The following discussion and analysis of our financial condition and results of operations for the fiscal year ended December 31, 2022 should be read in conjunction with our Financial Statements and corresponding notes to those financial statements that are 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.





Company Overview

The Company has seen a business opportunity in wholesaling and retailing high quality, sustainable, environmentally friendly bio-carbon-based fertilizer (herein referred to as "BCBF"), which is capable of not only increasing the crop yield but also at the same time preserving the environment. The Company's BCBF is sourced from, and produced by, a third party through heating straw in a closed container with little or no available air. This method is also known as thermal decomposition of organic material under limited supply of oxygen at relatively low temperature. In accordance with requirements imposed by the PRC Ministry of Agriculture, the Company's Supplier of BCBF has registered with Sichuan Province Provincial Department of Agriculture and Rural Affairs, which has an effective period of 5 years, from December 2019 to December 2024. The Company does not maintain or operate any production and/or manufacturing of any BCBF facility, machine and/or equipment.

The Company is currently wholesaling and retailing BCBF through its wholly owned subsidiary SCQC. Management of the Company believes that the BCBF sold by the Company is capable of maintaining soil fertility, enhancing crop yield, improving soil structure, improving water and fertilizer retention capability and improving fertilizer utilization efficiency and effectiveness. This is achieved through balancing carbon and nitrogen content, neutralizing soil pH while at the same time creating soil particle structure that is conducive to plant growth.

The BCBF sold by the Company, produced through straw thermal decomposition, replaces the function of activated carbon. The combination of soil and BCBF is capable of absorbing and reducing pollution content such as heavy metals from agricultural residual wastes. Further, the combination of water and BCBF is capable of purifying water by producing carbohydrate and glucose, which could be absorbed by, and is conducive to the growth of, plants. Additionally, BCBF possesses outstanding water storage capacity, which can store up to 10 times the water content when compared to soil without BCBF, which in turn provides farmers greater flexibility during times of hardship such as a drought.

As such, the management of the Company believes that the Company's BCBF is not only a superior option compared to conventional fertilizer in terms of environmentally sustainability, but also from an economic perspective due to the improvement in crop yield quality and quantity. The Company's BCBF consists of roughly 45% organic matter, 20% bio-charcoal, 10% humic acid, 5% NPK and boats an effective microorganism count of 20,000,000 per gram.

On July 25, 2022, the Company ventures into online retailing business through e-commerce platform, retailing a series of daily use products covering from healthcare products, cosmetic products, fashion products, household products and so forth. Customer will place order through platform and make payment accordingly of which shall be collected by Company. Meanwhile Company shall place exact order towards supplier and supplier will deliver such ordered products directly to customer, settlement between Company and supplier will take place once a week. It is worth mentioning that the Company act as the intermediary role and do not keep any form of inventory throughout the transaction.





11






Results of operations



Year ended December 31, 2022



For the years ended December 31, 2022 and 2021, the Company has generated a
revenue of $118,396 and $105,317, respectively. Breakdown of revenue as
following:



                                        Years ended December 31
                                          2022             2021
BCBF Business Sales Revenue           $     33,972       $ 105,317
Percentage towards Total Revenue                29 %           100 %

Online Business Revenue               $     84,424       $       -
Percentage towards Total Revenue                71 %             0 %
Total Revenue                         $    118,396       $ 105,317

BCBF Business Cost of Sales                (19,475 )       (57,178 )
Online Business Cost of Sales                    -               -
Total Cost of Sales                   $    (19,475 )     $ (57,178 )

BCBF Business Gross Profit                  14,497          48,139
Online Business Gross Profit                84,424               -
Total Gross Profit                    $     98,921       $  48,139

Gross Profit Margin                             84 %            46 %

BCBF Business Gross Profit Margin               43 %            46 %
Online Business Gross Profit Margin            100 %             - %

For the year ended December 31, 2022, the Company has experience significant improvement in total revenue due to the establishment of new business segment, which is the online retailing business through e-commerce platform. For the year ended December 31, 2022, the revenue of BCBF trading business has been reduced because the sales of BCBF have decreased. For the year ended December 31, 2022, the BCBF trading business segment and the online retailing business segment contributed 29% and 71% of the total revenue respectively.

Years ended December 31, 2022 and 2021

The Company generated revenue in the amount of $118,396 for the year ended December 31, 2022 while the cost of revenue was $19,475, which resulted in gross profit of $98,921 and a gross margin of 84%. For the year ended December 31, 2022, the Company generated revenue from BCBF trading business in the amount of $33,972 while the cost of revenue for was $19,475, which resulted in gross profit of $14,497 and a gross margin of 43%. For the year ended December 31, 2022, the Company generated revenue from online business in the amount of $84,424 while the cost of revenue for was none, which resulted in gross profit of $84,424 and a gross margin of 100%.

The Company generated revenue in the amount of $105,317 for the year ended December 31, 2021 while the cost of revenue was $57,178, which resulted in gross profit of $48,139 and a gross margin of 46%.

The Company has improved the revenue due to the establishment of new business segment, which is the online retailing business through e-commerce platform. Fluctuation in gross profit margin of BCBF trading business which caused by fluctuation in unit selling price, may vary amongst customers, depending on number of factors including customer historical purchase quantity and payment terms. The gross profit margin of online business may vary amongst customers due to the types of products required by the customers based on their consumption behaviors.

The general and administrative expenses for the year ended December 31, 2022 and 2021 were $173,471 and $270,307 respectively, primarily related to salary and social contribution, storage and logistic expenses, lease expenses, audit fees and consultancy fees. The general and administrative expenses have been reduced because the consultancy fee has decreased significantly as the business consultancy fee is being charged one-time off only.

As result, the Company incurred an operating loss of $74,550 for the year ended December 31, 2022 and incurred an operating loss of $222,168 for the year ended December 31, 2021.





12

Liquidity and Capital Resources

Years ended December 31, 2022 and 2021

Cash Used In Operating Activities

For the year ended December 31, 2022, the Company realized cash provided by operating activity in the amount of $120,469, of which primarily consist of net loss, offsetting by decreased in inventories, increased in prepayment and increased in other payables.

For the year ended December 31, 2021, the Company used $161,812 in operating cash flow, of which primarily consist of net loss and increased in inventories, offsetting by decreased in prepayment and increased in other payables.

Cash Used In Investing Activities

For the year ended December 31, 2022, the Company does not have any investing activities affecting cash position.

For the year ended December 31, 2021, the Company does not have any investing activities affecting cash position.

Cash Provided by Financing Activities

For the year ended December 31, 2022, the Company realized cash provided by financing activity in the amount of $84,561, of which consist of advance from director.

For the year ended December 31, 2021, the Company realized cash provided by financing activity in the amount of $109,891, of which consist of proceed from issuance of share offsetting by repayment to director.





Foreign Currency

Most of our revenues and operating expenses are denominated in Renminbi. The Renminbi is currently freely convertible under the "current account," which includes dividends, trade and service-related foreign exchange transactions, but not under the "capital account," which includes foreign direct investment and loans. Under our current corporate structure, our company in the United States may rely on dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have.

Under existing PRC foreign exchange regulations, payments of current account items, including payment of dividends, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval of the State Administration of Foreign Exchange, or SAFE, by complying with certain procedural requirements. Our PRC subsidiaries may also retain foreign exchange in its current account, subject to a ceiling approved by SAFE, to satisfy foreign exchange liabilities or to pay dividends. However, we cannot assure you that the relevant PRC governmental authorities will not limit or eliminate our ability to purchase and retain foreign currencies in the future.

Since a significant amount of our future revenues will be denominated in Renminbi, the existing and any future restrictions on currency exchange may limit our ability to utilize revenues generated in Renminbi to fund our business activities outside China, if any, or expenditures denominated in foreign currencies.

Foreign exchange transactions under the capital account are subject to limitations and require registration with or approval by the relevant PRC governmental authorities. In particular, any transfer of funds from us to any of our PRC subsidiaries, either as a shareholder loan or as an increase in registered capital, is subject to certain statutory limit requirements and registration or approval of the relevant PRC governmental authorities, including the relevant administration of foreign exchange and/or the relevant examining and approval authority. Our ability to use the U.S. dollar proceeds of the sale of our equity or debt to finance our business activities conducted through our PRC subsidiaries will depend on our ability to obtain these governmental registrations or approvals. In addition, because of the regulatory issues related to foreign currency loans to, and foreign investment in, domestic PRC enterprises, we may not be able to finance the operations of our PRC subsidiaries by loans or capital contributions. We cannot assure you that we can obtain these governmental registrations or approvals on a timely basis, if at all.

The amount of cash denominated in RMB is approximately CNY1,573,043 (Equivalent to USD227,680) as of December 31, 2022.

Off-balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as of December 31, 2022.





Contractual Obligations

As a smaller reporting company, we are not required to provide the aforementioned information.





Critical Accounting Policies

Recent accounting pronouncements

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326). ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses ("CECL") to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted.

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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