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 March 31,September 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

(86) 158 5924 0902180 5901 6050

(Telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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.

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 May 12,November 6, 2023, 1,032,466,000518,831,367 shares of common stock were issued and outstanding.

TABLE OF CONTENTS

Index to Form 10-Q

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. In addition, there is uncertainty about the spread of the Coronavirus Disease 2019 (“COVID-19”) and the impact it may have on the Company’s operations, the demand for the Company’s products or services, global supply chains, and economic activities in general. 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)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

Heyu Biological Technology Corporation

Consolidated Statements of Operations and Comprehensive IncomeIncome(Loss)

(Unaudited)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

Heyu Biological Technology Corporation

Consolidated Statements of Cash Flows

(Unaudited)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statementsstatements.

Heyu Biological Technology Corporation

Condensed Consolidated Statements of Stockholders’ Deficit

(Unaudited)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

Heyu Biological Technology Corporation

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1 – THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES1. ORGANIZATION

(a) Nature of operations

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 WebWorks1987.

Hongchang Global Investment Holdings Limited (“Hongchang BVI”)) was incorporated in British Virgin Island under the laws of the British Virgin Islands in January 1999. From 1999 to 20162023. Fuqing Hongchang Food Co., Ltd. (“Hongchang Food”, or the “Operating Entity”) was established in September 2017, and primarily engages in the construction of and investment in Hongchang Food Industrial Park project. Its main asset is its investment in the food industrial park, which was obtained by bidding in September 2020 and is currently under construction. Upon completion of such project, Hongchang Food will engage in the core businesses of food trade and biotechnology (collectively, “Principal Business”).

On September 4, 2023, the Company engagedcompleted the merger and other related transactions (the “Merger Transactions” or “Merger”) with Hongchang BVI, as a result of which Hongchang BVI became a wholly-owned subsidiary of the Company and the Company assumed and began conducting the principal business of Hongchang Food.

(b) History and reorganization of the Group

In preparation of its business combination with Heyu Biological Technology Corporation in the developmentUnited States, the following transactions were undertaken to reorganize the legal structure of Operating Entity (“Reorganization”). On January 13, 2023, Mr. Zengqiang Lin and distributionMs. Zhenzhu Lin, the existing shareholders of web tools software, electronic business storefront hosting,Hongchang Food established two wholly-owned subsidiaries (“BVI-1” and Internet payment systems for individuals“BVI-2”) in British Virgin Island, respectively. On January 18, 2023, Hong Chang Global Investment Holdings Limited (“Hongchang BVI”) was then incorporated by BVI-1 and small to mid-sized businesses.BVI-2 which held 70% and 30% equity interest of Hongchang BVI, respectively. On February 23, 2016, the Company filed6, 2023, Hongchang BVI incorporated a voluntary petition for bankruptcywholly-owned subsidiary, Hong Chang Biotechnologies (HK) Limited (“Hongchang HK”). On February 28, 2023, Hongchang HK incorporated a wholly-owned subsidiary, Fujian Hongjin Biotechnology Co., Ltd. (“WFOE”) in the U.S. Bankruptcy CourtPeople’s Republic of China (“PRC”). WFOE then purchased the total equity interest of Hongchang Food. After the Reorganization, Mr. Zengqiang Lin and Ms. Zhenzhu Lin hold 70% and 30% equity interest of Hongchang Food through WFOE, respectively. As all the entities involved in the process of the Reorganization are under common ownership of Hongchang Food’s shareholders before and after the Reorganization, the Reorganization is accounted for the Districtin a manner similar to a pooling of Utah, and soon afterwards ceased its business activities. On August 19, 2016,interests with 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 transferredparties to the liquidating trust.Reorganization carried over at their historical amounts. Therefore, the accompanying consolidated financial statements were prepared as if the corporate structure of the Company had been in existence since the beginning of the periods presented. Hongchang BVI and its subsidiaries hereinafter are collectively referred to as the “Group”.

