GENERAL
Green Vision Biotechnology Corp. (the "Company"), formerly known as Vibe
Wireless Corp., also formerly known as Any Translation Corp., was incorporated
under the laws of the State of Nevada on July 5, 2012. We were founded to be in
the business of translation and interpretation. The Company undertook
translation and interpretation projects for various fields from business,
economics, to science issues. The Company later adopted a business plan to
pursue business opportunities in the global telecommunications industry.
On September 2, 2015, a change in control of the Company took place by virtue of
the Company's largest shareholder and sole officer and director at that time,
selling 4,000,000 shares of the Company's common stock to Forestbay Capital
Partners II, LLC, a Delaware limited liability company. Such shares represented
65.8% of the Company's total issued and outstanding shares of common stock. As
part of the sale of the shares, Forestbay Capital Partners arranged with the
former officer and director, prior to his resignation as the sole officer and
director of the Company Board, to appoint Mr. Edward Mooney as the sole officer
and director of the Company. Mr. Mooney is the Manager of Forestbay Capital
Partners II, LLC.
On November 12, 2015, we changed our name to Vibe Wireless Corp in connection
with merging with our wholly-owned subsidiary. This name change and our ticker
symbol change was acknowledged by FINRA and effected in the market on November
23, 2015.
The Company was originally incorporated under the laws of the State of Nevada on
July 5, 2012 as Any Translation Corp.
On September 30, 2016, the Company filed a Certificate of Amendment with the
Nevada Secretary of State (the "Nevada SOS") whereby it amended its Articles of
Incorporation to increase the Company's authorized number of shares of common
stock from 75 million to 750 million and forward split all of its issued and
outstanding shares of common stock at a ratio of ten (10) shares for every one
(1) share held. The Company's Board of Directors approved this amendment on
September 30, 2016.
On September 30, 2016, the Company filed Articles of Merger with the Nevada SOS
whereby it entered into a statutory merger with its wholly-owned subsidiary,
Green Vision Biotechnology Corp. pursuant to Nevada Revised Statutes 92A.200 et.
seq. The effect of such merger is that the Company is the surviving entity and
changed its name to "Green Vision Biotechnology Corp."
On September 30, 2016, the Company filed an Issuer Company-Related Action
Notification Form with FINRA requesting that the aforementioned forward split
and name change be effected in the market. The Company also requested that its
ticker symbol be changed to "GVBT". This name change and our ticker symbol
change was acknowledged by FINRA and effected in the market on November 27,
2016.
As disclosed in our Current Report on Form 8-K dated May 12, 2017 there was a
change in our management. Effective May 3, 2017, the Company accepted the
resignation of Edward P. Mooney as the sole officer of the Company and as the
sole member of the Company's board of directors. Simultaneously, Mr. Ma Wai Kin,
was elected as the Company's President, Secretary, Treasurer and a member of the
Board of Directors.
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Results of Operations
Our financial statements have been prepared assuming that we will continue as a
going concern and, accordingly, do not include adjustments relating to the
recoverability and realization of assets and classification of liabilities that
might be necessary should we be unable to continue our operation.
We expect we will require additional capital to meet our long term operating
requirements. We expect to raise additional capital through, among other things,
the sale of equity or debt securities.
Result of Operations for the Three Months ended June 30, 2018 and 2017
Revenue was $33,650 for the three months ended June 30, 2018 ("Q2"), decreased
by $8,295, or 19.8% from $41,945 for the three months ended June 30, 2017
("Comparable Quarter"). The decrease in revenue during the Q2 as compared to the
Comparable Quarter was due to the restrictions on our production capacity as a
result of the enforcement on new environmental regulations over industrial
production by coal-fired boilers by local authorities in Shanxi. In this
quarter, our company has conducted various field trials in Guangxi,
Heilongjiang, and Yunnan in order to promote our products.
Cost of sales was increased by $3,594, or 14% from $25,594 in the Comparable
Quarter to $29,188 in Q2. The change of cost of sales because the cost including
finished goods repair fee. In terms of percentage of revenue, cost of sales was
86.7% in Q2 as compared to 61.0% in the Comparable Quarter. The increase was due
to the repair fee.
