This discussion summarizes the significant factors affecting the operating results, financial condition, liquidity and cash flows of the Company and its subsidiaries for the fiscal years ended December 31, 2022 and 2021. The discussion and analysis that follows should be read together with our consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this annual report on Form 10-K.

Except for historical information, the matters discussed in this section are forward looking statements that involve risks and uncertainties and are based upon judgments concerning various factors that are beyond the Company's control. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report.





Business Overview

We conduct our businesses primarily through our 98.75% owned subsidiary, Macao E-Media Development Company Limited, a Macau Company ("MED"), and 50% owned subsidiary, Gold Gold Gold Limited ("3G"), a Hong Kong company.

In this MD&A section, we will primarily discuss the business of MED, as 3G is a joint venture and its financial position and results of operations are not consolidated with our consolidated financial statements. The financial position and results of operations of 3G are summarized in the Notes to our consolidated financial statements.

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As a leading mobile platform of ordering and delivery services for restaurants or other merchants, we operate in Macau, and our businesses are built on our platform, Aomi App (the "Platform"). The Platform connects restaurants/merchants (collectively referred to as "Merchants") with consumers and delivery riders. The Platform is created to serve the needs of these three key constituencies and to become more intelligent and efficient with every customer order. As we grow, we enjoy the benefits of scale and enjoy our competitive advantages, and at the same time we deliver substantial benefits to everyone we serve. For the year ended December 31, 2022, our Platform generated over 11,779,000 transactions, totaling $1,285,186,000 MOP (approximately $160,248,000) in Gross Merchandise Volume.

In 2022, with the changes in the macroeconomic environment, market, and competition, our business strategy was adjusted to maintain a stable market share, reduce costs and increase efficiency, and ensure the Company's profitability. During the year, we reduced or suspended our investment in certain exploratory business activities, such as online supermarket, live broadcasting business, and focus on our main business and the business initiatives with good profitability. At the same time, we carried out various measures to reduce distribution costs and platform operating costs, and lay off some employees to reduce labor costs.

Impact of COVID-19 on Our Operations and Financial Performance

Outbreaks of epidemic, pandemic, or contagious diseases such as COVID-19, could have an adverse effect on our business, financial condition, and results of operations. The spread of COVID-19 has resulted in the World Health Organization declaring the outbreak of COVID-19 as a global pandemic. Substantially all of our revenues and workforce are concentrated in Macau and in China. In response to the intensifying efforts to contain the spread of COVID-19, the Macau government took a number of actions, which included extending the Chinese New Year holiday, quarantining individuals suspected of having COVID-19, asking residents to stay at home and to avoid public gathering, among other things.

The Covid-19 has had a mixed-impact on our businesses. Affected by the epidemic, customers have reduced going out and banned dine-in, which has brought big opportunities for our main business, i.e., takeaway service. The order volume has increased, the average unit price has increased, and the transaction volume has increased. Taking advantage of this opportunity, more merchants were joined our network. However, it is disadvantageous for our other services, because customers' consumption is downgraded and they are more sensitive to discounts.

While we continue business operations, there remain significant uncertainties surrounding the COVID-19 outbreak and its further development as a global pandemic. Hence, the extent of the business disruption and the related impact on our financial results and outlook for 2023 cannot be reasonably estimated at this time. The extent to which the COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and the actions taken globally to contain the coronavirus or treat its impact, among others. We are still assessing our business operations and the total impact COVID-19 may have on our results and financial condition, but there can be no assurance that this analysis will enable us to avoid part or all impact from the spread of COVID-19 or its consequences, including downturns in business sentiment generally.





2022 Highlights

Our operating results for the year ended December 31, 2022 included the following:





  ? Total revenue increased by $10.0 million to $44.1 million for the year ended
    December 31, 2022, as compared to the year ended December 31, 2021.

  ? Total gross profit increased by $2.4 million to $13.2 million for the year
    ended December 31, 2022, as compared to the year ended December 31, 2021.

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Results of Operations

Comparison of the Year Ended December 31, 2022 to the Year Ended December 31, 2021





The following table shows operating results for the years ended December 31,
2022 and 2021.



                                  Years Ended
                                     December 31,
                                2022             2021            $ Change       % Change
Revenues                   $ 44,111,814     $ 10,049,891        34,061,923          339 %
Cost of revenue              30,901,653        7,664,721        23,236,932          303 %
Gross Profit                 13,210,161        2,385,170        10,824,991          454 %

Operating expense            17,053,486        3,344,172        13,709,314          410 %
Operating loss               (3,843,325 )       (959,002 )       2,884,323          301 %

Other income / (expense)         20,824          (29,079 )          49,903          n/a
Net loss                   $ (3,822,501 )   $   (988,081 )       2,834,420          287 %




Sales

For the year ended December 31, 2022, the Company generated sales for $44,111,814 compared to $10,049,891 for the year of 2021. The new generated sales were entirely from the newly acquired 98.75% owned subsidiary, MED, which was acquired by the Company in September 2021.

Costs of Revenue

For the year ended December 31, 2022, the Company generated cost of revenue for $30,901,653 compared to $7,664,721 for the year of 2021. Currently the Company is attributable to delivery rider costs and purchase of inventory for the whole year.





Operating expenses

For the year ended December 31, 2022, the Company's operating expenses were $17,053,486 compared to $3,344,172 for the year of 2021. The increase is primarily the result of expense paid towards Macau and Zhuhai business operations in 2022.





Other Income (Expense)

For the year ended December 31, 2022, the Company had $20,824 of other income, net, as compared to $29,079 of interest expense, net, for the same period last year. The interest income in 2022 is related to loan receivable from a joint venture company. The interest expense in 2022 and 2021 are related to loan interest payable to the banks. The increase is primarily the result of new bank loan paid towards Macao and Zhuhai business operations.





Net Loss

For the year ended December 31, 2022, the Company had a net loss of $3,766,129, or $(0.014) per share, as compared to a net loss of $967,685, or $(0.005) per share, for the year of 2021.





Going Concern

The Company's consolidated financial statements are prepared using U.S. GAAP applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company had a net loss of $3,766,129 for the year ended December 31, 2022 and had an accumulated deficit of $14,034,905 as of December 31, 2022. The Company has not yet established an adequate ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease development of operations. Moreover, the Company may be continuously raising capital through the sale of debt and equity securities.

The Company's ability to achieve these objectives cannot be determined at this stage. If the Company is unsuccessful in its endeavors, it may be forced to cease operations. These consolidated financial statements do not include any adjustments that might result from this uncertainty which may include adjustments relating to the recoverability and classification of recorded asset

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amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

These factors have raised substantial doubt about the Company's ability to continue as a going concern. There can be no assurances that the Company will be able to obtain adequate financing or achieve profitability. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Liquidity and Capital Resources

As of December 31, 2022, the Company had cash and cash equivalents of $2,677,775 and a working capital deficit of $5,804,912. The Company generates a significant amount of cash flows from operations.

For the year ended December 31, 2022, the Company used net cash of $3,393,848 from its operating activities primarily from our net loss of $3,822,501, net with depreciation and amortization of $185,102, a disposal of equipment of $8,353, an increase in account receivables of $218,783, an decrease in inventories of $147,067, an increase in prepaid expenses of $267,133, a decrease in deposits of $173,117, an increase in other receivables of $89,902, an decrease in accrued expense of $79,457, a increase in deposit received of $201,219, a decrease in other payables of $235,835, an increase in account payable of $604,905. By comparison, net cash used in operating activities was $4,798,556 in 2021.

During the year ended December 31, 2022, the Company provided net cash of $303,242 from its investing activities which comprised with purchase of equipment of $51,517, purchase of intangible asset of $65,541, loan to associate of $9,640, advances to related company of $71,739, repayment from shareholder of $501,679. By comparison, net cash used in investing activities was $1,755,473 in 2021.

During the year ended December 31, 2022, the Company's financing activities provided net cash of $24,174, which was comprised of repayment of bank loans of $599,065 and loan borrowing from bank of $623,239. By comparison, net cash provided by financing activities was $11,652,469 in 2021.

We believe that our existing cash, cash equivalents, short term investments and borrowings available under the credit facility will be sufficient to meet our working capital requirements for at least the next twelve months. However, our liquidity assumptions may prove to be incorrect, and we could utilize our available financial resources sooner than currently expected. If we are unable to obtain needed additional funds, we will have to reduce operating costs, which could impair our growth prospects and could otherwise negatively impact our business.

The bank loans are borrowed by MED and Zhuhai Chengmi Technology Company Limited ("Chengmi"), which are the new subsidiaries during business combinations in September 2021. The banking credit facility from MED dated March 3, 2020 for a maximum principal of $374,672 expiring July 31, 2025 at an interest rate of 4.25% per annum. This loan is secured against the directors of MED and for the use of MED operation due to the outbreak of COVID-19. Another bank loan borrowed by Chengmi with principle of $464,583 and $309,721 and expiring December 2022 and May 2023, respectively, at an interest rate of 4.6% and 4.45% per annum. On June 13, 2022, MED borrowed another loan from Ant Bank (Macao) Limited with principle of $623,239 (equivalent to MOP5,000,000), at an interest rate of 4% per annum with no fixed term of repayment.

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

The Company does not have any off-balance sheet arrangements.





Contractual Obligations

The Company leases approximately 250 square feet of space in Jersey City, New Jersey under a month-by-month basis at rent of $650 per month. In addition, the Company entered into a two-year lease for office space of approximately 770 square feet in Hong Kong, expiring January 2024 with monthly payments of approximately $4,404 per month. Besides, the acquisition of Macau and Zhuhai subsidiaries, it results on addition lease for office and warehouse approximately 39,800 square feet in Macau and Zhuhai, expiring within year 2023 and 2024 with monthly payment of approximately $28,351 per month.

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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 2 to our consolidated financial statements.

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