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, 20172023

¨☐ 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 officers 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 16, 2024.

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TABLE OF CONTENTS

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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 2006,2021, 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 interestthe “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”), 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 an aggregate consideration of $65,668,750. The acquisition was completed on September 27, 2021. As a result, MED becomes a 98.75% owned subsidiary of the Company.

Based on its gross merchandise volume and market share, MED is a leading food and grocery ordering and delivery service company in Macau. MED was founded in Macau in 2011, and in 2015, once was Meituan Dianping’s exclusive business partner in Macau. Meituan Dianping is the biggest platform in China 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 e-commerce platform. Since then, MED has grown and become the biggest food and grocery ordering and delivery service provider in Macau, with approximately 70% of the market share.

New Subsidiaries

On January 2023, the Company acquired 90% shares of Fresh Life Technology Company Limited (“Fresh Life”) through its subsidiary, Zhuhai Migua Technology Company Limited. The main business of Fresh Life is provision of logistic services in Macau.

On October 9, 2023, the Company acquired 70% shares of Citysearch Technology (HK) Company Limited (“Citysearch”) in Hong Kong.  The main business of Citysearch is provision of group dining service platform, which mainly solves the lunch and dinner group dining needs for corporate employees in Hong Kong. As a startup, for the period ended December 31, 2023, Citysearch had a revenue of approximately $27,450, and net loss of approximately $969,632.

On December 22, 2023, the Company established a new wholly-owned subsidiary, Graphite Energy, Inc., which was incorporated in the Joint Venture respectively.State of Florida. The purpose of forming this new subsidiary is to enter the business of graphite production and sales, including establishing a production line for graphite refined powder products in Madagascar. Consequently, the Company first needs to ensure the long-term, sufficient and stable supply of graphite ore, which is the most important raw material for the Company’s graphite production line. On January 18, 2024, the Company entered into a Base Agreement for Purchase of Graphite Ore with Madagascar Graphite Limited (the “Supplier”) to ensure the long-term, sufficient and stable supply of graphite ore, which is the most important raw material for the Company’s graphite production line. The Supplier owns approximately 280-square-kilometer graphite mining area in the Tamatave region of Madagascar, with hundreds of millions of tons of the estimated graphite ore reserves and a history of graphite mining for more than a hundred years. On March 22, 2024, this agreement was amended and restated. Under the amended and restated agreement, the Company will not make advance payments to Supplier for the purchase of graphite ore; instead, payments will be made after manufacturing graphite products using the ore as raw material. The agreement term is one year, ending on March 30, 2025. During the term, Supplier agrees to sell and deliver to the Company, and the Company agrees to purchase and accept from Supplier sufficient amount of graphite ore so that the Company can produce up to 100,000 tons of graphite refined powder products with a carbon content of more than 95%. Parties agree to decide whether to renew or reach a new agreement 30 days before the expiration of this agreement.

Due to the uncontrollable variations among different grades of graphite ore, such as volume, weight, carbon content, as well as inaccuracies in testing, to protect each party’s interest and simplify the process of pricing, parties agree that the price for the graphite ore used for the production of refined graphite powder shall be calculated on an output based formula as follows: (i) for each metric ton of refined graphite powder output, the Company shall pay Supplier a fixed price of $200, regardless of how many metric tons

of graphite ore used as input; and (ii) This fixed price shall cover all mining and transporting the graphite ore to the warehousing facility at the Company’s production line in Tamatave, Madagascar by Supplier.

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Parties agree that purchase price shall be paid to Supplier by the Company’s issuance of its common stock shares, at a price of $0.50 per share. The Venture Joint,Company’s share payment shall be made quarterly in accordance with the supportquantity of blockchainthe refined graphite powder produced for the quarter. Parties agree the Company’s shares shall be issued to Supplier within 90 days of each quarterly settlement.

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

Our Business

Currently we conduct our businesses primarily through our 98.75% owned subsidiary, Macao E-Media Development Company Limited, a Macau Company (“MED”), and 50% owned company, 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 2023, our Platform generated over 9,182,000 transactions, totaling $1,061,530,000 MOP (approximately $133,000,000) in Gross Merchandise Volume.

We offer customers access to the Platform primarily through our mobile applications designed for iPhone, Android, and iPad devices. To use 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. The Company’s delivery arrangements with merchants are structured under two models: Instant Delivery and Scheduled Delivery. As of December 31, 2023, the Company had 600 delivery drivers.

