |
| |
| | | |
| | |
Effect of exchange rate changes on cash | |
| 69,725 | | |
| 40,730 | |
| |
| | | |
| | |
NET INCREASE IN CASH AND CASH EQUIVALENTS | |
| (5,346 | ) | |
| (2,213 | ) |
| |
| | | |
| | |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | |
| 11,428 | | |
| 4,323 | |
| |
| | | |
| | |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | |
$ | 6,082 | | |
$ | 2,110 | |
| |
| | | |
| | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |
| | | |
| | |
Cash paid for interest | |
$ | - | | |
$ | - | |
Cash paid for income tax | |
$ | - | | |
$ | - | |
The
accompanying notes are an integral part of these unaudited condensed consolidated financial statements
Heyu
Biological Technology Corporation
Condensed
Consolidated Statements of Stockholders’ Deficit
(Unaudited)
| |
Heyu Biological Shareholders’ Equity | | |
| | |
| |
| |
Common Stock | | |
Additional | | |
Accumulated Other | | |
| | |
Non - | | |
| |
| |
Number of shares | | |
Par value | | |
Paid in Capital | | |
Comprehensive Income | | |
Accumulated Deficit | | |
controlling Interest | | |
Total | |
Balance at January 1, 2022 | |
| 103,246,600 | | |
$ | 103,247 | | |
$ | 18,078,269 | | |
| (175,659 | ) | |
| (19,621,121 | ) | |
| (194,588 | ) | |
| (1,809,852 | ) |
Foreign currency translation adjustment | |
| - | | |
| - | | |
| - | | |
| 80,503 | | |
| - | | |
| (13,259 | ) | |
| 67,244 | |
Loss for the period | |
| - | | |
| - | | |
| - | | |
| - | | |
| (145,306 | ) | |
| - | | |
| (145,306 | ) |
Balance at June 30, 2022 | |
| 103,246,600 | | |
$ | 103,247 | | |
$ | 18,078,269 | | |
$ | (95,156 | ) | |
$ | (19,766,427 | ) | |
$ | (207,847 | ) | |
$ | (1,887,914 | ) |
| |
Common Stock | | |
Additional | | |
Accumulated Other | | |
| | |
Non – | | |
| |
| |
Number of shares | | |
Par value | | |
Paid in Capital | | |
Comprehensive Income (Loss) | | |
Accumulated Deficit | | |
controlling Interest | | |
Total | |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Balance at January 1, 2023 | |
| 103,246,600 | | |
$ | 103,247 | | |
$ | 18,078,269 | | |
| (52,298 | ) | |
| (19,886,700 | ) | |
| (215,124 | ) | |
| (1,972,606 | ) |
Foreign currency translation adjustment | |
| - | | |
| - | | |
| - | | |
| 86,025 | | |
| - | | |
| (16,300 | ) | |
| 69,725 | |
Loss for the period | |
| - | | |
| - | | |
| - | | |
| - | | |
| (340,876 | ) | |
| - | | |
| (340,876 | ) |
Balance at June 30, 2023 | |
| 103,246,600 | | |
$ | 103,247 | | |
$ | 18,078,269 | | |
$ | 33,727 | | |
$ | (20,227,576 | ) | |
| (231,424 | ) | |
$ | (2,243,757 | ) |
The
accompanying notes are an integral part of these unaudited consolidated financial statements.
Heyu
Biological Technology Corporation
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 as the President, Chief Executive Officer, Chief Financial Officer, Secretary and Chairman of the Board of
the Company. Such 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 of the Company. Mr.
Tan was appointed as the Executive Director of the Company. Ms. Wendy Li was appointed as the Chief Financial Officer of the Company.
On February 28, 2021, Ms. Wendy Li resigned from her position with the Company as the Chief Financial Officer. To fill the vacancies
created by Ms. Wendy Wei Li’s resignation, Mr. Ang was appointed as the Chief Financial Officer. On November 30, 2021, Mr. Bo Lyu
has been appointed as the 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.
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 Guangzhui 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 have caused substantial disruptions to our
business operations. We suspended our business operation in early February 2020 due to government mandates.
On
March 17, 2020, we entered into a business service cooperation agreement with Xiamen Qingda Intelligent Technology Co., Ltd., a wholly-owned
subsidiary of Cross-strait Tsinghua Research Institute, pursuant to which we agreed to jointly improve the plant based disinfectant spray
for treating skin infections and disinfecting wounds. The term of such agreement is three years, and can be renewed upon mutual agreement
of both parties. The original plant based disinfectant spray was developed and owned by the Company, while the improved product shall
be owned by both the Company and the Cross-strait Tsinghua Research Institute. The Cross-strait Tsinghua Research Institute will receive
2% of gross proceeds from the sales of such improved product.
On March 27, 2023, JSEL jointly established
an associate Lefengteng (Xiamen) Healthcare Technology Co., Ltd “LFT”) of which JSEL holds 40% share.
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 six months ended June 30. 2023 and 2022 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 June 30, 2023, the results of its operations for the six months ended June 30, 2023 and 2022,
and its cash flows for the six months ended June 30, 2023 and 2022. 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, 2022 has been derived from the
Company’s audited financial statements included in the Form 10-K for the year ended December 31, 2022.
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, 2022.
As
of June 30, 2023, the details of the consolidating subsidiaries are as follows:
Name of Company | |
Jurisdiction of Formation | |
Attributable equity interest % | |
HP Technology Limited | |
British Virgin Islands | |
| 100 | % |
| |
| |
| | |
Heyu Healthcare Technology Limited | |
Hong Kong | |
| 100 | % |
| |
| |
| | |
JSEL | |
PRC | |
| 100 | % |
| |
| |
| | |
Kangzi | |
PRC | |
| 60 | % |
Reverse Stock Split
On August 8, 2023, the Company filed a Certificate
of Amendment to the Company’s Certificate of Incorporation (the “Certificate of Amendment”) with the State of Nevada,
which has effected a one-for-ten reverse stock split (the “Reverse Stock Split”) of the Company’s outstanding common
stock, par value $0.001 per share (the “Common Stock”). As a result of the Reverse Stock Split, the number of outstanding
shares of Common Stock has been reduced by the ratio of one-for-ten. All references made to share or per share amounts in the accompanying
consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the Reverse Stock
Split.
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 cost or market value. The Company applies the weighted average cost method to its inventory.
Advances from Customers
Advances from customers are payments received
from customers for goods or services that have not yet been delivered. Once the corresponding goods or services are delivered, the amount
in this account is transferred to a revenue account. The advance from customer account is generally classified as a short-term liability
since the amounts held in it are typically settled within 12 months. If the settlement extends beyond 12 months, they are classified as
long-term liabilities instead.
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 $ 192,574 of ROU assets and $ 192,574 of lease liabilities on our consolidated balance sheet related to office space lease commitment
on March 31, 2023. As of June 30, the ROU assets and lease liabilities are $168,686 and $ 148,059, respectively.
Foreign Currency
For the six months ended on June 30, 2023 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 the exchange rates on June 30, 2023 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 quarters ended June 30, 2023 and 2022.
| |
As of | |
| |
June 30, 2023 | | |
December 31, 2022 | |
RMB: US$ exchange rate | |
| 7.2258 | | |
| 6.8983 | |
| |
Six Months ended June 30, | |
| |
2023 | | |
2022 | |
RMB: US$ exchange rate | |
| 6.9291 | | |
| 6.4763 | |
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.
Revenue Recognition
Revenue is recognized when control of the promised
goods or services is transferred to the customers in an amount that reflects the consideration the Company expects to be entitled to receive
in exchange for those goods or services. Revenue is recognized when the following 5-step revenue recognition criteria are met:
(1) Identify the contract with a customer
(2) Identify the performance obligations
in the contract
(3) Determine the transaction price
(4) Allocate the transaction price
(5) Recognize revenue when or as the
entity satisfies a performance obligation
Revenue from product sales is recognized at the
point in time control of the products is transferred, generally upon customer receipt based upon the standard contract terms. Shipping
and handling activities are considered to be fulfillment activities rather than promised services and are not, therefore, considered to
be separate performance obligations. The Company’s sales terms provide no right of return outside of a standard quality policy and
returns are generally not significant.
The following chart provides a summary of our
revenues for the six months ended June 30, 2023 and 2022, respectively.
| |
For the six months Ended June 30, | |
| |
2023 | | |
2022 | |
| |
USD | | |
% | | |
USD | | |
% | |
Revenue – related parties, net: | |
| | |
| | |
| | |
| |
Disinfectant sprays | |
| - | | |
| 0 | % | |
| 24,103 | | |
| 81.64 | % |
Healthcare instruments | |
| 16,432 | | |
| 100 | % | |
| 1,087 | | |
| 3.68 | % |
Others | |
| - | | |
| 0 | % | |
| 4332 | | |
| 14.67 | % |
Total | |
| 16,432 | | |
| 100.0 | % | |
| 29,522 | | |
| 100.0 | % |
Cost of Revenue
The cost of revenue primarily consists of goods
purchased from third parties, including disinfectant sprays, healthcare instruments, and other items.
