UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549  

FORM 10-K

x☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. 

For the Fiscal Year Ended December 31, 20172022

¨☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for The Transition Period From __________To ____________

Commission file number: 000-50559

SCIENTIFIC ENERGY, INC

(Name of registrant as specified in Its Charter)

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, Par Value $0.01

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.         Yes¨      Nox

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.       Yes¨      Nox

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.       Yesx    No¨  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files:files):    Yesx    No¨ 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’sregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large“large accelerated filer,” “accelerated“accelerated filer,” “smaller“smaller reporting company,” and “emerging“emerging growth company”company” in Rule 12b–12b–2 of the Exchange Act.

(Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B)13(a) of the Securities Act.☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) iof the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.     Yes ☐     No x

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.     Yes ☐     No x

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive offi cers during the relevant recovery period pursuant to 240.10D-1(b).     Yes ¨     No x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes¨☐       Nox

State the aggregate market value of the voting and non-voting equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: Approximately $1.60$3.2 million.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: 114,915,852263,337,500 shares of the registrant’s common stock were outstanding as of March 29, 2018.April 5, 2023.

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TABLE OF CONTENTS

ITEM		Page
PART I
1.	Business	4
1A.	Risk Factors	10
1B.	Unresolved Staff Comments	10
2.	Description of Property	10
3.	Legal Proceedings	11
4.	Mine Safety Disclosure	11
PART II
5.	Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities	11
6.	Selected Financial Data	12
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
7A.	Quantitative and Qualitative Disclosures About Market Risk	16
8.	Consolidated Financial Statements and Supplementary Data	17
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	36
9A.	Controls and Procedures	36
9B.	Other Information	37
PART III
10.	Directors, Executive Officers and Corporate Governance	38
11.	Executive Compensation	40
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	41
13.	Certain Relationships and Related Transactions, and Director Independence	42
14.	Principal Accounting Fees and Services	42
PART IV
15.	Exhibits, Financial Statement Schedules	43

PART I

Item 1.  BUSINESS

Background

Scientific Energy, Inc. (the “Company”(together with its subsidiaries, the “Company,” “we,” “us” or “our”) was incorporated under the laws of the State of Utah on May 30, 2001. PriorFrom 2001 to April 2006,2018, the Company had endeavored to developa number of business activities, from developing and manufacturemanufacturing various energy generation devices and energy efficient mechanisms.  The current business plan of the Company ismechanisms to engageengaging in a business of e-commerce platform.platform, but weren't successful.

In January 2008,On April 13, 2006, Todd Crosland, Jana Meyer, Mark Clawson and Dale Gledhill (collectively the Company“Sellers”) entered into a joint venture agreementShare Purchase Agreement with China Resources DevelopmentKelton Capital Group Ltd., a Hong Kong company.  Under the agreement, a joint venture company, Kabond Investments LtdLimited (the “JVC”"Buyer"), was established in Hong Kong, and the Company invested $39.6 million Hong Kong dollars (approximately $5.09 million) into the JVC for 72%each of the JVC’s capital shares, and China Resources Development Group Ltd., jointly with its partner, invested $15.4 million Hong Kong dollars (approximately $1.98 million) into the JVC to receive 28%Sellers was a director of the JVC’s capital shares.  In December 2008, all equity interestCompany. Pursuant to the Share Purchase Agreement, the Buyer acquired from the Sellers an aggregate of 7,905,000 shares of the JVC owned byCompany's issued and outstanding common stock, representing approximately 86.3% of the Company was sold to a third partyCompany's outstanding shares at that time, for $39.6 million Hong Kong dollars (approximately $5,109,743).

In January 2009, the Company through its wholly-owned subsidiary, PDI Global Limited (a British Virgin Islands corporation, “PDI”), entered into a joint venture agreement with China Resources Development Group Ltd.  Under the agreement, the Company agreed to invest $43,040,000 Hong Kong dollars (approximately $5.55 million) into a joint venture company Sinoforte Ltd. in Hong Kong (“Sinoforte”).  The Company got 80%aggregate cash purchase price of Sinoforte's capital shares, and China Resources invested $10,222,000 Hong Kong dollars, approximately $1,318,967, and another investor invested  $538,000 Hong Kong dollars, or approximately $69,419, into Sinoforte for 19% and 1% of Sinoforte's capital shares, respectively.  The main business of Sinoforte was trading mineral products such as graphite produced in China.  In June 2009 and September 2009, respectively, China Resources and the other minority investor cancelled their investments in Sinoforte, and the full amount of their original investments was returned.$539,929. As a result Sinoforte becameof the transaction, a wholly-owned subsidiarychange of PDI.

The Company has not been involved in any bankruptcy, receivership or similar proceeding.

Business

The Company conducts business primarily through its wholly owned subsidiary Sinoforte Ltd., a Hong Kong corporation.

Prior to August 2011,control of the Company operated primarily as a merchant, buying and selling various type and grades of graphite, such as medium- and high-carbon graphite, high-purity graphite, micro-powder graphite and expandable graphite. As a merchant, the Company acted as a reseller. It purchased graphite products in bulk, primarily from graphite producers, and resold them, either in bulk or in smaller quantities (in either case, without further processing), to various small and mid-sized customers.occurred. 

In August 2011, the Company started to engage in a business of e-commerce platform.  Currently the Company is in the process of developing a website, “Makeliving.com” ("Makeliving"), which provides an e-commerce platform, where registered members can exchange goods and services.

Makeliving will act both as a platform and as a conduit between those (individuals or companies) who desire to acquire goods and services and those (individuals or companies) who desire to offer goods and services.  Makeliving plans to charge a certain percentage fee for the transactions.  However, no revenues have been generated.  The website is now temporarily under maintenance. At the same time, the Company is considering new business models.

On January 23, 2018, the Company entered into an agreement with Cityhill Limited, a wholly owned subsidiary of South Sea PetroleumElate Holdings Limited, a Hong Kong listed public company, pursuantcompany. Pursuant to whichthe agreement, the parties agreed to establish a 50% - 50% joint venture in Hong Kong, Gold, Gold, Gold Limited (the “Joint Venture”“3G”).  Each party3G operates in Hong Kong and owns 50% equity interest in the Joint Venture respectively.

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The Venture Joint, with the support of blockchain technology, is to provide global trading service of“Goldeck App”, a physical gold trading platform. 3G offers its customers with one-stop services including: physical gold trading, deposits and withdrawals.

On May 10, 2021, the Company acquired 98.75% of the issued and outstanding share capital of Macao E-Media Development Company Limited, a Macau company (“MED”, which was found in Macau in 2011), by issuance of 131,337,500 shares of the Company’s restricted common stock, par value $0.01 per share, at $0.50 per share, for global customers.an aggregate consideration of $65,668,750. The parties contribute their respective experiencesacquisition was completed on September 27, 2021. As a result, MED becomes a 98.75% owned subsidiary of the Company.

Based on its monthly gross merchandise volume and market share, MED is a leading food and grocery ordering and delivery service company in blockchain technologyMacau. MED was founded in Macau in 2011, and marketing. The Company will assistin 2015, once was Meituan Dianping’s exclusive business partner in Macau. Meituan Dianping is the Joint Venturebiggest platform in exploringChina that offers diversified daily needs services, including food delivery, hotel and travel booking and other goods and services. In June 2016, MED launched its own first generation of e-commerce platform, i.e., Aomi App. Since then, MED has grown and become the North Americabiggest food and Europe markets, while Cityhill will focus ongrocery ordering and delivery service provider in Macau, with approximately 70% of the Asian markets.  market share.