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. 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 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) Flash Sales Service, which is, the Company utilizes its existing takeout platform, suddenly offering huge discounts, in a specific period of time, to clear a small amount of inventory for merchants. The discounted prices are available to exclusive members for a limited time. Each special sale only lasts for 1- 2 days. First come, first served, while supplies last.

(2) In-Store Service means that after users obtain store information and discounts through the Company’s online platform, they come to offline stores for dining, entertainment, accommodation, etc., from which the platform collects commissions and marketing fees. In addition to in-store dining that complements takeout, In-Store Service also includes various leisure and entertainment, as well as medical beauty, parent-child, education, home decoration, etc.

For the year ended December 31, 2023, approximately 86% of the Company's revenue derived from food ordering and delivery business, about 5% from flash sale service, and approximately 5% from in-store service.

Since 2022, with the changes in the macroeconomic environment, market, and competition, our business strategy was adjusted to maintain a stable market share, reduce costs and increase efficiency, and ensure the Company’s profitability. As a result, in 2022, we reduced or suspended our investment in certain exploratory business activities, such as online supermarket, live broadcasting business, and focus on our main business and the business initiatives with good profitability.

Merchant 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 5,500 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 780,000 active registered Platform customers as of December 31, 2023, we believe that we provide customers with the following key benefits:

Discovery. We aggregate menus/merchandise catalogs and enable ordering from more than 5,500 merchants in Macau as of December 31, 2023, 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.

For the year ended December 31, 2023, approximately 86% of the Company's revenue derived from food ordering and delivery business, about 5% from flash sale service, and approximately 5% from in-store service.

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 driver 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, 2023, we had approximately 780,000 active registered Platform customers and served over 5,500 partnered merchants. For the years ended December 31, 2023 and 2022, 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 also 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 780,000 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 provide global tradingsatisfy 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 Driver experience. We invest in improving delivery driver 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 physical goldboth merchants and customers through customer service, we seek to gain their loyalty and support 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 Cityhillour Platform.

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

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

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 Company does not own any patents, trademarks, copyrights, franchises, concessions, royalty agreements, or labor contracts.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.

Product ResearchIntellectual Property

We believe that our intellectual property rights are valuable and Developmentimportant 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.

To dateWe 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, 2023, we had 6 patents registered. In addition, we owned 96 registered trademarks and 79 software copyrights.

We intend to pursue additional intellectual property protection to the Company has not conducted any product researchextent we believe it would be beneficial and development. The Company does not plancost-effective. Despite our efforts to conduct any product research and development activitiesprotect our intellectual property rights, they may be infringed in the next twelve months.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, 2017, the Company has five2023, we had approximately 478 full time employees and 369 part time employees. Of 478 full time employees, 231 were delivery drivers. 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

You should carefully consider the following risk factors and other information included in this Annual Report.  The risks and uncertainties described below are not the only ones we face.  Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also impair 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, asAs 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.

Ifsmaller reporting company, 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 meansprovide the information called 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 new in the e-commerce platform business, and our revenue is difficult to predict.  Our revenue may not recur from period to period, which contributes to the variability 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.

5

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 depends on the efforts and abilities of our officers and directors, particularly Stanley Chan, our President and CEO.  The loss 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 Company or any of its executive officers and directors;

o    Enforce judgments obtained in U.S. courts against the Company based upon the civil liability provisions 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 expensesItem.

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, which could have a material adverse effect on the value of the common stock.

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 in response to numerous factors, many of which are beyond 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 even 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 and we do not anticipate paying any cash dividends in the foreseeable future.

7

We have never declared or paid cash dividends on our common stock and we do not anticipate paying any cash dividends 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.

Item 1B.   UNRESOLVED STAFF COMMENTS

None.

Item 1C.  CYBERSECURITY

None.

Item 2.   DESCRIPTION OF PROPERTY

We do not own any properties. We entered into lease agreements for our offices located in Macau, Hong Kong, and Zhuhai, Guangdong, China, totaling approximately 27,444 square feet.  

We leasebelieve these facilities are in good condition and sufficient for our office space, approximately 250 square feet, in 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 in Hong Kong, which is leased on a term of two years ending in January 2018. The space is approximately 770 square feet,current needs but may need to seek additional or expanded facilities if our business continues to grow, and the rent is approximately $3,780 per month.

