This quarterly report on Form 10-Q (this "Report") and other written and oral
statements made from time to time by us may contain so-called "forward-looking
statements," all of which are subject to risks and uncertainties.
Forward-looking statements can be identified by the use of words such as
"expects," "plans," "will," "forecasts," "projects," "intends," "estimates," and
other words of similar meaning. One can identify them by the fact that they do
not relate strictly to historical or current facts. These statements are likely
to address our growth strategy, financial results and product and development
programs. One must carefully consider any such statement and should understand
that many factors could cause actual results to differ from our forward-looking
statements. These factors may include inaccurate assumptions and a broad variety
of other risks and uncertainties, including some that are known and some that
are not. No forward-looking statement can be guaranteed and actual future
results may vary materially.
Information regarding market and industry statistics contained in this Report is
included based on information available to us that we believe is accurate. It is
generally based on industry and other publications that are not produced for
purposes of securities offerings or economic analysis. We have not reviewed or
included data from all sources, and cannot assure investors of the accuracy or
completeness of the data included in this Report. Forecasts and other
forward-looking information obtained from these sources are subject to the same
qualifications and the additional uncertainties accompanying any estimates of
future market size, revenue and market acceptance of products and services. We
do not assume any obligation to update any forward-looking statement. As a
result, investors should not place undue reliance on these forward-looking
statements.
The following discussion and analysis are intended as a review of significant
factors affecting our financial condition and results of operations for the
periods indicated. The discussion should be read in conjunction with our
consolidated financial statements and the notes presented herein. In addition to
historical information, the following Management's Discussion and Analysis of
Financial Condition and Results of Operations contains forward-looking
statements that involve risks and uncertainties. Our actual results could differ
significantly from those expressed, implied or anticipated in these
forward-looking statements as a result of certain factors discussed herein and
any other periodic reports filed and to be filed with the Securities and
Exchange Commission.
4
Table of Contents
Cautionary Note Regarding Forward-Looking Statements
Some of the statements contained in this report discuss our plans and strategies
for our business or state other forward-looking statements, as this term is
defined in the Private Securities Litigation Reform Act of 1995. Statements that
are not statements of historical facts may be deemed to be forward-looking
statements. The words "anticipate," "believe," "estimate," "expect," "plan,"
"intend," "should," "seek," "will," and similar expressions are intended to
identify these forward-looking statements but are not the exclusive means of
identifying them. These forward-looking statements reflect the current views of
our management. However, various risks, uncertainties and contingencies could
cause our actual results, performance or achievements to differ materially from
those expressed in, or implied by, these statements. See our current report on
Form 8-K filed on January 14, 2021 for a discussion of certain known risks.
Business Overview
We are a leading supplier of innovative products that process, store and
administer therapeutic doses of endometrial stem cells for treatment of disease
and injuries in the PRC. Our future products will harvest stem cells, wound
healing proteins or growth factors from the blood, or tissue, of a single donor.
We also plan to market our products, Life Shinkansen Liquid Dressing and Life
Shinkansen Spray Dressing, which, combined with different ingredients and
equipment, will be used for treatment of small wounds, bruises, cutting wounds
and other superficial wounds, as well as for skincare, respiratory system
cleansing and conditioning, and eye cleansing.
Unless otherwise provided in this Item 2, this Item 2 discusses the financial
condition and results of operations of Platinum International Biotech Co., Ltd.,
a company organized under the laws of the Cayman Islands, and its wholly-owned
subsidiaries, including without limitation, Yubo International Biotech (Beijing)
Limited, a company organized under the laws of the People's Republic of China.
Our previous shell company's results of operations are immaterial and will not
be included in the discussion below. Key factors affecting our results of
operations include revenues, cost of revenues, operating expenses and income and
taxation.
History
We were incorporated as a New York corporation on February 22, 1991 and
commenced operations on February 10, 1992. Prior to March 2003, our business had
been focused on pre-revenue development and commercialization of disposable
medical devices designed to enhance the effectiveness of magnetic resonance
imaging in detection and diagnosis of heart disease. Due to the unavailability
of funding, beginning in the Fall of 2002 we essentially ceased all of our
operations including product development and commercialization activities. Our
efforts to realize value for our prior business and MRI technology have been
unsuccessful. As a result, we view our most viable option to be merging with an
unrelated operating company that could benefit from our status as a reporting
company in a so-called "reverse merger" transaction. In November 2006, our then
shareholders approved a 1 for 100 reverse stock split of our common stock. On
March 1, 2007, such reverse stock split became effective. Fractional shares were
rounded up to the next full share.
Change of Control
On September 23, 2020, Activist Investing LLC (the "Seller"), the owner of
116,697,438 common shares (the "Shares") upon conversion of $1,472,000 of
promissory notes and accrued interest acquired by the Seller after the Seller
purchased control of our Company in July 2020, agreed to sell the Shares to Lina
Liu (the "Purchaser), a resident of China, for $255,000, pursuant to an Amended
and Restated Stock Purchase Agreement (the "Stock Purchase Agreement"). The
first agreement between the Seller and the Purchase was superseded because it
had the incorrect name of the Seller. The Seller is owned 100% by David Lazar.
The Shares represent approximately 99.0% of the 117,875,323 Class A common
shares outstanding at November 30, 2020.
5
Table of Contents
The sale of the Shares to Ms. Liu was completed on October 2, 2020. Ms. Liu, as
our 99.0% majority shareholder, then appointed Jun Wang, Yang Wang and Zhihui
Bai as members of our board of director (the "Board") and Ms. Liu as a director
and CFO, Treasurer and Secretary (together, the "Designees"). As a result, there
was a change of control of our Company; and the change of management was
completed on or about October 12, 2020 (the "New Management Date"), ten (10)
days after our Information Statement pursuant to SEC Rule 14f-1 was filed with
the SEC and mailed to our stockholders. There is no family relationship or other
relationship between the Seller and the Purchaser.
In connection with the sale under the Stock Purchase Agreement, Mr. Lazar
resigned as an officer and director, and John B. Lowy and Dovid Kotkes have
resigned as directors, and have appointed the Designees as our directors, on the
New Management Date. As a result thereof, the Designees became our directors, on
or about October 12, 2020.
Name Change
After obtaining the approval of the Board and the majority stockholder, we
amended our Article of Incorporations by filing of a Certificate of Amendment
changing the name of the Company to "Yubo International Biotech Limited" under
stock symbol "YBGJ". The name change became effective December 4, 2020, pursuant
to the Certificate of Amendment, upon completion of processing by the Financial
Industry Regulatory Authority and in accordance with the SEC rules and
regulations.
Reverse Merger with Platinum International Biotech Co., Ltd.
On January 14, 2021 (the "Closing Date"), we entered into a voluntary share
exchange transaction with Platinum International Biotech Co., Ltd., a company
organized under the laws of the Cayman Islands ("Platinum"), pursuant to that
certain Agreement and Plan of Share Exchange, dated January 14, 2021 (the
"Exchange Agreement"), by and among us, Platinum, Yubo International Biotech
(Beijing) Limited, a company organized under the laws of the People's Republic
of China ("Yubo"), and certain selling stockholders named therein.
In accordance with the terms of the Exchange Agreement, on the Closing Date, we
issued a total of 117,000,000 shares of our Class A common stock to the then
stockholders of Platinum (the "Selling Stockholders"), in exchange for 100% of
the issued and outstanding capital stock of Platinum (the "Exchange
Transaction"). As a result of the Exchange Transaction, the Selling Stockholders
acquired more than 99% of our issued and outstanding capital stock, Platinum
became our wholly-owned subsidiary, and we acquired the business and operations
of Platinum and Yubo.
Platinum was incorporated on April 7, 2020 under the laws of the Cayman Islands
as a holding company. Commencing April 2020, its consolidated variable interest
entity Yubo is a leading supplier of innovative products that process, store and
administer therapeutic doses of endometrial stem cells for treatment of disease
and injuries in the PRC.
