The following discussion and analysis of our financial condition and results of
operations for the years ended December, 2019 and 2018 should be read in
conjunction with the Financial Statements and corresponding notes included in
this Annual Report on Form 10-K. Our discussion includes forward-looking
statements based upon current expectations that involve risks and uncertainties,
such as our plans, objectives, expectations, and intentions. Actual results and
the timing of events could differ materially from those anticipated in these
forward-looking statements as a result of a number of factors, including those
set forth under the Risk Factors and Special Note Regarding Forward-Looking
Statements in this report. We use words such as "anticipate," "estimate,"
"plan," "project," "continuing," "ongoing," "expect," "believe," "intend,"
"may," "will," "should," "could," "target", "forecast" and similar expressions
to identify forward-looking statements.



Overview



Our Business



We are a household appliances and related domestic appliances products company
in the PRC. Our principal business activity is the provision of household
appliances products and related domestic appliances products. Our products
improve the home lifestyle and living solutions experience, predominately
through power savings, resources efficiencies and functionalities of products.
We sell our products to corporate customers, retail customers and independent
distributors predominately in the PRC and intend to expand our business in other
countries around the world. Our products are typically used in a home setting of
consumers of all demographics on a daily basis and meet the convenience-oriented
preferences of today's consumer across a broad range of household activities. We
help make daily life easier through a broad range of products that offer
multi-purpose functions. Our diverse product portfolio includes televisions,
air-conditioners, laundry appliances, refrigerators and freezers, cooking
appliances, dishwashers, mixers and other small domestic appliances. Our
products are known for their quality, which is recognized by our consumers,
retail customers, and corporate customers alike. We believe our customers know
they can depend on our trusted brand. These factors generate loyalty which
empowers us to develop and launch new products that expand application scenarios
and transforms our product portfolio into the smart household appliances
category.



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Our business has three main divisions and revenue streams, namely, (i) sales of
household appliances and related domestic appliances products, (ii) consultancy,
and (iii) integration and installation services. Virtually all of our products
are manufactured by independent original equipment manufacturers ("OEMs") in the
PRC. For the year ended December 31, 2019, our revenue was $5.5 million, and our
gross profit was approximately $1.7 million. For the year ended December 31,
2018, our revenue was $5,084, and our gross profit was approximately $796. We
conduct our business through Shenzhen Wiseman Smart Industrial Co., Limited and
its subsidiaries which are founded in the PRC and our Hong Kong subsidiary,
Wiseman Global Limited ("Wiseman HK").



Results of operations

For the years ended December 31, 2019 and 2018





                                               Years Ended December 31,                        Increase (decrease) in
                                          2019                          2018                   2019 compared to 2018
                                      (In U.S. dollars, except for percentages)
Revenue                         $  5,534,822       100.0 %    $   5,084            100 %    $  5,529,738       108,767.5 %

Cost of revenues                  (3,865,556 )     (69.8 )%      (4,287 )        (84.3 )%     (3,861,269 )     (90,069.3 )%
Gross profit                       1,669,266        30.2 %          797           15.7 %       1,668,469       209,343.7 %
Operating expenses                  (537,477 )      (9.7 )%     (52,350 )     (1,029.7 )%       (485,127 )        (926.7 )%
Other income, net                     48,791         0.9 %            2            0.0 %          48,789             100 %
Income (Loss) from operations      1,180,580        21.4 %      (51,551 )     (1,014.0 )%      1,232,131         2,390.1 %
Net finance cost                         130         0.0 %            -              -               130             100 %
Income tax expense                  (325,221 )      (5.9 )%           -              -          (325,221 )          (100 )%
Net profit (loss)               $    855,489        15.5 %    $ (51,551 )
  (1,014.0 )%   $    907,040         1,759.5 %




Revenues



For the years ended December 31, 2019 and 2018, the Company generated revenue in
the amount of approximately $5.5 million and $5,084, respectively. The revenue
was generated from the sales of household appliances and related products in the
PRC. We have achieved rapid growth since our inception in 2018 and we believe
this is the result of our strategies in increasing brand awareness and equity to
acquire new customers and expanding network of retail stores placements and

authorized distributors.



Cost of Revenue



Cost of revenue for the year ended December 31, 2019 amounted to approximately
$3.9 million as compared to $4,287 for the year ended December 31, 2018. The
significant increase of cost of revenue was a result of the overall growth of
our business and relatively in line with the rapid growth of net revenues. The
cost of revenue was predominantly the cost of manufactured goods sold to
customers.

General and Administrative Expenses





For the years ended December 31, 2019 and 2018, we had general and
administrative expenses in the amount of $537,477 and $52,350, respectively.
These were primarily comprised salary, public and investors' relations expenses,
overseas travelling expenses, sundry expenses and advertising and promotion

expenses.



Gross profit

Our gross profit increased from $797 in 2018 to approximately $1.7 million in 2019, primarily attributable to our sales growth.





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Our gross margin increased from 15.7% to 30.2% for the same periods. The increase in gross margin was primarily due to the economies of scale and a significant increase in net revenues contribution from other product categories.





Income tax expenses

For the years ended December 31, 2019 and 2018, we had an income tax expenses of $325,221 and $0, respectively.





Net Profit (Loss)

For the year ended December 31, 2019, we had a net profit of $855,489 while we incurred a net loss of $51,551 for the year ended December 31, 2018.

Liquidity and Capital Resources





Summary cash flows information for the years ended December 31, 2019 and 2018
are as follow:



                                               2019          2018
                                               (In U.S. dollars)

Net cash used in operating activities $ (90,841 ) $ (42,755 ) Net cash used in investing activities $ (237,519 ) $ (4,321 ) Net cash provided by financing activities $ 675,834 $ 64,063

Cash Used in Operating Activities


For the years ended December 31, 2019 and 2018, net cash used in operating
activities was $90,841 and $43,755, respectively. The cash used in operating
activities was attributable to accounts receivable, inventories, and deposits
paid, prepayments and other receivables.

Cash Used in Investing Activities

For the years ended December 31, 2019 and 2018, net cash used in investing activities was $237,519 and $4,321 respectively. The cash used in investing activities was attributable to purchase of property, plant and equipment.

Cash Provided by Financing Activities

For the years ended December 31, 2019 and 2018, the Company has repaid $56,166 to our chief executive officer and Director, Mr. Lai Jinpeng.

For the years ended December 31, 2019 and 2018, net cash provided by financing activities was $675,834 and $64,063, respectively. The net cash provided by financing activities was attributable to the proceeds from sale of common stock.





Working capital turnover



Inventory



Our inventory consists of finished products. As of December 31, 2019 and 2018,
our inventory was $143,559 and $0, respectively. The increase reflected the
growth in our sales. Our inventory turnover days was 7 days for the year ended
December 31, 2019. Inventory turnover days for a given period are equal to
average of the balances of inventories, net of allowance for doubtful accounts,
at the beginning and the end of the period divided by cost of revenues during
the period and multiplied by the number of days during the period.



31






Accounts receivable




Our accounts receivable represent primarily accounts receivable from third
parties. As of December 31, 2019 and 2018, our accounts receivable, net of
allowance for doubtful accounts, was approximately $1.2 million and $0,
respectively. The increase reflected a significant growth in our business and
revenues. Our accounts receivable turnover days were 40.4 days and 0 day for the
years ended December 31, 2019 and 2018, respectively. Accounts receivable
turnover days for a given period are equal to average of the balances of
accounts and notes receivable, net of allowance for doubtful accounts, at the
beginning and the end of the period divided by net revenues during the period
and multiplied by the number of days during the period.



Accounts payable




Our accounts payable represent primarily accounts payable to manufacturers. As
of December 31, 2019 and 2018, our accounts payable were $31,181 and $3,284,
respectively. The increase reflected the growth of our sales. Our accounts and
notes payable turnover days were 1.6 days and 139.8 days for the years ended
December 31, 2019 and 2018, respectively. Accounts payable turnover days for a
given period are equal to average of the balances of accounts and notes payable,
at the beginning and the end of the period divided by cost of revenues during
the period and multiplied by the number of days during the period.

Off-Balance Sheet Arrangements





We had no off-balance sheet arrangements (as that term is defined in Item
303(a)(4)(ii) of Regulation S-K) as of December 31, 2019 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.



Contractual Obligations



As of December 31, 2019, the Company's subsidiary lease an office in Cambodia
under a non-cancellable operating lease for five years commencing from August 1,
2019 and expiring on July 31, 2024. As December 31, 2019, the future minimum
rental payments under this lease aggregate approximately $1,100,000 and due as
follows: 2020 $240,000, 2021 $240,000, 2022 $240,000, 2023 $240,000, and 2024
$140,000.



Critical Accounting Policies

Recent accounting pronouncements





In February 2016, the Financial Accounting Standards Board (the "FASB") issued
Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842). Under the
new guidance, lessees will be required recognize the following for all leases
(with the exception of short-term leases) at the commencement date: 1) A lease
liability, which is a lessee's obligation to make lease payments arising from a
lease, measured on a discounted basis; and 2) A right-of-use asset, which is an
asset that represents the lessee's right to use, or control the use of, a
specified asset for the lease term. The new lease guidance simplified the
accounting for sale and leaseback transactions primarily because lessees must
recognize lease assets and lease liabilities. Lessees will no longer be provided
with a source of off-balance sheet financing. The amendments in this ASU are
effective for fiscal years beginning after December 15, 2018, including interim
periods within those years. This standard takes effect for fiscal years, and
interim periods within those fiscal years, beginning after December 15, 2018.
According to this new standard, the Company should record both right-of-use
asset and lease liability of $982,682 on its consolidated financial statements
for the fiscal year ended December 31, 2019.

The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company's consolidated financial statements.

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