Gross profit was decreased by $11,889, or 72.7% from $16,351 in the Comparable
Quarter to $4,462 in Q2. The decrease reflected the correlation in reduction of
revenue. In terms of percentage of revenue, the gross profit percentage was
decreased to 13.3% for Q2 as compared to 39% for the Comparable Quarter. The
decrease of gross profit was primarily due to the significant drop in the sales
revenue.
Selling expenses were increased by $21,390, or 401.5% from $5,328 for the
Comparable Quarter to $26,718 in Q2. In terms of percentage of revenue, the
rates were 79.4% in Q2 compared to 12.7% in the Comparable Quarter. The increase
is primarily due to the increase of sample expenses.
General and administrative expenses were decreased by $85,868, or 32.6% from
$263,537 for the Comparable Quarter to $177,669 for Q2. The decrease is
primarily due to the traveling expenses, consulting fee, audit fee and legal fee
in Q2.
The following is a summary of general and administrative expenses for the three
months ended June 30, 2018, and 2017.
June 30, June 30,
2018 2017 Difference
Unaudited Unaudited
Consulting fees $ 13,218 $ 35,193 $ (21,975 )
Salary and payroll expenses 51,218 48,827 2,391
Professional fees 7,156 45,451 (38,295 )
Travel and entertainment 14,339 26,023 (11,684 )
Research and Development - 22,451 (22,451 )
Provision for doubtful debts (277 ) - (277 )
Depreciation and amortization 65,864 57,946 7,918
Other 26,151 27,646 (1,495 )
$ 177,669 $ 263,537 $ (85,868 )Consulting fees were decreased by $21,975, or 62.4%, from $35,193 in Comparable
Quarter to $13,218 in Q2.
Our salary and payroll expenses were increased by $2,391, or 4.9%, to $51,218 in
Q2, as compared to $48,827 in the Comparable Quarter. We anticipate that salary
and payroll expenses will continue to rise in future periods as it becomes
necessary to increase our staff in order to enhance our management quality for
the listing requirement and to increase our production activities.
Professional fees were decreased by $38,295, from $45,451 in Comparable Quarter
to $7,156 in Q2.
Travel and entertainment expenses were decreased by $11,684, or 44.9%, from
$26,023 in Comparable Quarter to $14,339 in Q2. The decrease of travel and
entertainment expenses was due to the reduction of project-based travelling
activities.
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Research and Development expenses were increased to $Nil in Q2 from $22,451 in
Comparable Quarter.
Depreciation and amortization expenses were increased by $7,918, or 13.7%, from
$57,946 in Comparable Quarter to $65,864 in Q2.
Other expenses include items such as office expenses, software related costs,
telephone and a variety of other miscellaneous expenses. None of these expenses
alone changed significantly, as the difference was $1,495, or 5.4% decrease from
$27,646 in Comparable Quarter to $26,151 in Q2.
We anticipate that we will incur higher general and administrative expenses as a
public company. We expect that our professional fees, cost of transfer agent,
investor relations costs and other stock related costs will increase.
We also anticipate that selling, general and administrative expenses will
concurrently increase with our increased activity in the future but will not
increase in the same proportion to that of revenue.
Our loss from operations was decreased by $52,589 or 20.8%, to negative $199,925
in Q2, from $252,514 in Comparable Quarter.
Non-operating income (expenses) was reduced by $1,998, or 142.1%, to negative
$592 in Q2, from $1,406 in Comparable Quarter, of which mainly due to the
decrease of other non-operating expense in Q2.
The net loss attributed to the Company was decreased by $50,591, or 20.1% to
negative $200,517 in Q2, as compared to negative $251,108 in Comparable Quarter.
