The information set forth in this Management's Discussion and Analysis of
Financial Condition and Results of Operations ("MD&A") contains certain
"forward-looking statements". Forward-looking statements are statements other
than historical information or statements of current condition. Some
forward-looking statements may be identified by use of terms such as "believes",
"anticipates", "intends" or "expects". These forward-looking statements relate
to our plans, liquidity, ability to complete financing and purchase capital
expenditures, growth of our business including entering into future agreements
with companies, and plans to successfully develop and obtain approval to market
our product. We have based these forward-looking statements largely on our
current expectations and projections about future events and financial trends
that we believe may affect our financial condition, results of operations,
business strategy and financial needs.
You should read the following discussion and analysis in conjunction with the
Financial Statements and Notes attached hereto, and the other financial data
appearing elsewhere in this report.
US Dollars are denoted herein by "USD", "$" and "dollars".
Overview
Umatrin Holding Limited (formerly known as Golden Opportunities Corporation)
("UMHL") was incorporated in the state of Delaware on February 2, 2005. UMHL was
originally incorporated in order to locate and negotiate with a targeted
business entity for the combination of that target company with the Company.
On January 6, 2016, UMHL acquired 80% of the equity interests of U Matrin
Worldwide SDN. BHD. ("Umatrin") in exchange for the issuance of a total of
100,000,000 shares of its common stock to the two holders of Umatrin, Dato' Sri
Eu Hin Chai and Dato' Liew Kok Hong. Immediately following the Share Exchange,
the business of Umatrin became the business of UMHL. The Company's operation
office remained in Malaysia and the business market will remain focus in Asia.
Umatrin, formerly known as OLC Worldwide SDN. BHD., was incorporated in Malaysia
on July 22, 1993. Umatrin has curated non-toxic beauty, personal care to health
and wellness products. We market our products through three primary methods:
direct contact, online distribution and/or by our dealer program. We apply
leading O2O (Online to Offline) marketing strategy to both retail and wholesale
trade. We provide technology and services to enable consumers, merchants and
other participants to conduct business in our cloud-based trading system. We use
advanced network technology and rigorous management system to create unlimited
business brand space. Without allocating large sums of operating cost, it
continuously introduces new products, combined with O2O internet business model
and career opportunities.
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Results of Operations - Comparison for the year ended December 31, 2020 and 2019
Sales
For the year ended December 31, 2020, the Company generated $3,681,484 in
revenues, which has an increase of $2,476,931, or 206% compared to the year
ended December 31, 2019. This was due to increase in sales volume for Akero
product series as the economy was improving.
Gross profit and gross margin
The Company was able to generate a gross profit margin of $1,536,066 for the
year ended December 31, 2020, which has an increase of $562,683 or 58% compared
to the year ended December 31, 2019. This was due to increase in sales volume
for new Akero product series which has higher profit margin and improvement in
the overall market condition.
Selling, general and administrative costs
Major operating costs include salaries and wages, advertising and promotional
costs for the years ended December 31, 2020 and 2019. Selling, general and
administrative costs decreased from $854,212 for the year ended December 31,
2019 to $815,111 for the year ended December 31, 2020. The decrease was due to
increase in operating efficiency and reduction in utility cost.
Net income
For the year ended December 31, 2020, the Company had $498,542 in net profit as
compared to $95,138 in net profit for the year ended December 31, 2019, which
was an increase in net profit of $403,404. The Company will continue to
implement new marketing strategies to improve its financial position.
Liquidity and Capital Resources
We had cash and cash equivalent of $50,459 and $171,678 as of December 31, 2020
and 2019, respectively.
Our company's operations have been funded through an equity financing and a
series of debt transactions, primarily with shareholders, directors, and
officers of our company and affiliated entities. These related party debt
transactions such as advances have operated as informal lines of credit since
the inception of our company, and related parties have extended credit as needed
which our company has repaid at its convenience. We anticipate that we will
incur operating losses in the foreseeable future and we believe we will need
additional cash to support our daily operations while we are attempting to
execute our business plan and produce revenues. If our related parties are
unable or unwilling to provide additional capital, we would likely require
financing from third parties. There can be no assurance that any additional
financing will be available to us, on terms we believe to be favorable or at
all. The inability to obtain additional capital would have a material adverse
effect on our operations and financial condition and could force us to curtail
or discontinue operations entirely and/or file for protection under bankruptcy
laws.
The following table sets forth information about our net cash flow for the years
ended December 31, 2020 and 2019:
For the years ended
December 31, December 31,
2020 2019
Net cash provided by (used in) operating
activities 728,908 344,732
Net cash provided by (used in) investing
activities (53,185 ) (82,872 )
Net cash provided by (used in) financing
activities (794,222 ) (128,932 )
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Operating Activities
For the year ended December 31, 2020 we generated $728,908 in operating
activities as compared to generated $344,732 in operating activities during the
year ended December 31, 2019. The movement in net cash used in operating
activities resulted from the movement in inventory, prepaid tax, other
receivables and deposits, accounts payable and accrued expenses and other
payables.
Investing Activities
During the year ended December 31, 2020 we used $53,185 in investing activities
as compared to using $82,872 in investing activities during the year ended
December 31, 2019. The movement in net cash used in investing activity resulted
from purchase of equipment.
Financing Activities
During the year ended December 31, 2020, we used $794,222 in financing
activities as compared to using $128,932 in financing activities during the year
ended December 31, 2019.
During the year ended December 31, 2020, the net cash provided by financing
activities resulted from net repayment to related party of $726,690 and net
repayment for borrowings of $67,532.
During the year ended December 31, 2019, the net cash provided by financing
activities resulted from net repayment received from related party of $147,797
and net repayment to term loan of $18,865.
Loan Commitment
On December 23, 2014, MYR 2,300,000 (approximately $657,507) term loan was
granted to Umatrin for the purchase of four Story Shop Offices located at No.32,
32-1, 32-2, 32-3, Jalan Radin Bagus 3, Bandar Baru Seri Petaling, 57000, Kuala
Lumpur with a repayment period of 240 months. This term loan was secured by (i)
title deed for the said property, and (ii) way of guarantee by directors of the
Company. This term loan is subject to an interest charges at 2.10% per annum
below the Bank's Base Lending Rate ("BLR") with daily rests. The BLR is
currently at 6.85% for both December 31, 2020 and December 31, 2019.
On July 27, 2015, the drawdown of MYR2,300,000 (approximately $609,554) was made
and repayment effectively starts on December 1, 2015 with a fixed installment of
MYR14,863.14 (approximately $3,561) for 240 installments.
Interest expenses were $15,438 and $23,576 for the years ended December 31, 2020
and 2019, respectively.
We have no known demands or commitments and we are not aware of any events or
uncertainties as of December 31, 2020 that will result in or that are reasonably
likely to materially increase or decrease our current liquidity.
We had no material commitments for capital expenditure for the years ended
December 31, 2020 and 2019 except mentioned above.
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Going Concern
Our financial statements have been prepared on a going concern basis. As
reflected in the accompanying financial statements, the Company had accumulated
deficit of $2,993,454 as of December 31, 2020 which include a profit of $498,542
for the year ended December 31, 2020. We expect to finance our operations
primarily through our existing cash, our operations and any future financing.
However, there exists substantial doubt about our ability to continue as a going
concern because we will be required to obtain additional capital in the future
to continue our operations and there is no assurance that we will be able to
obtain such capital, through equity or debt financing, or any combination
thereof, or on satisfactory terms or at all. Additionally, no assurance can be
given that any such financing, if obtained, will be adequate to meet our capital
needs. If adequate capital cannot be obtained on a timely basis and on
satisfactory terms, our operations would be materially negatively impacted.
Therefore, our auditor has substantial doubt as to our ability to continue as a
going concern. Our ability to complete additional offerings is dependent on the
state of the debt and/or equity markets at the time of any proposed offering,
and such market's reception of the Company and the offering terms. There is no
assurance that capital in any form would be available to us, and if available,
on terms and conditions that are acceptable.
Critical Accounting Policies and Estimates
Please refer to Note 2 of our Consolidated Financial Statements included in the
financial statements for the year ended December 31, 2020 for details of our
critical accounting policies.
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, sales or expenses, results of operations, liquidity or
capital expenditures, or capital resources that are material to an investment in
our securities.
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UMATRIN HOLDING LIMITED 