Patents, trademarks, franchises, concessions, royalty agreements or labor contracts

The Company doeshas not ownbeen involved in any patents, trademarks, copyrights, franchises, concessions, royalty agreements,bankruptcy, receivership or labor contracts.similar proceedings.

Product Research and DevelopmentOur Business

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 the following sections, 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.

We are a leading mobile platform of ordering and delivery services for restaurants or other merchants in Macau. We operate in Macau. 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 areas 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. In 2022, our Platform generated over 11,779,000 transactions, totaling $1,285,186,000 MOP (approximately $160,248,000) in Gross Merchandise Volume.

We offer customers access to the Platform primarily through our mobile applications designed for iPhone, Android, and iPad devices. To dateuse the mobile applications, customers either enter their delivery address or use geo-location and are thereby connected with local merchants that provide takeout or offer their services. Customers can further refine their search results using

the search capability, enabling them to filter results across cuisines or merchandise types, merchant names, proximity, ratings and other criteria. Once customers have found what they are looking for, they place their orders. Once an order is received, the Company transmits the order to the merchant, while saving the customers’ preferences for future orders, thus providing them with a convenient repeat order experience.  A customer can choose to have the food delivered or for pick-up/take-away. The Platform informs the customer of the duration of food preparation, and when the food is ready for pick-up or the amount of time it will take for delivery. The customers can also track the meal through the real-time location of the delivery rider as displayed on the Platform.

Customers pay us for their meals or goods when orders are placed. Payment is administered by paying with a credit card, debit card, or third-party payment methods, such as WeChat Pay, Alipay, Apple Pay, Mpay, etc. For these transactions, we collect the total amount of the customer’s order less payment processing fees from the payment processor and remits the net proceeds to the merchants less commission and other fees. We generally accumulate funds and remit the net proceeds to the merchant partners at least on a monthly basis.

Consumers may also access our services through the WeChat mini program, a mobile app operated by a third party. Leveraged by the leading market status of WeChat along with its vast user base, it enables us to broaden our user reach. The WeChat mini program is easy to use. Customers can swipe or search to open the mini app and connect to the Company’s Platform without downloading or installing additional mobile applications. The WeChat mini program provides customers with the same functionality as the Company’s mobile applications, including finding merchant, searching and ordering.

Merchants have the option to either engage the Company to provide the delivery service or deliver by themselves. By providing delivery services, the Company is able to significantly increase the number of merchants it can offer to customers while enhancing the transparency, consistency and reliability of the customer experience. Delivery services benefit the merchants by allowing them to focus on making great food or providing good merchandise while the Company handles the complexity of operating the delivery networks. Presently the Company is by far the largest citywide on-demand food and merchandise delivery network in Macau.  For the year ended December 31, 2022, approximately 85% of the delivery transactions generated on our Platform were fulfilled by us. The Company’s delivery arrangements with merchants are structured under two models: Instant Delivery and Scheduled Delivery, of which the ratings are the same. As of December 31, 2022, the Company had 1,879 delivery riders.

From time to time, merchants run promotion campaigns or other activities via the Company’s Platform. Consumers are able to purchase coupons for merchandise at discounted prices on the Platform, and then go to merchants’ physical retail stores to redeem the coupons, and enjoy the goods or services at a member-discounted price. By doing so, merchants can establish their online presence, grow more customers, and promote and sell goods and services directly to consumers online.

We generate revenues primarily when customers place orders on our Platform. Merchant partners pay a commission, typically a percentage of the transaction, on orders that are processed through our Platform. In many cases, we also provide delivery services to merchants on the Platform that do not have their own delivery operations. Merchant partners that use our delivery services pay an additional commission on the transaction for the use of those services. We also recognize as revenue any fees charged directly to the customer.

We provide our customer with a wide variety of payment methods. Customers may use credit card, debit card, or a third-party payment method to pay for their goods and services when the orders are placed. For Macau customers, we accept debit card and credit card of major Macau banks, e.g., Industrial and Commercial Bank of China (Macau), Bank of China (Macau), Tai Fung Bank, Luso International Bank, Banco Nacional Ultramarino. International customers can use credit card issued by Visa, Mastercard, or China UnionPay. We also offer third-party payment methods such as WeChat, Alipay and Mpay.  For these transactions, we collect the total amount of the customer’s order net of payment processing fees from the payment processor and remits the net proceeds to the merchants less commission and other fees. We generally accumulate funds and remit the net proceeds to the merchant partners at least on a monthly basis.

A significant portion, approximately 99.7%, of the Company’s revenues are the commissions earned from merchant partners for consumer orders generated on our Platform.

Additional Services

The Platform of the Company originally serviced only food ordering and delivery, later, built on the Platform’s user base, the Company expands its services to other areas, and continues to drive customer growth and enhance customer value.

(1) Mobile Supermarket (Aomi Supermarket) and Home Delivery Service.  

Since September 2020, in addition to food, customers can also order grocery and other non-food merchandise through our Platform called “Aomi Supermarket”, such as fruits and vegetables, meat, poultry, eggs and milk, seafood and aquatic products, grain, oil, seasoning, snacks, beverages and other groceries. Customers can satisfy their daily needs anytime, anywhere on their mobile phones without leaving home. The Platform allows customers to direct delivery riders to purchase the desired merchandise at the Aomi Supermarket and deliver to them, which typically takes less than one hour after an order is placed. We set ourselves apart from traditional retail supermarket brands in many ways. The most notable advantage is that we enjoy lower operating costs without physical retail stores, by selling groceries only online. It has been a year since we started our Aomi Supermarket operation. For the year ended December 31, 2022, due to higher delivery and warehouse costs, we are still losing money in this operation. We believe that as a result of our existing large customer base and on-demand delivery network getting more efficient, and by cutting certain non-profitable stock keeping units (SKUs) and negotiating with suppliers for more favorable pricing, we will be able to offer our online supermarket services with more efficiency and at low marginal cost. For the year ended December 31, 2022, approximately 8.6% of the Company’s revenue was derived from this service.

(2)  Brand Promotion Service

Taking advantage of the vast user base of the Platform, we have built and maintained stable business relationships with clients from different business sectors who seek more brand exposure. By using our platform, clients can establish their online presence, promote their brands and sell their goods and services directly to consumers online. We offer clients multiple advertisement options in order to meet their various marketing needs, in forms of ads such as pop-up, pop-under, floating or banner, therefore provide clients with consumer acquisition channels through which they can gain customer traffic. Through partnership with local banks, governmental departments, or large corporations, we endeavor to assist our clients to develop new customers while retain existing customers, improve corporate image, and eventually boost corporate trading volume. For the year ended December 31, 2022, approximately 1.7% of the Company’s revenue was derived from this service.

Except for our main business line (food ordering and delivery), other new business initiatives are currently not conducted any product research and development.profitable. The Company does not plan to conduct any product research and development activitiesmain reason is that in the next twelve months.initial stage of the new business, various investments are relatively large, and the gross profit is low.

EmployeesMerchant Benefits

We focus on providing value to both merchants and customers through our Platform. We provide merchants with more orders, help them serve customers better, facilitate delivery logistics, and enable them to improve the efficiency of their business. For customers, we make ordering, takeout accessible, simple and enjoyable, enabling them to discover new merchants and accurately and easily place their orders anytime and from anywhere.

With more than 4,000 merchants currently on our Platform, we believe that we can provide merchants with the following key benefits:

More Orders. Through our Platform, merchants in the network receive more orders at full prices.

Targeted Reach. Merchants in the network gain a mobile presence with the ability to reach their most valuable customers.

Low Risk, High Return. For merchants, our Platform enables them to grow their business without adding seating capacity or wait/service staff, and enable them to leverage their existing fixed costs.

