Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 2019. | |
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 No.:000-54440
| US-CHINA BIOMEDICAL TECHNOLOGY, INC. |
| (Exact name of registrant as specified in its charter) |
| Nevada | | 27-4479356 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
2 Park Plaza, Suite 400 Irvine, CA 92614 |
| (Address of principal executive offices) |
Issuer’s telephone number: (949) 679-3992
_______________________________
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| None | N/A | N/A |
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 ☐
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, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☐ | Smaller reporting company | ☒ |
| Emerging growth company | ☐ | | |
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 Act). Yes ☐ No ☒
As of July 22, 2019, 19,800,646 shares of our common stock and 0 shares of our preferred stock were issued and outstanding.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. These risks and uncertainties include the following:
| • | The availability and adequacy of our cash flow to meet our requirements; |
| • | Economic, competitive, demographic, business and other conditions in our local and regional markets; |
| • | Changes or developments in laws, regulations or taxes in our industry; |
| • | Actions taken or omitted to be taken by third parties including our suppliers and competitors, as well as legislative, regulatory, judicial and other governmental authorities; |
| • | Competition in our industry; |
| • | The loss of or failure to obtain any license or permit necessary or desirable in the operation of our business; |
| • | Changes in our business strategy, capital improvements or development plans; |
| • | The availability of additional capital to support capital improvements and development; and |
| • | Other risks identified in this report and in our other filings with the Securities and Exchange Commission (“SEC”). |
This report should be read completely and with the understanding that actual future results may be materially different from what we expect. The forward looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Use of Term
Except as otherwise indicated by the context, references in this Quarterly Report to the words "we," "our," "us," the "Company," "UCBB," or “US-China” refers to US-China Biomedical Technology, Inc. All references to “USD” or United States Dollars refer to the legal currency of the United States of America.
US-CHINA BIOMEDICAL TECHNOLOGY, INC.
FORM 10-Q
May 31, 2019
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
US-CHINA BIOMEDICAL TECHNOLOGY, INC.
CONDENSED BALANCE SHEETS
| | | May 31, 2019 | | | February 28, 2019 | |
| | | | (unaudited) | | | | | |
| ASSETS | | | | | | | | |
| Current assets: | | | | | | | | |
| Cash | | $ | 142,331 | | | $ | 36,542 | |
| Prepaid expenses | | | 12,693 | | | | 21,726 | |
| Total current assets | | | 155,024 | | | | 58,268 | |
| Operating lease right-of-use - non-current | | | 313,627 | | | | – | |
| Deposit | | | 19,219 | | | | 19,219 | |
| Total assets | | $ | 487,870 | | | $ | 77,487 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 17,643 | | | $ | 21,595 | |
| Due to related party | | | 1,600 | | | | 1,600 | |
| Accrued payroll - non-related parties | | | 12,239 | | | | 6,216 | |
| Accrued payroll - related parties | | | 40,083 | | | | 38,500 | |
| Deferred rent | | | – | | | | 8,167 | |
| Operating lease liability - current | | | 182,684 | | | | – | |
| Total current liabilities | | | 254,249 | | | | 76,078 | |
| Operating lease liability - non-current | | | 140,415 | | | | – | |
| Total liabilities | | | 394,664 | | | | 76,078 | |
| | | | | | | | | |
| Commitments and contingencies | | | – | | | | – | |
| | | | | | | | | |
| Stockholders' equity: | | | | | | | | |
| Preferred stock, $0.001 par value, 10,000,000 shares authorized; none issued and outstanding at May 31, 2019 and February 28, 2019, respectively | | | – | | | | – | |
| Common stock, $0.001 par value, 190,000,000 shares authorized; 19,800,646 and 15,510,646 shares issued and outstanding at May 31, 2019 and February 28, 2019, respectively | | | 19,801 | | | | 15,510 | |
| Additional paid-in capital | | | 3,132,891 | | | | 2,922,682 | |
| Accumulated deficit | | | (3,059,486 | ) | | | (2,936,783 | ) |
| Total stockholders' equity | | | 93,206 | | | | 1,409 | |
| Total liabilities and stockholders’ equity | | $ | 487,870 | | | $ | 77,487 | |
See accompanying notes to the unaudited condensed financial statements
US-CHINA BIOMEDICAL TECHNOLOGY, INC.