The following chart provides a summary of our
cost of revenues for the six months ended June 30, 2023 and 2022, respectively.
| |
For the Six months Ended June 30, | |
| |
2023 | | |
2022 | |
| |
USD | | |
% | | |
USD | | |
% | |
Cost of revenues: | |
| | |
| | |
| | |
| |
Disinfectant sprays | |
| - | | |
| 0 | % | |
| 7,720 | | |
| 78.72 | % |
Healthcare instruments | |
| 1,928 | | |
| 100 | % | |
| 867 | | |
| 8.84 | % |
Others | |
| - | | |
| 0 | % | |
| 1,220 | | |
| 12.44 | % |
Total | |
| 1,928 | | |
| 100.0 | % | |
| 9,807 | | |
| 100.0 | % |
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 200,000,000 shares of common stock authorized, par
value $0.001 per share, with 103,246,600 shares issued and outstanding as of June 30, 2023, and December 31, 2022.
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.
For the six months ended June 30, 2023 and 2022, there were no potentially
dilutive shares.
| |
For the six months ended June 30, | |
| |
2023 | | |
2022 | |
Statement of Operations Summary Information: | |
| | |
| |
Net loss | |
$ | (340,876 | ) | |
$ | (145,306 | ) |
Weighted-average common shares outstanding - basic and diluted | |
| 103,246,600 | | |
| 103,246,600 | |
Net loss per share, basic and diluted | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
NOTE 2 – GOING CONCERN
During the six months ended June 30, 2023, the
Company was unable to generate cash flows sufficient to support its operations and was dependent on related party advances from the two
directors. In addition, the Company had experienced recurring net losses, and had an accumulated deficit of $20,227,576 and working capital
deficit of $ 2,342,302 as of June 30, 2023. 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.
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 fund 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 June 30, 2023 | | |
As of December 31, 2022 | |
Bank Deposits-China & HK | |
| 6,082 | | |
| 11,428 | |
| |
$ | 6,082 | | |
$ | 11,428 | |
NOTE 4 – OTHER RECEIVABLE
Other receivable consists of the following:
| |
As of June 30, 2023 | | |
As of December 31, 2022 | |
Rental and POS machine deposits | |
| 1,267 | | |
| 13,954 | |
Others | |
| 21,748 | | |
| 3,891 | |
Less: Allowance for doubtful accounts | |
| - | | |
| - | |
| |
$ | 23,015 | | |
$ | 17,845 | |
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 three
months ended June 30, 2023.
NOTE 5 – ADVANCES TO SUPPLIERS
Advances to suppliers consists of the following:
| |
As of June 30, 2023 | | |
As of December 31, 2022 | |
Purchases of scientific research equipment | |
| 2,989 | | |
| 3,131 | |
| |
$ | 2,989 | | |
$ | 3,131 | |
NOTE 6 – OPERATING LEASE RIGHT-OF-USE ASSET
AND LIABILITIES
On March 31, 2023, the Company entered in a lease
agreement for office space, the right-of-use asset is recognized as following:
| |
As of June 30, 2023 | | |
As of December 31, 2022 | |
Operating lease right-of-use asset | |
| 168,686 | | |
| - | |
| |
$ | 168,686 | | |
$ | - | |
Operating lease liability consist both current and noncurrent component
as the following:
| |
As of June 30, 2023 | | |
As of December 31, 2022 | |
Operating lease liability - current portion | |
| 55,418 | | |
| - | |
Operating lease liability- long term | |
| 92,641 | | |
| - | |
| |
$ | 148,059 | | |
$ | - | |
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.
| |
June, 2022 | |
Weighted Average Remaining Lease Term(Year) | |
| 2.75 | |
Weighted Average Discount Rate | |
| 4.30 | % |
The approximate future minimum lease payments
under operating leases as:
|
|
Operating
Leases |
|
2023 |
|
|
52,605 |
|
2024 |
|
|
60,600 |
|
2025 |
|
|
60,600 |
|
2026 |
|
|
5,050 |
|
Total Lease payments |
|
|
178,855 |
|
Less Imputed interest |
|
|
30,796 |
|
Present value of lease liabilities |
|
$ |
148,059 |
|
NOTE 7 – ADVANCES FROM CUSTOMERS
| |
As of June 30, 2023 | | |
As of December 31, 2022 | |
Advances from customers(1) | |
| 416,563 | | |
| 434,890 | |
| |
$ | 416,563 | | |
$ | 434,890 | |
NOTE 8 – ACCRUED EXPENSES AND OTHER PAYABLES
Accrued expenses and other payables consist of the following:
| |
As of June 30, 2023 | | |
As of December 31, 2022 | |
Accrued payroll | |
| 121,106 | | |
| 155,078 | |
Other Payables | |
| 5,057 | | |
| 130,003 | |
| |
$ | 126,163 | | |
$ | 285,081 | |
Accrued payroll includes all company employee payroll
liabilities as of June 30, 2023, and other payables contains employee reimbursements.
NOTE 9 – RELATED PARTY TRANSACTIONS
As of June 30, 2023 and December 31, 2022, the
Company owed related parties $1,761,003 and $1,268,749, respectively. Almost all expenses incurred during this reporting period are paid
by two directors. Expenses mainly included auditing, consulting and legal advisory expenses, government registration expenses, and payrolls.
For the six months ended June 30, 2023 and 2022,
the Company earned revenues from Mr. Ban Siong Ang, in the amount of $10,002 and $29,522, respectively.
NOTE 10 – EQUITY
The Company had not recorded any equity transactions
during the six months ended June 30, 2023.
The Company had not recorded any equity transactions
during the six months ended June 30, 2022.
Reverse Stock split
On August 8, 2023, the Company filed a Certificate
of Amendment to the Company’s Certificate of Incorporation with the State of Nevada, which has effected a one-for-ten reverse stock
split of the Company’s outstanding common stock, par value $0.001 per share. As a result of the Reverse Stock Split, the number
of outstanding shares of Common Stock has been reduced by the ratio of one-for-ten. All references made to share or per share amounts
in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects
of the Reverse Stock Split.
NOTE 11 – 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.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of financial
condition and results of operations relates to the operations and financial condition reported in our consolidated financial statements,
which appear elsewhere in this Report, and should be read in conjunction with such financial statements and related notes included in
this Report. Except for the historical information contained herein, the following discussion, as well as other information in this Report,
contain “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, and are subject to the “safe harbor” created by those sections. Actual
results and the timing of the events may differ materially from those contained in these forward-looking statements due to many factors,
including those discussed in the “Forward-Looking Statements” set forth elsewhere in this Report.
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 July 3, 2018, the Company changed its name
to Heyu Biological Technology Corporation and applied for a new ticker symbol HYBT.
On January 17, 2019, Jiashierle (Xiamen) Healthcare
Technology Co., Ltd. (“JSEL”), a limited liability company organized under the laws of the People’s Republic of China
(the “PRC”), and an indirect wholly owned subsidiary of the Company, entered into a Share Transfer Agreement (the “Share
Transfer Agreement”) with Mr. Yu Xu (“Mr. Xu”), an individual 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”). Pursuant to the
Share Transfer Agreement, Mr. Xu transferred 60% of the equity interests of Kangzi to JSEL on January 17, 2019 for the purpose of developing
a joint venture in the business of selling medical equipment. In return, JSEL would fund the operations of Kangzi in proportion to its
equity interest in Kangzi. Kangzi owned no assets and conducts no business operation of its own. As a result, as of January 17, 2019,
Kangzi became an indirect subsidiary of the Company.
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. Specifically, we believe that exposure to an appropriate
amount of submillimeter waves could 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 process of cancer by converting selenium into nickel
inside cells.
The core research and development team consists
of researchers who have extensive experience in medicine and physics. The lead scientist of the team, Mr. Xu, served as the deputy chief
engineer of the New Energy Base of the National Defense-Science and Technology Commission in 1995, the director of Shanghai Hengbian New
Energy Research Institute from 2003 to 2008, and the chairman and chief scientist of Shanghai Guangzhui New Energy Technology Co., Ltd.
from 2011 to 2019. In 2012, Mr. Xu was awarded the “Harmony Person of the Year in China” at the “2011 Harmony China
Annual Summit” in Beijing. He was also jointly 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. In 2013, the Organizing Committee of Boau Forum on Asian Small and Medium Enterprise
Development awarded Mr. Xu “2013 China Economic Outstanding Contribution Award.”
Pursuant to the terms of the Share Transfer Agreement,
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 at Kangzi, JSEL started accepting pre-orders for the Chamber
in September 2019. 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 RMB5.5 million as the total pre-order payment. RMB1.5 million and RMB1.5 million were delivered to JSEL on September 7 and September
27, 2019, respectively. The parties are currently working on the timing for payment of the remaining RMB2.5 million 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 Saikun’s preferred location, properly install it, and conduct
a clinical trial that lasts at least one month. During the clinical trial, JSEL shall provide training sessions regarding the proper operation
of the Chamber to Saikun’s employees. Both Saikun and JSEL are obligated to find third-party hospitals that will agree to act as
partners to co-host the clinical trial and patients who will voluntarily undergo treatment provided by the Chamber. While Saikun is responsible
for various expenses related to the clinical trial, JSEL is responsible for communicating with patients receiving treatment and other
patient-related administrative matters. When JSEL determines that Saikun is capable of properly operating the Chamber and managing activities
related to the Chamber, Saikun may request JSEL to move the Chamber to a location designated by Saikun and reinstall it. Furthermore,
upon the successful completion of the clinical trial, JSEL shall provide Saikun governmental permits necessary for the operation of the
Chamber, and Saikun shall operate the Chamber and provide related services to patients under the supervision of JSEL. In addition, JSEL
shall transfer the right of using the Chamber and any beneficiary right affiliated with using the Chamber to Saikun upon receiving the
full amount of payment from Saikun. JSEL, nevertheless, owns all the intellectual property rights affiliated with the Chamber. If the
two parties decide to terminate the Clinical Cooperation Agreement prior to the expiration of its term, Saikun’s right of using
the Chamber during the term is still effective as long as its use of the Chamber does not infringe any of JSEL’s intellectual property
rights affiliated with the Chamber. The two parties agreed that the term of the Clinical Cooperation Agreement would not end until Kangzi
successfully obtains permits issued by relevant government entities supervising development and sale of medical equipment.
To prepare for mass production of the Chambers,
Kangzi is conducting clinical experiments to make further improvements on the Chamber and adjusting features of the mass-production mold
for the Chambers. As its long-term business strategy, Kangzi focuses on researching, developing, and manufacturing high-technology medical
equipment while targeting both individual and institutional customers. It plans to mass-produce the Chambers in small and medium sizes,
establish operation centers to sell the Chambers in various cities across China, and initiate advertising and marketing campaigns on different
media platforms. Kangzi will also monetize services provided to customers who use the Chambers and other medical products. As of the date
of this Report, we are still in the clinical experiment phase and Kangzi is still in the process of obtaining official governmental permits
from relevant government authorities to produce and sell the Chambers on a national scale. There is no assurance that we will obtain the
official governmental permits.
In addition to business activities related to
the Chamber, the Company is also conducting research, development, manufacturing, and sale of healthcare equipment and plant-based disinfectant
spray for treating skin infections and disinfecting wounds. On March 17, 2020, we entered into a business service cooperation agreement
with Xiamen Qingda Intelligent Technology Co., Ltd., a wholly-owned subsidiary of Cross-strait Tsinghua Research Institute, pursuant to
which the parties agreed to jointly improve a plant-based disinfectant spray for treating skin infections and disinfecting wounds. The
term of such agreement is three years, and the agreement can be renewed upon mutual agreement of both parties. The original plant-based
disinfectant spray was developed and owned by the Company, while the improved product shall be owned by both the Company and Cross-strait
Tsinghua Research Institute. The Cross-strait Tsinghua Research Institute will receive 2% of the gross proceeds from sales of such improved
product.
Liquidity and Capital Resources
As of June 30, 2023, we had assets of $223,639,
which consisted of current assets of $6,082 in cash and cash equivalents, $23,015 in other receivables, $ 2,989 as advances to suppliers,
367 in inventory, noncurrent assets of $168,686 as operating lease right-of-use asset, $10,100 as long-term deposit for lease and $12,400
as advance for intangible asset. We had liabilities of $2,467,396, which consisted of current liabilities of $ 15,506 in accounts payable,
$126,163 in accrued expenses and other payables, $416,563 in advances from customers, $102 in Income tax and other taxes payable, $1,761,003
in related party payables, $55,418 in short-term operating lease liabilities and $92,641 in long-term operating lease liabilities. We
had an accumulated deficit of $20,227,576.
As of December 31, 2022, we had assets of $32,404,
which mainly consisted of $11,428 in cash and cash equivalents, and $17,845 in other receivables. As of December 31, 2022, we had liabilities
of $2,005,010, which mainly consisted of $16,150 in accounts payable, $285,081 in accrued expenses and other payable, $434,890 in advances
from customers, $140 in other taxes payables, and $1,268,749 in related party payables. We also had an accumulated deficit of $19,886,700.
Results of Operations
Comparison of the six Months Ended June 30, 2023 and 2022
Our revenues during the six months ended June
30, 2023, were $ $16,432, and cost of revenues was $1,928, as compared to revenues of $29,522 and cost of revenues $9,807, for the same
period in 2022, respectively. The decrease in our revenue was mainly due to reduced demand of our disinfectant sprays.
The following chart provides a summary of our
revenues for the six months ended June 30, 2023 and 2022, respectively.
| |
For the six months Ended June 30, | |
| |
2023 | | |
2022 | |
| |
USD | | |
% | | |
USD | | |
% | |
Revenue – related parties, net: | |
| | |
| | |
| | |
| |
Disinfectant sprays | |
| - | | |
| 0 | % | |
| 24,103 | | |
| 81.64 | % |
Healthcare instruments | |
| 16,432 | | |
| 100 | % | |
| 1,087 | | |
| 3.68 | % |
Others | |
| - | | |
| 0 | % | |
| 4332 | | |
| 14.67 | % |
Total | |
| 16,432 | | |
| 100.0 | % | |
| 29,522 | | |
| 100.0 | % |
We had incurred selling expenses of $0 and administrative
expenses of $355,575 during the six months ended June 30, 2023, as compared to $178 and $164,928 for the same period in 2022, respectively.
The decrease in selling expenses was mainly due to fewer selling personnels for our products in the six months ended June 30, 2023 compared
with the same period in 2022. The increase in administrative expenses was mainly due to increased counsel fees and other experts’
expenses during the period.
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 June 30, 2023, the Company had an accumulated deficit of $ 20,227,576, and a net loss of $340,876 for the six
months ended June 30, 2023. It is relying on advances from two of its directors, Mr. Ban Siong Ang and Mr. Hungseng Tan, to meet its limited
operating expenses.
If the economic environment in China worsens,
or if we incur unanticipated capital expenditures or decide to accelerate growth, we may need additional financing. As of June 30, 2023,
we had borrowed a loan from our directors for working capital purposes. The loan is unsecured, non-interest bearing and payable on demand.
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 stockholders.
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 are material to investors.
ITEM 3. QUANTITATIVE AND QUALITATIVE ABOUT MATERIAL
RISKS
Pursuant to Item 305(e) of Regulation S-K (§
229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,”
as defined by Rule 229.10(f)(1).
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 Report. 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 U.S. GAAP. In the future, we also intend to hire more personnel with sufficient training and experience
in U.S. GAAP.
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 June 30, 2023, 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. Litigation is subject to inherent uncertainties, and an
adverse result in these or other matters may arise from time to time that may harm our business. There are currently no legal proceedings
or claims that we believe will have 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.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
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 July 1, 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. |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
|
Heyu Biological Technology Corporation |
|
|
|
Dated: August 16, 2023 |
By: |
/s/ Ban Siong Ang |
|
Name: |
Ban Siong Ang |
|
Title: |
Chief Executive Officer |
|
|
|
Dated: August 16, 2023 |
By: |
/s/ Bo Lyu |
|
Name: |
Bo Lyu |
|
Title: |
Chief Financial Officer |
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I
have reviewed this report on Form 10-Q of Heyu Biological Technology Corporation;
Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered
by this report;
Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant’s other
certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15I and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation;
and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
The registrant’s other
certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s
auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
a)
All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
I
have reviewed this report on Form 10-Q of Heyu Biological Technology Corporation;
Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered
by this report;
Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant’s other
certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15I and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation;
and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
The registrant’s other
certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s
auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
a)
All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
The undersigned hereby certifies,
in his capacity as an officer of Heyu Biological Technology Corporation (the “Company”), for the purposes of 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:
The foregoing certification
is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter
63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.
The
undersigned hereby certifies, in his capacity as an officer of Heyu Biological Technology Corporation (the “Company”),
for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of
his knowledge:
The foregoing certification
is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter
63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.