Higher Efficiency. Merchant partners in the network can receive and handle a larger volume of takeout orders more accurately, increasing their operational efficiency while providing their takeout customers with a high-quality experience.

Delivery Service. In many cases, we provide delivery services to those merchants who do not have their own delivery operations. By providing delivery services, merchants can focus on making great food while we handle the complexity of operating the delivery networks.

Customer Benefits

With 832,700 registered Platform customers as of December 31, 2022, we believe that we provide customers with the following key benefits:

Discovery. We aggregate menus/merchandise catalogs and enable ordering from more than 4,000 merchants in Macau as of December 31, 2022, in most cases we provide customers with more choices than the menu drawer and allowing them to discover hidden gems from merchants on our Platform.

Lower price.  From time to time, merchants run promotion campaigns or other activities via our Platform. Consumers are able to purchase coupons at discount prices on the Platform, and then they go to merchants’ physical stores to redeem the coupons, and enjoy the goods and services at discounted prices.

Convenience. Using our Platform, customers do not need to place their orders over the phone or physically going to the merchants’ place of business. We provide customers with an easy-to-use, intuitive and personalized interface that helps them search and discover local merchants and then accurately and efficiently place orders from any places.

Service.  We strive to deliver a comprehensive and smooth end-to-end experience to our customers characterized with speedy delivery, good quality, and ease of use.

Sources of Revenues and Costs of Revenues

We generate revenue primarily from (i) commission from merchants for orders placed on our Platform, which are generally determined as a percentage of the value of the transaction completed, (ii) mobile marketing services in various advertising formats provided to restaurants/merchants or other clients, and (iii) delivery fees from customers and merchants for delivery services provided by us.

Our costs of revenue primarily consist of (i) food/merchandise delivery rider costs, (ii) payment processing costs, (iii) employee benefits, expenses for customer service and other personnel, (iv) depreciation of property, plant and equipment, and (v)Cloud server operation and maintenance costs.

A significant portion of costs of our revenues is attributable to delivery rider costs, which accounted for approximately 20% - 25% of our revenues.

Market and Customers

With increased smartphone penetration, in recent years, the mobile food/grocery ordering market has grown worldwide. Mobile ordering has started to become the norm, thanks to the convenience, accuracy, and ability to integrate payments.

We operate in Macau and serve approximately over one million people, of which approximately 700,000 are permanent residents and more than 300,000 are non-Macau residents/college students who work or study full time in Macau. Our customers are mainly Macau residents, i.e., Macau households, office workers, laborers and college students.

As of December 31, 2017,2022, we had approximately 831,700 registered Platform customers and served over 4,000 partnered merchants. For the Companyyears ended December 31, 2022 and 2021, none of these active Platform customers or merchants accounted for 10% or more of our net revenues.

Sales and Marketing

Our sales team add new restaurant/merchant partners to the network by emphasizing the Platform’s low risk, high return proposition: providing more orders, low upfront payments or subscription fees without requiring any discounts from a restaurant/merchant’s full price menus, and we only get paid for orders we generate for them. Our delivery network has fivealso expanded our offerings and ability to attract restaurants/merchants that do not have their own delivery operations. Leads for new merchants are generated either directly by the merchant through our Platform, or are self-prospected by the sales team. Once merchants have joined our network, our representatives continue to work with them to maintain quality control and to increase their order volume.

We believe that our mobile ordering platform, innovative products and excellent customer care are our best and most effective marketing tools, helping to generate strong word-of-mouth referrals, which have been the primary driver of our customer growth. Our integrated marketing efforts are aimed at encouraging new customers to try the Platform and driving existing customers to engage more frequently with the Platform. We use both mobile and offline advertising.

We worked with the Industrial and Commercial Bank of China to issue a co-branded credit card. Every new card holder is given $50 MOP (approximately $6.25) worth of coupon redeemable on our Platform. Together with our good services, this campaign significantly increased our customer base.

From time to time, we also introduce various types of promotions and activities to keep the existing users active, such as giving out coupons, discounts, and cash back activities.

Technology

Technology has changed consumer behavior and driven a wave of demand for convenience.  We enable local brick-and-mortar businesses, which are fundamental to the vitality of local economies and communities, to address consumers’ expectations of ease and immediacy and thrive in an increasingly convenience-driven economy. We generally develop additional features for our Platform in-house, focusing on quick release cycles and constant improvement. Our mobile properties are either stored on secure remote servers and software networks through a public cloud provider or are hosted by a third-party provider of hosting services. The Platform includes a variety of encryption, antivirus, firewall and patch-management technology to protect and maintain systems and computer hardware across the business. We rely on third-party off-the-shelf technology as well as internally developed and proprietary products and systems to ensure rapid, high-quality customer care, software development, website integration, updates and maintenance.

Growth Strategy

We strive to make our Platform an integral part of everyday life for merchants and customers through the following growth strategies:

(1) More merchants. We intend to broaden our network of merchants by providing innovative services that help merchants operate and grow their businesses. We have experienced tremendous success serving merchants. Today we have over 4,400 merchants, the majority of which are restaurants, on our Platform, and there are many more that we have yet to reach. We will continue to innovate and introduce new products and services to add value for our merchants and unlock additional revenue opportunities, and will continue our sales efforts to continue adding new merchants.  

(2) More consumers. Presently there are over 831,700 consumers on our Platform. We plan to continue to increase our consumer reach by more consumer engagement. At present, consumers use our Platform for a small fraction of their monthly meals or purchases. We strive to increase the frequency with which consumers use our Platform by being the most delicious, affordable, and convenient way to eat or make purchase. We plan to do this by increasing the breadth of restaurant/merchant selection, expanding availability of meals at all times of the day. In addition, our goal is to satisfy consumers, thereby promoting their use of our Platform and making it easier for us to gain new consumers. We continue to make investments aimed at improving the consumer experience.

We intend to continue to grow the number of customers and orders placed on our Platform primarily through word-of-mouth referrals and marketing that encourages adoption of our ordering Platform and increased order frequency.

(3) Better Delivery Rider experience. We invest in improving delivery rider experience and satisfaction.

(4) More Service Offerings. As we grow, we plan to expand our service offerings, and grow into a full-category service e-commerce company. We will continue to add new service categories covering more use cases in consumers’ daily lives. We also plan to further broaden service selections within our current service categories. We believe expanding service offerings will improve consumer loyalty and lead to more cross-selling.

(5) Deliver Excellent Customer Care. By meeting and exceeding the expectations of both merchants and customers through customer service, we seek to gain their loyalty and support for our Platform.

(6) Improve Our Operational Efficiency. We will focus on optimizing our cost structure primarily through product improvements meant to enhance the operational efficiency and quality of our logistics platform. These improvements include enhancements to our batching algorithms and order preparation and traffic predictions.

Competition

As a leading mobile food and grocery ordering and take-out delivery service in Macau, we primarily compete with the traditional offline ordering process used by the vast majority of restaurants/grocery stores and diners involving paper menus that restaurants distribute to diners, as well as advertising that restaurants/grocery stores place in local publications to attract customers. For dining customers, we compete with the traditional ordering process by aggregating restaurant and menu information in one place online so that it is easier and more convenient to find a desirable restaurant option and place a customized order without having to interact directly with the restaurants. For restaurants, we offer a more targeted marketing opportunity than the telephone pages, billboards or other local advertising media since dining customers typically access our Platform when they are looking to place a takeout order, and we capture the transaction right at the time when a dining customer has made a decision.

Most restaurants in Macau are small businesses, who do not have their own standalone websites and online interfaces. Compared to other dining platforms, we offer customers a wide range of choices, with over 4,400 restaurants on our Platform, including low cost or no cost delivery, menu price parity with any other online ordering option and the lowest overall pricing and most compelling rewards for customers in Macau.

There is another mobile food delivery service provider in Macau, MFood, which is owned and operated by Mpay, a Macau local digital payment company. While MFood has access to a massive number of users inherited from its parent company, but MFood is small in scale and unable to compete with us effectively.

While we are currently the leading mobile food and grocery take-out delivery service in Macau, new competitors could emerge and existing competitors could continue to grow in our markets. These competitors may have greater resources and other advantages than us and could impact our growth rates and ability to maintain profitability.

Government Regulation

We are subject to a wide variety of laws and regulations in Macau. These laws, regulations, and standards govern issues such as business registration, labor and employment, commissions and fees, anti-discrimination, payments, product liability, environmental protection, personal injury, text messaging, subscription services, intellectual property, consumer protection and warnings, marketing, taxation, privacy, data security, competition, terms of service, mobile application and website accessibility, money transmittal, and background checks. We are also subject to regulations and best practices stipulated by the Monetary and Foreign Exchange Authority of Macau (“AMCM”). Especially, AMCM requires us to open an official bank account under the supervision of AMCM and other equivalent Macau government departments. When a customer places an order on our Platform, the customer’s payment will directly go to this official bank account in the first step. We then settle the payment later with merchants periodically.

The laws and government regulations are constantly evolving, and it is impossible to predict accurately the effect they may have upon our operations, earnings and its competitive position in the future. As of December 31, 2022, we had not encountered any obstacles rising from government regulations.

Intellectual Property

We believe that our intellectual property rights are valuable and important to our business. We rely on trademarks, patents, copyrights, trade secrets, license agreements, intellectual property assignment agreements, confidentiality procedures, non-disclosure agreements, and employee non-disclosure agreements to establish and protect our proprietary rights.

We have devoted to identify and protect a substantial portion of our strategic intellectual property in logistics, selection optimization, and other technologies relevant to its business. As of December 31, 2022, we had 6 patents registered and 2 pending patent applications with the State Intellectual Property Office of China. In addition, we owned 45 trademarks in various categories

and registered with the China Trademark Office, 15 trademarks registered with the Economic and Technological Development Bureau of Macau, 6 trademarks registered with the Intellectual Property Department in Hong Kong. Also, we hold 75 software copyrights registered with the State Copyright Bureau of China.

We intend to pursue additional intellectual property protection to the extent we believe it would be beneficial and cost-effective. Despite our efforts to protect our intellectual property rights, they may be infringed in the future or may be invalidated, circumvented, or challenged.

Employees

We believe that our future success will depend, in part, on our continued ability to attract, hire, and retain qualified personnel. As of December 31, 2022, we had approximately 549 full time employees and 504 part time employees. Of 549 full time employees, 295 were delivery riders. All of our part-time employees are delivery riders. None of the Company’sour employees are covered by collective bargaining agreements.  The Company believes its relationshipsWe have not experienced any work stoppages, and we believe that our relationship with itsour employees to be satisfactory.is good.

Item 1A.   RISK FACTORS

COVID-19 Pandemic

You should carefully consider

In March 2020, the following risk factorsWorld Health Organization characterized the outbreak of the novel strain of coronavirus, specifically identified as COVID-19, as a global pandemic. This has resulted in governments enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods, and other information includedsocial distancing, have caused material disruption to business, resulting in this Annual Report.  a global economic slowdown. Equity markets have experienced significant volatility and weakness and the governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions.

The risks and uncertainties described below are not the only ones we face.  Additional risks and uncertainties not currently knowncurrent challenging economic climate may lead to us adverse changes in cash flows, working capital levels, and/or that we currently deem immaterialdebt balances, which may also impairhave a direct impact on our business operations.  If any of the following risk factors occur, our business, financial condition, operating results and cash flows could be materially adversely affected.

Risks Related to the Company’s Business

We have never been profitable. We may never become profitable, and, as a result, we could go out of business.

Since inception we have never been profitable.  There can be no guarantee that we will ever be profitable.  For the year ended and as of December 31, 2017, the Company had net losses of $306,251 and had accumulated deficit of $7,952,355.  There is no assurance that we will be successful in reaching or maintaining profitable operations.  If our losses continue, our ability to operate may be severely impacted or alternatively we may be forced to terminate our operations.

If we are not able to obtain adequate funding, we could be required to limit our operations significantly or cease operations entirely.

Our business plan requires us to deploy sufficient capital to generate profit. If adequate funds are not available, we would be required to limit our operations significantly or cease operations entirely.  We have no immediate means for obtaining additional financing.  There can be no assurance that such additional financing, when and if necessary, will be available to us on acceptable terms, or at all.

Our operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results to fall below expectations.

We are newfinancial position in the e-commerce platform business,future. The ultimate duration and our revenue is difficult to predict.  Our revenue may not recur from period to period, which contributes tomagnitude of the variabilityimpact and the efficacy of our results from period to period.  Accordingly, the quarter-to-quarter comparisons of our operating results may not be meaningful, and, therefore, prior results are not necessarily indicative of results to be expected in future periods.

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If we are unable to compete effectively with our competitors, our profitability and financial condition will be adversely affected.

We are a small company and we face intense competition, many of our competitors have substantially greater resources than us, including greater financial, marketing and distribution resources. We have no proprietary competitive advantage, and there are no substantial barriers to competitors entering the market.  There is no assurance that we will be able to compete successfully with any of these competitors.  In addition, increased competition could result in price reductions, reduced margins and loss of market share for our services, all of which would adversely affect our business, results of operations and financial condition.

Our success will be dependent upon our management’s efforts.  We cannot sustain profitability without the efforts of our management.

Our success largely dependsgovernment interventions on the effortseconomy and abilitiesthe financial effect on our company is not known at this time. The extent of such impact will depend on future developments, which are highly uncertain and not in our officerscontrol, including new information which may emerge concerning the spread and directors, particularly Stanley Chan, our President and CEO.  The lossseverity of his services could materially harm our business because of the cost and time necessary to find successors.  Such a loss would also divert management attention away from operational issues.  We do not have other key employees who manage our operations. To the extent that we are smaller than our competitors and have fewer resources, we may not be able to attract a sufficient number and quality of staff, when required.

Risks Related to Doing Business in Hong Kong

Changes in the political and economic policies of Hong Kong’s government may have a significant negative impact upon our business operations.

Substantially all of our assets are located in Hong Kong and a considerable portion of our revenues are expected to derive from our operations in Hong Kong.  The Hong Kong government exerts substantial influence and control over the manner in which we must conduct our business activities.  Our ability to operate in Hong Kong may be adversely affected by changes in Hong Kong laws and regulations.  As a result, changes in the political and economic policies of the Hong Kong government could have a significant impact on the results of our operations and financial condition.

Our executive officer and director are located outside of the U.S. It is difficult to effect service of process and enforcement of legal judgments upon us and our officers and directors.

Our sole executive officer and director is located outside of the United States.  As a result, it may be difficult to effect service of process within the United States and enforce judgment of the US courts obtained against us and our executive officers and directors.  Particularly, our shareholders may not be able to:

o    Effect service of process within the United States on the CompanyCOVID-19, or any of its executive officersvariants, and directors;

o    Enforce judgments obtained in U.S. courts against the Company based upon the civil liability provisionsactions taken to address its impact, among others. The repercussions of the U.S. federal securities laws;

o     Enforce, in a court outside of the U.S. judgments of U.S. courts based on the civil liability provisions of the U.S. federal securities laws; and

o    Bring an original action in a court in China to enforce liabilities against the Company or any of its executive officers and directors based upon the U.S. federal securities laws.

