The following discussion of our results of operations and cash flows for the years ended December 31, 2021 and 2020 and financial condition as of December 31, 2021 should be read in conjunction with our financial statements and the related notes included elsewhere in this report.

Results of Operations - Year Ended December 31, 2021 Compared to Year Ended December 31, 2020.







Revenues

We generated $0 and $290 in revenues for the years ended December 31, 2021 and 2020, respectively. The Company did not generate any revenue during the year ended December 31, 2021 due to the impact of COVID-19.





Cost of Goods Sold

Our cost of goods sold was $0 and $58 for the years ended December 31, 2021 and 2020, respectively. The Company did not incur any cost in the year ended December 31, 2021 because there were no sales during the year of 2021.

Selling and Marketing Expenses

Our selling and marketing expenses primarily consist of advertising and product promotion expenses. Our selling and marketing expenses were $28,499 for the year ended December 31, 2021 as compared to $68,804 for the year ended December 31, 2020. Our total selling and marketing expenses decreased by $40,305 or 58.6% during the year ended December 31, 2021, compared to the same period in 2020. Such decrease in selling and marketing expenses was mainly due to the decrease in promotion conference expense.

General and administrative expenses

Our general and administrative expenses primarily consist of payroll and benefit costs for corporate employees, legal, consulting, professional expenses, rental expenses and other corporate overhead costs.

The general and administrative expenses was $709,735 for the year ended December 31, 2021 as compared to $597,873 for the year ended December 31, 2020. Our general and administrative expenses increased by $111,862 or 18.7% during the year ended December 31, 2021, compared to the same period in 2020. Such increase in general and administrative expenses was mainly due to the increase in legal, accounting, printing, and stock transfer agent fees that were associated with the Company's merger and acquisition activities and SEC filings.





Interest expense

Interest expense was $4,970 for the year ended December 31, 2021 as compared to $15,102 for the year ended December 31, 2020. Our total interest expense decreased by $10,132 or 67.1% during the year ended December 31, 2021, compared to the same period in 2020. The decrease in interest expense was primarily due to the repayment of short-term bank loan on March 17, 2021.





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Other Income (expense), net

Other expense, net was $4,321 for the year ended December 31, 2021 as compared to other expense, net of $9,339 for the year ended December 31, 2020. The decrease of $5,018, or 53.7% was principally caused by the disposal of inventory in 2020.





Net Loss

Our net loss was $747,525 for the year ended December 31, 2021 as compared to $690,886 for the year ended December 31, 2020, increased by $56,639 or 8.2% as a result of the above factors.

Foreign Currency Translation Loss

We had $36,291 in foreign currency translation loss during the year ended December 31, 2021 as compared to $68,201 in foreign currency translation loss during the year ended December 31, 2020, reflecting a change of $31,910 or 46.8%. Such decrease in foreign currency translation loss was primarily caused by the currency exchange rate fluctuation.

Liquidity and Capital Resources





Working Capital



                                  For the Years ended
                                     December 31,                          Change
                                2021              2020           (Dollars)        (Percent)
Current Assets              $   4,628,531     $   3,834,747          793,784            20.7 %
Current Liabilities         $  16,316,116     $  14,206,129        2,109,987            14.9 %
Working Capital (deficit)   $ (11,687,585 )   $ (10,371,382 )     (1,316,203 )          12.7 %

Our working capital deficit was $11,687,585 for the year ended December 31, 2021 as compared to $10,371,382 for the year ended December 31, 2020, an increase of $1,316,203 or 12.7%. The increase in working capital deficiency is primarily due to an increase in loan from related parties and from third parties.

Cash Flow from Operating Activities

Our net cash used in operating activities were $561,297 for the year ended December 31, 2021 as compared to $473,534 for the year ended December 31, 2020, an increase of $87,763 or 18.5%. The increase was primarily due to the increased net loss, increased cash outflow in prepaid taxes and advance to suppliers during the year ended December 31, 2021 compared to the year ended December 31, 2020.

Cash Flow from Investing Activities

Our net cash used in investing activities was $20,599 for the year ended December 31, 2021 as compared to $181,531 for the year ended December 31, 2020, an decrease of $160,932 or 88.7%. The decrease was primarily due to the cash receipt from reverse merger, partially offset by the increase in payment for construction in progress and equipment during the year ended December 31, 2021 as compared to the year ended December 31, 2020.

Cash Flow from Financing Activities

Our net cash provided by financing activities were $860,718 for the year ended December 31, 2021 as compared to $591,635 for the year ended December 31, 2020, an increase of $269,083 or 45.5%. The increase was primarily due to the increase in loans from related parties, partially offset by the repayment of short-term bank loan and loans from third parties during the year ended December 31, 2021 compared to the year ended December 31, 2020.





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Off-Balance Sheet Arrangements

As of December 31, 2021, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

Critical Accounting Policies and Estimates

We prepare our financial statements in conformity with Generally Accepted Accounting Principles ("GAAP") of the United States, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared. On a regular basis, we review our accounting policies and how they are applied and disclosed in our financial statements.

While we believe that the historical experience, current trends and other factors considered support the preparation of our financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.





Inventories

Our inventories primarily consist of dandelion teas and water purifiers. Inventories are valued at the lower of cost (determined on a weighted average basis) and net realizable value. Inventories consist of raw materials, goods in process, and finished goods. We review our inventories regularly for possible obsolete goods and establishes reserves when determined necessary. As of December 31, 2021 and 2020, the allowance for obsolete inventories was $0 and $0, respectively.





Construction in Progress

Construction in progress represents direct costs of construction, interest and design fees incurred. No interest was capitalized for the years ended December 31, 2021 and 2020. Capitalization of these costs ceases and the construction in progress is transferred to property, plant, and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. No depreciation is recognized until it is completed and ready for intended use. Construction in progress as of December 31, 2021 and 2020 was $8,726,299 and $8,283,595, respectively.





Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. To determine the revenue to be recognized, the Company applies the following five-step model:





  ? identify arrangements with customers;

  ? identify performance obligations;

  ? determine transaction price;

  ? allocate transaction price to the separate performance obligations in the
    arrangement, if more than one exists; and

  ? recognize revenue as performance obligations are satisfied.

The Company generates revenues mainly from sales of packaged dandelion teas and water purifiers. Revenue from the sales of goods is recognized when the control over the promised goods is transferred to customers.

Cash payments received or due from customers before revenue recognized are recorded as advances from customers. The advance from customers is recognized as revenue when the Company's performance obligation is completed.





Related parties

The Company follows ASC 850, "Related Party Disclosures," for the identification of related parties and disclosure of related party transactions. Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation.

Recent Accounting Pronouncements

See Note 3 to our audited, consolidated, and condensed financial statements for the fiscal years ending December 31, 2021 and 2020.

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