Result of Operations for the Six months ended June 30, 2018 and 2017
Revenue was decreased by $18,287, or 17.4% from $104,854, in the six months
ended June 30, 2017 (the "Six-Month Comparable Period") to $86,567 in the six
months ended June 30, 2018 (the "First Half Year of FY2018"). The decrease in
revenue during the First Half Year of FY2018 as compared to the Six
Month-Comparable Period was due to the restrictions on our production capacity
as a result of the enforcement on new environmental regulations over industrial
production by coal-fired boilers by local authorities in Shanxi. In this
quarter, our company has conducted various field trials in Guangxi,
Heilongjiang, and Yunnan in order to promote our products.
Cost of sales was increased by $2,283, or 3.6% from $64,160 in the Six
Month-Comparable Period to $66,443 in the First Half Year of FY2018. The change
of cost of sales because the cost including finished goods repair fee. In terms
of percentage of revenue, cost of sales was 76.8% in the First Half Year of
FY2018 as compared to 61.2% in the Six Month-Comparable Period . The increase
was due to the repair fee.
Gross profit was decreased by $20,570, or 50.5% from $40,694 in the Six
Month-Comparable Period to $20,124 in the First Half Year of FY2018. The
decrease reflected the correlation in reduction of revenue. In terms of
percentage of revenue. In terms of percentage of revenue, the gross profit
percentage was decreased to 23.2% for the First Half Year of FY2018 as compared
to 38.8% for the Six Month-Comparable Period. The decrease was primarily due to
the significant drop in the sales revenue
Selling expenses were increased by $17,406, or 131.8%, to $30,616 in the First
Half Year of FY2018 from $13,210 in the Six Month-Comparable Period. In terms of
percentage of revenue, the rates were 35.4% in the First Half Year of FY2018
compared to 12.6% in the Six Month-Comparable Period. The increase is primarily
due to the increase of sample expenses.
General and administrative expenses were decreased by $44,194, or 9.3% to
$428,823 in the First Half Year of FY2018 from $473,017 in the Six
Month-Comparable Period. The decrease is generally due to a decrease in our
operating activities in the First Half Year of FY2018 as compared to the Six
Month-Comparable Period.
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The following is a summary of general and administrative expenses for the six
months ended June 30, 2018, and 2017.
June 30, June 30,
2018 2017 Difference
Unaudited Unaudited
Consulting fees $ 71,803 $ 68,290 $ 3,513
Salary and payroll expenses 106,050 101,985 4,065
Professional fees 15,065 45,451 (30,386 )
Travel and entertainment 35,074 63,241 (28,167 )
Research and Development 786 22,451 (21,665 )
Provision for doubtful debts (277 ) - (277 )
Depreciation and amortization 121,292 112,817 8,475
Other 71,247 58,782 12,475
$ 421,040 $ 473,017 $ (51,977 )Consulting fees were increased by $3,513, or 5.1%, from $68,290 in the Six
Month-Comparable Period to $71,803 in the First Half Year of FY2018.
Our salary and payroll expenses were increased by $4,065, or 4.0%, to $106,050
in the First Half Year of FY2018, as compared to $101,985 in the Six
Month-Comparable Period. We anticipate that salary and payroll expenses will
continue to rise in future periods as it becomes necessary to increase our staff
in order to enhance our management quality for the listing requirement and to
increase our production activities.
Professional fees were decreased by $30,386, from $45,451 in the Six
Month-Comparable Period to $15,065 in the First Half Year of FY2018.
Travel and entertainment expenses were decreased by $28,167, or 44.5%, from
$63,241 in the Six Month-Comparable Period to $35,074 in the First Half Year of
FY2018. The decrease of travel and entertainment expenses was due to the
reduction of project-based travelling activities.
Research and Development expenses were increased to $786 in the First Half Year
of FY2018 from $22,451 in the Six Month-Comparable Period.
Depreciation and amortization expenses were increased by $8,475, or 7.5%, from
$112,817 in the Six Month-Comparable Period to $121,292 in the First Half Year
of FY2018.
Other expenses include items such as office expenses, software related costs,
telephone and a variety of other miscellaneous expenses. None of these expenses
alone changed significantly, as the difference was $12,465, or 21.2% increase
from $58,782 in the Six Month-Comparable Period to $71,247 in the First Half
Year of FY2018.
We anticipate that we will incur higher general and administrative expenses as a
public company. We expect that our professional fees, cost of transfer agent,
investor relations costs and other stock related costs will increase.
We also anticipate that selling, general and administrative expenses will
concurrently increase with our increased activity in the future but will not
increase in the same proportion to that of revenue.
Our loss from operations was decreased by $14,001 or 3.1%, to negative $431,532
in the First Half Year of FY2018, from negative $445,533 in the Six
Month-Comparable Period.
Non-operating income (expenses) was reduced by $241, or 9.5%, to negative $2,298
in the First Half Year of FY2018, from negative $2,539 in the Six
Month-Comparable Period, of which mainly due to the decrease of other
non-operating income in the First Half Year of FY2018.
The net loss attributed to the Company was decreased by $14,242, or 3.2% to
negative $433,830 in the First Half Year of FY2018, as compared to negative
$448,073 in the Six Month-Comparable Period.
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Liquidity and Capital Resources
The Company's liquidity and capital is dependent on whether the Company is
capable of generating its revenues and increasing its capital for the
development and expansion of its business.
Management plans to support the Company's operation and its business strategy by
raising funds through public and private offerings and relying on officers and
directors to perform essential management functions with minimal compensation.
If we do not raise all of the money we need from a public offering, we will have
to find alternative sources, such as a private placement of securities, or loans
from our officers, directors or others. The loans are likely to be unsecured,
non-interest bearing and repayable at demand.
Moreover, management has actively taken steps to revise its operating and
financial needs. Management believes that the Company's current and available
capital resources will allow it to continue its operations throughout this
fiscal year.
Working capital
At June 30, 2018, we had a working capital deficit of $9,296,877, as compared to
a working capital deficit of $9,029,045 at December 31, 2017. Of the working
capital deficit at June 30, 2018, $9,296,877 was amount due to related parties
and shareholder. Excluding the amounts due to related parties and shareholder,
we would have had a working capital surplus of $87,971 at June 30, 2018. As
comparison, the working capital deficit at December 31, 2017, $9,029,045 was
amount due to related parties and holding company. Excluding the amounts due to
related parties and holding company, we would have had a working capital surplus
of $167,717 at December 31, 2017. The amounts due to related parties and
shareholder are unsecured, interest free and repayable on demand.
Operating activities
During the six months ended June 30, 2018, operating activities used cash of
$204,006, and for the comparable six months ended June 30, 2017, operating
activities used cash in operations of $286,031. The use of cash in operating
activities for the six months ended June 30, 2018 was mainly derived from a net
loss of $433,830 with a non-cash item of $133,494
in depreciation and amortization; moreover, there was an increase of $46,911 in
inventories; an increase of $27,013 in another receivables; a decrease of
$13,627 in accounts receivables; a decrease of $31,044 in accrued expenses,
which were offset by an increase of $40,260 in amount due from related parties.
As comparison, the use of cash in operating activities for the six months ended
June 30, 2017 was mainly derived from a net loss of $448,072 with a non-cash
item of $131,899 in depreciation and amortization; moreover, there was an
increase of $41,957 in inventories; an increase of $23,251 in advance to
supplies; a decrease of $11,638 in advances from customer; a decrease of $16,837
in other tax payables, which were offset by a net increase of $103,657 ($395,782
minus $292,125) in amount due from related parties; and a decrease of $12,829 in
accounts receivable.
Investing Activities
During the six months ended June 30, 2018, investing activities used $2,108 of
cash; and for comparable the six months ended June 30, 2017, investing
activities used $1,502 of cash. The increase in use of cash was due to the
spending in investment on purchases of property, plant and equipment,
construction in progress and exchange difference between USD and CNY.
Financing Activities:
During the six months ended June 30, 2018, financing activities provided cash of
$177,388; and for comparable the six months ended June 30, 2017, financing
activities used cash of $222,431. The change of cash used by financing
activities was derived from the changes in the amounts due to our shareholder.