Fluctuations in the exchange rate between the Hong Kong dollar and the United States dollar may bring down our operating income.

The functional currency of our operations in Hong Kong is the Hong Kong dollar.  Results of our operations are translated at average exchange rates into United States dollars for purposes of reporting results.  During the years ended December 31, 2017 and 2016 and through this date, there has not been significant fluctuation in exchange rates between Hong Kong dollars and US dollars. However, future fluctuations in exchange rates may adversely affect our expenses

6

and results of operations as well as the value of our assets and liabilities.  Any future significant fluctuations in the exchange rate between the Hong Kong dollar and the United States dollar may bring down our operating income and lower our stock price.  We have no current plans to undertake any hedging activity to minimize exchange rate fluctuations.

Risks Related to Investment in the Company’s Securities

A number of our shareholders own a large percentage of our voting stock and will have a significant influence over matters requiring stockholder approval and could delay or prevent a change in control.

Kelton Capital Group Ltd. currently owns 31,190,500 shares, or approximately 27.2%, of our outstanding common stock. As a result, if acting together with other shareholders, Kelton Capital may have the ability to determine the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets.  In addition, these persons, if acting together, may have the ability to control the management and affairs of the Company, whichhealth crisis could have a material adverse effect on the value of the common stock.our business, financial condition, liquidity, and operating results.

There has been low volume and therefore an inactive market for our common stock, the stock price may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above your stock purchase price.

If you purchase shares of our common stock, you may not be able to resell those shares at or above your original purchase price.  An active or liquid market in our common stock may not develop or, if it does develop, it may not be sustainable.  The market price of our common stock may fluctuate significantly inIn response to numerous factors, many of which are beyondCOVID-19, we have implemented working practices to address potential impacts to our operations, employees, and customers, and will take further measures in the Company’s control.

Because our common stock is deemed a low-priced "Penny" stock, an investment in our common stock should be considered high risk and subject to marketability restrictions.

Since our common stock is a penny stock, as defined in Rule 3a51-1 under the Securities Exchange Act, it will be more difficult for investors to liquidate their investment evenfuture if and when a market develops for the common stock. Until the trading price of the common stock rises above $5.00 per share, if ever, trading in the common stock is subject to the penny stock rules of the Securities Exchange Act specified in rules 15g-1 through 15g-10. Those rules require broker-dealers, before effecting transactions in any penny stock, to:

o   Deliver to the customer, and obtain a written receipt for, a disclosure document;

o   Disclose certain price information about the stock;

o   Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;

o   Send monthly statements to customers with market and price information about the penny stock; and

o   In some circumstances, approve the purchaser's account under certain standards and deliver written statements to the customer with information specified in the rules.

Consequently, the penny stock rules may restrict the ability or willingness of broker-dealers to sell the common stock and may affect the ability of holders to sell their common stock in the secondary market and the price at which such holders can sell any such securities.  These additional procedures could also limit our ability to raise additional capital in the future.

We have never declared or paid cash dividends on our capital stock andas required. At present, we do not anticipate payingbelieve there has been any cash dividends in the foreseeable future.

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We have never declared or paid cash dividendsappreciable impact on our common stock andcompany specifically associated with COVID-19.

As a smaller reporting company, we doare not anticipate paying any cash dividendsrequired to provide the information called for in the foreseeable future.  We currently intend to retain future earnings, if any, to fund the development and growth of our business.  Any future determination to pay dividends will be at the discretion of our Board of Directors and will be dependent upon our financial condition, operating results, capital requirements, applicable contractual restrictions and other such factors as our Board of Directors may deem relevant.this Item.

Item 1B.   UNRESOLVED STAFF COMMENTS

None.

Item 2.   DESCRIPTION OF PROPERTY

We leasedo not own any real estate or other properties.We conduct our businesses primarily in Macau and Hong Kong. We leased office space, approximately 250 square feet, infacilities and warehouse at four locations: Jersey City, New Jersey, on a month-by-month basis. For the year ended December 31, 2017, the rent was $585 per month.  We also have an office inUSA; Hong Kong, which is leased on a term of two years ending in January 2018. The space isKong; Macau; and Zhuhai, Guandong, China, totaling approximately 77039,800 square feet, of which approximately 21,480 square feet were used as warehouses.  

We believe these facilities are in good condition and the rent is approximately $3,780 per month.

If we requiresufficient for our current needs but may need to seek additional space,or expanded facilities if our business continues to grow, and we believe that wesuitable additional or alternative space will be ableavailable as needed to obtainaccommodate any such space on commercially reasonable terms.growth.

Item 3.   LEGAL PROCEEDINGS

We are not a party to any material pending legal proceedings, nor are we aware of any pending litigation or threatened legal proceeding against us, our officers, directors, or any beneficial holders of 5% or more of our voting securities that if determined in a manner adverse to us, couldwould have a material adverse effect on our business andfinancial position or results of operations.

Item 4.   MINE SAFETY DISCLOSURES

Not applicable.

PART II

Item 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is quoted for trading on the OTC Pink marketplace under symbol "SCGY", and has been traded very thinly and infrequently. Accordingly, we are not including a history of reported trades in the public market through December 31, 2017.2022.  

Holders of Our Common Stock

As of December 31, 2017,2022, we had approximately 242 holders of record263,337,500 shares of our common stock.stock issued and outstanding, held by approximately 256 stockholders of record. The number of record holders does not include beneficial owners of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies.

Dividends

We have never paid or declared any cash dividends on our common stock. We currently intend to retain any future earnings to finance the growth and have no plansdevelopment of our business, and we do not expect to do sopay any cash dividends on our common stock in the foreseeable future. ThePayment of future policydividends, if any, will be determined byat the discretion of our boardBoard of directorsDirectors and will depend upon a number of factors, includingon our financial condition, results of operations, capital requirements, preferential rights of any preferred stock, restrictions contained in future financing instruments, and other factors our Board of Directors deems relevant.

Penny Stock

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performance, our cash needsThe SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges, provided that current price and expansion plans, income tax consequences,volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the restrictionssignificance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer's account.

In addition, the penny stock rules require that applicable lawsprior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.

These disclosure requirements may have the effect of reducing the trading activity for our credit arrangementscommon stock should our stock ever be traded on a public market. Therefore, stockholders may impose.have difficulty selling our securities.

Securities Authorized for Issuance under Equity Compensation Plans

We do not have any equity compensation plans.plans under which equity securities may be issued.

Performance graph

Not required for smaller reporting companies.

Recent Sales of Unregistered Securities

None.On May 10, 2021, the Company entered into a stock purchase agreement with multiple accredited investors to sell and issue to the purchasers in reliance on Section 4(2) of the Securities Act of 1933, as amended, and Rule 506 promulgated thereunder, an aggregate of 17,084,148 shares of the Company’s common stock, par value $0.01 per share at a price of $0.50 per Share.  Proceeds to the Company from the sale of the Shares were $8,542,074.

On May 10, 2021, the Company entered into a share purchase agreement, by and among the Company, Macao E-Media Development Company Limited, a company registered in Macau (“MED”), and the shareholders of MED (the “MED Shareholders” and, together with MED, the “Sellers”), whereby the Company acquired from the Sellers 98.75% of the issued and outstanding share capital of MED (the “MED Shares”).

As consideration for the MED Shares, the Company agreed to issue the Sellers, or its assigns, in a total of 131,337,500 shares of the Company’s restricted common stock, par value $0.01 per share, at a consideration of $0.50 per share, for an aggregate consideration of $65,668,750.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

No purchases of our equity securities were made by us or any affiliated entity during the year ended December 31, 2017.2022.

Item 6.  SELECTED FINANCIAL DATA

Not required forA smaller reporting companies.company is not required to provide the information required by this Item.

Item 7.   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, 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 contains certain forward-lookingon Form 10-K.

Except for historical information, the matters discussed in this section are forward looking statements that involve risks and uncertainties.  We use words such as "anticipate," "believe," "expect," "future," "intend," "plan,"uncertainties and similar expressions to identify forward-looking statements. These statements are only predictions.  Although we believebased upon judgments concerning various factors that are beyond the expectations reflected in theseCompany’s control. Consequently, and because forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  You should not place undue reliance on these forward-looking statements, which apply only as ofinherently subject to risks and uncertainties, the date of this report.  Our actual results couldand outcomes may differ materially from those anticipatedthe results and outcomes discussed in thesethe forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report.

Business Overview

The Company conducts businessWe conduct our businesses primarily through its whollyour 98.75% owned subsidiary, Sinoforte Ltd.Macao E-Media Development Company Limited, a Macau Company (“MED”), and 50% owned subsidiary, Gold Gold Gold Limited (“3G”), a Hong Kong corporation.company.

PriorIn 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 August 2011,our consolidated financial statements.

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 Company operated primarily asneeds 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 merchant, buyingstable market share, reduce costs and selling various typeincrease efficiency, and grades of graphite,ensure the Company’s profitability. During the year, we reduced or suspended our investment in certain exploratory business activities, such as medium-online supermarket, live broadcasting business, and high-carbon graphite, high-purity graphite, micro-powder graphitefocus on our main business and expandable graphite. As a merchant, the Company acted as a reseller. It purchased graphite products in bulk, primarily from graphite producers, and resold them, either in bulk or in smaller quantities (in either case, without further processing), to various small and mid-sized customers.    

In August 2011, the Company started to engage in a business of e-commerce platform.  Currently the Company is in the process of developing a website, “Makeliving.com” ("Makeliving"), which provides an e-commerce platform, where registered members can exchange goods and services.

Makeliving will act both as a platform and as a conduit between those (individuals or companies) who desire to acquire goods and services and those (individuals or companies) who desire to offer goods and services.  Makeliving plans to charge a certain percentage fee for the transactions.  However, no revenues have been generated.  The website is now temporarily under maintenance.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 CompanyWorld 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 considering newdisadvantageous for our other services, because customers' consumption is downgraded and they are more sensitive to discounts.

While we continue business models.

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On January 23, 2018,operations, there remain significant uncertainties surrounding the Company entered into an agreement with Cityhill Limited,COVID-19 outbreak and its further development as a wholly owned subsidiaryglobal pandemic. Hence, the extent of South Sea Petroleum Holdings Limited, a Hong Kong listed public company, pursuantthe 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 parties agreedthe 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 establish a joint venture (the “Joint Venture”). Each party owns 50% equity interestcontain 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 Joint Venture respectively.year ended December 31, 2022 included the following:

The Venture Joint, with the support of blockchain technology, is to provide global trading service of physical gold for global customers. The parties contribute their respective experiences in blockchain technology and marketing. The Company will assist the Joint Venture in exploring the North America and Europe markets, while Cityhill will focus on the Asian markets.

Results of Operations

ForComparison of the Year Ended December 31, 2017 Compared2022 to the Year Ended December 31, 20162021

Sales

For the years ended December 31, 2017 and 2016, the Company generated no sales. Currently the Company is in the process of developing a website, which provides an e-commerce platform, where registered members can exchange goods and services.

Costs of Goods Sold

Cost of goods soldThe following table shows operating results for the years ended December 31, 20172022 and 2016 were nil because there were no sales.2021.

Operating expensesSales

For the year ended December 31, 2017,2022, the Company’s operating expenses were $306,252Company generated sales for $44,111,814 compared to $387,248$10,049,891 for the year of 2016.2021. The decrease is primarilynew generated sales were entirely from the result of reduced consulting fees paid towards business development with Makelivingnewly acquired 98.75% owned subsidiary, MED, which was acquired by the Company in 2017.

September 2021.  

Other Income (Expense)Costs of Revenue

For the year ended December 31, 2017,2022, the Company had $1generated cost of interest income, asrevenue for $30,901,653 compared to $7 of interest income$7,664,721 for the same period lastyear of 2021. Currently the Company is attributable to delivery rider costs and purchase of inventory for the whole year.

Net LossOperating expenses

For the year ended December 31, 2017,2022, 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 $306,251,$3,766,129, or $(0.003)$(0.014) per share, as compared to a net loss of $387,241,$967,685, or $(0.004)$(0.005) per share, for the year of 2016.2021.  

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

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, 2017,2022, the Company had cash and cash equivalents of $54,200$2,677,775 and a working capital deficit of $1,089,401.  $5,804,912.  The Company generates a significant amount of cash flows from operations.

For the year ended December 31, 2017,2022, the Company used net cash of $308,347$3,393,848 from its operating activities primarily from our net loss of $306,251$3,822,501, net with depreciation and ouramortization of $185,102,  a disposal of equipment of $8,353, an increase in account receivables of $218,783, an decrease in accounts payableinventories of $904, net with a decrease$147,067, an increase in prepaid expenses of $1,192.$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 $387,799$4,798,556 in 2016.

During the year ended December 31, 2017 and 2016, investing activities was nil.2021.

During the year ended December 31, 2017,2022, 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 $200,000,$24,174, which were proceedswas comprised of repayment of bank loans of $599,065 and loan borrowing from issuancebank of 20 million shares$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 Company’s common stock in a private placement.  Fordirectors of MED and for the year endeduse 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 31, 2016, there were2022 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 financing activities.  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

10

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

We doThe Company does not have any off-balance sheet arrangements.

Contractual Obligations

Consulting Agreement with Tsui Siu Ting: On January 1, 2010, the Company entered into a Consulting Agreement with Tsui Siu Ting.  Under the Agreement, Mr. Tsui shall serve as a business advisor to the Company, on a non-exclusive basis, and render such advice and services to the Company as may be reasonably requested or assigned by the Company, including, without limitation, new business development and marketing activities in China and Hong Kong.  In consideration for his services, the Company agrees to pay to Mr. Tsui a monthly fee of $20,000 Hong Kong dollars (approximately $2,564). The initial term of this agreement is five years, which shall be automatically extended for additional five years if no notice of termination is given by any party 60 days prior to expiration.

Operating leases 

The Company leases approximately 250 square feet of space in Jersey City, New Jersey onunder a month to monthmonth-by-month basis at rent of approximately $565$650 per month.  In addition, the Company entered into a two yeartwo-year lease for office space of approximately 770 square feet in Hong Kong, expiring January 2018,2024 with monthly payments of approximately $3,780$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.

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 12 to our consolidated financial statements.

Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not required for

As we are a smaller reporting companies.

11

company, we are not required to provide the information required by this Item.

Item 8.  CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

F-5

SCIENTIFIC ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 20172022

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES

Scientific Energy, Inc., (the "Company") was incorporated under the laws of the State of Utah on May 30, 2001.  Prior to August 2011, the Company was principally devoted to the buying and selling of various types and grades of graphite, such as medium- and high-carbon graphite, high-purity graphite, micro-powder graphite and expandable graphite.   In August 2011, the Company decided to engage in a business of e-commerce platform. Currently the Company is in the process of developing a website, which provides an e-commerce platform, where registered members can exchange goods and services.

On March 28, 2006, the Company set up a wholly-ownedwholly owned subsidiary, PDI Global Limited (“PDI”), which was incorporated in the British Virgin Islands in order to engage in a business of e-commerce platform.