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
| | | For the
Three Months
Ended | | | For the
Three Months
Ended | |
| | | May 31, 2019 | | | May 31, 2018 | |
| | | | | | | |
| Operating expense: | | | | | | | | |
| General and administrative | | $ | 122,196 | | | $ | 86,593 | |
| Operating loss | | | (122,196 | ) | | | (86,593 | ) |
| | | | | | | | | |
| Other (expense) income: | | | | | | | | |
| Interest expense - related party | | | (507 | ) | | | (3,896 | ) |
| Loss on settlement of debt | | | – | | | | (184,156 | ) |
| Total other (expense) income | | | (507 | ) | | | (188,052 | ) |
| | | | | | | | | |
| Loss before provision for income taxes | | | (122,703 | ) | | | (274,645 | ) |
| Provision for income taxes | | | – | | | | – | |
| | | | | | | | | |
| Net loss | | $ | (122,703 | ) | | $ | (274,645 | ) |
| | | | | | | | | |
| Weighted average shares basic and diluted | | | 19,707,385 | | | | 14,032,385 | |
| Weighted average basic and diluted loss per common share | | $ | (0.01 | ) | | $ | (0.02 | ) |
See accompanying notes to the unaudited condensed financial statements
US-CHINA BIOMEDICAL TECHNOLOGY, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY/(DEFICIT)
| | | Common Stock | | | Additional
Paid-in | | | Accumulated | | | Total
Stockholders' | |
| | | Shares | | | Amount | | | Capital | | | Deficit | | | Equity | |
| | | | | | | | | | | | | | | | |
| Balance at February 28, 2019 | | | 15,510,646 | | | $ | 15,510 | | | $ | 2,922,682 | | | $ | (2,936,783 | ) | | $ | 1,409 | |
| Common stock issued in connection with stock purchase agreement with related party | | | 4,290,000 | | | | 4,291 | | | | 210,209 | | | | – | | | | 214,500 | |
| Net loss | | | – | | | | – | | | | – | | | | (122,703 | ) | | | (122,703 | ) |
| Balance at May 31, 2019 (unaudited) | | | 19,800,646 | | | $ | 19,801 | | | $ | 3,132,891 | | | $ | (3,059,486 | ) | | $ | 93,206 | |
| | | Common Stock | | | Additional
Paid-in | | | Accumulated | | | Total
Stockholders' Equity/ | |
| | | Shares | | | Amount | | | Capital | | | Deficit | | | (Deficit) | |
| | | | | | | | | | | | | | | | |
| Balance at February 28, 2018 | | | 13,510,646 | | | $ | 13,510 | | | $ | 1,940,526 | | | $ | (2,225,843 | ) | | $ | (271,807 | ) |
| Common stock issued in connection with stock purchase agreement with related party | | | 2,000,000 | | | | 2,000 | | | | 798,000 | | | | – | | | | 800,000 | |
| Loss on conversion of related party debt | | | – | | | | – | | | | 184,156 | | | | – | | | | 184,156 | |
| Rounding | | | – | | | | 1 | | | | – | | | | – | | | | 1 | |
| Net loss | | | – | | | | – | | | | – | | | | (274,645 | ) | | | (274,645 | ) |
| Balance at May 31, 2018 (unaudited) | | | 15,510,646 | | | $ | 15,511 | | | $ | 2,922,682 | | | $ | (2,500,488 | ) | | $ | 437,705 | |
See accompanying notes to the unaudited condensed financial statements
US-CHINA BIOMEDICAL TECHNOLOGY, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
| | | For the
Three Months
Ended | | | For the
Three Months
Ended | |
| | | May 31, 2019 | | | May 31, 2018 | |
| Cash flows from operating activities: | | | | | | | | |
| Net loss | | $ | (122,703 | ) | | $ | (274,645 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | |
| Non-cash portion of rent expense | | | 1,305 | | | | – | |
| Interest expense settled by issuance of common stock | | | 507 | | | | 3,896 | |
| Loss on settlement of debt | | | – | | | | 184,156 | |
| Changes in operating assets and liabilities: | | | | | | | | |
| Prepaid expenses | | | 9,033 | | | | (12,698 | ) |
| Accounts payable | | | (3,952 | ) | | | 5,321 | |
| Accrued liabilities | | | 7,606 | | | | (27,763 | ) |
| Net cash used in operating activities | | | (108,204 | ) | | | (121,733 | ) |
| | | | | | | | | |
| Cash flows from financing activities: | | | | | | | | |
| Net proceeds from sale of common stock | | | 163,993 | | | | 569,805 | |
| Proceeds from related party note payable | | | 50,000 | | | | – | |
| Payments on notes payable | | | – | | | | (45,000 | ) |
| Net cash provided by financing activities | | | 213,993 | | | | 524,805 | |
| | | | | | | | | |
| Net change in cash | | | 105,789 | | | | 403,072 | |
| Cash, beginning of period | | | 36,542 | | | | 56,407 | |
| Cash, end of period | | $ | 142,331 | | | $ | 459,479 | |
| | | | | | | | | |
| Supplemental disclosures of cash flow information | | | | | | | | |
| Cash paid during the period for: | | | | | | | | |
| Interest | | $ | – | | | $ | – | |
| Taxes | | $ | 800 | | | $ | 800 | |
See accompanying notes to the unaudited condensed financial statements
US-CHINA BIOMEDICAL TECHNOLOGY, INC.
NOTES TO (UNAUDITED) CONDENSED FINANCIAL STATEMENTS
MAY 31, 2019
| 1. | Organization and Business |
History and Organization
We were incorporated on December 20, 2010 in the State of Nevada as Accend Media. On May 23, 2012 we consummated a merger (the “Merger”) with Cloud Star Corporation, a Nevada corporation, and we changed our name to Cloud Star Corporation (“Cloud Star”). The Merger was accounted for as a reverse acquisition with Cloud Star being treated as the acquirer for accounting purposes.
On May 28, 2013, we changed our corporate name from Cloud Star Corporation to Cloud Security Corporation.
On December 8, 2014, we entered into a Stock Purchase Agreement (the “Goldenrise Agreement”) with Goldenrise Development, Inc. (“Goldenrise”). Under the Goldenrise Agreement, we sold 12,000,000 shares of our common stock to Goldenrise for $180,000 which equated to approximately 92% of our outstanding shares. This transaction effectuated a change in control of our Company.
On June 28, 2017, Goldenrise and our Company entered into a Stock Purchase Agreement (the “Dunn Agreement”) with Michael R. Dunn, our then sole officer and director (“Dunn”). Pursuant to Dunn Agreement, Goldenrise agreed to sell 12,000,000 shares of our common stock to Dunn representing approximately 92% of our outstanding shares. In consideration for these shares, Dunn agreed to pay Goldenrise a total of $400,000 as follows: (i) $180,000 on or before July 15, 2017 (extended to July 28, 2017), (ii) $180,000 withheld as an offset to monies owed by Goldenrise to Dunn; and (iii) $40,000 withheld and applied towards invoices related to the audit and legal fees associated with the reporting requirements of our Company through the date of Closing.
Concurrently, on June 28, 2017, Dunn entered into a Stock Purchase Agreement (the “SPA”) with China Israel Biotechnology Co. Ltd. (“China-Israel”) and Central Bio-MD Technology Co. Ltd., each a Chinese corporation (collectively, the “Buyers” or “China-Israel”). Pursuant to the SPA, Dunn agreed to sell 6,000,000 of our common shares, representing approximately 46% of our outstanding shares. In consideration for the shares, Buyers agreed to pay Dunn a total of $200,000 upon the SPA’s execution (the “Purchase Price”).
The Closing for both the Dunn Agreement and the SPA occurred on July 28, 2017. The Dunn Agreement and the SPA resulted in a change in control of our Company.
On December 29, 2017, our Board of Directors approved an agreement and plan to merge with our wholly-owned subsidiary, US-China Biomedical Technology, Inc., a Nevada corporation, to effectuate a name change from Cloud Security Corporation to US-China Biomedical Technology, Inc. (“US-China”). US-China was formed solely for the purpose of this name change and our Company was the surviving entity following the merger. On February 8, 2018, the Financial Industry Regulatory Authority (“FINRA”) announced the effectiveness of a change in our Company’s name to “US-China Biomedical Technology, Inc.” and new trading symbol “UCBB” which became effective on the opening of trading as of February 9, 2018.
Business
We are an early stage biomedical technology and services company. Our immediate business focus is directed at the marketing and sales in the United States of unique products and technology developed by BSP Medical Ltd. (“BSP”), an affiliate company headquartered in Israel. BSP is a biomedical technology company revolutionizing non-invasive diagnosis of cardiac diseases. BSP offers a range of electrocardiogram (“ECG”) products based on the HyperQ™ technology. These include complete systems for routine clinical use, research-oriented systems, and original equipment manufacturer (“OEM”) products. Research systems facilitate data analysis by exporting all test parameters and measurements in a configurable format via a web based user-friendly interface. We have begun identifying qualified physicians and additions to our management team to begin initiation of operations in the US in order to begin sales and marketing of the BSP products in the US market. In addition, we are in the process of developing a joint venture with BSP whereby we will market and sell certain of their products. The joint venture is to be voted on by stockholders of BSP at a special meeting to be held at the end of July 2019.
One BSP product of interest is the HyperQ Analyzer Stress, a unique software module designed to analyze Stress Test ECG based on the detection of changes in the high frequency component of the QRS segment. HyperQ can be integrated in any ECG stress systems.
Another product is the HyperQ Analyzer Rest which is an innovative software module for early detection of acute coronary artery disease on any ECG rest systems. It provides a new perspective to the clinical staff, in particular diagnosis of Non-ST Elevation MI (NSTEMI) and Unstable Angina (UA).
A secondary aspect of our plan is the integration and development of synergistic relationships with high profiled doctors and hospitals that will act as a bridge for connecting patients and bio-technology advances in China with our Company’s network of US based doctors and hospitals. We intend to develop a scalable biomedical bridge for the US and China markets. We will provide services for moving patients from China to the US with an emphasis on the following demographics:
| | (i) | cancer patient referrals that are in non-critical, non-life-threatening positions, |
| | (ii) | pre-screening and genetic testing for family members of cancer patients, |
| | (iii) | patients suffering from Diabetes, and |
| | (iv) | general medical services including preventative care and physicals. |
We also intend to develop working relationships with key medical innovators for possible joint ventures related to medical device manufacturing in China, including working towards obtaining China Food & Drug Administration (“CFDA”) approval for medical device sales to government owned hospitals. As of the date of this report, we have begun identifying qualified physicians and additions to our management team to begin initiation of operations in the US. The business plan is currently in the development phase.
| 2. | Summary of Significant Accounting Policies |
Basis of Presentation
The accompanying unaudited interim financial statements have been prepared by us pursuant to the rules and regulations of the United States Securities Exchange Commission (“SEC”). Certain information and disclosures normally included in the annual financial statements prepared in accordance with the accounting principles generally accepted in the Unites States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these financial statements have been included. Such adjustments consist of normal recurring adjustments. These interim financial statements should be read in conjunction with our Company’s historical financial statements and related notes filed with the SEC including our Annual Report on Form 10-K for the fiscal year ended February 28, 2019 filed on June 12, 2019. The results of operations for the three months ended May 31, 2019, are not necessarily indicative of the results that may be expected for the full year.
Going Concern Considerations and Management’s Plans
The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplate continuation of our Company as a going concern. We currently have no revenues, have incurred net losses, and have an accumulated deficit in excess of $3.0 million as of May 31, 2019. We presently have limited liquidity and limited access to capital. These factors raise substantial doubt about our ability to continue as a going concern for one year from the date of this report. If we are unable to obtain adequate capital, we could be forced to cease operations.
Management anticipates we will be dependent, for the foreseeable future, on additional capital to fund further development of our infrastructure and to fund operations until such time we have sufficient revenues to meet our cost structure. Additional capital will be required for, among other things, the establishment of a network of medical partners, the development of a marketing program, and to fund ongoing business needs. There are no assurances that we will be successful in obtaining sufficient capital to continue as a going concern. Our ability to continue as a going concern is also dependent upon our success in accomplishing the plans described in the section of Note 1 titled “Business” for which there can be no assurance.
Adoption of New Lease Accounting Standard
On March 1, 2019, we adoptedASU 2016-02, Leases (“Topic 842”). Under this new lease standard, we are required to recognize a "right-of-use asset" and "lease liability" on our accompanying Condensed Balance Sheets for all leases (except for any lease with an original term of less than 12 months).
In July 2018, the FASB issuedASU 2018-11, Lease (Topic 842) Targeted Improvements, providing a package of practical expedients and an optional transition method, in which the new standard is not applied to prior periods. We elected the optional transition method upon adoption of this ASU on March 1, 2019 and the package of practical expedients available under the transition provisions. Therefore, we did not reassess the following upon adoption: (i) whether expired or existing contracts contain leases, (ii) lease classification, and (iii) initial direct costs for our existing lease.
Our one lease consists of a facility lease which is classified as an operating lease. Werecognize a lease liability to make contractual payments under our lease and a corresponding right-of-use asset, representing our right to use the underlying asset for the lease term. The lease liability is initially measured at the present value of the lease payments over the lease term using the collateralized incremental borrowing rate since the implicit rate is unknown. There are no ptions to extend or terminate our lease. The right-of-use asset is initially measured as the contractual lease liability plus any initial direct costs and prepaid lease payments made, less any lease incentives. Lease expense is recognized on a straight-line basis over the lease term.
Leased right-of-use assets are subject to impairment testing as a long-lived asset at the asset-group level. We monitor any long-lived assets for indicators of impairment. As our leased right-of-use asset relates to a facility lease, early abandonment of all or part of facility as part of a restructuring plan is typically an indicator of impairment. If impairment indicators are present, we test whether the carrying amount of the leased right-of-use asset is recoverable including consideration of sublease income, if any, and if not recoverable, measure impairment loss for the right-of-use asset or asset group. Impairment charges on leased right-of-use assets, if any arise, will be included in restructuring charges in the statement of operations.
New Accounting Pronouncements
We have reviewed all recently issued accounting pronouncements and determined that these were either disclosed in our most recently filed Form 10-K or are not believed by us to have a material impact on our present or future financial statements, based on our current operations.
| 3. | Related Party Transactions |
Stock Purchase and Loan Agreements
On May 8, 2018, we completed a subscription agreement for the sale of 2,000,000 shares of our common stock to our largest stockholder for $800,000. $230,195 of the purchase price was applied to the settlement of related party notes payable and accrued interest and the remaining $569,805 was paid in cash. During the year ended February 28, 2019, we recorded a loss on settlement of debt of $184,156 on the accompanying condensed statement of operations based on the excess in fair market value of the shares issued in connection with this transaction.
On April 16, 2019, we borrowed $50,000 from our largest stockholder, China-Israel Biological Technology, Co. Ltd. (“CIB”) pursuant to a Note with an annual interest rate of 10% and having a maturity date of October 16, 2019 (the “April 2019 Note”). The April 2019 Note was repaid as part of the funding of the May 24, 2019 Subscription Agreement, as discussed below.
On May 24, 2019, we entered into a Subscription Agreement with CIB pursuant to which we sold 4,290,000 units. Each single Unit consists of one (1) share of our common stock and two and one half (2.5) warrants (collectively the “Units”). The warrants are exercisable for 18 months at $0.05 per share. The aggregate purchase price for the Units is USD $214,500 (the “Purchase Price”) or USD $0.05 per share. The Purchase Price was paid as follows: (i) $50,507 applied in extinguishment of the principal and accrued interest underlying the April 2019 Note between CIB and our Company, and (ii) $163,993 in cash funded May 29, 2019. The shares were issued effective May 29, 2019.
We valued the common stock and warrant at $386,100 using the Black-Scholes option-pricing model. The use of the Black-Scholes model required that we make a number of estimates, including the expected option term (1.5 years), the expected volatility in the price of our common stock (284% going back 1.5 years), the risk-free rate of interest (2.25% using average Treasury Bill rates) and the dividend yield on our common stock (no dividends). If our variable volatility assumptions were different, the resulting determination of the fair value of the warrant could be materially different and our results of operations could be materially impacted.
Accrued Payroll – Related Parties
Our Company approved compensation to Michael Dunn in the amount of $5,000 per month beginning in June 2017, and to Qingxi Huang, our CEO and Chairman, in the amount of $3,000 per month beginning in April 2019. In addition, at February 28, 2019, we owed Safa Movassaghi compensation of $5,000 for the month of February 2019. As of May 31, 2019 and February 28, 2019, we have recorded accrued and unpaid payroll, inclusive of estimated payroll taxes, for each of these individuals as follows:
| | | May 31,
2019 | | | February 28,
2019 | |
| Michael Dunn (1) | | $ | 33,000 | | | $ | 33,000 | |
| Qingxi Huang (2) | | | 7,083 | | | | – | |
| Safa Movassaghi (3) | | | – | | | | 5,500 | |
| Total accrued payroll – related parties | | $ | 40,083 | | | $ | 38,500 | |
_______________
| | (1) | Mr. Dunn is deceased; his estate may pursue his accrued and unpaid compensation. |
| | (2) | Amounts owed to Mr. Huang remain unpaid. |
| | (3) | All amounts owed to Mr. Movassaghi were paid March 1, 2019. |
Due to related party
As of May 31, 2019 and February 28, 2019, we owed $1,600 to Andrew Dunn for one time services provided, respectively. The amount owed is unsecured and non-interest bearing with no fixed terms of repayment. The imputed interest for both years is immaterial.
Andrew Dunn is the son of Michael Dunn, our former President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Chairman of the Board; his beneficial ownership includes 2,900,000 shares of common stock, as acquired control of the shares as administrator of the Dunn Estate and 0 shares issuable upon the exercise of stock options. Mr. Michael Dunn passed away November 19, 2017. Mr. Michael Dunn’s beneficial ownership has been transferred to the administrator, Andrew Dunn, however the estate is still in probate pending completion.
Joint Venture
On April 1, 2019, our Board approved our entering into a strategic joint venture agreement with BSP for the creation of a joint venture, BSP Medical America, Inc (the “JV”). Our Company will acquire 50% of the JV pursuant to a subscription agreement for $100,000, and BSP shall contribute the same for their 50% ownership. Our CEO, Qingxi Huang, will be an officer and director of the JV. We are awaiting confirmation of consent from BSP and their executed JV agreement. As of the date of this filing the JV is to be voted on by stockholders of BSP at a special meeting to be held at the end of July 2019. As such, the JV is pending approval.
Our initial review of the JV suggests it will be treated as a Variable Interest Entity (“VIE”) to be consolidated. While the JV entity has been established, its future implementation cannot be assured until BSP approves and executes the joint venture agreement which has not yet been completed. As such, our determination of the VIE treatment will be determined once all approvals are obtained and the agreement has been executed.
| 4. | Accrued Payroll – Non-related Parties |
As of May 31, 2019 and February 28, 2019, there is accrued and unpaid payroll, inclusive of estimated payroll taxes, to non-related parties of $12,239 and $6,216 respectively. The May 31, 2019 balance was paid on June 20, 2019 while the February 28, 2019 balance was paid on March 1, 2019.
On March 7, 2018, we entered into a lease with our landlord for the 5,824 square feet of office space. The lease, which is our only lease, has a minimum term of approximately 35 months, expiring January 31, 2021. On March 1, 2019, we adopted ASU 2016-02, Leases (“Topic 842”) which requires that we recognize a “right-of-use asset” and “lease liability” on our accompanying Condensed Balance Sheet for this lease. In implementing this ASU, we elected the optional transition method allowed underASU 2018-11, Lease (Topic 842) Targeted Improvements.Accordingly, we recorded $356,392 to our March 1, 2019 balance sheet for both our right-of-use asset and our lease liability under this lease.
This asset and liability substantially represents our aggregate benefit of use and present-value obligation to make corresponding minimum lease payments for the duration of each lease term, respectively. Since the implicit rate is not readily determinable in any of our leases, we used an estimated incremental borrowing rate as of the lease commencement date using the “effective interest method” to derive the present value of our aggregate lease liability. The interest rate we used is 10% per annum. The asset and liability associated with the lease is amortized over the respective lease term.
We elected to not separate lease components from non-lease components in our measurement of minimum lease payments. We recognizelease expense on a straight-line basis over the expected lease term, as reported within general and administrative expense on the accompanying Condensed Statement of Operations. For the three months ended May 31, 2019 and 2018, this expense amounted to aggregated $53,843 and $31,149, respectively.
Components of Lease Expense
Total lease expense, inclusive of our variable lease payments, for the three months ended March 31, 2019, is summarized as follows:
| | | Three Months Ended May 31,
2019 | | | Three Months
Ended May 31,
2018 | |
| Operating lease expense | | $ | 51,330 | | | $ | 31,149 | |
| Variable lease expense | | | 2,513 | | | | – | |
| Total lease expense | | $ | 53,843 | | | $ | 31,149 | |
Future Lease Payments
Thetable below summarizes our (i) minimum lease payments over the next five years, (ii) implied interest (from the application of our incremental borrowing rate), and (iii) present value of future lease payments:
| Future Payments | | May 31, 2019 | |
| Year ending 2/29/20 | | $ | 151,192 | |
| Year ending 2/28/21 | | | 192,192 | |
| Total future lease payments, undiscounted | | | 343,384 | |
| Less: implied interest and deferred rent | | | (20,285 | ) |
| Present value of operating lease payments | | | 323,099 | |
| Less current portion | | | (182,684 | ) |
| Non-current portion | | | 140,415 | |
Authorizations and Designations
We are authorized to issue 190,000,000 shares of our $0.001 par value common stock and 10,000,000 shares of our $0.001 par value preferred stock. As of May 31, 2019 and February 28, 2019, no preferred stock had been issued.
Sale of Common Stock
On May 24, 2019, we entered into a Subscription Agreement with CIB pursuant to which we sold 4,290,000 units. Each single Unit consists of one (1) share of our common stock and two and one half (2.5) warrants (collectively the “Units”). The warrants are exercisable for 18 months at $0.05 per share. The aggregate purchase price for the Units is USD $214,500 (the “Purchase Price”) or USD $0.05 per share. The Purchase Price was paid as follows: (i) $50,507 applied in extinguishment of the principal and accrued interest underlying the April 2019 Note between CIB and our Company, and (ii) $163,993 in cash funded May 29, 2019. The shares were issued effective May 29, 2019.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CERTAIN STATEMENTS IN THIS QUARTERLY REPORT ON FORM 10-Q (THIS “FORM 10-Q”), CONSTITUTE “FORWARD LOOKING STATEMENTS” WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1934, AS AMENDED, AND THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 (COLLECTIVELY, THE “REFORM ACT”). CERTAIN, BUT NOT NECESSARILY ALL, OF SUCH FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS “BELIEVES”, “EXPECTS”, “MAY”, “SHOULD”, OR “ANTICIPATES”, OR THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY, OR BY DISCUSSIONS OF STRATEGY THAT INVOLVE RISKS AND UNCERTAINTIES. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF US-CHINA BIOMEDICAL TECHNOLOGY, INC. (“THE COMPANY”, “WE”, “US” OR “OUR”) TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. REFERENCES IN THIS FORM 10-Q, UNLESS ANOTHER DATE IS STATED, ARE TO MAY 31, 2019.