(c) Reverse merger

On April 18, 2018,August 21, 2023, the Company entered into a share purchase agreement with Mr. Ban Siong Ang and Mr. Dan MastersShare Exchange Agreement (the “Share PurchaseExchange Agreement”) with Hongchang BVI and Hongchang BVI’s shareholders, Zengqiang Investment Limited, a business company incorporated in the BVI, and Hong Jin Investment Limited, a business company incorporated in the BVI (the “Selling Shareholders” and each a “Selling Shareholder”), pursuantin relation to whichthe acquisition of Hongchang BVI by our Company (the “Hongchang Acquisition”). Zengqiang Investment Limited is wholly-owned by Mr. Ang acquired 1,021,051,700Zengqiang Lin and Hong Jin Investment Limited is wholly-owned by Ms. Zhenzhu Lin. Mr. Zengqiang Lin has been a director of our Company since February 17, 2023, and Ms. Zhenzhu Lin is the sister of Mr. Zengqiang Lin. In accordance with the terms of the Share Exchange Agreement, the Selling Shareholders sold and transferred 100 shares representing 98.91%of Hongchang BVI, constituting all of the issued and outstanding sharesshare capital of common stock ofHongchang BVI, to the Company (“Common Stock”), from Mr. Mastersin exchange 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 a415,582,375 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.

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 months ended March 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 March 31, 2023, the results of its operations for the three months ended March 31, 2023 and 2022, and its cash flows for the three months ended March 31, 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 March 31, 2023, the details of the consolidating subsidiaries are as follows:

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. Allshares of the Company’s cash that is held in bank accounts in the PRCcommon stock (the “Consideration Shares”), of which 353,322,843 shares were issued to Zengqiang Investment Limited and 62,259,532 shares were issued to 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.Jin Investment Limited.

Leases1. ORGANIZATION (cont.)

(c) Reverse merger (cont.)

Immediately following the closing of the Hongchang Acquisition, the Company had a total of 518,831,367 issued and outstanding shares of common stock. The 415,582,375 Consideration Shares constitute 80.1% of our enlarged share capital following the closing of the Hongchang Acquisition. The exchange consideration for the Hongchang Acquisition was determined on an arms’ length basis based on our valuation of the Hongchang Group and its assets.

As Heyu Biological Technology Corporation, the legal acquirer and accounting acquiree, does not meet the definition of a business, management concluded that the Merger should be accounted for as a continuation of the financial statements of Hongchang BVI (the legal subsidiary), together with a deemed issue of shares and a re-capitalization of the equity of Hongchang BVI. Hongchang BVI is the continuing entity and is deemed to have issued shares in exchange for the identifiable net assets held by Heyu Biological Technology Corporation together with the listing status of Heyu Biological Technology Corporation. Management concluded that September 4, 2023 is the acquisition date of the Merger.

Based on above transactions, the accompanying interim condensed consolidated financial statements reflect the activities of each of the following entities:

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and applicable rules and regulations of the Securities and Exchange Commission regarding financial reporting that are consistent with those used in the preparation of the Company’s audited consolidated financial statements for the period ended September 30, 2022 and 2023. Accordingly, these unaudited interim condensed consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP for annual financial statements.

In the opinion of the Company’s management, the accompanying unaudited interim condensed consolidated financial statements contain all normal recurring adjustments necessary to present fairly the financial position, operating results and cash flows of the Company for each of the periods presented. The results of operations for the nine months ended September 30, 2023 are not necessarily indicative of results to be expected for any other interim period or for the year ending December 31, 2023. The condensed consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated financial statements at that date but does not include all the disclosures required by U.S. GAAP for annual financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the years ended December 31, 2022.

Through the Reorganization, the Company became the holding company of the companies now comprising the Group. Accordingly, for the purpose of preparation of the consolidated financial statements of the Group, the Company is considered as the holding company of the companies now comprising the Group throughout the reporting period.