In January 2008, the Company entered into a joint venture agreement with China Resources Development Group Ltd., a Hong Kong company.  Under the agreement, a joint venture company, Kabond Investments Ltd (the “JVC”), was established in Hong Kong, and the Company invested $39.6 million Hong Kong dollars (approximately $5.09 million) into the JVC for 72% of the JVC’s capital shares, and China Resources Development Group Ltd., jointly with its partner, invested $15.4 million Hong Kong dollars (approximately $1.98 million) into the JVC to receive 28% of the JVC’s capital shares.  In December 2008, all equity interest of the JVC owned by the Company was sold to a third party for $39.6 million Hong Kong dollars (approximately $5,109,743).

In January 2009, the Company through its wholly-owned subsidiary, PDI, entered into a joint venture agreement with China Resources Development Group Ltd.  Under the agreement, the Company agreed to invest $43,040,000 Hong Kong dollars (approximately $5.55 million) into a joint venture company Sinoforte Ltd. in Hong Kong (“Sinoforte”).  The Company got 80% of Sinoforte's capital shares, and China Resources invested $10,222,000 Hong Kong dollars, approximately $1,318,967, and another investor invested $538,000 Hong Kong dollars, or approximately $69,419, into Sinoforte for 19% and 1% of Sinoforte's capital shares, respectively.  The main business of Sinoforte was trading mineral products such as graphite produced in China.  In June 2009 and September 2009, respectively, China Resources and the other minority investor cancelled their investments in Sinoforte, and the full amount of their original investments was returned.  As a result, Sinoforte became a wholly-owned subsidiary of PDI. On December 8, 2020, PDI sold all the shares of Sinoforte to the Company at consideration of HK$10.

On February 28, 2012, the Company set up a wholly-owned subsidiary, Makeliving Ltd., which was incorporated in the Cayman Islands in order to engage in a business of e-commerce platform.

On January 23, 2018, the Company entered into an agreement with Cityhill Limited, a wholly owned subsidiary of South Sea Petroleum Holdings Limited, a Hong Kong listed public company, pursuant to which parties agreed to establish a joint venture (the “Joint Venture”).  Each party owns 50% equity interest in the Joint Venture respectively.

On February 8, 2021, the Company acquired an entire share of a Hong Kong company, Qwestro Limited, for HK$1,000 without any goodwill and bargaining purchase.

On March 24, 2021, the Company disposed of its wholly-owned dormant subsidiary, PDI Global Limited, with a positive net worth of $1 to an unaffiliated third-party purchaser for $1.  

In September 27, 2021, the Company completed the acquisition of 98.75% shares of Macao E-Media Development Company Limited (“MED”). As consideration for the MED shares, the Company agreed to issue the Sellers, or its assigns, in a total of 131,337,500 shares of the Company’s restricted common stock, par value $0.01 per share, at a consideration of $0.50 per share, in the aggregate consideration of $65,668,750 (the “Purchase Price”). As a result of this acquisition, MED becomes a 98.75% owned subsidiary of the Company. MED was founded at Macau in 2011. Its main area of business includes food and grocery order-pickup-delivery services from local restaurants, supermarkets and hotels.

MED has five subsidiaries, each of which is in charge of respective area such as Development & Maintenance, Marketing & Operation, Logistics & Delivery, Payment & Clearance, Emerging Market Business Development.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying audited consolidated financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) have been made that are necessary to present fairly the financial position, and the results of its operations and its cash flows. Operating results as presented are not necessarily indicative of the results to be expected for a full year.

The Company's consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not generated significant revenues since 2011 and is unlikely to generate significant earnings in the immediate or foreseeable future.  The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations. The management will seek to raise funds from shareholders.

The accompanying consolidated financial statements present the financial position and the results of operations of the Company and its 100% owned subsidiaries, Makeliving, Ltd. and PDI.  PDI,Sinoforte Limited.  Qwestro Limited, in turn, is the 100% ownerowned subsidiary and consolidates with Sinoforte Limited.

All significant intercompany transactions and balances have been eliminated in consolidation.

Business Combinations

The Company accounts for acquisition of entities that include inputs and processes and has the ability to create outputs as business combinations. The Company allocates the purchase price of the acquisition to the tangible assets, liabilities and identifiable intangible assets acquired based on their estimated fair values. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition-related expenses and integration costs are expensed as incurred.

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized:when: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed or determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management'smanagement’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales arerevenue is recorded.

ASC 605-10 incorporates Accounting Standards Codification subtopic 605-25, Multiple-Element Arrangements (“ASC 605-25”).  ASC 605-25 addresses accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets.  The effect of implementing ASC 605-25 on the Company's financial position and results of operations was not significant.

The Company defers any revenue for which the product has not been delivered or services have not been rendered or are subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or services have been rendered or no refund will be required.

Revenues on the sale of products, net of estimated costs of returns and allowance, are recognized at the time products are shipped to customers, legal title has passed, and all significant contractual obligations of the Company have been satisfied. Products are generally sold on open accounts under credit terms customary to the geographic region of distribution. The Company performs ongoing credit evaluations of the customers and generally does not require collateral to secure the accounts receivable.

The Company is exploring web based e-commerce to bring buyersoperating mobile platform of ordering and sellersdelivery services for restaurants and supermarket in Macau, together recognizing revenue as commissions on closed transactions.

Segment information

ASC 280-10 establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. ASC 280-10 also establishes standards for related disclosures about products and services and geographic areas.  Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance.  All sales and substantial assets of the Company are in China.China and Macau. The Company applies the management approach to the identification of our reportable operating segments as provided in accordance with ASC 280-10.  The information disclosed herein materially represents all of the financial information related to the Company’s principal operating segment.

Use of Estimates

The preparation of theconsolidatedfinancial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of theconsolidatedfinancial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Concentration of Credit Risk

The Company’s financial instruments that are exposed to a concentration of credit risk are cash and accounts receivable.  Generally, the Company’s cash and cash equivalents in interest-bearing accounts may exceed FDIC insurance limits. The financial stability of these institutions is periodically reviewed by senior management.

As of December 31, 20172022, and December 31, 2016,2021, the Company maintained $47,515$2,058,216 and $152,113$4,899,488 in foreign bank accounts not subject to FDIC coverage

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements.

Cash and Cash Equivalents

For purposes of the statements of cash flows, cash and cash equivalents include cash on hand and demand deposits held by banks.

Comprehensive Income (Loss)

The Company adopted Accounting Standards Codification subtopic 220-10, Comprehensive Income (“ASC 220-10”) which establishes standards for the reporting and displaying of comprehensive income and its components. Comprehensive income is defined as the change in equity of a business during a period from transactions and other events and circumstances from non-owners sources.  It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. ASC 220-10 requires other comprehensive income (loss) to include foreign currency translation adjustments.

Foreign Currency Translation

The Company translates the foreign currencyconsolidatedfinancial statements into US Dollars (“USD”) using the year or reporting period-end or average exchange rates in accordance with the requirements of Accounting Standards Codification subtopic 830-10, Foreign Currency Matters (“ASC 830-10”).  Assets and liabilities of these subsidiaries were translated at exchange rates as of the balance sheet date.  Revenues and expenses are translated at average rates in effect for the periods presented.

Theconsolidatedfinancial statements were presented in US Dollars except as other specified.

The cumulative translation adjustment is included in the accumulated other comprehensive gain (loss) within stockholders’ equity (deficit).  Foreign currency transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the consolidated results of operations.