Overview of Current Operations
Following the change in control of our Company discussed above under Item 1 “History and Organization”, we decided to put all cloud computing software development on hold and shift our primary business focus. Our immediate business focus is directed at the marketing and sales in the United States of unique products and technology developed by BSP Medical Ltd. (“BSP”), an affiliate company headquartered in Israel. BSP is a biomedical technology company revolutionizing non-invasive diagnosis of cardiac diseases.BSP offers a range of electrocardiogram (“ECG”) products based on the HyperQ™ technology. These include complete systems for routine clinical use, research-oriented systems, and original equipment manufacturer (“OEM”) products. Research systems facilitate data analysis by exporting all test parameters and measurements in a configurable format via a web based user-friendly interface.We have begun identifying qualified physicians and additions to our management team to begin initiation of operations in the US in order to begin sales and marketing of the BSP products in the US market. In addition, we are in the process of developing a joint venture with BSP whereby we will market and sell certain of their products.
A secondary aspect of our plan is the integration and development of synergistic relationships with high profiled doctors and hospitals that will act as a bridge for connecting patients and bio-technology advances in China with our Company’s network of US based doctors and hospitals. We intend to develop a scalable biomedical bridge for the US and China markets. We will provide services for moving patients from China to the US with an emphasis on the following demographics:
| | (i) | cancer patient referrals that are in non-critical, non-life-threatening positions, |
| | (ii) | pre-screening and genetic testing for family members of cancer patients, |
| | (iii) | patients suffering from Diabetes, and |
| | (iv) | general medical services including preventative care and physicals. |
We also intend to develop working relationships with key medical innovators for possible joint ventures related to medical device manufacturing in China, including working towards obtaining China Food & Drug Administration (“CFDA”) approval for medical device sales to government owned hospitals. As of the date of this report, we have begun identifying qualified physicians and additions to our management team to begin initiation of operations in the US. The business plan is currently in the development phase.
RESULTS OF OPERATIONS
We had no revenues in the three-month periods ending May 31, 2019 (“2019”) and May 31, 2018 (“2018”).
General and administrative expense - during the 2019 and 2018 periods, we incurred general and administrative expense of $122,196 and $86,593, respectively, an increase of $35,603. During the 2019 period, we experienced higher costs for compensation and benefits (up $20,420) as we ramped up our staffing in anticipation of expanding our operating activities. Other increased costs were rent (up $22,695) and consulting (up $8,400). Consulting costs were higher as we pursued new business opportunities. These increases in expense were offset by reductions in legal and accounting costs (down $8,476 and $2,250, respectively) along with reduced costs for dues and subscriptions (down $1,775).
Interest expense - during the 2019 and 2018 periods, we incurred interest expense to our largest stockholder of $507 and $3,896, respectively, a decrease of $3,389. The reduction was the result of lower levels of debt in 2019.
Gain and loss on settlements of debt - during the 2018 period we recorded a loss on conversion of related party debt of $184,156 attributable to our sale of 2,000,000 shares of our common stock based on the excess in fair market value over purchase price of the shares issued in connection with this transaction.
Net loss - our net loss decreased to $122,703 in 2019 compared to $274,645 for the 2018 period as a result of the factors described above.
Summary of any product research and development that we will perform for the term of our plan of operation.
During the 2019 and 2018 periods, we did not incur costs associated with research and development activities.
Expected purchase or sale of plant and significant equipment
We do not anticipate the purchase or sale of any plant or significant equipment; as such items are not required by us at this time.
Significant changes in the number of employees
As of May 31, 2019, we have three active employees. We utilize independent contractors on a part-time/as needed basis to assist in our development activities, marketing, and financial and accounting support. We are also dependent upon our officers and directors for our future business development. As our operations expand, we anticipate the need to hire additional employees, consultants and professionals; however, the exact number is not quantifiable at this time.
LIQUIDITY AND CAPITAL RESOURCES
As of May 31, 2019, we had cash and cash equivalents of $142,331 and working capital of $82,621. In comparison, as of February 28, 2019, we had cash and cash equivalents of $36,542 and a working capital deficit of $19,811.
We had total liabilities of $394,664 as of May 31, 2019 consisting of accounts payable, accrued payroll, due to related party and an operating lease liability. This compares to total liabilities at February 28, 2019 of $76,078 consisting of accounts payable, accrued payroll, due to related party and deferred rent.
As of May 31, 2019, we had total stockholders’ equity of $93,206 and an accumulated deficit of $3,445,586. This compares to total stockholders’ equity of $1,409 and an accumulated deficit of $2,936,783 as of February 28, 2018.
During 2019, we used $108,204 of cash in operating activities which was attributable to our net loss of $122,703 offset by the net change in operating assets and liabilities of $12,687, the non-cash portion of rent expense of $1,305 and the interest expense settled by common stock of $507.
During 2018, we used $121,733 of cash in operating activities which was attributable to our net loss of $274,645 and the net change in operating assets and liabilities of $35,140, offset by the loss on conversion of related party debt of $184,156 and the interest expense settled by common stock of $3,896.
During 2019, net cash provided by financing activities was $213,993, which consisted of $163,993 of proceeds from sale of common stock to our largest stockholder, plus $50,000 from a notes payable from that same stockholder.
During 2018, net cash provided by financing activities was $524,805, which consisted of $569,805 of proceeds from sale of common stock to our largest stockholder, less $45,000 from repayment of notes payable.
Additional capital is required in order to implement our business plan. Since we have no liquidity and have suffered losses, we depend to a great degree on the ability to attract external financing in order to conduct our business activities and expand our operations. These factors raise substantial doubt about our ability to continue as a going concern. If we are unable to raise additional capital from conventional sources, including increases in related party and non-related party loans and/or additional sales of stock, we may be forced to curtail or cease our operations. Even if we are able to continue our operations, the failure to obtain financing could have a substantial adverse effect on our business and financial results. We have no commitments to provide us with financing in the future, other than described above. Our independent registered public accounting firm included an explanatory paragraph in their report raising substantial doubt about our ability to continue as a going concern. We continue to pursue debt and/or equity financing, although there can be no assurance that our efforts will be successful.
Going Concern
We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, there is substantial doubt that we will be able to continue as a going concern.
Future Financings
We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.
Recently Issued Accounting Pronouncements
We have implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results or operations, liquidity, capital expenditures or capital resources that is material to investors.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Item 10(f) (1) of Regulation S-K, we are not required to provide information required by this item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of May 31, 2019.
Changes in Internal Control Over Financial Reporting
On November 19, 2017, Mr. Michael R. Dunn, our then Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer, and director, died unexpectedly. As a result, our Company’s Chairman of the Board of Directors, Mr. Qingxi (“Sunny”) Huang, was appointed as our Chief Executive Officer, Chief Financial Officer, President, Secretary and Treasurer. This change may have affected our internal control over financial reporting during the quarter ended May 31, 2018 and subsequent periods. Our Chief Executive Officer will evaluate our controls and procedures quarterly to determine whether or not our controls and procedures have become effective again.
We are not required by current SEC rules to include, and does not include, an auditor's attestation report. Our registered public accounting firm has not attested to Management's reports on our Company's internal control over financial reporting.
Limitations on Effectiveness of Disclosure Controls and Internal Procedures
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.
The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may become subject to various legal proceedings that are incidental to the ordinary conduct of its business. Although we cannot accurately predict the amount of any liability that may ultimately arise with respect to any of these matters, it makes provision for potential liabilities when it deems them probable and reasonably estimable. These provisions are based on current information and legal advice and may be adjusted from time to time according to developments.
We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any director, officer or any affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the quarter ended May 31, 2019, we issued the shares described below in private placements pursuant to Section 4(a)(2) of the Securities Act, Rule 506 of Regulation D and Regulation S, in each case on the basis that the shares were offered and sold in a non-public offering to an “accredited investor” as defined in Rule 501 of Regulation D. Additionally, at the time of the issuances, unless registered for resale, the shares were deemed to be restricted securities under the Securities Act and the certificates evidencing such shares bear a legend to that effect.
On May 24, 2019, we entered into a Subscription Agreement with CIB pursuant to which we sold 4,290,000 units. Each single Unit consists of one (1) share of our common stock and two and one half (2.5) warrants (collectively the “Units”). The warrants are exercisable for 18 months at $0.05 per share. The aggregate purchase price for the Units is USD $214,500 (the “Purchase Price”) or USD $0.05 per share. The Purchase Price was paid as follows: (i) $50,506.85 applied in extinguishment of the principal and accrued interest underlying the April 2019 Note between CIB and our Company, and (ii) $163,993.15 in cash funded May 29, 2019. The shares were issued effective May 29, 2019.
Exemption From Registration. The shares of Common Stock referenced herein were issued in reliance upon one of the following exemptions:
(a) The shares of Common Stock referenced herein were issued in reliance upon the exemption from securities registration afforded by the provisions of Section 4(2) of the Securities Act of 1933, as amended, ("Securities Act"), based upon the following: (a) each of the persons to whom the shares of Common Stock were issued (each such person, an "Investor") confirmed to the Company that it or he is an "accredited investor," as defined in Rule 501 of Regulation D promulgated under the Securities Act and has such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities, (b) there was no public offering or general solicitation with respect to the offering of such shares, (c) each Investor was provided with certain disclosure materials and all other information requested with respect to the Company, (d) each Investor acknowledged that all securities being purchased were being purchased for investment intent and were "restricted securities" for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act and (e) a legend has been, or will be, placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequently registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.
(b) The shares of common stock referenced herein were issued pursuant to and in accordance with Rule 506 of Regulation D and Section 4(2) of the Securities Act. We made this determination in part based on the representations of the Investor(s), which included, in pertinent part, that such Investor(s) was an “accredited investor” as defined in Rule 501(a) under the Securities Act, and upon such further representations from the Investor(s) that (a) the Investor is acquiring the securities for his, her or its own account for investment and not for the account of any other person and not with a view to or for distribution, assignment or resale in connection with any distribution within the meaning of the Securities Act, (b) the Investor agrees not to sell or otherwise transfer the purchased securities unless they are registered under the Securities Act and any applicable state securities laws, or an exemption or exemptions from such registration are available, (c) the Investor either alone or together with its representatives has knowledge and experience in financial and business matters such that he, she or it is capable of evaluating the merits and risks of an investment in us, and (d) the Investor has no need for the liquidity in its investment in us and could afford the complete loss of such investment. Our determination is made based further upon our action of (a) making written disclosure to each Investor prior to the closing of sale that the securities have not been registered under the Securities Act and therefore cannot be resold unless they are registered or unless an exemption from registration is available, (b) making written descriptions of the securities being offered, the use of the proceeds from the offering and any material changes in the Company’s affairs that are not disclosed in the documents furnished, and (c) placement of a legend on the certificate that evidences the securities stating that the securities have not been registered under the Securities Act and setting forth the restrictions on transferability and sale of the securities, and upon such inaction of the Company of any general solicitation or advertising for securities herein issued in reliance upon Rule 506 of Regulation D and Section 4(2) of the Securities Act.
(c) The shares of Common Stock referenced herein were issued pursuant to and in accordance with Rule 903 of Regulation S of the Act. We completed the offering of the shares pursuant to Rule 903 of Regulation S of the Act on the basis that the sale of the shares was completed in an "offshore transaction", as defined in Rule 902(h) of Regulation S. We did not engage in any directed selling efforts, as defined in Regulation S, in the United States in connection with the sale of the shares. Each investor represented to us that the investor was not a "U.S. person", as defined in Regulation S, and was not acquiring the shares for the account or benefit of a U.S. person. The agreement executed between us and each investor included statements that the securities had not been registered pursuant to the Act and that the securities may not be offered or sold in the United States unless the securities are registered under the Act or pursuant to an exemption from the Act. Each investor agreed by execution of the agreement for the shares: (i) to resell the securities purchased only in accordance with the provisions of Regulation S, pursuant to registration under the Act or pursuant to an exemption from registration under the Act; (ii) that we are required to refuse to register any sale of the securities purchased unless the transfer is in accordance with the provisions of Regulation S, pursuant to registration under the Act or pursuant to an exemption from registration under the Act; and (iii) not to engage in hedging transactions with regards to the securities purchased unless in compliance with the Act. All certificates representing the shares were or upon issuance will be endorsed with a restrictive legend confirming that the securities had been issued pursuant to Regulation S of the Act and could not be resold without registration under the Act or an applicable exemption from the registration requirements of the Act.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
| Exhibit No. | | Description |
| 3.1 | | Articles of Incorporation of Accend Media. (now known as Cloud Security Corp), incorporated by reference to our Registration Statement on Form S-1 filed on April 29, 2011. |
| 3.2 | | Bylaws, incorporated by reference to our Registration Statement on Form S-1 filed on April 29, 2011. |
| 3.3 | | Articles of Amendment to Articles of Incorporation, incorporated by reference to our Current Report on Form 8-K dated May 22, 2012. |
| 3.4 | | Articles of Merger, incorporated by reference to our Current Report on Form 8-K dated May 22, 2012. |
| 3.5 | | Articles of Merger, incorporated by reference to our Current Report on Form 8-K dated May 28, 2013. |
| 3.6 | | Articles of Merger, incorporated by reference to our Current Report on Form 8-K dated February 9, 2018. |
| 10.1 | | 2014 Stock Incentive Plan, incorporated by reference to our Registration Statement on Form S-8 filed on February 20, 2014. |
| 10.2 | | Stock Purchase Agreement, dated December 8, 2014 between Cloud Security Corp. and Goldenrise Development, Inc., incorporated by reference to our Current Report on Form 8-K dated December 12, 2014. |
| 10.3 | | Stock Purchase Agreement, dated June 28, 2017 between Cloud Security Corp., Goldenrise Development, Inc. and Michael R. Dunn, incorporated by reference to our Current Report on Form 8-K dated June 29, 2017. |
| 10.4 | | Stock Purchase Agreement dated June 28, 2017, by and between Mr. Michael R. Dunn and China Israel Biotechnology Co. Ltd. and Central Bio-MD Technology Co. Ltd., incorporated by reference to our Current Report on Form 8-K dated August 1, 2017. |
| 10.5 | | Subscription Agreement by and between the Company and CIB, incorporated by reference to our Current Report on Form 8-K dated May 24, 2018. |
| 10.6 | | Debt Settlement Agreement between the Company and CIB, incorporated by reference to our Current Report on Form 8-K dated May 24, 2018. |
| 10.7 | | Subscription Agreement by and between the Company and CIB, incorporated by reference to our Current Report on Form 8-K dated June 10, 2019. |
| 10.8 | | Form of Warrant between the Company and CIB, incorporated by reference to our Current Report on Form 8-K dated June 10, 2019. |
| 10.9 | | Debt Settlement Agreement between the Company and CIB, incorporated by reference to our Current Report on Form 8-K dated June 10, 2019. |
| 31.1 | | Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer. * |
| 31.2 | | Rule 13a-14(a)/ 15d-14(a) Certification of Chief Financial Officer. * |
| 32.1 | | Chief Executive Officer and Chief Financial Officer Certification pursuant to 18 U.S.C. § 1350 adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.* |
| 32.2 | | Chief Financial Officer Certification pursuant to 18 U.S.C. § 1350 adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. * |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: July 22, 2019 | /s/ Qingxi Huang |
| | Name: Qingxi Huang |
| | Title: Chief Executive Officer (Principal Executive Officer), President, and Chief Financial Officer (Principal Financial and Accounting Officer) |
