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.
The Board of Director of the U Matrin Worldwide SDN. BHD. approved to change the
company name to MACN SDN. BHD. ("MACN") and successfully registered on Companies
Commission of Malaysia ("SSM") on June 9, 2020.
Results of Operations
Comparison for the three months ended September 30, 2021 and 2020
Sales
For the three months ended September 30, 2021, the Company generated $256,162 in
revenues, which has a decrease of $564,943, or 69% compared to the three months
ended September 30, 2020. This was due to decrease in sales volume for Akero
product series as the economy was declining due to pandemic issues in the
country.
Gross profit and gross margin
The Company was able to generate a gross profit margin of $193,752 for the three
months ended September 30, 2021, which has a decrease of $367,438 or 65%
compared to the three months ended September 30, 2020 of $561,190. This was due
to decrease in sales volume for new Akero product series which has higher profit
margin.
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Selling, general and administrative costs
Major operating costs include salaries and wages, advertising and promotional
costs for the three months ended September 30, 2021 and 2020. Selling, general
and administrative costs decreased from $303,559 for the three months ended
September 30, 2020 to $47,928 for the three months ended September 30, 2021. The
decrease was due to decrease in business activity.
Net income
For the three months ended September 30, 2021, the Company had $78,815 in net
loss as compared to $252,051 in net profit for the three months ended September
30, 2020, which was a decrease in net profit of $330,866. The Company will
continue to implement new marketing strategies to improve its financial
position.
Comparison for the nine months ended September 30, 2021 and 2020
Sales
For the nine months ended September 30, 2021, the Company generated $1,159,702
in revenues, which has a decrease of $1,474,039, or 56% compared to the nine
months ended September 30, 2020. This was due to decrease in sales volume for
Akero product series as the economy was declining due to pandemic issues in the
country.
Gross profit and gross margin
The Company was able to generate a gross profit margin of $931,669 for the nine
months ended September 30, 2021, which has a decrease of $932,120 or 50%
compared to the nine months ended September 30, 2020 of $1,1863,789. This was
due to decrease in sales volume for new Akero product series which has higher
profit margin.
Selling, general and administrative costs
Major operating costs include salaries and wages, advertising and promotional
costs for the nine months ended September 30, 2021 and 2020. Selling, general
and administrative costs decreased from $806,555 for the nine months ended
September 30, 2020 to $483,561 for the nine months ended September 30, 2021. The
decrease was due to decrease in business activity.
Net income
For the nine months ended September 30, 2021, the Company had $216,547 in net
profit as compared to $1,039,516 in net profit for the nine months ended
September 30, 2020, which was a decrease in net profit of $822,969. 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 $11,899 and $50,459 as of September 30, 2021
and December 31, 2020, respectively.
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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 nine
months ended September 30, 2021 and 2020:
For the nine months ended
September 30, September 30,
2021 2020
Net cash provided by operating activities 17,800 577,618
Net cash used in investing activities (157,289 ) (52,790 )
Net cash provided by / (used in) financing
activities 102,294 (605,332 )
Operating Activities
For the nine months ended September 30, 2021 we used $17,800 in operating
activities as compared to generated $577,618 in operating activities during the
nine months ended September 30, 2020. The movement in net cash used in operating
activities resulted from the movement in inventory, income tax payable, other
receivables and deposits, accounts payable and accrued expenses and other
payables.
Investing Activities
During the nine months ended September 30, 2021 we used $157,289 in investing
activities as compared to using $52,790 in investing activities during the nine
months ended September 30, 2020. The movement in net cash used in investing
activity resulted from purchase of motor vehicle.
Financing Activities
During the nine months ended September 30, 2021, we have provided by $102,294 in
financing activities as compared to using $605,332 in financing activities
during the nine months ended September 30, 2020.
During the nine months ended September 30, 2021, the net cash provided by
financing activities resulted from net proceed from related party of $74,875 and
net proceed for borrowings of $27,419.
During the nine months ended September 30, 2020, the net cash provided by
financing activities resulted from net repayment to related party of $520,755
and net repayment to term loan of $84,577.
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Loan Commitment
On December 23, 2014, MYR 2,300,000 (approximately $657,507) term loan was
granted to MACN 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 at 5.45%
and 6.85% for September 30, 2021 and December 31, 2020 respectively.
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 $14,956 and $17,718 for the nine months ended September
30, 2021 and 2020, respectively.
We have no known demands or commitments and we are not aware of any events or
uncertainties as of September 30, 2021 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 nine months ended
September 30, 2021 and December 31, 2020 except mentioned above.
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