UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q10-Q/A

(Amendment No.1)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended SeptemberJune 30, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number 000-26731

HEYU BIOLOGICAL TECHNOLOGY CORPORATION

(Exact name of registrant as specified in its charter)   

(86) 180 5901 6050158 5924 0902

(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 November 6,August 16, 2023, 518,831,367103,246,600 shares of common stock were issued and outstanding.

TABLE OF CONTENTSExplanatory Note

This Amendment No. 1 on Form 10-Q/A (the “Amended Quarterly Report”) amends the Quarterly Report on Form 10-Q of Heyu Biological Technology Corporation (the “Company” or “we”) for the quarterly period ended June 30, 2023 (the “Original Form 10-Q”), filed on August 16, 2023, with the Securities and Exchange Commission (the “SEC”).

The sole purposes of this Amended Quarterly Report are to: (i) correct a typographical errors in the number of authorized common stock in the Consolidated Balance Sheet in the Original Form 10-Q, (ii) revise the Consolidated Statements of Operations and Comprehensive Income in the Original Form 10-Q, and (iii) add a note to the financial statements entitled “Comparison of the three Months Ended June 30, 2023 and 2022” (collectively, the “Restatement”).

For the convenience of the reader, this Amended Quarterly Report sets forth the Original Form 10-Q in its entirety, as amended to reflect the Restatement. Except for the Restatement, the Company has not modified, or updated disclosures presented in this Amended Quarterly Report. Accordingly, the Amended Quarterly Report does not reflect events occurring after the Original Form 10-Q or modify or update those disclosures affected by subsequent events. Information not affected by the Restatement remains unchanged and reflects disclosures made at the time of the filing of the Original Form 10-Q.

TABLE OF CONTENTS

FORWARD LOOKING STATEMENTS

This quarterly report on Form 10-Q (“Report”), financial statements, and notes to financial statements contain forward-looking statements that discuss, among other things, future expectations and projections regarding future developments, operations, and financial conditions. Forward-looking statements may appear throughout this Report and other documents we file with the Securities and Exchange Commission (the “SEC”), including without limitation, the following section: Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report.

Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will be,” “will continue,” “may,” “could,” “will likely result,” and similar expressions. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Heyu Biological Technology Corporation

Consolidated Balance Sheets

(Unaudited)

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 Income

(Unaudited)

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

Heyu Biological Technology Corporation

Consolidated Statements of Operations and Comprehensive Income(Loss)Cash Flows

(Unaudited)

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

Heyu Biological Technology Corporation

Condensed Consolidated Statements of Cash FlowsStockholders’ Deficit

(Unaudited)

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

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)

1. ORGANIZATIONNOTE 1 – THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

(a) Nature of operations

Heyu Biological Technology Corporation (the “Company”) was incorporated in the state of Nevada on May 18, 1987.1987, 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.

Hongchang Global Investment HoldingsOn April 18, 2018, the Company entered into a share purchase agreement with Mr. Ban Siong Ang and Mr. Dan Masters (the “Share Purchase Agreement”), pursuant to which Mr. Ang acquired 1,021,051,700 shares, representing 98.91% of the issued and outstanding shares of common stock of the Company (“Common Stock”), from Mr. Masters for an aggregate purchase price of $335,000 (the “Share Purchase”). As a result of the Share Purchase, Dan Masters resigned from his positions as the President, Chief Executive Officer, Chief Financial Officer, Secretary and Chairman of the Board of the Company. Such resignation took place in connection with the closing of the Share Purchase and was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices. Additionally, all debt due to Mr. Masters from the Company was cancelled as of the closing of the Share Purchase and recognized as contributed capital.

On April 18, 2018, to fill the vacancies created by Mr. Masters’ resignation, Ban Siong Ang and Hung Seng Tan were elected as the directors of the Company. Mr. Ang was appointed as President, Chief Executive Officer, and Chairman of the Board of the Company. Mr. Tan was appointed as the Executive Director of the Company. Ms. Wendy Li was appointed as the Chief Financial Officer of the Company. On February 28, 2021, Ms. Wendy Li resigned from her position with the Company as the Chief Financial Officer. To fill the vacancies created by Ms. Wendy Wei Li’s resignation, Mr. Ang was appointed as the Chief Financial Officer. On November 30, 2021, Mr. Bo Lyu has been appointed as the Chief Financial Officer.

On July 3, 2018, the Company changed its name to Heyu Biological Technology Corporation and applied for a new ticker symbol “HYBT”.

During 2018, the Company established the following subsidiaries: (1) HP Technology Limited, (“Hongchang BVI”)) was incorporated ina British Virgin IslandIslands 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 British Virgin Islands in January 2023. 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 completed 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 United States, the following transactions were undertaken to reorganize the legal structure of Operating Entity (“Reorganization”). On January 13, 2023, Mr. Zengqiang Lin and Ms. Zhenzhu Lin, the existing shareholders of Hongchang Food established two wholly-owned subsidiaries (“BVI-1” and “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 BVI-2 which held 70% and 30% equity interest of Hongchang BVI, respectively. On February 6, 2023, Hongchang BVI incorporated a wholly-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 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 (“PRC”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”). WFOE then purchasedJSEL received 60% of the totaloutstanding equity interest of Hongchang Food. AfterKangzi from Mr. Xu for the Reorganization,purpose of developing a joint venture in selling medical equipment. It was Mr. Zengqiang LinXu and Ms. Zhenzhu Lin hold 70% and 30%JSEL’s intention that JSEL would fund the operations of Kangzi in proportion to JSEL’s equity interest of Hongchang Food through WFOE, respectively. As allin Kangzi. At the entities involved in the processtime of the Reorganization are under common ownership of Hongchang Food’s shareholders before and after the Reorganization, the Reorganization is accounted for in a manner similar to a pooling of interests with theshare transfer, Kangzi owned no assets and liabilities of the parties to the 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 sinceconducted no business operation.

Since the beginning of 2019, Mr. Xu has led the periods presented. Hongchang BVIcore research and its subsidiaries hereinafter are collectively referreddevelopment team of Kangzi to asdevelop and manufacture a new medical product, the “Group”.

(c) Reverse merger

On August 21, 2023, the Company entered into a Share Exchange AgreementSubmillimeter Wave (Terahertz) Quantized Space Therapy Chamber (the “Share Exchange 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”), in relation to the acquisition of Hongchang BVI by our Company (the “Hongchang Acquisition”“Chamber”). Zengqiang Investment LimitedUtilizing submillimeter waves, the Chamber is wholly-owneda medical equipment designed to treat cancer through cold nuclear fusion caused by Mr. Zengqiang Lincosmic 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 Hong Jin Investment Limited is wholly-ownedthat such cosmic ray muons could further facilitate cold nuclear fusion, which could reverse the cancer 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 of Hongchang BVI, constituting all of the issued and outstanding share capital of Hongchang BVI, to the Company in exchange for an aggregate of 415,582,375 new shares of the Company’s common 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 Jin Investment Limited.converting selenium into nickel inside cells.

1. ORGANIZATION (cont.)

(c) Reverse merger (cont.)

Immediately following the closingOur team consists of researchers who have years of extensive experience in medicine and physics. The lead scientist of the Hongchang Acquisition,team, Mr. Xu, had extensive professional experience in the aforementioned fields and has served as the deputy chief engineer of the New Energy Base of the National Defense-Science and Technology Commission in 1995, the chairman and chief scientist of Shanghai Guangzhui New Energy Technology Co., Ltd. from 2011 to 2019, and the director of Shanghai Hengbian New Energy Research Institute from 2003 to 2008. In 2012, Mr. Xu received the “Harmony-Person of the Year in China” award at the “2011 Harmony China Annual Summit” in Beijing. He was recognized as “Leaping China: One of the Most Influential People of the Year in 2011” by China International Economic and Technical Cooperation Promotion Association, China Elite Culture Promotion Association, and China Outstanding Chinese Merchants Association. Mr. Xu also received the “2013 China Economic Outstanding Contribution Award” from the Organizing Committee of Boau Forum on Asian SME Development.

Pursuant to the terms of the share transfer agreement entered into by JSEL and Kangzi on January 17, 2019, JSEL has the right to monitor and manage all aspects of operation of Kangzi, including its research and development activities relating to the Chamber. As the development of the Chamber enters its final stage, JSEL started accepting pre-orders for the Chamber in September 2019.

The outbreak of the novel coronavirus, commonly referred to as “COVID-19”, first found in mainland China, then in Asia and eventually throughout the world, has significantly affected business and manufacturing activities within China, including travel restrictions, widespread mandatory quarantines, and suspension of business activities within China. These measures have caused substantial disruptions to our business operations. We suspended our business operation in early February 2020 due to government mandates.

On March 17, 2020, we entered into a business service cooperation agreement with Xiamen Qingda Intelligent Technology Co., Ltd., a wholly-owned subsidiary of Cross-strait Tsinghua Research Institute, pursuant to which we agreed to jointly improve the plant based disinfectant spray for treating skin infections and disinfecting wounds. The term of such agreement is three years, and can be renewed upon mutual agreement of both parties. The original plant based disinfectant spray was developed and owned by the Company, had a totalwhile 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 518,831,367 issued and outstanding sharesgross proceeds from the sales of common stock. The 415,582,375 Consideration Shares constitute 80.1%such improved product.

On March 27, 2023, JSEL jointly established an associate Lefengteng (Xiamen) Healthcare Technology Co., Ltd “LFT”) 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.which JSEL holds 40% share.

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 presentationPresentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformityaccordance with generally accepted 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. The consolidated financial statements forinclude the period ended September 30, 2022financial statements of the Company and 2023. Accordingly, these unaudited interimits subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation.

The condensed consolidated financial statements do not include all of the informationCompany as of and footnotes required by U.S. GAAP for annual financial statements.

the six months ended June 30. 2023 and 2022 are unaudited. In the opinion of the Company’s management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments (including normal recurring adjustmentsadjustments) that have been made are necessary to fairly present fairly the financial position operating results and cash flows of the Company for eachas of June 30, 2023, the periods presented. The results of its operations for the ninesix months ended SeptemberJune 30, 2023 and 2022, and its cash flows for the six months ended June 30, 2023 and 2022. Operating results for the interim periods presented are not necessarily indicative of the results to be expected for any other interim period or for the year ending December 31, 2023.a full fiscal year. The condensed consolidated balance sheet as of December 31, 2022 washas been derived from the Company’s audited consolidated financial statements at that date but does not include allincluded in 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 statementsForm 10-K for the yearsyear 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) PrinciplesThe statements and related notes have been prepared pursuant to the rules and regulations of consolidationthe 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.

TheAs of June 30, 2023, the details of the consolidating subsidiaries are as follows:

Reverse Stock Split

On August 8, 2023, the Company filed a Certificate of Amendment to the Company’s Certificate of Incorporation (the “Certificate of Amendment”) with the State of Nevada, which has effected a one-for-ten reverse stock split (the “Reverse Stock Split”) of the Company’s outstanding common stock, par value $0.001 per share (the “Common Stock”). As a result of the Reverse Stock Split, the number of outstanding shares of Common Stock has been reduced by the ratio of one-for-ten. All references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the Group include the financial statements of the Company and its subsidiaries for which the Company is the ultimate primary beneficiary.Reverse Stock Split.

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 a statute or agreement among the shareholders or equity holders.

All significant transactions and balances 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 estimatesEstimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenue and expenses during the reported period in the consolidated financial statements and accompanying notes. Significant accountingManagement believes that the estimates reflectedused in preparing the Group’s consolidated financial statements mainlyare reasonable and prudent; however, actual results could differ from these estimates. Significant estimates include but are not limited to, standalone selling pricethe allowance for doubtful accounts, impairment assessments of each distinct performance obligation in revenue recognition, estimated useful life of land use right, assessment for impairment of long-lived assets,goodwill, valuation of deferred tax assets, rebilling collections and current expected credit losscertain accrued liabilities such as contingent liabilities.

Cash Equivalents

The Company considers all highly liquid debt instruments purchased with a maturity period of receivables. Actual results could differ from those estimates.three months or less to be cash or cash equivalents. The carrying amounts reported in the accompanying unaudited condensed consolidated balance sheets for cash and cash equivalents approximate their fair value. All of the Company’s cash that is held in bank accounts in the PRC and Hong Kong is not protected by Federal Deposit Insurance Corporation (“FDIC”) insurance or any other similar insurance in the PRC, or Hong Kong.