If we require additional space, 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

WeFrom time-to-time, we are not awareinvolved in legal proceedings relating to claims arising out of our operations in the normal course of business. It is our policy to record accruals for legal contingencies to the extent that we have concluded that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated, and to expense costs associated with loss contingencies, including any pendingrelated legal fees, as they are incurred. As of December 31, 2023, and through the filing date of this Form 10-K, there were no such actions or threatened legal proceedingproceedings, either individually or in the aggregate, that, if determined in a manner adversedecided adversely to us, could have aour interests, we believe would be material adverse effect onto our business and operations.business.

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

Our common stock is considered to be penny stock under rules promulgated by the SEC. Under these rules, broker-dealers participating in transactions in these securities must first deliver a historyrisk disclosure document which describes risks associated with these stocks, broker-dealers’ duties, customers’ rights and remedies, market and other information, and make suitability determinations approving the customers for these stock transactions based on financial situation, investment experience and objectives. Broker-dealers must also disclose these restrictions in writing, provide monthly account statements to customers, and obtain specific written consent of reported trades ineach customer. With these restrictions, the publiclikely effect of designation as a penny stock is to decrease the willingness of broker-dealers to make a market through December 31, 2017.  

for the stock, to decrease the liquidity of the stock and increase the transaction cost of sales and purchases of these stocks compared to other securities.

Holders of Our Common Stock

As of December 31, 2017,2023, we had approximately 242254 holders of record of our common stock. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies. We have appointed Securities Transfer Corporation, 2901 Dallas Parkway, Suite 380, Plano TX 75093 to act as transfer agent for the common stock.

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

8

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, 2017.2023.

Item 6.  SELECTED FINANCIAL DATARESERVED

Not required for smaller reporting companies.

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, 2023 and 2022. 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 businessCurrently we 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 company, 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, 2023, our Platform generated over 11,779,000 transactions, totaling $1,285,186,000 MOP (approximately $160,248,000) in Gross Merchandise Volume.

In 2023, 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, the Company is considering new business models.we carried out various measures to reduce distribution costs and platform operating costs, and lay off some employees to reduce labor costs.

New Subsidiaries

9

On January 23, 2018,2023, the Company acquired 90% shares of Fresh Life Technology Company Limited (“Fresh Life”) through its subsidiary, Zhuhai Migua Technology Company Limited. The main business of Fresh Life is provision of logistic services in Macau.

On October 9, 2023, the Company acquired 70% shares of Citysearch Technology (HK) Company Limited (“Citysearch”) in Hong Kong.  The main business of Citysearch is provision of group dining service platform, which mainly solves the lunch and dinner group dining needs for corporate employees in Hong Kong. As a startup, for the period ended December 31, 2023, Citysearch had a revenue of approximately $27,450, and net loss of approximately $969,632.

On December 22, 2023, the Company established a new wholly-owned subsidiary, Graphite Energy, Inc., which was incorporated in the State of Florida. The purpose of forming this new subsidiary is to enter the business of graphite production and sales, including establishing a production line for graphite refined powder products in Madagascar.

Consequently, the Company first needs to ensure the long-term, sufficient and stable supply of graphite ore, which is the most important raw material for the Company’s graphite production line. On January 18, 2024, the Company entered into an agreementa Base Agreement for Purchase of Graphite Ore with CityhillMadagascar Graphite Limited a wholly owned subsidiary(the “Supplier”) to ensure the long-term, sufficient and stable supply of South Sea Petroleum Holdings Limited, a Hong Kong listed public company, pursuant tographite ore, which parties agreed to establish a joint venture (the “Joint Venture”). Each partyis the most important raw material for the Company’s graphite production line. The Supplier owns 50% equity interestapproximately 280-square-kilometer graphite mining area in the Joint Venture respectively.Tamatave region of Madagascar, with hundreds of millions of tons of the estimated graphite ore reserves and a history of graphite mining for more than a hundred years. On March 22, 2024, this agreement was amended and restated. Under the amended and restated agreement, the Company will not make advance payments to Supplier for the purchase of graphite ore; instead, payments will be made after manufacturing graphite products using the ore as raw material. The agreement term is one year, ending on March 30, 2025. During the term, Supplier agrees to sell and deliver to the Company, and the Company agrees to purchase and accept from Supplier sufficient amount of graphite ore so that the Company can produce up to 100,000 tons of graphite refined powder products with a carbon content of more than 95%. Parties agree to decide whether to renew or reach a new agreement 30 days before the expiration of this agreement.