Through the Reorganization, the Company became the holding company of the contributed businesses now comprising the Group, which were under the common control of the controlling shareholder before and after the Reorganization. Accordingly, the financial statements were prepared on a consolidated basis by applying the principles of the pooling of interest method as if the Reorganization had been completed at the date when contributed business first came under the control of the controlling party.

The consolidated statements of loss and other comprehensive income, changes in equity and cash flows of the Group included the results and cash flows of all companies now comprising the Group from the earliest date presented or since the date when the subsidiaries and/or businesses first came under the common control of the controlling shareholder, whenever the period is shorter.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(b) Principles of consolidation

The accompanying consolidated financial statements of the Group include the financial statements of the Company adopted Accounting Standards Update No. 2016-02, Leases (Topic 842) (ASU 2016-02), as amended,and its subsidiaries for which supersedes the lease accounting guidanceCompany is the ultimate primary beneficiary.

A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; has the power to appoint or remove the majority of the members of the board of directors (the “Board”); and to cast majority of votes at the meeting of the Board or to govern the financial and operating policies of the investee under Topic 840,a statute or agreement among the shareholders or equity holders.

All significant transactions and generallybalances between the Company and its subsidiaries have been eliminated. The non-controlling interests in consolidated subsidiaries are shown separately in the consolidated financial statements.

(c) Use of estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires lesseesmanagement to recognize operatingmake estimates and financing leaseassumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and corresponding right-of-use (ROU) assets onliabilities at the balance sheet date, and the reported revenue and expenses during the reported period in the consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Group’s consolidated financial statements mainly include, but are not limited to, provide enhanced disclosures surrounding the amount, timingstandalone selling price of each distinct performance obligation in revenue recognition, estimated useful life of land use right, assessment for impairment of long-lived assets, valuation of deferred tax assets and uncertaintycurrent expected credit loss of cash flows arisingreceivables. Actual results could differ from leasing arrangements.those estimates.

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.(d) Foreign Currency

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.

Foreign Currency

For fiscal year 2022, 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 March 31, 2023 and 2022.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(d) Foreign Currency (cont.)

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.

(e) Construction-in-progress

Property and equipment that are purchased or constructed which require a period of time before the assets are ready for their intended use are accounted for as construction-in-progress. Construction-in-progress is recorded at acquisition cost, including installation costs. Construction-in-progress is transferred to specific property and equipment accounts and commences depreciation when these assets are ready for their intended use.

(f) Land use right, net

The land use rights represent the operating lease prepayments for the rights to use the land in the PRC. Amortization of the prepayments is provided on a straight-line basis over the terms of the respective land use rights certificates.

(g) Revenue recognition

Revenue is recognized when or as the control of the goods or services is transferred to a customer. Depending on the terms of the contract and the laws that apply to the contract, control of the goods and services may be transferred over time or at a point in time. Control of the goods and services is transferred over time if the Group’s performance:

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(g) Revenue recognition (cont.)

If control of the goods and services transfers over time, revenue is recognized over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognized at a point in time when the customer obtains control of the goods and services.

Contracts with customers may include multiple performance obligations. For such arrangements, the Group allocates revenue to each performance obligation based on its relative standalone selling price. The Group generally determines standalone selling prices based on the prices charged to customers. If the standalone selling price is not directly observable, it is estimated using expected cost plus a margin or adjusted market assessment approach, depending on the availability of observable information. Assumptions and estimations have been made in estimating the relative selling price of each distinct performance obligation, and changes in judgments on these assumptions and estimates may impact the revenue recognition.

When either party to a contract has performed, the Group presents the contract in the consolidated balance sheets as a contract asset or a contract liability, depending on the relationship between the entity’s performance and the customer’s payment.

A contract asset is the Group’s right to consideration in exchange for goods and services that the Group has transferred to a customer. A receivable is recorded when the Group has an unconditional right to consideration. A right to consideration is unconditional if only the passage of time is required before payment of that consideration is due.

