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 resignations 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
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. We partially recovered our business operation on February 17, 2020, and on March 1, 2020, most of our staff members
returned to the office and we fully resumed our business operations on the same day. Accordingly, our business, results of operations
and financial condition were adversely affected. As of the date of this Report, Chinese industries have gradually resumed businesses
as government officials started to ease the restrictive measures since April 2020. However, as most of our top management team
is an overseas team, due to the international travel ban, we still operate under remote-working conditions, so the business of
the Company is still recovering. Our management believes that our revenues will gradually improve as the epidemic and the travel
ban are lifted.
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. By September 30, 2020,
we have had generated revenues of approximately $21,796 through sales of the improved product.
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 and nine months ended September 30, 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 September 30, 2020, the results of its operations
for the three and nine months ended September 30, 2020 and 2019, and its cash flows for the nine months ended September 30, 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 September 30, 2020, 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
|
%
|
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. As of September 30, 2020, the Company considered the
economic implications of the COVID-19 pandemic on its significant judgments and estimates. Given the impact and other unforeseen
effects on the global economy from the COVID-19 pandemic, these estimates required increased judgment, and actual results could
differ from these estimates.
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 2020
|
|
|
20,661
|
|
Fiscal 2021
|
|
|
83,533
|
|
Fiscal 2022
|
|
|
56,873
|
|
Total Lease payments
|
|
|
161,067
|
|
Less Imputed
interest
|
|
|
10,689
|
|
Present value
of lease liabilities
|
|
$
|
150,378
|
|
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 quarters ended September 30, 2020 and 2019.
|
|
As
of
|
|
|
|
September 30,
2020
|
|
|
December 31,
2019
|
|
RMB: US$ exchange rate
|
|
|
6.8013
|
|
|
|
6.9668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
months ended
September 30,
|
|
|
|
2020
|
|
|
2019
|
|
RMB: US$ exchange rate
|
|
|
6.9941
|
|
|
|
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 common stock authorized, par value $0.001 per share, with 1,032,466,000 shares issued and
outstanding as of September 30, 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.
For the nine months ended September 30, 2020 and 2019, there
were no potentially dilutive shares.
|
|
For the nine months ended
September 30,
|
|
|
|
2020
|
|
|
2019
|
|
Statement of Operations Summary Information:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(257,972
|
)
|
|
$
|
(190,766
|
)
|
Weighted-average common shares outstanding - basic and diluted
|
|
|
1,032,466,000
|
|
|
|
1,080,043,580
|
|
Net loss per share, basic and diluted
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
NOTE
2 – GOING CONCERN
During
the quarter ended September 30, 2020, the Company was unable to generate cash flows sufficient to support its operations despite
Kangzi’s business operation and was 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 $19,156,356 and working capital deficit of
$1,116,680 As of September 30, 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 September 30,
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 September 30, 2020, we have borrowed from such shareholder a total of $1,116,680 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
September 30,
2020
|
|
|
As
of
December 31,
2019
|
|
Bank
Deposits-China & HK
|
|
|
3,277
|
|
|
|
95,522
|
|
|
|
$
|
3,277
|
|
|
$
|
95,522
|
|
NOTE
4 – OTHER RECEIVABLE
Other
receivable consists of the following:
|
|
As
of
September 30,
2020
|
|
|
As
of
December 31,
2019
|
|
Rental and POS machine deposits
|
|
|
14,588
|
|
|
|
14241
|
|
Others
|
|
|
50,058
|
|
|
|
61,494
|
|
Less: Allowance
for doubtful accounts
|
|
|
-
|
|
|
|
(24,499
|
)
|
|
|
$
|
64,646
|
|
|
$
|
51,236
|
|
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 nine months ended September 30, 2020.
NOTE
5 – ADVANCES TO SUPPLIERS
Advances
to suppliers consists of the following:
|
|
As
of
September 30,
2020
|
|
|
As
of
December 31,
2019
|
|
Purchases
of scientific research equipment
|
|
|
19,055
|
|
|
|
48,344
|
|
|
|
$
|
19,055
|
|
|
$
|
48,344
|
|
NOTE
6 – INVENTORY
Inventory
consists of the following:
|
|
As
of
September 30,
2020
|
|
|
As
of
December 31,
2019
|
|
Working
in process
|
|
|
434,437
|
|
|
|
421,533
|
|
Inventories
- raw materials
|
|
|
47,001
|
|
|
|
-
|
|
|
|
$
|
481,438
|
|
|
$
|
421,533
|
|
No impairment was provided for the inventories
as of September 30, 2020 and December 31, 2019.
NOTE
7 – OPERATING LEASE RIGHT-OF-USE ASSET AND LIABILITIES
On
September 1, 2019, the Company entered in a lease agreement for office space, the right-of-use asset is recognized as following:
|
|
As
of
September 30,
2020
|
|
|
As
of
December 31,
2019
|
|
Operating
lease right-of-use asset
|
|
|
147,712
|
|
|
|
202,976
|
|
|
|
$
|
147,712
|
|
|
$
|
202,976
|
|
Operating
lease liability consist both current and noncurrent component as the following:
|
|
As of
September 30,
2020
|
|
|
As of
December 31,
2019
|
|
Operating lease liability - current portion
|
|
|
75,723
|
|
|
|
31,017
|
|
Operating lease liability
|
|
|
74,655
|
|
|
|
172,610
|
|
|
|
$
|
150,378
|
)
|
|
$
|
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
|
|
|
20,661
|
|
Fiscal
2021
|
|
|
83,533
|
|
Fiscal
2022
|
|
|
56,873
|
|
Total
Lease payments
|
|
|
161,067
|
|
Less
Imputed interest
|
|
|
10,689
|
|
Present
value of lease liabilities
|
|
$
|
150,378
|
|
NOTE
8 – ADVANCES FROM CUSTOMERS
|
|
As
of
September 30,
2020
|
|
|
As
of
December 31,
2019
|
|
Advances
from customers(1)
|
|
|
484,674
|
|
|
|
430,616
|
|
|
|
$
|
484,674
|
|
|
$
|
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 the 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
September 30,
2020
|
|
|
As
of
December 31,
2019
|
|
Accrued payroll
|
|
|
88,699
|
|
|
|
30,674
|
|
Other Payables
|
|
|
147,900
|
|
|
|
80,700
|
|
|
|
$
|
236,599
|
|
|
$
|
111,374
|
|
Accrued
payroll includes all company employee payroll liabilities as of September 30, 2020, and other payables contains employee reimbursements.
Operating
lease liability consist both current and noncurrent component as the following:
|
|
As of
September 30,
2020
|
|
|
As of
December 31,
2019
|
|
Operating lease liability - current portion
|
|
|
75,723
|
|
|
|
31,017
|
|
Operating lease liability
|
|
|
74,655
|
|
|
|
172,610
|
|
|
|
$
|
150,378
|
|
|
$
|
203,627
|
|
NOTE
10 – RELATED PARTY TRANSACTIONS
As of September 30, 2020 and December 31,
2019, the Company owed related parties $898,344 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.
NOTE
11 – EQUITY
The Company had not recorded any equity
transactions during the nine months ended September 30, 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.