This report contains certain forward-looking statements that involve risks and
uncertainties. We use words such as "anticipate," "believe," "expect,"
"future," "intend," "plan," and similar expressions to identify forward-looking
statements. These statements are only predictions. Although we believe that the
expectations reflected in these forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements. You should not place undue reliance on these forward-looking
statements, which apply only as of the date of this report. Our actual results
could differ materially from those anticipated in these forward-looking
statements.
Overview
The Company conducts business primarily through its wholly owned subsidiary
Sinoforte Ltd., a Hong Kong corporation.
Prior to August 2011, the Company operated primarily as a merchant, buying and
selling various type and grades of graphite, such as medium- and high-carbon
graphite, high-purity graphite, micro-powder graphite and expandable graphite.
As a merchant, the Company acted as a reseller. It purchased graphite products
in bulk, primarily from graphite producers, and resold them, either in bulk or
in smaller quantities (in either case, without further processing), to various
small and mid-sized customers.
In August 2011, the Company started to engage in a business of e-commerce
platform. Currently the Company is in the process of developing a website,
"Makeliving.com" ("Makeliving"), which provides an e-commerce platform, where
registered members can exchange goods and services.
Makeliving will act both as a platform and as a conduit between those
(individuals or companies) who desire to acquire goods and services and those
(individuals or companies) who desire to offer goods and services. Makeliving
plans to charge a certain percentage fee for the transactions. However, no
revenues have been generated. The website is now temporarily under maintenance.
At the same time, the Company is considering new business models.
On January 23, 2018, the Company entered into an agreement with Cityhill
Limited, a wholly owned subsidiary of South Sea Petroleum Holdings Limited, a
Hong Kong listed public company, pursuant to which parties agreed to establish a
joint venture (the "Joint Venture"). Each party owns 50% equity interest in the
Joint Venture respectively.
The Joint Venture, with the support of blockchain technology, is to provide
global trading service of physical gold for global customers. The parties
contribute their respective experiences in blockchain technology and marketing.
The Company will assist the Joint Venture in exploring the North America and
Europe markets, while Cityhill will focus on the Asian markets.
In September 2021, the Company completed the acquisition of 98.75% shares of
Macao E-Media Development Company Limited ("MED"). As consideration for the MED
shares, the Company agreed to issue the sellers, or its assigns, in a total of
131,337,500 shares of the Company's restricted common stock, par value $0.01 per
share, at a consideration of $0.50 per share, in the aggregate consideration of
$65,668,750. As a result of this acquisition, MED becomes a 98.75% owned
subsidiary of the Company. MED was founded at Macau in 2011. Its main area of
business includes food and grocery order-pickup-delivery services from local
restaurants, supermarkets and hotels. For the year ended December 31, 2021, MED
generated approximately $10 million of revenue.
MED has four subsidiaries, each of which is in charge of respective area such as
Development & Maintenance, Marketing & Operation, Logistics & Delivery, Payment
& Clearance, Emerging Market Business Development.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Results of Operations
For the Three Months Ended September 30, 2022 Compared to the Three Months Ended
September 30, 2021
Sales
For the three months ended September 30, 2022, the Company generated sales of
$11,249,720 compared to $Nil for the same period of 2021. The new generated
sales were entirely from the newly acquired 98.75% owned subsidiary, MED.
Costs of Goods Sold
For the three months ended September 30, 2022, the Company generated cost of
goods sold for $7,637,524 compared to $Nil for the same period of 2021.
Currently the Company is attributable to delivery rider costs and purchase of
inventory.
Operating expenses
For the three months ended September 30, 2022 and 2021, the Company's selling,
general and administrative expenses were $4,152,071 compared to $96,489 for the
same period of the previous year. The increase is primarily the result of new
operation generated from Macao's and Zhuhai's subsidiaries.
Other Income (Expense)
For the three months ended September 30, 2022, the Company had $9,730 of
interest expense relating to bank loan interest payable, as compared to $1,446
of interest expense for the same period last year.
Net Loss
For the three months ended September 30, 2022, the Company had a net loss of
$577,639, or $(0.002) per share, as compared to a net loss of $98,181, or
$(0.001) per share, for the same period of 2021.
For the Nine Months Ended September 30, 2022 Compared to the Nine Months Ended
September 30, 2021
Sales
For the nine months ended September 30, 2022, the Company generated sales of
$33,070,741 compared to $Nil for the same period of 2021. The new generated
sales were entirely from the newly acquired 98.75% owned subsidiary, MED.
Costs of Goods Sold
For the nine months ended September 30, 2022, the Company generated cost of
goods sold for $23,873,771 compared to $Nil for the same period of 2021.
Currently the Company is attributable to delivery rider costs and purchase of
inventory.
Operating expenses
For the nine months ended September 30, 2022 and 2021, the Company's selling,
general and administrative expenses were $12,149,149 compared to $202,695 for
the same period of the previous year. The increase is primarily the result of
new operation generated from Macao's and Zhuhai's subsidiaries.
Other Income (Expense)
For the nine months ended September 30, 2022, the Company had $28,836 of
interest expense relating to bank loan interest payable, as compared to $7,294
of interest expense for the same period last year.
Net Loss
For the nine months ended September 30, 2022, the Company had a net loss of
$3,140,473, or $(0.012) per share, as compared to a net loss of $210,725, or
$(0.002) per share, for the same period of 2021.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liquidity and Capital Resources
As of September 30, 2022, the Company had cash and cash equivalents of
$2,895,560 and a working capital deficit of $5,072,970. For the nine months
ended September 30, 2022, the Company used net cash of $2,899,909 from its
operating activities primarily from our net loss of $3,140,473, adjusted net
with depreciation and amortization of $159,268, a loss of disposal of equipment
of $8,020, a increase in account receivables of $65,083, an decrease in
inventories of $105,902, a decrease in prepaid expenses of $89,931, a decrease
in deposits of $204,059, an increase in other receivables of $436,519, an
decrease in accrued expense of $33,086, an increase in deposit received of
$641,850, a decrease in other payables of $536,098, an increase in account
payable of $102,320. By comparison, net cash used in operating activities was
$2,372,841 for the same period of 2021.
During the nine months ended September 30, 2022, the Company provided net cash
of $276,142 from its investing activities which comprised with purchase of
equipment of $41,561, purchase of intangible assets of $63,743, advances to
related company of $61,274, repayment from shareholder of $442,720. By
comparison, net cash provided by investing activities was $4,475,322 for the
same period of 2021.
During the nine months ended September 30, 2022, the Company's financing
activities provided net cash of $415,074, which comprised of repayment of bank
loans of $203,363 and addition borrowings of $618,437. By comparison, net cash
provided by financing activities was $3,054,017 for the same period of 2021.
Until we are able to generate sufficient liquidity from operations, we intend to
continue to fund operations from cash on-hand, and through private debt or
equity placements of our securities. Our continued operations will depend on
whether we are able to generate sufficient liquidity from operations and/or
raise additional capital through such sources as equity and debt financings,
collaborative and licensing agreements and strategic alliances. There can be no
assurance that additional capital will become available or, if it does, that it
will become available on acceptable terms, or that any additional capital we may
obtain will be sufficient to meet our long-term needs. We currently have no
commitments for any additional capital, both internally and externally.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Contractual Obligations
We lease our office space, approximately 250 square feet, in Jersey City, New
Jersey, on a month-by-month basis. For the six-month ended June 30, 2020, the
rent was $650 per month. We also have an office in Hong Kong, which is leased
on a term of two years ending in January 2022. The space is approximately 770
square feet, and the rent is approximately $4,393 per month. With the
acquisition with MED, the Company has the office in Macao and Zhuhai, which are
leased on terms of two to three years from 2020 to 2024. The rent is
approximately $44,724 per month.
Critical Accounting Policies
In preparing the consolidated financial statements, we follow accounting
principles generally accepted in the United States ("GAAP"). GAAP requires us
to make estimates and judgments that affect the reported amounts of assets,
liabilities, sales and expenses, and related disclosure of contingent assets and
liabilities. We re-evaluate our estimates on an on-going basis. Our estimates
are based on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances. Actual results may differ
from these estimates under different assumptions and conditions.
We believe our use of estimates and underlying accounting assumptions adhere to
GAAP and are consistently applied. Our significant accounting policies are
summarized in Note 1 to our consolidated financial statements.
© Edgar Online, source Glimpses