Accounts receivable and allowance for doubtful accounts

Accounts receivable are stated at the historical carrying amount net of allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts which reflects its best estimate of amounts that potentially will not be collected. The Company determines the allowance for doubtful accounts taking into consideration various factors, including but not limited to historical collection experience and credit-worthiness of the debtors, as well as the age of the individual receivables balance. Additionally, the Company makes specific bad debt provisions based on any specific knowledge the Company has acquired that might indicate that an account is uncollectible. The facts and circumstances of each account may require the Company to use substantial judgment in assessing its collectability.

Inventories

Inventories consist of finished goods, work in process, and raw materials. Inventories are stated at the lower cost or market value. The Company applies the weighted average cost method to its inventory.

(d) Advances from Customers

Advances from customers are payments received from customers for goods or services that have not yet been delivered. Once the corresponding goods or services are delivered, the amount in this account is transferred to a revenue account. The advance from customer account is generally classified as a short-term liability since the amounts held in it are typically settled within 12 months. If the settlement extends beyond 12 months, they are classified as long-term liabilities instead.

Leases

The Company adopted Accounting Standards Update No. 2016-02, Leases (Topic 842) (ASU 2016-02), as amended, which supersedes the lease accounting guidance under Topic 840, and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use (ROU) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements.

Operating leases are included in operating lease right-of-use (“ROU”) assets and short-term and long-term lease liabilities in our consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the leases do not provide an implicit rate, we use the industry incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Adoption of the standard resulted in the initial recognition of $ 192,574 of ROU assets and $ 192,574 of lease liabilities on our consolidated balance sheet related to office space lease commitment on March 31, 2023. As of June 30, the ROU assets and lease liabilities are $168,686 and $ 148,059, respectively.

Foreign Currency

For fiscal year 2022,the six months ended on June 30, 2023 the Company’s principal country of operations is the PRC. The accompanying consolidated financial statements are presented in US$. The functional currency of the Company is US$, and the functional currency of the Company’s subsidiaries is RMB. The consolidated financial statements are translated into US$ from RMB at year-endthe exchange rates on June 30, 2023 as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. The resulting translation adjustments are recorded as a component of shareholders’ equity included in other comprehensive income. Gains and losses from foreign currency transactions are included in profit or loss. There were no gains and losses from foreign currency transactions during the quarters ended June 30, 2023 and 2022.

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 Recognition(cont.)

IfRevenue is recognized when 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 transferpromised 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. customers in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services. Revenue is recognized when the following 5-step revenue recognition criteria are met:

Revenue from product sales is recognized at the point in time control of the products is transferred, generally upon customer receipt based upon the standard contract terms. Shipping and handling activities are considered to be fulfillment activities rather than promised services and are not, therefore, considered to be separate performance obligations. The Company’s sales terms provide no right of return outside of a standard quality policy and returns are generally not significant.

The following chart provides a summary of our revenues for the six months ended June 30, 2023 and 2022, respectively.

(h) Cost of Revenue

The cost of revenue primarily consists of goods purchased from third parties, including disinfectant sprays, healthcare instruments, and other items.

The following chart provides a summary of our cost of revenues for the six months ended June 30, 2023 and 2022, respectively.

General and administrative expensescosts

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

(i) Income taxes

Current income taxes are recorded in accordance with the regulations of the relevant tax jurisdiction. The Group accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Tax, (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the tax consequences attributable to differences between carrying amounts of existing assets and liabilities in the financial statements and their respective tax basis, and operating loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of comprehensive loss in the period of change. Valuation allowances are established when necessary to reduce the amount of deferred tax assets if it is considered more likely than not that amount of the deferred tax assets will not be realized.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(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.

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:

7. ORDINARY SHARES AND ADDITIONAL PAID-IN CAPITALIncome Taxes

Ordinary sharesThe Company accounts for income taxes pursuant to ASC Topic 740, Income Taxes. Income taxes are provided on an asset and additional paid-in capital consistedliability 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 following: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.

NotesCapital Structure

The Company had 200,000,000 shares of common stock authorized, par value $0.001 per share, with 103,246,600 shares issued and outstanding as of June 30, 2023, and December 31, 2022.

