What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2023-03-31 compared with 2022-03-31 · 113 added, 104 removed, 23 unchanged (90% of the section changed)

1 unchanged sentence

CONDITION AND RESULTS OF OPERATIONS

We are headquartered in Flushing, New York.

After a series of acquisitions

and dispositions in 2021 and 2020, our primary business, which is carried out by Shandong Yunchu, Jingshan Sanhe, Jilin Chuangyuan, Anhui

Ansheng, Fast Approach Inc and Xianning Bozhuang, includes:

sell black tea product cultivation, packaging, and sales;

sell high-grade synthetic fuel products

● To import beef products and sell

such products in China

sell f ormaldehyde, urea-formaldehyde glue, methylal,

and clean fuel oil

sell the barrier and explosion-proof skid-mounted refueling devices, SF double-layer buried oil storage tank

design and online advertising services;

The accompanying audited consolidated financial statements have been prepared

assuming that the Company will continue as a going concern.

However, the Company has incurred a net loss of $9,740,486 attributable to

common shareholders for the year ended December 31, 2021.

As of December 31, 2021, the Company had an accumulated deficit of $94,072,383,

a working capital deficit of $7,075,320, and its net cash used in operating activities for the year ended December 31, 2021 was $519,396

Company plans to continue its expansion and investments, which will require continued improvements in revenue, net income and cash flows.

of Operations

following discussion should be read in conjunction with the company’s audited consolidated financial statement for the years ended

December 31, 2021, and 2020 and related notes to that.

We are headquartered in Flushing, New York City.

After a series of

acquisitions and dispositions in 2022 and 2021, our primary business, which is carried out by Shandong Yunchu, Jingshan Sanhe, Jilin Chuangyuan,

Fast Approach Inc.

and Xianning Bozhuang, is:

● Tea products cultivation, packaging, and sales;

● To sell high-grade synthetic fuel products

● To distribute beef and mutton products.

● To sell f ormaldehyde,

urea-formaldehyde glue, methylal, and clean fuel oil

● Online advertising services and mobile games;

Results of Operations

The following discussion should be read in conjunction

with the company’s audited consolidated financial statement for the years ended December 31, 2022, and 2021 and related notes to

Twelve months ended

5 unchanged sentences

Research & Developing expenses

Operating income (loss)

Interest income (expense)

Other income (expense)

Operating loss

Interest expense

Impairment of goodwill

Write off receivables from disposal of former subsidiaries

(Loss) income before tax

Loss on disposal

Income tax expense/(income)

Income (loss) from continuing operations

Net income(loss)from discontinuing operations

Net (loss) income

Our net revenues for the twelve months ended December 31, 2021 amounted to $37.77 million, which represents an increase

of approximately $34.13 million, or 938%, from $3.64 million for the twelve months ended December 31, 2020.

This increase was attributable

to the acquisition of certain subsidiaries and VIEs.

During the twelve months ended December 31, 2021, we experienced an increase in cost of revenue of $31.6 million or

1331%, in comparison to the twelve months ended December 31, 2020, from approximately $2.37 million to $33.9 million.

This increase was

mainly due to the acquisition of certain subsidiaries and VIEs.

Loss before tax

Income tax expense

loss from continuing operations

Net loss from discontinuing operations

Net Revenues .

Our net revenues for the

twelve months ended December 31, 2022 amounted to $44.76 million, which represents an increase of approximately $6.99 million, or 19%,

from $37.77 million for the twelve months ended December 31, 2021.

This increase was attributable to the acquisition of certain subsidiaries

and VIE in 2022.

Cost of Revenues.

During the twelve months

ended December 31, 2022, we experienced an increase in cost of revenue of $6.48 million or 19%, in comparison to the twelve months ended

December 31, 2021, from approximately $33.92 million to $40.41 million.

This increase was mainly due to the acquisition of certain subsidiaries

and VIE in 2022.

Gross Profit .

Our gross profit increased by $2.58 million,

or 203% to $3.85 million for the twelve months ended December 31, 2021 from $1.27 million for the twelve months ended December 31, 2020.

This increase was mainly attributable to the acquisition of certain subsidiaries and VIEs.

and Marketing Expenses.

Our selling and marketing expenses increased by $1.89 million, or 1183%, to $2.05 million for the twelve

months ended December 31, 2021 from $0.16 million for the twelve months ended December 31, 2020.

This increase was mainly due to our

effort to expand our business.

Our gross profit increased

by $0.51 million, or 13% to $4.35 million for the twelve months ended December 31, 2022 from $3.85 million for the twelve months ended

December 31, 2021.

This increase was mainly due to the aforementioned reasons, attributable to the acquisition of certain subsidiaries

and VIEs in 2022.

Operating Expenses

Selling and Marketing Expenses.

Our selling and marketing expenses

increased by $112,000, or 5%, to $2.17 million for the twelve months ended December 31, 2022 from $2.05 million for the twelve months ended

December 31, 2021.

The selling and marketing expenses mainly come from transportation and storage cost of $0.72 million;

the sales staff

salaries cost of $0.36 million and selling commission of $0.43 million.

General and Administrative Expenses.

We experienced an increase

in general and administrative expense of $3.33 million from $3.90 million to approximately $7.22 million for the twelve months ended December

We experienced a slight decrease

in general and administrative expense of $181,000 from $7.22 million to approximately $7.01 million for the twelve months ended December

31, 2022, compared to the twelve months ended December 31, 2021.

This cost increase was mainly due to the increase of the professional

service fees and expenses incurred by the newly acquired business operation.

net loss decreased by $1.06 million, or 10%, to a net loss of $9.99 million for the twelve months ended December 31, 2021 from $11.05

million in net loss for the twelve months ended December 31, 2020.

This decrease was mainly due to our effort to expand our business.

and Capital Resources

assessing our liquidity, we monitor and analyze our cash-on-hand and operating and capital expenditure commitments.

Our liquidity needs

meet our working capital requirements, operating expenses, and capital expenditure obligations.

In the reporting period in the fiscal

year 2021, our primary sources of financing have been cash generated from operations and private placements.

of December 31, 2021, we had cash and cash equivalents (including restricted cash) of $1.13 million compared to $3.42 million as of December

The debt to assets ratio was 40.41% and 16.65% as of December 31, 2021 and December 31, 2020, respectively.

We expect to continue

to finance our operations and working capital needs in 2021 from cash generated from operations and, if needed, private financings.

available liquidity is insufficient to meet our operating and loan obligations as they come due.

In that case, our plans include pursuing

alternative financing arrangements or reducing expenditures as necessary to meet our cash requirements.

However, there is no assurance

that we will raise additional capital or reduce discretionary spending to provide liquidity if needed.

We cannot be sure of the availability

or terms of any alternative financing arrangements.

following table provides detailed information about our net cash flow for all financial statement periods presented in this report.

For the twelve months ended

This cost decrease was mainly due to the decline in third party service

The General and Administrative Expenses mainly come from third party service fees of $1.96 million;

administrative staff salary

costs of $1.60 million and depreciation;

amortization expense of $0.81 million and other daily sporadic management costs.

Our net loss increased by $15.86 million, or 159%, to a net loss of

$25.85 million for the twelve months ended December 31, 2022 from $9.99 million in net loss for the twelve months ended December 31, 2021.

This increase was mainly due to losses of disposal of the subsidiary, Anhui Ansheng Petrochemical

Equipment Co., Ltd., impairment of goodwill and our effort to expand our business.

Going Concern and Capital Resources

In assessing our liquidity, we monitor and analyze

our cash-on-hand and operating and capital expenditure commitments.

Our liquidity needs meet our working capital requirements, operating

expenses, and capital expenditure obligations.

In the reporting period in the fiscal year 2022, our primary sources of financing have

been cash generated from operations and private placements.

As of December 31, 2022, we had cash and cash

equivalents (including restricted cash) of $93,500 compared to $1.13 million as of December 31, 2021.

The debt to assets ratio was 33.16%

and 40.41% as of December 31, 2022 and December 31, 2021, respectively.

We expect to continue to finance our operations and working capital

needs in 2022 from cash generated from operations and, if needed, private financings.

Suppose available liquidity is insufficient to meet

our operating and loan obligations as they come due.

In that case, our plans include pursuing alternative financing arrangements or reducing

expenditures as necessary to meet our cash requirements.

However, there is no assurance that we will raise additional capital or reduce

discretionary spending to provide liquidity if needed.

We cannot be sure of the availability or terms of any alternative financing arrangements.

The following table provides detailed information

about our net cash flow for all financial statement periods presented in this report.

Cash Flows Data:

For the years ended

(In thousands of U.S.

2 unchanged sentences

Net cash flows provided by financing activities

the year ended December 31, 2021, net cash used in operating activities was $0.52 million, which consisted primarily of net loss of $9.99

million, and was adjusted by depreciation and amortization of $2.45 million, impairment of goodwill of $3.23 million and share based

compensation expense of $1.16 million.

The Company had an increase of $4.81 million in other receivables from

related parties, an increase of $1.33 million in inventories and an increase of $4.31 million in payables and other current liabilities.

the year ended December 31, 2020, net cash used in operating activities was $3.50 million, which consisted primarily of net loss of $11.10

million, and was adjusted by depreciation and amortization of $0.45 million, write off receivables of $6.08 million, impairment of goodwill

of $2.34 million and exchange loss of $1.83 million.

Company had an increase of $1.53 million in accounts and other receivables, an increase of $4.07 million in prepayments and other current

assets and an increase of $0.88 million in payables and other current liabilities.

Operating Activities

Net cash used in operating activities from operations was approximately

$9.01 million and $0.52 million for the year ended December 31, 2022, and 2021.

Net Cash decrease in operating activities for the year

ended December 31, 2022, was mainly comprised of non-cash effects of depreciation and amortization expense of approximately $1.48 million,

impairment of inventories of approximately $0.2 million, impairment of goodwill of about $10.38 million, loss on disposal of subsidiaries

of approximately $9.57 million and the decrease of account receivable of approximately $0.66 million, the reduction in accounts payable

of about $0.36 million and the decrease in other payables and accrued liabilities of about $2.97 million.

Investing Activities

Net cash used in investing activities for the twelve months ended December

31, 2021 was $11.81 million, representing an increase of $10.96 million in net cash used in investing activities from $0.85 million for

the same period of 2020.

This is mainly due to the recent acquisition activities.

Net cash provided by financing activities for the twelve months ended December

31, 2021, was $8.93 million, representing an increase of $8.69 million in net cash provided by financing activities from $0.24 million

for the same period of 2020.

This is mainly due to the proceeds from the private placement transactions.

Accounting Policies

preparation of financial statements in conformity with the United States generally accepted accounting principles requires our management

to make assumptions, estimates, and judgments that affect the amounts reported in the financial statements, including the notes to that,

and related disclosures of commitments contingencies, if any.

consider our critical accounting policies to require the more significant judgments and estimates in preparing financial statements,

including those outlined in Note 2 to the financial statements included herein.

Company has evaluated the timing and the impact of the guidance above on the financial statements.

of December 31, 2021, there were no other recently issued accounting standards not yet adopted that would or could have a material effect

on the Company’s consolidated financial statements.

Sheet Arrangements

do not have any off-balance arrangements.

31, 2022 was $3.85 million, representing a decrease of $7.96million in net cash used in investing activities from $11.8 million for the

same period of 2021.

Cash used in investing activities for the year ended December 31, 2022 was mainly comprised of the partial investment

payments of approximately $4.1 million that we made in relation to the Xiangtian Energy Co., Ltd.

Financing Activities

Net cash provided by financing activities for

the twelve months ended December 31, 2022, was $10.84 million, representing an increase of $1.91 million in net cash provided by financing

activities from $8.93 million for the same period of 2021.

This is mainly due to the proceeds from the issuance of common stock.

Critical Accounting Policies

The preparation of financial statements in conformity

with the United States generally accepted accounting principles requires our management to make assumptions, estimates, and judgments

that affect the amounts reported in the financial statements, including the notes to that, and related disclosures of commitments contingencies,

We consider our critical accounting policies to

require the more significant judgments and estimates in preparing financial statements, including those outlined in Note 2 to the financial

statements included herein.

The Company has evaluated the timing and the impact

of the guidance above on the financial statements.

As of December 31, 2022, there were no other recently

issued accounting standards not yet adopted that would or could have a material effect on the Company’s consolidated financial statements.

Off-Balance Sheet Arrangements

We do not have any off-balance arrangements.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

1 unchanged sentence

FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL DATA

The full text of our audited consolidated financial statements as

of December 31, 2020, begins on page F-1 of this annual report on Form 10-K.

The full text of our audited consolidated financial

statements as of December 31, 2022, begins on page F-1 of this annual report on Form 10-K.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis