UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For The Quarterly Period Ended March 31,June 30, 2020

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 333-226885

BIOPLUS LIFE CORPORATION

(Exact name of registrant issuer as specified in its charter)

No 9 & 10, Jalan P4/8B, Bandar Teknologi Kajang,

Semenyih, Selangor D.E., Malaysia 43500

(Address of principal executive offices)(zip code)

Issuer’s telephone number: +60 3 8703 2020

(Registrant’s telephone number, including area codes)

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES [  ] NO [X]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding twelve months (or shorter period that the registrant was required to submit and post such files).

YES [  ] NO [X]

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 [X]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes [  ] No [  ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS:

BIOPLUS LIFE CORP.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BIOPLUS LIFE CORP.

CONSOLIDATED BALANCE SHEETS

(Amount expressed in United States Dollars (“US$”), except for number of shares)

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

BIOPLUS LIFE CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/ (LOSS)

(Amount expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

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

BIOPLUS LIFE CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amount expressed in United States Dollars (“US$))

(Unaudited)

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

BIOPLUS LIFE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

MARCH 31,JUNE 30, 2020

NOTE 1- ORGANIZATION AND BUSINESS BACKGROUND

Bioplus Life Corp., a Nevada corporation (“Company”), was incorporated under the laws of the State of Nevada on April 13, 2017. For purposes of financial statements presentation, Bioplus Life Corp. and its subsidiaries are herein referred to as “the Company” or “We”.

On July 10, 2017, the Company acquired 100% of the equity interests ofWe have historically conducted our business through Bio Life Neutraceuticals Sdn Bhd, a private limited liability company, incorporated in Malaysia. Bioplus Life Corp. (US), a Malaysian company. On July 19, 2017, the Company, through its Malaysian subsidiary,incorporated in United State of Nevada, is an investment holding company with 100% equity interest in Bioplus Life Corp., acquired 100% of the equity interests of Bioplus Life International Holdings Ltd, a Hong Kong company. On October 27, 2017, the Company through its Hong Kong subsidiary, Bioplus Life International Holdings Ltd, acquired 100% equity interest of Bioplus Life Corp. (ShenZhen) (Labuan), a company incorporated in China.

On June 11, 2018, the Company through its subsidiaryLabuan, which subsequent hold 100% equity interest in Hong Kong, Bioplus Life International Holdings Ltd, acquiredLimited, a company incorporated in Hong Kong, which subsequent hold 99.8% equity interest ofin Bio Life Holdings Berhad, a company incorporated in Malaysia.Malaysia, which subsequent hold 100% equity interest in Bio Life Neutraceuticals Sdn Bhd. On December 31, 2017, Bioplus Life Corp was organized to be holding company parent to, and succeed to the operations of, Bioplus Life Corp. (Labuan), Bioplus Life International Holdings Ltd, Bio Life Holdings Berhad owns 100% of the equity interests ofand Bio Life Neutraceuticals Sdn.Sdn Bhd., This transaction was accounted for as a company incorporated in Malaysia.transaction among entities under common control and the assets, liabilities, revenues, and expenses, and as if the transfer occurred at the beginning of the period. Prior periods have been retrospectively adjusted to furnish comparative information.

The Company, through its subsidiaries supplies high quality health products. Details of the Company’s subsidiaries are below:

Going Concern

The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders and affiliates, the ability of the Company to obtain necessary financing to continue operations, and the attainment of profitable operations. The Company recorded a total comprehensive loss of $78,851 for the period ended March 31, 2020 and recorded an accumulated deficit of $208,332 as of March 31, 2020.

Chong Khooi You, President/CEO, a major shareholder of the Company, has provided a written undertaking to provide financials support for year 2020 if any shortfall in cash flow. In this respect, Company has the ability to continue as a going concern, if the Company is unable to obtain adequate capital. The accompanying financial statements do not include any adjustments to reflect the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

These accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

In this Quarterly Report, “the Company,” “us” or “we” refer to the consolidated entity, including its subsidiaries and affiliates. The terms refer only to the publicly held holding company, The Bioplus Life Corporation, excluding its subsidiaries and affiliates. Furthermore, in which the Company has a variable interest have been consolidated where the Company is the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.

In preparing these financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the periods reported. Actual results may differ from these estimates.

Cash and cash equivalents represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

Property and plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis to write off the cost over the following expected useful lives of the assets concerned. The principal annual rates used are as follows:

Fully depreciated plant and equipment are retained in the financial statements until they are no longer in use.

Intangible assets are stated at cost less accumulated amortization. Intangible assets represented the application development costs, which are amortized on a straight-line basis over a useful life of five years.

The Company follows ASC Topic 350 in accounting for intangible assets, which requires impairment losses to be recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by the assets are less than the assets’ carrying amounts. There was no impairment losses recorded on intangible assets for the year ended March 31, 2020.

Inventories consisting of products available for sell, are stated at the lower of cost or market value. Cost of inventory is determined using the first-in, first-out (FIFO) method. Inventory reserve is recorded to write down the cost of inventory to the estimated market value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the Consolidated Statements of Operations and Comprehensive Income.

Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

Cost of revenue includes the purchase cost of retail goods for re-sale to customers and packing materials (such as boxes). It excludes purchasing and receiving costs, inspection costs, warehousing costs, internal transfer costs and other costs of distribution network in cost of revenues.

Shipping and handling fees, if billed to customers, are included in revenue. Shipping and handling fees associated with inbound and outbound freight are expensed as incurred and included in selling and distribution expenses.

ASC Topic 220, “Comprehensive Income” establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying statements of stockholders’ equity consists of changes in unrealized gains and losses on foreign currency translation and cumulative net change in the fair value of available-for-sale investments held at the balance sheet date. This comprehensive income is not included in the computation of income tax expense or benefit.

Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclosed in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

The Company conducts major businesses in Malaysia and is subject to tax in their own jurisdictions. As a result of its business activities, the Company will file separate tax returns that are subject to examination by the foreign tax authorities.

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.

The functional currency of the Company is the United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. In addition, the Company maintains its books and record in a local currency, Malaysian Ringgit (“MYR” or “RM”), which is functional currency as being the primary currency of the economic environment in which the entity operates.

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income.

Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates for the respective years: <<see comment below>>

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

The carrying value of the Company’s financial instruments: cash and cash equivalents, trade receivable, deposits and other receivables, amount due to related parties and other payables approximate at their fair values because of the short-term nature of these financial instruments.

The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

As of March 31,June 30, 2020, and December 31, 2019, the Company did not have any nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements, at least annually, on a recurring basis, nor did the Company have any assets or liabilities measured at fair value on a non-recurring basis.

Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

The amounts are unsecured, bear no interest and are payable on demand.

The amounts are unsecured, bear no interest and are payable on demand.

The amounts are unsecured, bear no interest and are payable on demand.

7.1 Included in deposits is an amount of $ 31,760 (2019: $ 63,308) representing deposits paid for rental of hostels and various utilities.

7.2 Included in prepayments is an amount of $ 47,841 (2019: $ 59,771) representing advanced payments made to suppliers for purchase of manufacturing materials.

Property, plant and equipment consisted of the following:

Depreciation expense for the six months period ended March 31,June 30, 2020 and March 31, 2019 were $29,887$59, 539 and $107,216,$55,030, respectively.

As of March 31,June 30, 2020, and December 31, 2019 the Company acquired motor vehicles under finance leases with carrying value of $112,735$102,422 and $129,925 respectively.

The leasehold land and building with carrying amount of $1,708,285$1,712,723 and $1,797,002 as of March 31,June 30, 2020 and December 31, 2019, respectively have been charged to licensed bank to secure banking facilities granted to the Company.

The Company purchased motor vehicles under finance lease agreements with the effective interest rate of 2.48% - 4.31% per annum (2019: 5.22% per annum), with principal and interest payable monthly. The obligation under the finance leases are as follows:

The bank overdraft of the Company is secured by way of the following:

Interested charged on the bank overdraft is 4% (2019: 4%) above the bank base lending rate per annum.

The term loan of the Company is secured by way of the following:

The term loan is payable by 240 monthly installments of US$4,492 (MYR18,248) each including interest, commencing from Oct 10, 2016 and subject to interest at 4% per annum flat.

(a) Major Customers

For three months ended June 30, 2020 and 2019, the customers who accounted for 10% or more of the Company’s revenues and its accounts receivable at period-end are presented as follows:

For six months ended June 30, 2020 and 2019, the customers who accounted for 10% or more of the Company’s revenues and its accounts receivable at period-end are presented as follows:

(b) Major Suppliers

For the three months ended June 30, 2020 and 2019, there was no supplier who accounted for 10% or more of the Company’s purchases nor with significant outstanding payables.

For the six months ended June 30, 2020 and 2019, there was no supplier who accounted for 10% or more of the Company’s purchases nor with significant outstanding payables.

The provision for income taxes consisted of the following:

The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company has subsidiaries that operate in various countries: United States, Hong Kong and Malaysia that are subject to taxes in the jurisdictions in which they operate, as follows:

United States of America

The Company is registered in the stateState of Nevada and is subject to the tax laws of the United States of America. As of March 31,June 30, 2020, the operations in the United States of America incurred $14,430$437,892 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carry forwards begin to expire in 2039, if unutilized. The Company has provided for a full valuation allowance of $3,030$7,333 against the deferred tax assets on the expected future tax benefits from the net operating loss carry forwards as the management believes it is more likely than not that these assets will not be realized in the futurefuture.

Malaysia

Bio Life Holdings Berhad (“BLHB”) and Bio Life Neutraceuticals Sdn Bhd (“BLNSB”) are subject to the Malaysia Corporate Tax Laws at a tax rate of 24% on the assessable income for its tax year.

Hong Kong

Bioplus Life International Holdings Ltd is subject to Hong Kong Profits Tax, which is charged at the statutory income tax rate of 16.5% on its assessable income.

China

The Company isBio Life Neutraceuticals (Shenzhen) Pty Ltd.is registered in Shenzhen, PRCthe Shen Zhen and is subject to the China Corporate Tax, which is charged at the statutory income tax rate of 25% on its assessable income.

The following table sets forth the significant components of the aggregate deferred tax liabilities of the Company as of March 31, 2020:

During the year, the Company has issued the following common stock:

As of MarchJune 30, 2020, and December 31, 2020, the Company2019, Bioplus Life Corp has an issued and outstanding common sharesshare of 362,905,561.362,905,561 and 359,305,561, respectively.

The related party transactions are generally transacted in an arm-length basis at the current market value in the normal course of business.

The Company cannot guarantee that the current exchange rate will remain stable, therefore there is a possibility that the Company could post the same amount of income for two comparable periods and because of the fluctuating exchange rate post higher or lower income depending on exchange rate converted into US$ at the end of the financial period. The exchange rate could fluctuate depending on changes in political and economic environments without notice.

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after March 31,June 30, 2020 up through the date June 16,September 21, 2020 was the Company presented these audited consolidated financial statements..statements.

During the fiscal year, the World Health Organization (WHO) declared the Coronavirus (COVID-19) outbreak to be a pandemic, which has caused severe global social and economic disruptions and uncertainties, including markets where the Company operates.

The Company considers this outbreak as non-adjusting-events. The consequences brought about by Covid-19 continue to evolve and whilst the Company actively monitoring and managing its operations to respond to these changes, the Company does not consider it practicable to provide any quantitative estimate on the potential impact it may have on the Company.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information contained in this quarterly report on Form 10-Q is intended to update the information contained in our Form 10-K dated March 27, 2020, for the year ended December 31, 2019 and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this Form 10-Q.

The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guaranteeing of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Form 10-K dated March 27, 2020 in the section entitled “Risk Factors” for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this transition report on Form 10-Q. The following should also be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto that appear elsewhere in this report.

Company Overview

Bioplus Life Corp., a Nevada corporation (“Company”), was incorporated under the laws of the State of Nevada on April 13, 2017. For purposes of financial statements presentation, Bioplus Life Corp. and its subsidiaries are herein referred to as “the Company” or “We”.

On July 10, 2017, the Company acquired 100% of the equity interests of Bioplus Life Corp., a Malaysian company. On July 19, 2017, the Company, through its Malaysian subsidiary, Bioplus Life Corp., acquired 100% of the equity interests of Bioplus Life International Holdings Ltd, a Hong Kong company. On October 27, 2017, the Company through its Hong Kong subsidiary, Bioplus Life International Holdings Ltd, acquired 100% equity interest of Bioplus Life Corp. (ShenZhen), a company incorporated in China.

On June 11, 2018, the Company through its subsidiary in Hong Kong, Bioplus Life International Holdings Ltd, acquired 99.8% equity interest of Bio Life Holdings Berhad, a company incorporated in Malaysia. Bio Life Holdings Berhad owns 100% of the equity interests of Bio Life Neutraceuticals Sdn. Bhd., a company incorporated in Malaysia, which is the sole operating subsidiary.

Our corporate structure is depicted below:

Bioplus Life Corp., through its wholly owned subsidiaries, is a company specialized in providing health and beauty care products to our customers. The Company mission is to create awareness for good health and personal care to improve our customers’ quality of life. We seek to achieve this by offering an affordable solution to existing health food businesses through the production, information, advisory and services pertaining to our product line. Our website, http://www.biolife2u.com/,www.biolife2u.com, can be utilized to inquire about our product offerings, butofferings. While we sell products through our website, andwe primarily sell our products to wholesalers and exportersexporters.

The product series, or line, of our company includes, but is not strictly limited to, products that fall into the following categories: bone, fiber, bee-propolis, cardiovascular health, herbal, health beverages, apple stem cell, beauty care, feminine health, UT care, anti-oxidant and eye health series. These health and beauty supplies are designed to help improve the consumers’ metabolism rate, burn excessive fats, provide anti-aging effects and improve the overall health and physical appearance of our customers. At our current, and reasonable future operating level, our supplier has indicated that they will have ample supply to fulfil our orders for raw materials while also fulfilling any and all orders they may receive from other customers.

Our financial statements are prepared in US Dollars and in accordance with accounting principles generally accepted in the United States. See information immediately below for information concerning the exchange rates at the Malaysian Ringett (MYR) and Chinese Renminbi (RMB) translated into US Dollars (“USD”) at various pertinent dates and for pertinent periods.

Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates for the respective years:

Results of Operation

For the three months ended March 31,June 30, 2020 and 2019

Revenues. For three months ended March 31,June 30, 2020, the Company realisedrealized revenues of $653,978$806,223 as compared to $357,935$396,954 for the three monthmonths period ended March 31,June 30, 2019. The increase is revenues of approximately 82.7%103.1% is due to the fulfilment of pre-existing orders from prior quarters.

Cost of Revenues. For the three months ended March 31,June 30, 2020, we had costscost of revenues of $362,617$472,261 compared with cost of revenues of $201,939$202,047 for the same period last year. The increase of 79%133.7% corresponds to the increase in product sales for the current quarter. Cost of revenue includes raw materials, packaging materials and lab tests.

Gross Profit. For the three months ended March 31,June 30, 2020, we had a gross profit of $292,361$333,962 compared with gross profit of $155,996$194,907 for the same period last year. The 87.4%71.3% increase in gross profit is due to the reasons discussed above.

Other Income. For the three months ended June 30, 2020, we had other income of $1,368, as compared $2,580 for the three months period ended June 30, 2019, a reduction from the same period last year. The difference primarily is due to fluctuations of foreign exchange rate between these periods.

Operating Expenses. For the three months ended June 30, 2020, we had operating expenses of $164,504, as compared to operating expenses of $169,814 for the quarterly period ended June 30, 2019, a slight decrease of approximately 3.2% from the same period last year. Operating expenses consists of general and administrative expenses which includes depreciation of fixed assets, employee compensation and benefits, professional fees and marketing and travel expenses.

Net Profit. For the three months ended June 30, 2020, we had a net profit of $170,476 compared with a net profit of $18,929 for the same period last year. The increase in net profit is due to the reasons discussed above.

Foreign currency translation gain/loss. For the three months ended June 30, 2020, we had foreign currency translation gain of $18,931 compared with foreign currency translation loss of $26,536 for the same three months period last year. Foreign currency translation gain represents the movement of the US Dollar against the Malaysian Ringgit.

For the six months ended June 30, 2020 and 2019

Revenues. For six months ended June 30, 2020, the Company realized revenues of $1,460,200 as compared to $754,889 for the six months period ended June 30, 2019. The increase is revenues of approximately 93.4% is due to the fulfilment of pre-existing orders from prior quarters.

Cost of Revenues. For the six months ended June 30, 2020, we had cost of revenues of $833,877 compared with cost of revenues of $403,986 for the same period last year. The increase of 106.4% corresponds to the increase in product sales for the current period. Cost of revenue includes raw materials, packaging materials and lab tests.

Gross Profit. For the six months ended June 30, 2020, we had a gross profit of $626,323 compared with gross profit of $350,903 for the same period last year. The 78.49% increase in gross profit is due to the reasons discussed above.

Other Income. For the quarterly periodsix months ended March 31,June 30, 2020, we had other income of $231,$1,599, as compared $1,634$4,214 for the quarterlysix months period ended March 31,June 30, 2019, a substantial reduction from the prior quarterlysame period last year. The difference is primarily due to fluctuationfluctuations of foreign exchange rate between these 2 quartersperiods.

Operating Expenses. For the quarterly periodsix months ended March 31,June 30, 2020, we had operating expenses of $274,985,$439,489, as compared to operating expenses of $201,413$371,227 for the quarterly periodsix months ended March 31,June 30, 2019, an increase of approximately 36.5%18.3% due to higher revenues during thisthe current six month period. <<not clear on why operating expenses are higher. Did you have a higher headcount? Please explain>>Operating expenses consists of general and administrative expenses which includes depreciation of fixed assets, employee compensation and benefits, professional fees and marketing and travel expenses.

Income Tax Expense. For the quarterly periodsix months ended March 31,June 30, 2020, we had no income tax expense comparedwhich same with income tax credit of $27,991 for the quarterly periodsix months ended March 31,June 30, 2019. During the current quarter,period, we had losses carry forward resulting in nofrom 2019, income taxes paidwas not payable for the quarter.

Net Profit. For the threesix months ended March 31,June 30, 2020, we had a net profit of $8,291$178,695 compared with a net loss of $24,410$32,886 for the same period last year foryear. The increase in net profit is due to the reasons discussed above.

Foreign currency translation gain/loss. For the threesix months ended March 31,June 30, 2020, we had foreign currency translation loss of $(78,851)$68,139 compared with foreign currency translation gainloss of $725$1,401 for the same three monthsix months period last year. Foreign currency translation gain/loss represents the movement of the US Dollar against the Malaysian Ringgit.

Liquidity and Capital Resources

As of March 31,June 30, 2020, and 2019, we had cash and bank balances of $175,307$262,140 and $227,619$210,740 respectively.

The slight decrease in working capital as of March 31, 2020 from March 31, 2019 is due principally to the reduction in cash used in our operations.

Our primary uses of cash have been for operations. The main sources of cash have been from operational revenues and the private placement of our common stock. The following trends are reasonably likely to result in a material increase in our liquidity over the near to long term:

Our financial statements reflect the fact that we have sufficient revenue to cover our operating expenses for the next 12 months, although at present time, we are under-capitalized. The Company intends to continue with capital investment or other financing to fund its marketing and promotional campaigns and the expansion of production capacity for 2020 and beyond to achieve a 20% to 30% increase in revenues in Malaysia, China, India and African markets. If continued funding and capital resources are unavailable at reasonable terms, the Company may not be able to implement its expansion plan.

Summary of Cash Flows

The following is a summary of the Company’s cash flows generated fromfrom/ (used in) operating, investing, and financing activities for the threesix months ended March 31,June 30, 2020 and 2019:

Operating Activities

During the threesix months ended March 31,June 30, 2020, the Company had a net profit $8,219$178,695 which, after adjusting for depreciation and interest expense, and changes in operating assets and liabilities, resulted in net cash of $40,440$247,718 being used ingenerated from operating activities during the period. By comparison, during the threesix months ended March 31,June 30, 2019, the Company incurred a net loss of $24,410$32,886 which, after adjusting for depreciation and interest expense, and changes in operating assets and liabilities, resulted in net cash of $110,699$96,219 being used in operating activities during the period.

Investing Activities