Due to the uncontrollable variations among different grades of graphite ore, such as volume, weight, carbon content, as well as inaccuracies in testing, to protect each party’s interest and simplify the process of pricing, parties agree that the price for the graphite ore used for the production of refined graphite powder shall be calculated on an output based formula as follows: (i) for each metric ton of refined graphite powder output, the Company shall pay Supplier a fixed price of $200, regardless of how many metric tons of graphite ore used as input; and (ii) This fixed price shall cover all mining and transporting the graphite ore to the warehousing facility at the Company’s production line in Tamatave, Madagascar by Supplier.

Parties agree that purchase price shall be paid to Supplier by the Company’s issuance of its common stock shares, at a price of $0.50 per share. The Venture Joint,Company’s share payment shall be made quarterly in accordance with the supportquantity of blockchain technology, isthe refined graphite powder produced for the quarter. Parties agree the Company’s shares shall be issued to provide global trading serviceSupplier within 90 days of physical goldeach quarterly settlement.

2023 Highlights

Our operating results for global customers. The parties contribute their respective experiences in blockchain technology and marketing. The Company will assist the Joint Venture in exploringyear ended December 31, 2023 included the North America and Europe markets, while Cityhill will focus on the Asian markets.following:

Results of Operations

ForComparison of the Year Ended December 31, 2017 Compared2023 to the Year Ended December 31, 20162022

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, 20172023 and 2016 were nil because there were no sales.2022.

Operating expensesSales

For the year ended December 31, 2017,2023, the Company generated sales for $38,958,211 compared to $44,111,814 for the year of 2022. The sales were entirely from the subsidiary, MED, which was acquired by the Company in September 2021.  

Costs of Revenue

For the year ended December 31, 2023, the Company generated cost of revenue for $21,097,763 compared to $30,901,653 for the year of 2022. Currently the Company is attributable to delivery rider costs and purchase of inventory for the whole year.

Operating expenses

For the year ended December 31, 2023, the Company’s operating expenses were $306,252$15,966,837 compared to $387,248$17,053,486 for the year of 2016.2022.  The decrease is primarily the result of reduced consulting fees paid towardsthe operational maturity of the business development with Makeliving in 2017.Macau and Zhuhai in 2023.

Other Income (Expense)

For the year ended December 31, 2017,2023, the Company had $1$56,510 of interest income,other expense, net, as compared to $7$20,824 of interestsundry income, net, for the same period last year.  The interest income in 2023 is related to loan receivable from a joint venture company. The interest expense in 2023 and 2022 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 LossIncome (Loss)

For the year ended December 31, 2017,2023, the Company had a net lossincome attributable to the Company of $306,251,$2,087,997, or $(0.003)$0.008 per share, as compared to a net loss of $387,241,$3,766,129, or $(0.004)$(0.014) per share, for the year of 2016.  2022.

Liquidity and Capital Resources

As of December 31, 2017,2023, the Company had cash and cash equivalents of $54,200$3,164,464 and a working capital deficit of $1,089,401.  $5,992,049.  The Company does not generate a significant amount of cash flows from operations.

For the year ended December 31, 2017,2023, the Company used net cash of $308,347$656,666 from its operating activities primarily from our net lossincome of $306,251$1,828,310, net with depreciation and ouramortization of $111,504,  a disposal of equipment of $19,757, an increase in account receivables of $276,618, an decrease in accounts payableinventories of $904, net with a decrease$40,651, an increase in prepaid expenses of $1,192.$9,167, a decrease in deposits of $207,324, an increase in other receivables of $437,126, an decrease in accrued expense of $83,611, an increase in deposit received of $225,203, a decrease in other payables of $555,320, a decrease in account payable of $1,727,573. By comparison, net cash used in operating activities was $387,799$3,393,848 in 2016.

During the year ended December 31, 2017 and 2016, investing activities was nil.2022.

During the year ended December 31, 2017,2023, the Company provided net cash of $460,064 from its investing activities which comprised with purchase of equipment of $177,844, purchase of intangible asset of $503,668, loan receivable from joint venture of $49,028, repayment from related companies of $937,687, repayment from non-controlling interest of $556,875 and net cash outflow from acquisition of subsidiaries of $402,014. By comparison, net cash provided by investing activities was $303,242 in 2022.

