Annual Report for Fiscal Year Ending December 31, 2023 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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, 2023 and 2022. The discussion and analysis that follows should be read together with the section entitled "Cautionary Note Concerning Forward-Looking Statements" and 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.

Currency and exchange rate

Unless otherwise noted, all currency figures quoted as "U.S. dollars", "dollars" or "US$" refer to the legal currency of the United States. References to "Hong Kong Dollar" are to the Hong Kong Dollar, the legal currency of the Hong Kong Special Administrative Region of the People's Republic of China. Throughout this report, assets and liabilities of the Company's subsidiaries are translated into U.S. dollars using the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders' equity.

Effective January 1, 2023, the Company approved and completed the internal corporate restructuring actions to streamline, right-size and optimize specific organizational structure by disposing of several subsidiaries. As a result of the corporate exercise, the Advertising business met the criteria set forth in Accounting Standards Codification ("ASC") 205-20 to be presented as a discontinued operation and the related assets and liabilities have been presented as held for discontinued operations. The Advertising business' results of operations and the related cash flows are reflected in Income from discontinued operations, net of tax in the Consolidated Statements of Operations and Comprehensive Loss and cash flows from discontinued operations in the Consolidated Statements of Cash Flows, respectively, for all years presented.

We, through our subsidiaries currently operate the sharing economy businesses. We derive our revenues from the sale of license and advertising right and in a term of certain periods. Unfortunately the COVID-19 situation has created adverse market conditions to sharing economy due to the changes in consumer and business market behaviors.

We reported a net income of $25,600,338 and net loss of $4,127,796 for the years ended December 31, 2023 and 2022, respectively. We had current assets of $18,080,853 and current liabilities of $3,933,360 as of December 31, 2023. As of December 31, 2022, our current assets and current liabilities were $2,707,371 and $12,372,740, respectively.

Our financial statements for the years ended December 31, 2023 and 2022 have been prepared assuming that we will continue as a going concern. Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders. Our sources of capital in the past have included the sale of equity securities, which include common stock sold in private transactions and public offerings, capital leases and short-term and long-term debts.

RESULTS OF OPERATIONS

For the year ended December 31, 2023, the Company recognized a gain of $26,222,555 from disposal of subsidiaries under the corporate reorganization exercise.

Years Ended December 31, 2023 and 2022

The following table sets forth the results of our continuing operations for the years ended December 31, 2023 and 2022:

		Years Ended December 31,
		2023				2022
Revenues		$	-			$	-
Cost of revenues			-				-
Gross profit			-				-
Operating expense			627,107				1,523,356
Loss from operations			(627,107	)			(1,523,356	)
Other incomes (expenses), net			26,227,445				(221,781	)
Income (loss) from continuing operations before provision for income taxes			25,600,338				(1,745,137	)
Loss from discontinuing operations, net of income taxes			-				(2,382,659	)
Provision for income taxes			-				-
Net income (loss)		$	25,600,338			$	(4,127,796	)

Revenues. During ended December 31, 2023 and 2022, we recognized no revenues from our sharing economy business for the

Cost of revenues. No direct costs were incurred in both the years ended December 31, 2023 and 2022.

Gross profit and gross margin. No gross profit and gross margin were resulted for the years ended December 31, 2023 and 2022, as no revenue generated and costs incurred.

Operating expenses. For the year ended December 31, 2023, operating expenses were $627,107 as compared to $1,523,356 for the year ended December 31, 2022, a decrease of approximately $896,249, or 58.83% due to decrease in selling, general and administrative expense.

Loss from operations. As a result of the factors described above, for the year ended December 31, 2023, loss from operations was $627,107, as compared to approximately $1,523,356 for the year ended December 31, 2022. The amount increased mainly due to an increase of selling, general and administrative expense during the year.

Other incomes (expenses), net. Other expenses, net of other incomes, included interest income, interest expense, loss on foreign currency translation loss, dividend income, gain on disposal of marketable securities, $26,227,445 gain on disposal of subsidiaries, for the year ended December 31, 2023. As compared to the year ended December 31, 2022, total other expense, net, amounted to $221,781 mainly consisted of interest income, interest expense, foreign currency translation loss, dividend income, gain on disposal of marketable securities.

Income tax provision. No income tax expense recorded for the year ended December 31, 2023 and 2022, respectively.

Income (loss) from continuing operations. As a result of the foregoing, our income (loss) from continuing operations was $25,600,338, or $0.02 per share (basic and diluted), for the year ended December 31, 2023, as compared with loss from continuing operations of $1,745,137, or $(0.01) per share (basic and diluted), for the year ended December 31, 2022, a change of $27,345,475 or 1,566.95%.

Income (loss) from discontinued operations, net of income taxes. Our income (loss) from discontinued operations was $0, or $(0.00) per share (basic and diluted), for the year ended December 31, 2023, as compared with loss from discontinued operations of $2,382,659 or $(0.01) per share (basic), for the year ended December 31, 2022, a change of $2,382,659 or 100%.

Net income (loss). As a result of the foregoing, our net income was $25,600,338 for the year ended December 31, 2023, as compared with net loss $4,127,796 for the year ended December 31, 2022, an increase of $29,728,134 or 720.19%. The amount increased mainly due to gain on disposal of subsidiaries as part of discontinued operation incurred during the year.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and otherwise operate on an ongoing basis. At December 31, 2023 and 2022, we had cash balance of $1,557 and $4,275, respectively. These funds are located in financial institutions mainly located in Hong Kong.

The following table sets forth a summary of changes in our working capital from December 31, 2022 to December 31, 2023:

		December 31, 2023				December 31, 2022				Change				Percentage Change
Working capital:
Total current assets		$	18,080,853			$	2,707,371			$	15,373,482				567.84	%
Total current liabilities			3,933,360				12,372,740				(8,439,380	)			(68.21	)%
Working capital (deficit)		$	14,147,493			$	(9,665,369	)		$	14,147,493				146.37	%

Our working capital was improved from $9,665,369 deficit at December 31, 2022 to $14,147,493 at December 31, 2023.

Cash Flows

Because the exchange rate conversion is different for the consolidated balance sheets and the consolidated statements of cash flows, the changes in assets and liabilities reflected on the consolidated statements of cash flows are not necessarily identical with the comparable changes reflected on the consolidated balance sheets.

		For the Years Ended December 31,
		2023				2022
Net Cash Used in Operating Activities		$	(82,703	)		$	(1,659,195	)
Net Cash Used in Investing Activities			-				(20,094	)
Net Cash (Used In) Provided by Financing Activities			(170,101	)			1,413,773
Effect of Exchange Rate Changes in Cash and Cash Equivalents			221,589				232,015
Cash and Cash Equivalents at Beginning of Year			32,772				66,273
Cash and Cash Equivalents at end of Year		$	1,557			$	32,772

Cash Flow in Operating Activities

For the year ended December 31, 2023, net cash used in operating activities was $82,703, which consisted of gain of disposal of the subsidiaries, stock-based consultancy fee, stock-based director's remuneration and stock-based staff salaries.

For the year ended December 31, 2022, net cash used in operating activities was $1,659,195, which consisted of stock-based consultancy fee, stock-based consultancy fee, and gain on disposal of subsidiaries.

Cash Flow in Investing Activities

For the year ended December 31, 2023, we had no investing activities.

For the year ended December 31, 2022, we had net cash used in investing activities of $20,094, primarily related to discontinued operation.

Cash Flow in Financing Activities

For the year ended December 31, 2023, we had net cash used in financing activities of $170,101. We repaid $116,570 to related party and repaid the bank overdraft of $53,531.

For the year ended December 31, 2022, we had net cash provided by financing activities of $1,413,773. We received temporary advances from related party of $616,684 and $53,531 drawings from bank overdrafts.

We have historically funded our capital expenditures through cash flow provided by operations and bank loans. We intend to fund the cost with cash flow from our operations and by obtaining financing mainly from local banking institutions with which we have done business in the past. We believe that the relationships with local banks are in good standing and we have not encountered difficulties in obtaining needed borrowings from local banks.

Going Concern

Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders. Our sources of capital may include the sale of equity securities, which include common stock sold in private transactions, short-term and long-term debts. While we believe that we will obtain external financing and the existing shareholders will continue to provide the additional cash to meet our obligations as they become due, there can be no assurance that we will be able to raise such additional capital resources on satisfactory terms. We believe that our capital resources are not currently adequate to continue operating and maintaining its business strategy for the next twelve months from the date of this report. We may seek to raise capital through additional debt and/or equity financings to fund its operations in the future. Although we have historically raised capital from sales of equity and from bank loans, there is no assurance that it will be able to continue to do so.

If we cannot raise additional funds, we will have to cease business operations. As a result, our common stock investors would lose all of their investment.

We believe that these matters raise substantial doubt about the ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Material Cash Requirements

We have not achieved profitability since our inception and we expect to continue to incur net losses for the foreseeable future. We expect net cash expended in 2024 to be similar as 2023. As of December 31, 2023, we had an accumulated deficit of $55,425,230. Our material cash requirements are highly dependent upon the additional financial support from our major shareholders in the next 12 - 18 months.

We have certain fixed contractual obligations and commitments that include future estimated payments. Changes in our business needs, cancellation provisions, changing interest rates, and other factors may result in actual payments differing from the estimates. We cannot provide certainty regarding the timing and amounts of payments. We have presented below a summary of the most significant assumptions used in our determination of amounts presented in the tables, in order to assist in the review of this information within the context of our consolidated financial position, results of operations, and cash flows. The following tables summarize our contractual obligations as of December 31, 2023, and the effect these obligations are expected to have on our liquidity and cash flows in future periods.

		Payments Due by Period
Contractual obligations:		Total				Less than 1 year				1-3 years				3-5 years				5 + years
Convertible note payable			1,031,775				-				-				-				-
Total		$	1,031,775				-				-			$	-			$	-

Off-balance Sheet Arrangements

Except as discussed below, we have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder's equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our consolidated financial statements. These accounting policies are important for an understanding of our financial condition and results of operations. Critical accounting policies are those that are most important to the presentation of our financial condition and results of operations and require management's subjective or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to consolidated financial statements and because of the possibility that future events affecting the estimate may differ significantly from management's current judgments. We believe the following accounting policies are critical in the preparation of our consolidated financial statements.

Principles of Consolidation

The Company's consolidated financial statements include the financial statements of its wholly-owned and majority owned subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation.

Noncontrolling interest

The Company accounts for noncontrolling interest in accordance with ASC Topic 810-10-45, which requires the Company to present noncontrolling interests as a separate component of total shareholders' equity on the consolidated balance sheets and the consolidated net loss attributable to the noncontrolling interest be clearly identified and presented on the face of the consolidated statements of operations and comprehensive loss.

Use of estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates in the years ended December 31, 2023 and 2022 include valuation allowance of deferred tax assets, accruals for taxes due, and the value of stock-based compensation.

Available-for-sale marketable securities

Available-for-sale marketable securities are reported at fair value using the market approach based on the quoted prices in active markets at the reporting date. The Company classifies the valuation techniques that use these inputs as Level 1 of fair value measurements. Any unrealized losses that are deemed other-than-temporary are included in current period earnings and removed from accumulated other comprehensive income (loss).

Realized gains and losses on marketable securities are included in current period earnings. For purposes of computing realized gains and losses, the cost basis of each investment sold is generally based on the weighted average cost method.

The Company regularly evaluates whether the decline in fair value of available-for-sale securities is other-than-temporary and objective evidence of impairment could include:

●

The severity and duration of the fair value decline;

●

Deterioration in the financial condition of the issuer; and

●

Evaluation of the factors that could cause individual securities to have an other-than-temporary impairment.

Property and equipment

Property and equipment are carried at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in the statements of operations in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.

		Useful life
Office equipment and furniture		5 years
Vehicles		5 years
Yachts		5 years

Revenue recognition

The Company adopted Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). Under ASU 2014-09, the Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

●

identify the contract with a customer;

●

identify the performance obligations in the contract;

●

determine the transaction price;

●

allocate the transaction price to performance obligations in the contract; and

●

recognize revenue as the performance obligation is satisfied.

The transaction price for each contract is determined based on the amount the Company expects to be entitled to receive in exchange for transferring the promised products or services to the customer. Collectability of revenue is reasonably assured based on historical evidence of collectability of fees the Company charges its customers. The transaction price in the contract is allocated to each distinct performance obligation in an amount that represents the relative amount of consideration expected to be received in exchange for satisfying each performance obligation. Revenue is recognized when performance obligations are satisfied. At contract inception, the Company determines whether it satisfies the performance obligation over time or at a point in time.

The Company derives its revenues from the sale of advertising service in a monthly payment term. The Company's performance obligation includes providing the connectivity among merchants and consumers, generally through its online media advertising platform. Online marketing consists of search engine marketing, display advertisements, referral programs and affiliate marketing. The Company will provide resources to support the marketing needs of the sharing economy businesses via partnerships and acquisitions of advertising companies.

The majority of the Company's contracts with customers only contain a single performance obligation. When the agreements involve with multiple performance obligations, the Company will account for individual performance obligations separately, if they are distinct.

Income taxes

The Company is governed by the Income Tax Law of the PRC, Inland Revenue Ordinance of Hong Kong and the U.S. Internal Revenue Code of 1986, as amended. The Company accounts for income taxes using the asset/liability method prescribed by ASC 740, "Accounting for Income Taxes." Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.

On December 22, 2017, the United States signed into law the Tax Cuts and Jobs Act (the "Act"), a tax reform bill which, among other items, reduces the current federal income tax rate in the United States to 21% from 35%. The rate reduction is effective January 1, 2018, and is permanent.

The Act has caused the Company's deferred income taxes to be revalued. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through income tax expense. Pursuant to the guidance within SEC Staff Accounting Bulletin No. 118 ("SAB 118"), as of December 31, 2021, the Company recognized the provisional effects of the enactment of the Act for which measurement could be reasonably estimated. Since the Company has provided a full valuation allowance against its deferred tax assets, the revaluation of the deferred tax assets did not have a material impact on any period presented. The ultimate impact of the Act may differ from these estimates due to the Company's continued analysis or further regulatory guidance that may be issued as a result of the Act.

The Company applied the provisions of ASC 740-10-50, "Accounting for Uncertainty in Income Taxes," which provides clarification related to the process associated with accounting for uncertain tax positions recognized in the Company's financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company's liability for income taxes. Any such adjustment could be material to the Company's results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of December 31, 2023 and 2022, the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future.

Foreign currency translation

The reporting currency of the Company is the U.S. dollar. The functional currency of the parent company is the U.S. dollar and the functional currency of the Company's operating subsidiaries is Hong Kong dollars ("HKD"). For the subsidiaries, whose functional currencies are HKD, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive loss.

The Company did not enter into any material transaction in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company.

Loss per share of common stock

ASC Topic 260 "Earnings per Share," requires presentation of both basic and diluted earnings per share ("EPS") with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.

Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period.

Comprehensive loss

Comprehensive loss is comprised of net loss and all changes to the statements of stockholders' equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. For the Company, comprehensive loss for the years ended December 31, 2023 and 2022 included net loss and unrealized (loss) gain from foreign currency translation adjustments.

Stock-based compensation

Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of ASC Topic 718, which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the vesting period or immediately if fully vested and non-forfeitable. The Financial Accounting Standards Board ("FASB") also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.

Fair value of financial instruments

The Company adopted the guidance of ASC Topic 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-

Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-

Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3-

Inputs are unobservable inputs which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The Company did not measure these assets at fair value at December 31, 2023 and 2022.

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, prepaid expenses and other receivables, short-term bank loans, convertible notes payable, note payable, accounts payable, accrued liabilities, amount due to a related party and income taxes payable approximate their fair market value based on the short-term maturity of these instruments.

ASC Topic 825-10 "Financial Instruments" allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.