If a customer pays consideration or the Group has a right to an amount of consideration that is unconditional, before the Group transfers a good or service to the customer, the Group presents the contract liability when the payment is made, or a receivable is recorded (whichever is earlier). A contract liability is the Group’s obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer.

Product sales

The Group generates revenue from food trading business. The revenue is recognized at a point in time when the control of the product is transferred to the customer. 

(h) General and administrative costsexpenses

General and administrative expenses include personnel expensesconsist primarily of salaries and benefits for executive, finance, and internal support personnel. In addition,employees involved in general and administrative expenses include fees for bad debt costs, professionalcorporate functions, amortization of land use right, legal and accountingother professional services insurance, office space, banking and merchant fees, rental and other overhead-related costs.general corporate related expenses.

(i) Income taxes

Income Taxes

Current income taxes are recorded in accordance with the regulations of the relevant tax jurisdiction. The CompanyGroup accounts for income taxes pursuant to ASC Topic 740, Income Taxes. Income taxes are provided on anunder the 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.method in accordance with ASC Topic 740, also requires the recognition ofIncome Tax, (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for both the expected impact oftax consequences attributable to differences between carrying amounts of existing assets and liabilities in the financial statements and thetheir respective tax basis, ofand operating loss carry-forwards. Deferred tax assets and liabilities and forare measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected future tax benefit to be derived from tax losses and tax credit carry-forwards. ASC Topic 740 additionally requires the establishmentrecovered or settled. The effect on deferred taxes of a valuation allowancechange in tax rates is recognized in the consolidated statements of comprehensive loss in the period of change. Valuation allowances are established when necessary to reflectreduce the likelihood of realization of deferred tax assets. Realizationamount 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 andit is considered more likely than not that 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 uncertaindeferred tax position toassets will not 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 March 31, 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.realized.

Potential dilutive securities are excluded from the calculation of diluted EPS in loss periods as their effect would be antidilutive.

For the three months ended March 31, 2023 and 2022, there were no potentially dilutive shares.

NOTE 2 – GOING CONCERN

During the quarter ended March 31, 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 $20,035,077 and working capital deficit of $2,219,843 as of March 31, 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.2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

NOTE 3 – CASH AND CASH EQUIVALENTS(i) Income taxes (cont.)

The Group records liabilities related to uncertain tax positions when, despite the Group’s belief that the Group’s tax return positions are supportable, the Group believes that it is more likely than not that those positions may not be fully sustained upon review by tax authorities. Accrued interest and penalties related to unrecognized tax benefits are classified as income tax expense. The Group did not recognize uncertain tax positions as of December 31, 2021 and 2022.

(j) Recent accounting pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This update simplifies the accounting for income taxes as part of the FASB’s overall initiative to reduce complexity in accounting standards. The amendments include removal of certain exceptions to the general principles of ASC 740, Income taxes, and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. The update is effective in fiscal years beginning after December 15, 2020, and interim periods therein, and early adoption is permitted. Certain amendments in this update should be applied retrospectively or modified retrospectively, all other amendments should be applied prospectively. The Company does not expect the impact of this guidance to have a material impact on the Company’s consolidated financial statements.

Cash and cash equivalents consist

3. OTHER CURRENT ASSETS

Other current assets consisted of the following:

4. CONSTRUCTION-IN-PROGRESS

Hongchang Food Industrial Park covers an area of 108,000 square meters, with a construction area of about 130,000 square meters. Hongchang Food Industrial Park is still under construction and expected to complete construction by 2024.

5. LAND USE RIGHT, NET

Land use rights, net consist of the following: 

5. LAND USE RIGHT, NET (cont.)

Amortization expenses for the land use rights were US$62,771, and US$59,602 for the nine months ended September 30, 2022 and 2023, respectively. No impairment charge was recorded for the nine months ended September 30, 2022 and 2023, respectively.

6. ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consisted of the following:

NOTE 4 – OTHER RECEIVABLE7. ORDINARY SHARES AND ADDITIONAL PAID-IN CAPITAL

Other receivable consistsOrdinary shares and additional paid-in capital consisted of the following:

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 March 31, 2023.

Notes

NOTE 5 – ADVANCES TO SUPPLIERS8. RELATED PARTY TRANSACTIONS

Advances to suppliers consists of

The principal related parties with which the following:Group had transactions during the years presented are as follows:

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:

Operating lease liability consist both current and noncurrent component as the following:8. RELATED PARTY TRANSACTIONS (cont.)

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.

The approximate future minimum lease payments under operating leases as:

NOTE 7 – ADVANCES FROM CUSTOMERS

NOTE 8 – ACCRUED EXPENSES AND OTHER PAYABLES

Accrued expenses and other payables consist ofAll balances with the following:

Accrued payroll includes all company employee payroll liabilitiesrelated parties as of MarchDecember 31, 2022 and September 30, 2023 were unsecured, interest-free and other payables contains employee reimbursements.had no fixed terms of repayments.

NOTE 9 – RELATED PARTY TRANSACTIONS9. Commitments and Contingencies

As of March 31,September 30, 2023, the Company has entered into several contracts for construction of the Hongchang Food Industrial Park and the improvement of Industrial Buildings. Total outstanding commitments under these contracts were $46,517,560 and $23,114,913 as of December 31, 2022 the Company owed related parties $ 1,581,133 and $1,268,749,September 30, 2023, 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.

NOTE 10 – EQUITY

The Company had not recorded any equity transactions duringexpected to pay off all the three months ended March 31, 2023.

The Company had not recorded any equity transactions during the year ended December 31, 2022.

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.balances within 1-3 years.

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”“HYBT”) was incorporated in the state of Nevada on May 18, 1987, as Asphalt Associates, Inc. and changed its name to Pacific WebWorks1987.

Hongchang Global Investment Holdings Limited (“Hongchang BVI”)) was incorporated in British Virgin Island under the laws of the British Virgin Islands in January 1999. From 1999 to 2016,2023. Fuqing Hongchang Food Co., Ltd. (“Hongchang Food”, or the Company engaged“Operating Entity”) was established in September 2017, and primarily engages in the developmentconstruction of and distributioninvestment in Hongchang Food Industrial Park project. Its main asset is its investment in the food industrial park, which was obtained by bidding in September 2020 and is currently under construction. Upon completion of web tools software, electronic business storefront hosting,such project, Hongchang Food will engage in the core businesses of food trade and Internet payment systems for individuals and small to mid-sized businesses.biotechnology (collectively, “Principal Business”).

On July 3, 2018,September 4, 2023, the Company changed its name to Heyu Biological Technology Corporationcompleted the merger and applied forother related transactions (the “Merger Transactions”) with Hongchang BVI, as a new ticker symbol HYBT.

On January 17, 2019, Jiashierle (Xiamen) Healthcare Technology Co., Ltd. (“JSEL”),result of which Hongchang BVI became a limited liability company organized under the laws of the People’s Republic of China (the “PRC”), and an indirect wholly ownedwholly-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% ofand the equity interests of Shanghai Kangzi Medical Technology Co., Ltd., a limited liability company organized underCompany assumed and began conducting 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 theprincipal 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.Hongchang Food.

The core research and development team consistsResults of researchers who have extensive experience in medicine and physics. The lead scientistOperations

Comparison of the team, Mr. Xu, servedThree Months Ended September 30, 2023 and 2022

Our revenues during the three months ended September 30, 2023, were $51,397, and cost of revenues was $62,955, as compared to revenues of nil and cost of revenues of nil for the deputy chief engineersame period in 2022, respectively. Hongchang Group’s business is in its early stages, revenue represents the sales of goods supplied to customers, and sales are primarily driven by the New Energy Basedemand from customer. The growth of the National Defense-ScienceHongchang Group’s revenue was primarily driven by increasing Hongchang Group’s product variety, expanding Hongchang Group’s distribution network, both in China and Technology Commission in 1995, the director of Shanghai Hengbian New Energy Research Institute from 2003 to 2008,overseas and the chairmaninitiation of other projects or business lines in the future. We had incurred general and chief scientistadministrative expenses of Shanghai Guangzhui New Energy Technology Co., Ltd. from 2011$137,193 during the three months ended September 30, 2023, as compared to 2019. In 2012, Mr. Xu$75,684 for the same period in 2022, respectively. The increase in general and administrative expenses was awardedmainly due to the “Harmony Person ofincrease in professional consulting fees, increase wages expenses related to the Yearincrease 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 Economicheadcount and Technical Cooperation Promotion Association, China Elite Culture Promotion Association,overall higher general 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.”administrative expenses.

PursuantComparison of the Nine Months Ended September 30, 2023 and 2022

Our revenues during the nine months ended September 30, 2023, were $78,204, and cost of revenues was $104,430, as compared to revenues of nil and cost of revenues of nil for the same period in 2022, respectively. Hongchang Group’s business is in its early stages, revenue represents the sales of goods supplied to customers, and sales are primarily driven by the demand from customer. The growth of Hongchang Group’s revenue was primarily driven by increasing Hongchang Group’s product variety, expanding Hongchang Group’s distribution network, both in China and overseas and the initiation of other projects or business lines in the future. We had incurred general and administrative expenses of $381,579 during the nine months ended September 30, 2023, as compared to $150,939 for the same period in 2022, respectively. The increase in general and administrative expenses was mainly due 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 Chamberincrease 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 variousprofessional consulting fees, increase wages expenses related to the clinical trial, JSEL is responsible for communicating with patients receiving treatmentincrease in headcount and other patient-relatedoverall higher general and 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.expenses.

To prepareCapital Expenditure Commitment as of September 30, 2023

As of September 30, 2023, the Company has entered into several contracts for mass productionconstruction 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,Hongchang Food Industrial Park and the agreement can be renewed upon mutual agreementimprovement of both parties.Industrial Buildings. Total outstanding commitments under these contracts were $46,517,560 and $23,114,913 as of December 31, 2022 and September 30, 2023, respectively. The original plant-based disinfectant spray was developed and owned byCompany expected to pay off all 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.

The recent COVID-19 outbreak has spread throughout the world, especially in China, the United States, and Europe. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic—the first pandemic caused by a coronavirus. The outbreak has resulted in the implementation of significant governmental measures, including lockdowns, closures, quarantines, and travel bans, intended to control the spread of the virus, which measures have caused severe disruptions to our business operations.balances within 1-3 years.

Liquidity and Capital Resources

As of March 31,September 30, 2023, we had assets of $262,658, which consisted of current assets of $29,210US$863,119 in cash and cash equivalents, $24,201as compared to US$3,141 as of December 31, 2022. As we started our business operation in 2023, so we have been relying on directors’ loan and capital contribution to finance our daily operation and construction in progress.

As of September 30, 2023, our construction in progress balance amounted to approximately US$38,674,338 , as compared to US$26,837,950 as of December 31, 2022. This reflects the construction progress of our Hongchang Food Industrial Park.

Off Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of September 30, 2023, and December 31, 2022.

Operating activities

Net cash used in operating activities for the nine months ended September 30, 2023 was US$777,143, which primarily reflected our net loss of US$392,435 as mainly adjusted for amortization of US$59,602, and adjustment for changes in working capital primarily consists of increase in other receivables, $3,143 as advances to suppliers, and noncurrentcurrent assets of $192,574US$862,632 offset by increase in Deferred subsidies of US$2,003,319.

Net cash used in operating activities for the nine months ended September 30, 2022 was US$109,357, which primarily reflected our net loss of US$152,345 as operating lease right-of-use asset. We had liabilitiesmainly adjusted for amortization of $2,388,612, which consistedUS$62,771, and adjustment for changes in working capital primarily consists of increase in other current liabilitiesassets of $16,205US$18,358.

Investing activities

Net cash used in accounts payable, $183,367 in accrued expensesinvesting activities for the nine months ended September 30, 2023 and other payables, $438,028 in advances2022 was US$41,407,175 and US$954,232 mainly attributable to purchase of property, plant and equipment.

Financing activities

Net cash provided by financing activities for or the nine months ended September 30, 2023 and 2022 was US$41,517,299 and US$1,062,404, primarily due to loan from customers, $1,581,133 in related party payables, and $57,664 in short-term operating lease liabilities. We had an accumulated deficit of $20,035,077.capital contributions made by shareholder.

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 Three Months Ended March 31, 2023 and 2022

Our revenues during the three months ended March 31, 2023, were $10,121, and cost of revenues was $1,161, as compared to revenues of $15,135 and cost of revenues $5,532, for the same period in 2022, respectively. The decrease in our revenue was mainly due to reduced demand of our products.

We had incurred selling expenses of $0 and administrative expenses of $157,468 during the three months ended March 31, 2023, as compared to $67 and $59,067 for the same period in 2022, respectively. The decrease in selling expenses was mainly due to fewer advertising expenses for our products in the quarter ended March 31, 2023 compared with the same period in 2022, selling expenses. The increase in administrative expenses was mainly due to increased counsel fees and other experts’ expenses during the period.

Going ConcernCritical Accounting Policies Involving Critical Accounting Estimates

The accompanyingdiscussion and analysis of our Group’s financial condition and results of operations are based upon our Group’s consolidated financial statements, which have been prepared in accordance with U.S. GAAP in a consistent manner. The preparation of these financial statements requires the selection and application of accounting policies. Further, the application of U.S. GAAP requires our Group to make estimates and judgments about future events that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. On an ongoing basis, our Group evaluate its estimates, including those discussed below. our Group bases its estimates on historical experience, current trends and various other assumptions that it believe are presented on a going concern basis. The Company’s financial condition raises substantial doubtreasonable under the circumstances, the results of which form the basis for making judgments about the Company’s ability to continue as a going concern. Ascarrying values of March 31, 2023, the Company had an accumulated deficit of $20,035,077,assets and a net loss of $148,377 for the three months ended March 31, 2023. It is relying on advancesliabilities that are not readily apparent from two of its directors, Mr. Ban Siong Ang and Mr. Hungseng Tan, to meet its limited operating expenses.other sources.

IfActual results may differ from these estimates under different assumptions or conditions. Our Group believes it is possible that other professionals, applying reasonable judgment to the economic environmentsame set of facts and circumstances, could develop and support a range of alternative estimated amounts. Our Group believes that it has appropriately applied its critical accounting policies. However, in China worsens,the event that inappropriate assumptions or if we incur unanticipated capital expenditures or decidemethods were used relating to accelerate growth, we may need additional financing. Asthe critical accounting policies below, our Group’s consolidated statements of March 31, 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, wouldoperations could 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.misstated.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likelyA detailed summary of significant accounting policies is included in Note 2 to have a current or future effect on our Group’s consolidated financial condition, changesstatements for the period ended December 31, 2022 and June 30, 2023 contained in financial condition, revenues, or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors.this report.

ITEM 33. 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 March 31,September 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 salesPlease refer to the Current Report on Form 8-K of equity securities during the period covered by this Report.Company filed with the SEC on September 7, 2023.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.There were no material changes to the procedures by which security holders may recommend nominees to the registrant’s board of directors. No insider trading arrangements and policies (such as Rule 10b5–1 trading arrangements) have been entered into by the directors and officers of the Company. 

ITEM 6. – EXHIBITS

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.

2019