What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-04-11 compared with 2024-04-01 · 72 added, 91 removed, 68 unchanged (71% of the section changed)

3 unchanged sentences

a series of acquisitions and dispositions in 2024 and 2023, our primary business, which is carried out by Shandong Yunchu, Jingshan Sanhe,

Jilin Chuangyuan, Fast Approach Inc and Xianning Bozhuang, is:

● To sell black tea product cultivation, packaging, and sales;

Xianning Bozhuang and Fast Approach Inc, is:

To import and distributes animal proteins, mainly beef products;

To sell high-grade synthetic fuel products;

● To sell f ormaldehyde,

urea-formaldehyde glue, methylal, and clean fuel oil;

● Online advertising services and mobile game.

To sell black tea product cultivation, packaging, and sales;

Online advertising services.

Results of Operations

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Other income (expense)

Impairment of goodwill

Share of losses from equity method investments

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Loss from continuing operations

Net loss from discontinuing operations

Net (loss) income

Net income (loss) from discontinuing operations

Net Revenues .

Our net revenues for the

fiscal year ending on December 31, 2023 amounted to $27.12 million, reflecting a decline of approximately $17.64 million or 39% compared

to the previous year’s figure of $44.76 million (ending on December 31, 2022).

Our net revenues for the fiscal

year ending on December 31, 2024 amounted to $6.73 million, reflecting a decline of approximately $10.93 million or 62% compared to the

previous year’s figure of $17.66 million (ending on December 31, 2023).

In the previous fiscal year, 50% of our total revenue was

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adverse effects of COVID-19, leading to a decline in sales from $14.32 million in 2023 to $2.04 million in 2024.

The residual decrease

was attributable to disposal of certain subsidiaries in late 2022.

Cost of Revenues .

During the year ended

December 31, 2023, we experienced a decrease in cost of revenue of $14.72 million or 36%, in comparison to the year ended December 31,

2022, from approximately $40.41 million to $25.69 million.

This change was mainly due to a decrease in sales of revenue, as discussed

above, and disposal of certain subsidiaries in late 2022.

During the year ended December 31, 2024, we experienced a decrease in cost of revenue of $10.11 million or 63%, in comparison to the

year ended December 31, 2023, from approximately $16.08 million to $5.97 million.

This change was mainly due to a decrease in sales of

revenue, as discussed above.

Gross Profit .

Our gross profit

declined by $2.92 million, representing a decrease of 67% to $1.43 million for the fiscal year ended December 31, 2023 compared to

$4.35 million for the fiscal year ended December 31, 2022.

This decline can be primarily attributed to the aforementioned factors,

namely a decrease in sales revenue and the divestiture of certain subsidiaries towards the end of 2022.

Additionally, another

contributing factor was a slight increase in the average combined cost per unit of our products.

The gross profit margin decreased

from 10.77% in 2022 to 5.57% in 2023, representing a decrease of 5.2%.

This decline is primarily attributed to the significant

reduction in sales of cold chain food mentioned earlier, as well as a notable increase in associated warehousing costs.

profit declined by $0.82 million, representing a decrease of 52% to $0.76 million for the fiscal year ended December 31, 2024 compared

to $1.58 million for the fiscal year ended December 31, 2023.

This decline can be primarily attributed to the decrease in sales revenue,

and partially offset by a slight decrease in the average combined cost per unit of our products.

The gross profit margin increased from

9.0% in 2023 to 11.3% in 2024, representing an increase of 2.3%, primarily attributed to change in product mix.

Operating Expenses

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and marketing expenses decreased by $0.05 million, or 57%, to $0.04 million for the year ended December 31, 2024 from $0.09 million for

the year ended December 31, 2022.

This decrease was mainly due to the aforementioned reasons, attributable to a decrease in sales of revenue

and the disposal of certain subsidiaries in 2022.

General and Administrative Expenses.

general and administrative expenses for the year ended December 31, 2023 increased by $1.98 million, or 28%, to $9.04 million compared

to the previous year’s $7.06 million.

After adjusting for the impact of $1.10 million from last year’s General and Administrative

Expenses generated by the disposed subsidiary, the increase in fiscal 2023 is approximately $3.03 million.

The primary reason for this

increase is attributed to inadequate inventory management, resulting in a loss of inventory of approximately $1.97 million and an expected

credit loss of $2.76 million on trade receivables, partially offset by a decrease of $1.70 million attributed to cost control during 2023.

Our net loss decreased by $5.09 million, or 20%,

to a net loss of $20.84 million for the year ended December 31, 2023 from $25.94 million in net loss for the year ended December 31, 2022.

This decrease was mainly due to the aforementioned reasons, attributable to a decrease in sales of revenue and the disposal of certain

subsidiaries in 2022.

the year ended December 31, 2023, mainly due to the decrease in transportation and storage cost, as well as decline in the sales staff

General and Administrative

Our general and administrative expenses for the year ended December 31, 2024 decreased by $0.67 million, to $7.33 million

compared to the previous year’s $8.00 million, mainly due to loss in the amount of $1.97 million recognized for obsolete tea products

during the year ended December 31, 2023, and partially offset by increase in allowance for doubtful accounts and impairment of long-term

investments during the year ended December 31, 2024.

Our net loss decreased by

$13.51 million, or 65%, to a net loss of $7.33 million for the year ended December 31, 2024 from $20.84 million in net loss for the year

ended December 31, 2023.

This decrease was mainly due to the decrease in loss on the disposal of certain subsidiaries.

Liquidity and Capital Resources

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In the reporting period in the fiscal year 2024, our primary sources of financing have

been cash generated from operations and private placements.

As of December 31, 2023, we had cash and cash equivalents

of $436.38 thousand compared to $93.49 thousand as of December 31, 2022.

The debt to assets ratio was 54.40% and 33.16% as of December

31, 2023 and December 31, 2022, respectively.

We expect to continue to finance our operations and working capital needs in 2023 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.

been cash generated from operations and proceeds from bank loans.

As of December 31, 2024, we had cash and restricted cash of $195,153

compared to $237,214 as of December 31, 2023.

The debt to assets ratio was 54.0% and 54.4% as of December 31, 2024 and December 31, 2023,

respectively.

We expect to continue to finance our operations and working capital needs in 2024 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.

Going Concern

The accompanying 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 $20,843,796

attributable to common shareholders for the year ended December 31, 2023.

As of December 31, 2023, the Company had an accumulated deficit

of $140,724,597, a working capital deficit of $6,675,220, its net cash used in operating activities for the year ended December 31, 2023

was $ 5,282,343.

These factors raise substantial doubt on the Company’s ability

to continue as a going concern.

The accompanying audited consolidated financial statements do not include any adjustments that might result

from the outcome of this uncertainty.

Management’s plan for the Company’s continued existence is dependent upon management’s

ability to execute the business plan, develop the plan to generate profit;

additionally, Management may need to continue to rely on private

placements or certain related parties to provide funding for investment, for working capital and general corporate purposes.

If management

is unable to execute its plan, the Company may become insolvent.

The accompanying consolidated

financial statements have been prepared assuming that the Company will continue as a going concern;

however, the Company has incurred

a net loss from continuing operations of $7,457,193 for the year ended December 31, 2024.

As of December 31, 2024, the Company had an

accumulated deficit of $148,053,653, a working capital deficit of $6,120,752, its net cash provided by operating activities from continuing

operations for the year ended December 31, 2024 was $928,644.

These factors raise substantial doubt on the Company’s

ability to continue as a going concern.

The accompanying audited consolidated financial statements do not include any adjustments that

might result from the outcome of this uncertainty.

Management’s plan for the Company’s continued existence is dependent upon

management’s ability to execute the business plan, develop the plan to generate profit;

additionally, Management may need to continue

to rely on private placements or certain related parties to provide funding for investment, for working capital and general corporate

If management is unable to execute its plan, the Company may become insolvent.

The following table provides detailed information

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(In thousands of U.S.

Net cash flows used in operating activities

Net cash flows provided by investing activities

Net cash flows provided by financing activities

Net cash flows provided by (used in) operating activities

Net cash flows (used in) provided by investing activities

Net cash flows (used in) provided by financing activities

Operating Activities

Net cash used in operating activities decreased by $3.73 million to

$5.28 million during the year ended December 31, 2023 from $9.01 million during the year ended December 31, 2022.

This decrease was primarily

due to the decrease in net loss excluding non-cash expenses, gains and losses of $1.42 million and changes in net operating assets and

liabilities of $5.15 million.

Net cash provided by operating

activities was $0.93 million during the year ended December 31, 2024, compared to $5.28 million used in operating activities during the

year ended December 31, 2023.

This change was primarily due to the decrease in net loss excluding non-cash expenses, gains and losses

of $1.41 million, changes in net operating assets and liabilities of $5.23 million, and partially offset by a decrease in net cash provided

by operating activities from discontinued operations of $0.43 million.

Investing Activities

Net cash provided by investing activities for

the year ended December 31, 2023 was $2.67 million, representing an increase of $6.52 million from the $3.85 million used in investing

activities for the same period in 2022.

This increase is primarily attributed to the disposal of a certain subsidiary amounting to $2.77

million and a decrease in long-term investments totaling $4.10 million compared to the previous year.

Net cash used in investing

activities for the year ended December 31, 2024 was $5,421, compared to $2.47 million provided by investing activities for the same period

This change is primarily due to a reduction in proceeds from disposal of equity method investments of $2.77 million compared

to the year ended December 31, 2023.

Financing Activities

Net cash provided by financing activities for the year ended December

31, 2023, amounted to $2.88 million, indicating a decrease of $7.95 million compared to the corresponding period in 2022.

primarily stems from a reduction of $11.10 million in proceeds generated from the issuance of common stock as opposed to 2022, partially

offset by an increase of $2.97 million attributed to changes involving related parties during 2023.

The net cash used in

financing activities was $0.97 million during the year ended December 31, 2024, compared to net cash provided by financing

activities of $2.89 million for the same period in 2023.

This change can be attributed to a rise in loan to related parties, and

partially offset by an increase in bank loans.

Critical Accounting Policies

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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