Immediately prior to the Exchange Transaction, we had 117,875,323 shares of
Class A common stock and 4,447 shares of Class B common stock issued and
outstanding. Immediately after the Exchange Transaction and the surrender and
cancellation of 116,697,438 shares of Class A common stock previously held by
Lina Liu, and as of the date hereof, our authorized capital stock consists of
120,000,000 shares of common stock, par value $.001 per share, of which
118,177,885 Class A common plus 4,447 Class B common) are issued and
outstanding, and 5,000,000 shares of Preferred Stock, $.001 par value, none of
which shares are issued or outstanding. Each share of Class A common stock is
entitled to one vote with respect to all matters to be acted on by the
stockholders; and each share of Class B common stock is entitled to five votes
per share, and is convertible into one share of Class A common stock.
COVID-19
On March 11, 2020, the World Health Organization declared the COVID-19 outbreak
to be a global pandemic. In addition to the devastating effects on human life,
the pandemic is having a negative ripple effect on the global economy, leading
to disruptions and volatility in the global financial markets. Most U.S. states
and many countries have issued policies intended to stop or slow the further
spread of the disease.
COVID-19 and the U.S's response to the pandemic are significantly affecting the
economy. There are no comparable events that provide guidance as to the effect
the COVID-19 pandemic may have, and, as a result, the ultimate effect of the
pandemic is highly uncertain and subject to change. We do not yet know the full
extent of the effects on the economy, the markets we serve, our business, or our
operations.
6
Table of Contents
Critical Accounting Principles
This section discusses our financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of these financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
income and expenses during the reporting period. On an on-going basis,
management evaluates its estimates and judgments, including those related to
accrued expenses, financing operations, and contingencies and litigation.
Management bases its estimates and judgments on historical experience and on
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying value of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions. The most significant accounting estimates inherent in
the preparation of our financial statements include estimates as to the
appropriate carrying value of certain assets and liabilities which are not
readily apparent from other sources. We consider certain accounting policies
related to fair value measurements and earnings per share to be critical
accounting policies that require the use of significant judgments and estimates
relating to matters that are inherently uncertain and may result in materially
different results under different assumptions and conditions. See Note 2 -
Summary of Significant Accounting Policies.
As of March 31, 2021, the impact of COVID-19 on our business continued to
unfold. As a result, many of our estimates and assumptions carry a higher degree
of variability and volatility. As events continue to evolve and additional
information becomes available, our estimates may change in future periods.
Recently Issued and Adopted Accounting Pronouncements
In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU
2016-02) "Leases (Topic 842)". ASU 2016-02 requires a lessee to recognize in the
statement of financial position a liability to make lease payments (the lease
liability) and a right-of-use asset representing its right to use the underlying
asset for the lease term. ASU 2016-02 is effective for interim and annual
reporting periods beginning after December 15, 2018. Early adoption is
permitted.
Results of Operations for the Three Months Ended March 31, 2021 Compared to the
Three Months Ended March 31, 2020
Sales, Cost of Goods Sold and Gross Profit
We generated sales of $462,329 for the three months ended March 31, 2021, as
compared to $0 for the three months ended March 31, 2020. Such increase was
primarily due to sale of nebulizers. Our cost of goods sold was $146,738 for the
three months ended March 31, 2021, as compared to $0 for the three months ended
March 31, 2020. Such increase was primarily due to cost of nebulizers sold. As a
result, our gross profit increased from $0 for the three months ended March 31,
2020 to $315,591 for the three months ended March 31, 2021.
Operating Expenses
Our operating expenses were $754,161 for the three months ended March 31, 2021,
as compared to $140,902 for the three months ended March 31, 2020. The increase
in operating expenses was primarily due to sales commissions, employee
compensation, occupancy, and other operating expenses.
Loss from Operations
Our loss from operations was $(438,570) for the three months ended March 31,
2021, as compared to $(140,902) for the three months ended March 31, 2020. The
increase in loss from operations was due to $613,259 increase in operating
expenses offset by $315,591 increase in gross profit.
Other Income (Expense)
Our other income (expense) was $(105) for the three months ended March 31, 2021,
as compared to $(46) for the three months ended March 31, 2020. The increase in
other expense was primarily due to increase in bank charge.
7
Table of Contents
Net Loss
Our net loss was $(438,675) for the three months ended March 31, 2021, as
compared to $(140,948) for the three months ended March 31, 2020. The increase
in net loss was primarily due to $613,259 increase in operating expenses offset
by $315,591 increase in gross profit.
Liquidity and Capital Resources
As of March 31, 2021, we had cash and equivalents on hand of $126,313 and
working capital of $(287,273). Generally, the primary sources of our funds have
been cash from operations and capital contributions. In addition, on May 6,
2021, we filed a registration statement on Form S-1 with the SEC in connection
with an offering, on a "best efforts" basis, up to an aggregate of 5,000,000
shares of our Class A common stock at a fixed price of $0.50 per share. We
estimate that the net proceeds of this offering will be approximately $2.42
million. We believe that our cash on hand and working capital will be sufficient
to meet its anticipated cash requirements through January 31, 2022. We intend to
continue working toward identifying and obtaining new sources of financing. No
assurances can be given that we will be successful in obtaining additional
financing in the future. Any future financing that we may obtain may cause
significant dilution to existing stockholders. Any debt financing or other
financing of securities senior to common stock that we are able to obtain will
likely include financial and other covenants that will restrict our flexibility.
Any failure to comply with these covenants would have a negative impact on our
business, prospects, financial condition, results of operations and cash flows.
If adequate funds are not available, we may be required to delay, scale back or
eliminate portions of our operations, cease operations or obtain funds through
arrangements with strategic partners or others that may require us to relinquish
rights to certain of our assets. Accordingly, the inability to obtain such
financing could result in a significant loss of ownership and/or control of our
assets and could also adversely affect our ability to fund our continued
operations and our expansion efforts.
During the next 12 months, we expect to incur significant research and
development expenses with respect to our products. The majority of our research
and development activity is focused on development of our stem cell bank.
We also expect to incur significant legal and accounting costs in connection
with being a public company. We expect those fees will be significant and will
continue to impact our liquidity. Those fees will be higher as our business
volume and activity increases.
Going concern
The accompanying interim unaudited condensed consolidated financial statements
for the three months ended March 31, 2021 included an explanatory paragraph
referring to our recurring operating losses and expressing substantial doubt in
our ability to continue as a going concern. Our consolidated financial
statements have been prepared on a going concern basis, which assumes the
realization of assets and settlement of liabilities in the normal course of
business. Our ability to continue as a going concern is dependent upon our
ability to generate profitable operations in the future and/or to obtain the
necessary financing to meet our obligations and repay our liabilities arising
from normal business operations when they become due. The outcome of these
matters cannot be predicted with any certainty at this time and raise
substantial doubt that we will be able to continue as a going concern. Our
consolidated financial statements do not include any adjustments to the amount
and classification of assets and liabilities that may be necessary should we be
unable to continue as a going concern.
Off Balance Sheet Arrangements
We have not entered into any other financial guarantees or other commitments to
guarantee the payment obligations of any third parties. We have not entered into
any derivative contracts that are indexed to our shares and classified as
shareholder's equity or that are not reflected in its consolidated financial
statements. Furthermore, we do not have any retained or contingent interest in
assets transferred to an unconsolidated entity that serves as credit, liquidity
or market risk support to such entity. We do not have any variable interest in
any unconsolidated entity that provides financing, liquidity, market risk or
credit support to us or engages in leasing, hedging or research and development
services with us.
8
Table of Contents© Edgar Online, source Glimpses
YUBO INTERNATIONAL BIOTECH LIMITED 