As at June 30, 2018, net cash and cash equivalents balance was $10,762 as
compared to balance $38,931 as at December 31, 2017.
As of June 30, 2018, stockholder's equity was negative $5,493,552, compared to a
negative equity of $5,092,072 at December 31, 2017.
The source of fund for supporting the Company's business operation was loans
from directors and shareholders. In the event the directors and shareholders do
not continue to support the Company's business operation, the Company could be
short of funds and may not be able to operate any longer. The amounts due to
related parties and director are interest-free loans. These loans are unsecured
and have no fixed repayment terms.
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Plan of Operation and Funding
We expect that working capital requirements will continue to be funded through a
combination of our existing funds, loans from third parties, other debt
facilities, or further issuances of securities. Our working capital requirements
are expected to increase in line with the growth of our business.
Existing working capital, further advances and debt instruments, and anticipated
cash flow are expected to fund our operations over the next three months. We
have no lines of credit or other bank financing arrangements. In connection with
our business plan, management anticipates additional increases in operating
expenses and capital expenditures relating to: (i) developmental expenses
associated with a growing business; and (ii) marketing expenses. We intend to
finance these expenses with further issuances of securities, and debt issuances.
Thereafter, we expect we will need to raise additional capital and generate
revenues to meet long-term operating requirements. Additional issuances of
equity or convertible debt securities will result in dilution to the
shareholdings of our current shareholders. Further, such securities might have
rights, preferences or privileges senior to our common stock. Additional
financing may not be available upon acceptable terms, or at all. If adequate
funds are not available or are not available on acceptable terms, we may not be
able to take advantage of prospective new business endeavors or opportunities,
which could significantly and materially restrict our business operations. We
will have to raise additional funds in the next twelve months in order to
sustain and expand our operations. We currently do not have a specific plan of
how we will obtain such funding; however, we anticipate that additional funding
will be in the form of equity financing from the sale of our common stock. We
have and will continue to seek to obtain short-term loans from our directors,
although no future arrangement for additional loans has been made. We do not
have any agreements with our directors concerning these loans. We do not have
any arrangements in place for any future equity financing.
Since 2017, local government of Jinzhong City, Shanxi Province, China (where
Shanxi Lutu and our production plant is located) has promulgated a new set of
environmental regulations restricting the use of coal-fired boilers in
factories. Since coal-powered generators were used in our production plant, our
production activities in 2018 were restricted to a certain extent.
We cannot ensure that we can comply with the new environmental regulations in
time. If that is the case, our production and our production capacity may be
reduced as a result. This will affect our ability to generate income and to meet
the demand of our customers, which in turn could have a material adverse effect
on our financial condition and results of operations.
Due to the enforcement on new environmental regulations over industrial
production by coal-fired boilers by local authorities in Shanxi, the Company's
production was restricted to a certain extent in 2017. In order to fully comply
with the new environmental regulations in place, management of the Company had
planned to carry our rectification work and expected that the rectification work
could be completed by mid of 2018 and full-scale production might resume in the
second half of 2018. However, due to the shortage of funding to carry out the
rectification work on our coal-powered generators, our production activities
were restricted since second quarter in 2018. Our production and our production
capacity was reduced as a result, significantly affected our ability to generate
income and to meet the demand of our customers, which in turn had a material
adverse effect on our financial condition and results of operations. The
management had decided to maintain our business by way of sub-contracting or
assignment of the production. Furthermore, the management had further researched
for other business opportunity to utilize the reduced capacity of the property
and equipment, in order to make better the worsened revenue.
Off-Balance Sheet Arrangements
As of the date of this Quarterly Report, 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 of operations, liquidity, capital expenditures or capital
resources that are material to investors.
Going Concern
The independent auditors' report accompanying our December 31, 2017 audited
financial statements filed in Form 10-K on April 17, 2018 contained an
explanatory paragraph expressing substantial doubt about our ability to continue
as a going concern. The financial statements have been prepared "assuming that
we will continue as a going concern," which contemplates that we will realize
our assets and satisfy our liabilities and commitments in the ordinary course of
business.
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