Earnings (loss) per share

Basic net income (loss) per share of common stock attributable to common stockholders is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average shares of common stock outstanding for the period. Potentially dilutive shares, which are based on the weighted-average shares of common stock underlying outstanding stock-based awards, warrants, options, or convertible debt using the treasury stock method or the if-converted method, as applicable, are included when calculating diluted net income (loss) per share of common stock attributable to common stockholders when their effect is dilutive.

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

For the six months ended June 30, 2023 and 2022, there were no potentially dilutive shares.

8. RELATED PARTY TRANSACTIONSNOTE 2 – GOING CONCERN

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

8. RELATED PARTY TRANSACTIONS (cont.)

All balances with the related parties as of December 31, 2022 and September 30, 2023 were unsecured, interest-free and had no fixed terms of repayments.

9. Commitments and Contingencies

As of Septembersix months ended June 30, 2023, the Company has entered into several contracts for constructionwas 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 the Hongchang Food Industrial Park$20,227,576 and the improvementworking capital deficit of Industrial Buildings. Total outstanding commitments under these contracts were $46,517,560 and $23,114,913$ 2,342,302 as of December 31, 2022June 30, 2023. These factors raise doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and September 30, 2023, respectively. Theclassification of liabilities that may result should the Company expectedbe unable to pay off allcontinue as a going concern.

There can be no assurance that sufficient funds required during the balances within 1-3 years.next year or thereafter will be generated from any future operations or that funds will be available from external sources such as debt or equity financings or other potential sources. If the Company is unable to raise capital from external sources when required, there will be a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company’s existing stockholders. Management is now seeking an operating company with which to merge or acquire. In the foreseeable future, the Company will rely on related parties, such as its controlling shareholder, to provide advances to fund general corporate purposes and any potential acquisitions of profitable investments. There is no assurance, however, that the Company will achieve its objectives or goals.

NOTE 3 – CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of the following:

NOTE 4 – OTHER RECEIVABLE

Other receivable consists 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 June 30, 2023.

NOTE 5 – ADVANCES TO SUPPLIERS

Advances to suppliers consists of the following:

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:

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 of the following:

Accrued payroll includes all company employee payroll liabilities as of June 30, 2023, and other payables contains employee reimbursements.

NOTE 9 – RELATED PARTY TRANSACTIONS

As of June 30, 2023 and December 31, 2022, the Company owed related parties $1,761,003 and $1,268,749, respectively. Almost all expenses incurred during this reporting period are paid by two directors. Expenses mainly included auditing, consulting and legal advisory expenses, government registration expenses, and payrolls.

For the six months ended June 30, 2023 and 2022, the Company earned revenues from Mr. Ban Siong Ang, in the amount of $10,002 and $29,522, respectively.

NOTE 10 – EQUITY

The Company had not recorded any equity transactions during the six months ended June 30, 2023.

The Company had not recorded any equity transactions during the six months ended June 30, 2022.

Reverse Stock split

On August 8, 2023, the Company filed a Certificate of Amendment to the Company’s Certificate of Incorporation with the State of Nevada, which has effected a one-for-ten reverse stock split of the Company’s outstanding common stock, par value $0.001 per share. As a result of the Reverse Stock Split, the number of outstanding shares of Common Stock has been reduced by the ratio of one-for-ten. All references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the Reverse Stock Split.

NOTE 11 – INCOME TAXES

The Company is subject to U.S. Federal tax laws. The Company has not recognized an income tax benefit for its operating losses in the United States because the Company does not expect to commence active operations in the United States.

Heyu Healthcare Technology Limited was incorporated in Hong Kong and is subject to Hong Kong profits tax at a tax rate of 16.5%. Since Heyu Healthcare Technology Limited had no taxable income during the reporting period, it has not paid Hong Kong profits taxes. Heyu Healthcare Technology Limited has not recognized an income tax benefit for its operating losses in Hong Kong because the Company does not expect to commence active operations in Hong Kong.

The Company has been conducting and plans to continue to conduct its major operations in the PRC through JSEL in accordance with the relevant tax laws and regulations. The corporate income tax rate in China is 25%. The Company has not paid PRC profits taxes, since it had no taxable income during the reporting period.