During the year ended December 31, 2023, the Company’s financing activities provided net cash of $200,000,$1,255,233, which were proceedswas comprised of repayment of bank loans of $288,187 and loan borrowing from issuancebank of 20 million shares$1,543,420. By comparison, net cash provided by financing activities was $24,174 in 2022.

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”). 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 indirectors of MED and for the use of MED operation due to the outbreak of COVID-19. 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 fixed term of repayment. In May and June 2023, Chengmi borrowed the loans with principle of $362,505 and $414,731, repaid within a private placement.  Foryear and at an interest rate of 4.5% per annum. In June 2023, Chengmi borrowed the loans with principle of $85,518 and $59,052, repaid within a year ended December 31, 2016, there were no financing activities.  and at an interest rate of 4.4% per annum.

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. In 2023, MED’s subsidiary, Citysearch Technology (HK) Company Limited, entered into a two-year lease for a cafe shop space of approximately 708 square feet in Hong Kong, expiring August 2025 with monthly payment of approximately $5,005 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

Report of Independent Registered Public Accounting FirmsFirm

To the Board of Directors and Stockholders of Scientific Energy, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Scientific Energy, Inc and its subsidiaries (the “Company”) as of December 31, 20172023 and 2016,2022, and the related consolidated statements of operations and comprehensive losses, stockholders’ deficit and cash flows for each of the two years in the period ended December 31, 2017,2023 and 2022, and the related notes (collectively referred to as the "financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20172023 and 2016,2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 20172023 and 2022 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management'sManagement’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company'sCompany’s management. Our responsibility is to express an opinion on the Company'sCompany’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company'sCompany’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

/s/ Centurion ZD CPA Ltd.& Co

Centurion ZD CPA Ltd.& Co.

Hong Kong

March 29, 2018April 16, 2024

We have served as the Company'sCompany’s auditor since 2014.2014.

PCAOB ID # 2769

F- 2

F-5

SCIENTIFIC ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 20172023

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES

Scientific Energy, Inc., (the "Company"“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.

On December 22, 2023, the Company established a new wholly-owned subsidiary, Graphite Energy, Inc., which was incorporated in the State of Florida. The purpose of forming this new subsidiary is to enter the business of graphite production and sales, including establishing a production line for graphite refined powder products in Madagascar.

On January 2023, the Company acquired 90% shares of Fresh Life Technology Company Limited (“Fresh Life”) through its subsidiary, Zhuhai Migua Technology Company Limited. The main business of Fresh Life is provision of logistic services in Macau.

On October 9, 2023, the Company acquired 70% shares of Citysearch Technology (HK) Company Limited (“Citysearch”) in Hong Kong.  The main business of Citysearch is provision of group dining service platform, which mainly solves the lunch and dinner group dining needs for corporate employees in Hong Kong. As a startup, for the period ended December 31, 2023, Citysearch had a revenue of approximately $27,450, and net loss of approximately $969,632.

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. The Company has 100% owned subsidiary, Graphite Energy, Inc., established in USA.

The Company has 98.75% owned subsidiary, MED. Zhuhai Chengmi Technology Limited, Guangzhou Chengmi Technology Company Limited, in turn, are the 100% owned subsidiaries with MED. Squirrel Logistic Company Limited and Green Supply Chain Management Company Limited are the 99% owned subsidiaries with MED. Zhuhai Migua Technology Company Limited is 100% owned subsidiary by Zhuhai Chengmi Technology Limited and has a 90% owned subsidiary, Fresh Life Technology Company Limited. The Company acquired 70% shares of Citysearch. All of the above companies consolidate with MED.

Summaries of subsidiaries:

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.

Non-controlling interest

When there is a change in ownership interests that result in a loss of control of a subsidiary, the Company deconsolidates the subsidiary from the date control is lost. Any retained non-controlling investment in the former subsidiary is measured at fair value and is included in the calculation of the gain or loss upon deconsolidation of the subsidiary.

For the Company's majority-owned subsidiaries, a non-controlling interest is recognized to reflect the portion of their equity which is not attributable, directly or indirectly, to the Group. “Net income (loss)” on the consolidated income statements includes the “net loss attributable to non-controlling interests”. The cumulative results of operations attributable to non-controlling interests are also recorded as non-controlling interests in the Company's consolidated balance sheets.

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.the Greater Bay Area. 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, 20172023, and December 31, 2016,2022, the Company maintained $47,515$3,157,764 and $152,113$2,058,216 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: