The following discussion and analysis of financial condition and results of
operations relates to the operations and financial condition reported in the
consolidated financial statements of the Company thereto, 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 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 March 12, 2018, the Board, with the consent of the majority shareholder,
approved a 1-for-464 reverse stock split. On April 11, 2018, the reverse split
became effective.
On April 18, 2018, the Company entered into a Share Purchase Agreement (the
"SPA") with Mr. Ban Siong Ang (the "Purchaser") and Mr. Dan Masters (the
"Seller"), pursuant to which the Purchaser acquired 1,021,051,700 shares,
representing 98.91% of the issued and outstanding shares of common stock of the
Company ("Common Stock") from Seller for an aggregate purchase price of $335,000
("Share Purchase"). As a result of the SPA, the Company accepted the resignation
of Dan Masters, as the Company's President, Chief Executive Officer, Chief
Financial Officer, Secretary and Chairman of the Board. This resignation was
given in connection with the closing of the Share Purchase and was not the
result of any disagreement with the Company on any matter relating to the
Company's operations, policies, or practices. Additionally, all debt due to Mr.
Masters from the Company was cancelled as of the closing of the Share Purchase
and recognized as contributed capital.
On April 18, 2018, to fill the vacancies created by Mr. Masters's resignations,
Ban Siong Ang and Hung Seng Tan were elected as the directors of the Company.
Mr. Ang was appointed as President, Chief Executive Officer, and Chairman of the
Board of the Company. Mr. Tan was appointed as Executive Director of the
Company. Ms. Wendy Wei Li was appointed as Chief Financial Officer. On February
28, 2021, Ms. Wendy Wei 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
February 17, 2023, the board of directors of the Company appointed Mr. Zengqiang
Lin as an independent director of the Company, effective 17, 2023
On July 3, 2018, the Company changed its name to Heyu Biological Technology
Corporation, with a new ticker symbol, HYBT. The Company currently has no
business operations. On July 30, 2018, the Company amended its Articles of
Incorporation with the State of Nevada in order to increase its authorized
shares of Common Stock from 150,000,000 to 2,000,000,000.
On September 11, 2018, the Nevada Secretary of State approved the Company's
certificate of amendment to amend its Articles of Incorporation to effectuate a
100-for-1 forward stock split. The total issued and outstanding shares of Common
Stock has been increased from 10,324,660 to 1,032,466,000 shares, with the par
value unchanged at $0.001.
On September 25, 2018, the Financial Industry Regulatory Authority, Inc. (the
"FINRA") announced the Forward Split with an Effective Date of September 25,
2018 and a Pay Date of September 24, 2018. In connection with the Forward Split,
no fractional shares are necessary to be issued, and stockholders do not need to
present certificates for exchange. The Forward Split will be payable directly to
each stockholder by the issuance of shares representing the split differential.
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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"). The closing of the
Shanzhiling Acquisition is subject to customary terms and conditions, including,
but not limited to, completion of due diligence, negotiation and execution of
definitive transaction documents between the parties and the delivery of audited
and unaudited financial statements of the Target as required under applicable
rules of the Securities and Exchange Commission. In addition, completion of the
transaction is subject to approval by our Board.
On October 18, 2018, the Company entered into a non-binding memorandum of
cooperation with Luoyang Ditiantai Agricultural Development Co., Ltd.
("Ditiantai"), a Chinese industrial agricultural chain enterprise, and on
October 19, 2018, the Company entered into a non-binding letter of intent with
Ditiantai. Pursuant to the two documents, the Company agreed to acquire 51% of
the outstanding capital of Ditiantai subject to certain adjustment provisions
(the "Ditiantai Acquisition"). The letter of intent has been terminated, and the
Company is not pursuing this proposed acquisition any further.
On January 17, 2019, Jiashierle (Xiamen) Healthcare Technology Co., Ltd.
("JSEL"), a limited liability company incorporated 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.
On March 15, 2019, the Company, with the approval of the Board, entered into a
Share Cancellation Agreement (the "Share Cancellation Agreement") with Mr. Ban
Siong Ang, the President, Chief Executive Officer, and Chairman of the Board of
the Company. Pursuant to the Share Cancellation Agreement, the Company and Mr.
Ang agreed to cancel 109,006,861 shares of Common Stock previously issued to Mr.
Ang.
In March 2019, the Company entered into a Raspberry Purchase Agreement and a
Raspberry Juice Processing Agreement with Ditiantai. Pursuant to these two
agreements, the Company purchased six tons of raspberry from Ditiantai, which
were processed by Ditiantai into raspberry juice and delivered to the Company.
The Company then sold the raspberry juice to a corporate buyer and five
individual buyers. The Company, however, does not plan to engage in the business
of selling raspberry juice in the long term.
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 cancering
process through which selenium is converted into nickel inside cells.
The team consists of researchers whom have extensive experience in medicine and
physics. The lead scientist of the team, Mr. Xu, had served as the deputy chief
engineer of the New Energy Base of the National Defense-Science and Technology
Commission in 1995, as 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 was
rewarded the "Harmony-Person of the Year in China" at the "2011 Harmony China
Annual Summit" in Beijing and 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 SME Development awarded Mr. Xu "2013
China Economic Outstanding Contribution Award."
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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 at Kangzi, JSEL started accepting pre-orders for the Chamber in September.
Subsequently, 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. 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 whom will agree to act as partners to co-host the clinical
trial and patients whom will be voluntarily willing to 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 to 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 the 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 the mass production of Chambers, Kangzi is conducting clinical
experiments to make further improvements on Chamber and adjusting features of
the mass-production mold for Chamber. Kangzi is also in the process of obtaining
official governmental permits from relevant government authorities to produce
and sell Chambers on a national scale. 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 massively manufacture Chambers in small and medium sizes, establish
operation centers to sell Chambers in various cities across China, and initiate
advertising and marketing campaigns on different media platforms. Kangzi will
also monetize on services provided to customers who use Chambers and other
medical products.
In addition to business activities related to Chamber, the Company will commit
to the research, development, manufacturing, and sale of healthcare equipment
and various health products containing natural plants, including cosmetics,
nutritional supplements, and drugs. In the near future, the Company aims to
standardize and internationalize the production and sale of healthcare equipment
and health products, while increasing its brand awareness in the healthcare and
consumer-product markets.
Liquidity and Capital Resources
The following chart provides a summary of our balance sheets on for the fiscal
years ended December 31, 2022 and 2021, and should be read in conjunction with
the financial statements, and notes thereto, included with this Report at Part
II, Item 8, below.
Year ended December 31 2022 2021
Cash and cash equivalents $ 11,428 $ 4,323
Other receivables, net $ 17,845 $ 29,608
Advances to suppliers $ 3,131 $ 3,446
Total current assets $ 32,404 $ 37,377
Total assets $ 32,404 $ 93,549
Accounts payable $ 16,150 $ 17,356
Accrued expenses and other payable $ 285,081 $ 283,874
Advances from customers $ 434,890 $ 471,788
Related party payable $ 1,268,749 $ 1,072,293
Total current liabilities $ 2,005,010 $ 1,903,401
Total liabilities $ 2,005,010 $ 1,903,401
Accumulated deficit $ (19,886,700 ) $ (19,621,121 )
Total stockholders' deficit $ (1,972,606 ) $ (1,809,852 )
10
As of December 31, 2021, we had assets of $93,549, which mainly consisted of
$29,608 in Other receivables, net and $56,172 in Operating lease right-of-use
asset; we had liabilities of $1,903,401, which mainly consisted of $1,072,293 in
Related party payables, $471,788 in Advances from customers, $283,874 in Accrued
expenses and other payable and 58,073 in Operating lease liability - current
portion; we had an accumulated deficit of $19,621,121.
As of December 31, 2022, we had assets of $32,404, which mainly consisted of
$17,845 in Other receivables, net; we had liabilities of $2,005,010, which
mainly consisted of $1,268,749 in Related party payables, $434,890 in Advances
from customers, and $285,081 in Accrued expenses; we had an accumulated deficit
of $19,886,700 .
Results of Operations
The following chart provides a summary of our results of operations for the
fiscal years ended December 31, 2022 and 2021 and should be read in conjunction
with the financial statements, and notes thereto, included with this Report at
Part II, Item 8, below.
From the period of the Liquidation on December 28, 2016 to September 6, 2019, we
had been a shell company without any significant assets or operations. Since
September 7, 2019, we are no longer a shell company due to the business
operation of Kangzi and the first amount of preordering payment received from
Saikun. For a detailed description, please see "Overview" above.
Fiscal Year ended December 31,
2022 2021
Revenue - related parties, net $ 78,953 $ 96,478
Total operating expenses
27,385 228,999
Loss from operations (265,779 ) (162,836 )
Total other income (expense) 199 (184 )
Income tax - -
Net loss $ (265,580 ) $ (163,020 )
Basic net loss per share $ (0.00 ) $ (0.00 )
We had $78,953 in revenues in the fiscal year ended December 31, 2022 and
$96,478 in revenues in the fiscal year ended December 31, 2021. Our expenses
during the fiscal year ended December 31, 2022, were $317,347 , as compared to
$228,999 for the fiscal year ended December 31, 2021. The increase in the
expenses was mainly due to increase in agency expenses, consulting fees and
other office expenditures. We will depend upon our shareholdersto make loans to
the Company to meet any costs that may occur. All such advances will be
interest-free loans or equity contributions. We have received customer
prepayments for our new medical product and services pursuant to the Clinical
Cooperation Agreement. When we start fulfilling our obligations under the
Clinical Cooperation Agreement, we expect to see significant increase in
revenue.
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. The Company had an accumulated deficit
of $19,886,700 and a net loss of $265,580 for the fiscal year ended December 31,
2022.
Off-balance sheet arrangements
As of December 31, 2022 and 2021, we did not have any off-balance sheet
arrangements.
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