The information contained in this quarter report on Form 10-Q is intended to
update the information contained in our Form S-1 Amendment No.3, dated April 30,
2019, for the period ended January 31, 2021 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 S-1. 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 guarantees 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 S-1
Amendment No.3, dated April 30, 2019, 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
MU Global Holding Limited, the US Company, operates through its wholly owned
subsidiary, MU Worldwide Group Limited, a Seychelles Company; which operates
through its wholly owned subsidiary, MU Global Holding Limited, a Hong Kong
Company; which operates through its wholly owned subsidiary, MU Global Health
Management (Shanghai) Limited, a Shanghai Company. The US, Seychelles and Hong
Kong Companies act solely for holding purposes whereas all current and future
operations in China are planned to be carried out via MU Global Health
Management (Shanghai) Limited, the Shanghai Company. The purpose of the Hong
Kong Company is to function as the current regional hub of the Company.
At present, we have a physical office in Shanghai with an address of A310, No.
2633, Yan'an West Road, Changning District, Shanghai City, 200050 People
Republic China, in which renovation has completed in October 2018 and the
Company has commenced business operations from the office. In addition, we also
have a physical outlet in Shanghai with address of 203, No. 193 Luo Jin Hui
South Road, Minhang District, Shanghai City, 201103, People Republic China in
which renovation completed in January 2019 and we have started to provide our
services to customers in Shanghai. In the future, we do not have definitive
plans for which markets intend to expand to, but we base our operations out of
our Shanghai location, as we prepare for future unidentified expansion efforts.
All of the previous entities share the same exact business plan with the goal of
developing and providing wellness and beauty services to our future clients. We
aim to promote improved overall health and beauty in our clients through a
holistic detoxification method. We will, at least initially, primarily focus our
efforts on attracting customers in China. We have intentions, but no definitive
plans or timelines, to expand to Singapore, Malaysia, Hong Kong, and Middle
Eastern countries in the coming years, and subsequently we intend to make
efforts to expand throughout Asia. We anticipate spending a substantial amount
in marketing and advertising in the coming year.
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Results of Operation
For the Six months ended January 31, 2021 and 2020
Revenues
For the six months ended January 31, 2021 and 2020, the Company has generated
revenue of $41,076 and $92,311 respectively. The revenue represented income from
wellness and beauty services provided to customers and sales of products via
Shanghai outlets and sharing of revenue from leasable equipment with business
alliance and franchisee.
Cost of Revenue and Gross Margin
For the six months ended January 31, 2021 and 2020, cost incurred arise in
providing wellness and beauty services is $9,556 and $7,365 respectively, and
generate a Gross profits the for the six months ended January 31, 2021 and 2020
of $31,520 and $84,946.
Selling and marketing expenses
For the six months ended January 31, 2021 and 2020, we had incurred no marketing
expenses on January 31, 2021 and incurred amount $17,722 on January 31, 2020.
These expenses comprised of advertisement expenses on Wechat, mobile apps and
public research on the market, and travelling expenses.
General and administrative expenses
For the six months ended January 31, 2021 and 2020, we had incurred general and
administrative expenses in the amount of $294,274 on January 31, 2021 and
$384,593 on January 31, 2020. These expenses are comprised of salary, allowance,
professional fees, consultancy fee for IT and system management, office and
outlet operation expenses and depreciation.
Other Income
The Company recorded an amount of $24,987 and $5,272 as other income for the six
months ended January 31, 2021 and 2020. This income is derived from the interest
income.
Net Loss
Our net loss for six months ended January 31, 2021 and 2020 were $237,767 and
$312,097. The net loss mainly derived from the general and administrative
expenses incurred.
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Liquidity and Capital Resources
As of January 31, 2021 and 2020, we had cash and cash equivalents of $43,603 and
$74,560 respectively. We expect increased levels of operations going forward
will result in more significant cash flow and in turn working.
We depend substantially on financing activities to provide us with the liquidity
and capital resources we need to meet our working capital requirements and to
make capital investments in connection with ongoing operations. During the six
months ended January 31, 2021, we have met these requirements primarily from the
receipt of subscription for convertible promissory note and share subscription
from Initial Public Offering (IPO).
Cash Used In Operating Activities
For the six months ended January 31, 2021, net cash used in operating activities
was $85,511 as compared to net cash used in operating activities of $269,996 for
the six months ended January 31, 2020. The increased in cash used in operating
activities was mainly for payment of general and administrative expenses.
Cash Provided By Financing Activities
For the six months ended January 31, 2021 and 2020, net cash provided by
financing activities was $109,517 and $158,570 respectively. The financing cash
flow performance primarily reflects the provision of long-term loan by director
and related party.
Cash Provided By Investing Activities
For the six months ended January 31, 2021, net cash from investing activities
was $12,110 as compared to net cash used in investing activities of $204,800 for
the six months ended January 31, 2020. The investing cash flow performance
primarily reflects the purchase of property, plant and equipment and trademark.
Credit Facilities
We do not have any credit facilities or other access to bank credit.
Off-balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in our financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to our
stockholders as of January 31, 2021.
Recent Accounting Pronouncements
The Company has 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 the Company does 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.
For the three months ended January 31, 2021 and 2020
Revenues
For the three months ended January 31, 2021 and 2020, the Company has generated
revenue of $19,381 and $65,141 respectively. The revenue represented income from
wellness and beauty services provided to customers and sales of products via
Shanghai outlets and sharing of revenue from leasable equipment with business
alliance and franchisee.
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Cost of Revenue and Gross Margin
For the three months ended January 31, 2021 and 2020, cost incurred arise in
providing wellness and beauty services is $7,845 and $5,296 respectively, and
generate a Gross profits the for the three months ended January 31, 2021 and
2020 of $11,536 and $59,845.
Selling and marketing expenses
For the three months ended January 31, 2021 and 2020, we had incurred no
marketing expenses on January 31, 2021 and incurred amount $14,615 on January
31, 2020. These expenses comprised of advertisement expenses on Wechat, mobile
apps and public research on the market, and travelling expenses.
General and administrative expenses
For the three months ended January 31, 2021 and 2020, we had incurred general
and administrative expenses in the amount of $173,023 on January 31, 2021 and
$166,542 on January 31, 2020. These expenses are comprised of salary, allowance,
professional fees, consultancy fee for IT and system management, office and
outlet operation expenses and depreciation.
Other Income
The Company recorded an amount of $20,321 and $1,551 as other income for the
three months ended January 31, 2021 and 2020. This income is derived from the
interest income.
Net Loss
Our net loss for three months ended January 31, 2021 and 2020 were $141,166 and
$119,761. The net loss mainly derived from the general and administrative
expenses incurred.
Credit Facilities
We do not have any credit facilities or other access to bank credit.
Off-balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in our financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to our
stockholders as of January 31, 2021.
Recent Accounting Pronouncements
The Company has 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 the Company does 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.
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