The exchange rates used to translate amounts in HKD and MOP into US Dollars for the purposes of preparing the consolidated financial statements were as follows:

Property, plant and equipment

The Company evaluates the carrying value of items of property, plant and equipment to be held and used whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  The carrying value of an item of property, plant and equipment is considered impaired when the projected undiscounted future cash flows related to the asset are less than its carrying value.  The Company measures impairment based on the amount by which the carrying value of the respective asset exceeds its fair value.  Fair value is determined primarily using the projected future cash flows discounted at a rate commensurate with the risk involved.

Intangible assets

Purchased intangible assets are recognized and measured at fair value upon acquisition. Separately identifiable intangible assets that have determinable lives continue to be amortized over their estimated useful lives using the straight-line method based on their estimated useful lives as follows:

The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Trade receivables

Trade receivables are recorded at the invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on management’s assessment of potential losses based on the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable.

The Company considered the amounts of receivables in dispute and believes an allowance for these receivables were not necessary as of December 31, 2022 and 2021.

Fair Value Measurements

ASC Topic 820 defines fair value, establishes a framework for measuring fair value and enhances disclosure requirements for fair value measurements. This topic does not require any new fair value measurements. ASC Topic 820 defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the

measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC Topic 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Earnings (Loss) Per Share

Earnings Per Share (‘EPS”) is computed by dividing net income available to common stockholders by the weighted average number of common stock shares outstanding during the year.  Diluted EPS is computed by dividing net income available to common stockholders by the weighted average number of common stock shares outstanding during the year plus potential dilutive instruments such as stock options and warrants.  

The effect of stock options on diluted EPS is determined through the application of the treasury stock method, whereby proceeds received by the Company based on assumed exercises are hypothetically used to repurchase the Company's common stock at the

average market price during the period.  The Company has no stock options, warrants or other potentially dilutive instruments outstanding at December 31, 20172022 and 2016.2021.

Investment in Unconsolidated Joint Ventures

The Company entered into a JV agreement with an independent third party, to form a JV company. The joint venture agreement provides the Company with only the rights to the assets and obligation for the liabilities of the joint arrangement resting primarily with the JV. In adopting ASC Topic 323, Investments - Equity Method and Joint Ventures (Topic 323), the Company’s investment in joint venture is accounted for using the equity method.

Inventories

Inventories are carried at the lower of cost and net realizable value, as determined using the weighted average cost method. Management compares the cost of inventories with the net realizable value and if applicable, an allowance is made for writing down the inventory to its net realizable value, if lower than cost. On an ongoing basis, inventories are reviewed for potential write-down for estimated obsolescence or unmarketable inventories which equals the difference between the costs of inventories and the estimated net realizable value based upon forecasts for future demand and market conditions. When inventories are written-down to the lower of cost or net realizable value, it is not marked up subsequently based on changes in underlying facts and circumstances.

The Company entered into a purchase agreement with JV company and through their platform to purchase of gold. In adopting ASC Topic 330, Inventory, it permits certain inventories such as precious metals, agricultural and mineral inventories to be stated above cost in exceptional cases. We believe that because our business model is to trade gold and held in short-term, market value is a more useful and relevant measurement than lower of cost or market value.

Goodwill

Goodwill is recorded as the difference between the aggregate consideration paid for in a business combination and the fair value of the acquired net tangible and intangible assets acquired. The Company evaluates goodwill for impairment on an annual basis in the fourth quarter or more frequently if indicators of impairment exist that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Based on that qualitative assessment, if it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company conducts a quantitative goodwill impairment test, which involves comparing the estimated fair value of the reporting unit with its carrying value, including goodwill. The Company estimates the fair value of a reporting unit using a combination of the income and market approach. If the carrying value of the reporting unit exceeds its estimated fair value, an impairment loss is recorded for the difference.

Non-controlling interest

Non-controlling interests represent the equity interests in the subsidiaries that are not attributable, either directly or indirectly, to the Company.

Lease liabilities

In adopting ASC Topic 842, Leases (Topic 842), the Company has elected the ‘package of practical expedients’, which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter is not applicable to the Company.  In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 month or less.  In determining the length of the lease term to its long-term lease, the Company determined it did not have an option to extend either lease.  

Recent Accounting Pronouncements

In January 2017,May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting Standards Updatefor Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU”ASU 2021-04”) 2017-04, Intangibles – Goodwill and Other (Topic 350). The amendments in this update simplifyASU 2021-04 provides guidance as to how an issuer should account for a modification of the testterms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains classified after modification or exchange as an exchange of the original instrument for goodwill impairment by eliminating Step 2 froma new instrument. An issuer should measure the impairment test, which requiredeffect of a modification or exchange as the entity to perform procedures to determinedifference between the fair value atof the impairment testing date of its assetsmodified or exchanged warrant and liabilities following the procedure that would be required in determining fair value of assets acquiredthat warrant immediately before modification or exchange and liabilities assumed inthen apply a business combination. The amendments in this update arerecognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective

for public companiesall entities for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. We are evaluating the impact of adopting this guidance on our Consolidated Financial Statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805); Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business to help companies evaluate whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The amendments in this update are effective for public companies for annual periods beginning after December 15, 2017,2021, including interim periods within those periods. The Company does not anticipate that this adoption will have a significant impactfiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on its financial position, results of operations, or cash flows.

In July 2017,after the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments.

As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception.

Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018.date. Early adoption is

permitted for all entities, including adoption in an interim period. If an entity elects to early adopts the amendmentsadopt ASU 2021-04 in an interim period, any adjustmentsthe guidance should be reflectedapplied as of the beginning of the fiscal year that includes that interim period. The adoption of ASU 2021-04 is not expected to have any impact on the Company’s consolidated financial statement presentation or disclosures.

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which establishes ASC 326, Financial Instruments - Credit Losses. The ASU revises the measurement of credit losses for financial assets measured at amortized cost from an incurred loss methodology to an expected loss methodology. The ASU affects trade receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. This ASU clarifies that receivables from operating leases are accounted for using the lease guidance and not as financial instruments. In May 2019, the FASB issued ASU No. 2019-05, Targeted Transition Relief, which amends ASC 326. This ASU provides an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost. The Company is currently reviewingevaluating the impact of adoption of ASU 2017-11onthis guidance will have on its financial statements. The Company doesadoption of this standard did not anticipate that this adoption will have a significant impact on its financial position, results of operations, or cash flows.

The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on resultsits consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 eliminates Step 2 of operations,the two-step goodwill impairment test, under which a goodwill impairment loss was measured by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. ASU 2017-04 requires only a one-step quantitative impairment test, whereby a goodwill impairment loss is measured as the excess of a reporting unit’s carrying amount over its fair value (not to exceed the total goodwill allocated to that reporting unit). Adoption of the ASUs is on a modified retrospective basis. As the Company qualifies as a smaller reporting company, the standard will be effective for the Company for interim and annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact that the adoption of ASU 2017-04 will have on its condensed consolidated financial condition,statement presentation or cash flows, baseddisclosures.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on current information.the Company’s consolidated financial statements upon adoption.

NOTE 3 – GOING CONCERN

As shown in the accompanying consolidated financial statements, the Company has generated a net loss of $306,251$3,766,129 and an accumulated deficit of $7,952,355$14,034,905 as of December 31, 2017.2022. The Company also experienced insufficient cash flows from operations and will be required continuous financial support from the shareholders. The Company will need to raise capital to fund its operations until it is able to generate sufficient revenue to support the future development. 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 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. Theseconsolidatedfinancial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 4 – PROPERTY, PLANT AND EQUIPMENT

Furniture and equipment as of December 31, 20172022 and 20162021 is summarized as follows: