| THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES | NOTE
1 – THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES Heyu
Biological Technology Corporation (the “Company”) was incorporated in the state of Nevada on May 18, 1987, as Asphalt Associates,
Inc. and changed its name to Pacific WebWorks in January 1999. From 1999 to 2016 the Company engaged in the development and distribution
of web tools software, electronic business storefront hosting, and Internet payment systems for individuals and small to mid-sized businesses.
On February 23, 2016, the Company filed a voluntary petition for bankruptcy in the U.S. Bankruptcy Court for the District of Utah, and
soon afterwards ceased its business activities. On August 19, 2016, the Company proposed a plan of liquidation and on November 28, 2016,
the court entered an order confirming the plan of liquidation and establishing a liquidating trust. On December 28, 2016, all assets
and liabilities of the Company were transferred to the liquidating trust. On
April 18, 2018, the Company entered into a share purchase agreement with Mr. Ban Siong Ang and Mr. Dan Masters (the “Share Purchase
Agreement”), pursuant to which Mr. Ang acquired 1,021,051,700 shares, representing 98.91% of the issued and outstanding shares
of common stock of the Company (“Common Stock”), from Mr. Masters for an aggregate purchase price of $335,000 (the “Share
Purchase”). As a result of the Share Purchase, Dan Masters resigned from his positions as the President, Chief Executive Officer,
Chief Financial Officer, Secretary and Chairman of the Board of the Company. Such resignations took place in connection with the closing
of the Share Purchase and was not the result of any disagreement with the Company on any matter relating to the Company’s operations,
policies, or practices. Additionally, all debt due to Mr. Masters from the Company was cancelled as of the closing of the Share Purchase
and recognized as contributed capital. On
April 18, 2018, to fill the vacancies created by Mr. Masters’ resignation, Ban Siong Ang and Hung Seng Tan were elected as the
directors of the Company. Mr. Ang was appointed as President, Chief Executive Officer, and Chairman of the Board of the Company. Mr.
Tan was appointed as the Executive Director of the Company. Ms. Wendy Li was appointed as the Chief Financial Officer of the Company.
On 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, 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. As
of December 31, 2022, the details of the consolidating subsidiaries are as follows:
Name of Company Jurisdiction of Attributable
HP Technology Limited British Virgin Islands 100 %
Heyu Healthcare Technology Limited Hong Kong 100 %
JSEL PRC 100 %
Kangzi PRC 60 % Use
of Estimates The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts
reported in the consolidated financial statements and accompanying notes. Management believes that the estimates used in preparing the
financial statements are reasonable and prudent; however, actual results could differ from these estimates. Significant estimates include
the allowance for doubtful accounts, impairment assessments of goodwill, valuation of deferred tax assets, rebilling collections and
certain accrued liabilities such as contingent liabilities. As of December 31, 2022, the Company considered the economic implications
of the COVID-19 pandemic on its significant judgments and estimates. Given the impact and other unforeseen effects on the global economy
from the COVID-19 pandemic, these estimates required increased judgment, and actual results could differ from these estimates. Cash
Equivalents The
Company considers all highly liquid debt instruments purchased with a maturity period of three months or less to be cash or cash equivalents.
The carrying amounts reported in the accompanying consolidated balance sheets for cash and cash equivalents approximate their fair value.
All of the Company’s cash that is held in bank accounts in the PRC and Hong Kong is not protected by Federal Deposit Insurance
Corporation (“FDIC”) insurance or any other similar insurance in the PRC, or Hong Kong. Accounts
receivable and allowance for doubtful accounts Accounts
receivable are stated at the historical carrying amount net of allowance for doubtful accounts. The Company maintains an allowance for
doubtful accounts which reflects its best estimate of amounts that potentially will not be collected. The Company determines the allowance
for doubtful accounts taking into consideration various factors, including but not limited to historical collection experience and credit-worthiness
of the debtors, as well as the age of the individual receivables balance. Additionally, the Company makes specific bad debt provisions
based on any specific knowledge the Company has acquired that might indicate that an account is uncollectible. The facts and circumstances
of each account may require the Company to use substantial judgment in assessing its collectability. Inventories Inventories
consist of finished goods, work in process, and raw materials. Inventories are stated at the lower of cost or market value. The Company
applies the weighted average cost method to its inventory. 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 $215,298 of ROU assets and $215,298 of lease liabilities on our consolidated balance
sheet related to office space lease commitment on September 1, 2019. Foreign
Currency For
fiscal year 2021, the Company’s principal country of operations is the PRC. The accompanying consolidated financial statements
are presented in US$. 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.
As of
December 31, December 31,
RMB: US$ exchange rate 6.8983 6.3588
For the year ended
2022 2021
RMB: US$ exchange rate 6.7279 6.4499 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. Revenue
Recognition Revenue
is recognized when control of the promised goods or services is transferred to the 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:
1) Identify
the contract with a customer
2) Identify
the performance obligations in the contract
3) Determine
the transaction price
4) Allocate
the transaction price
5) Recognize
revenue when or as the entity satisfies a performance obligation 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. Cost
of Revenue The
cost of revenue primarily consists of goods purchased from third parties, including disinfectant sprays, healthcare instruments, and
other items. The cost of revenue for the years ended December 31, 2022 and 2021 was $27,385 and $30,315, respectively. General
and administrative costs General
and administrative expenses include personnel expenses for executive, finance, and internal support personnel. In addition, general and
administrative expenses include fees for bad debt costs, professional legal and accounting services, insurance, office space, banking
and merchant fees, and other overhead-related costs. Income
Taxes The
Company accounts for income taxes pursuant to ASC Topic 740, Income Taxes. Income taxes are provided on an asset and liability approach
for financial accounting and reporting of income taxes. Any tax paid by subsidiaries during the year is recorded. Current tax is based
on the profit or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purpose and
is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date. ASC Topic 740 also requires
the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and
the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry-forwards.
ASC Topic 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax
assets. Realization of deferred tax assets, including those related to the U.S. net operating loss carry-forwards, are dependent upon
future earnings, if any, of which the timing and amount are uncertain. The
Company adopted ASC Topic 740-10-05, Income Tax, which provides guidance for recognizing and measuring uncertain tax positions. It prescribes
a threshold condition that a tax position must meet for any of the benefits of the uncertain tax position to be recognized in the financial
statements. It also provides accounting guidance on derecognizing, classification and disclosure of these uncertain tax positions. The
Company’s policy on classification of all interest and penalties related to unrecognized income tax positions, if any, is to present
them as a component of income tax expense. Capital
Structure The
Company had 2,000,000,000 shares of common stock authorized, par value $0.001 per share, with 1,032,466,000 shares issued and outstanding
as of December 31, 2022, and December 31, 2021. 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 year ended December 31, 2022 and 2021, there were no potentially dilutive shares.
For the year ended
2022 2021
Statement of Operations Summary Information:
Net loss $ (265,579 ) $ (163,020 )
Weighted-average common shares outstanding - basic and diluted 1,032,466,000 1,032,466,000
Net loss per share, basic and diluted $ (0.00 ) $ (0.00 ) |
