COVID-19 Impacts and Effects

COVID-19, a viral pandemic, has affected the international community, public health, and financial markets throughout the world. Similarly, this public health crisis has impacted the Company, its operations, and the results of those business activities. Due to the location of the Company's segmented business activities in China, the virus has had a significant impact as it reportedly began spreading from Southeast Asia.

During these unprecedented times, our priority has been, and continues to be, the health, safety and sustainability of our employees, customers, communities, and our marketplace. We have responded quickly to the crisis to drive as much business as possible to e-commerce and telecommunication portals. We will continue to support the local communities and our customers that are struggling with this uncertain and difficult time period.

For the year ended December 31, 2020, like most businesses, we experienced a swift change in customer behavior during February and March when the pandemic took hold throughout China. Initially, we observed a decrease in business activity in both of our operational segments as news of the pandemic upended typical routines and there was considerable uncertainty about what day-to-day life would be like.

Limited Operating History; Need for Additional Capital

We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to the price and cost increases in supplies and services.

If we are unable to meet our needs for cash from either our operations, or possible alternative sources, then we may be unable to continue, develop, or expand our operations.





Results of Operations

Our operations for the years ended December 31, 2020 and 2019 are outlined below:

Year ended December 31, 2020 compared to year ended December 31, 2019





                                       Year Ended
                                      December 31,                 Change
                                 2020              2019            Amount
Revenue                      $  14,355,341     $ 29,787,188     $ (15,431,847 )
Cost of Goods Sold           $  14,281,300     $ 28,270,026     $ (13,988,726 )
Gross profit                 $      74,041     $  1,517,162     $  (1,443,121 )
Operating expenses           $   3,086,862     $    859,121     $   2,227,741
Other income (expense)       $ (22,767,970 )   $    309,360     $ (23,077,330 )
Provision for income taxes   $      20,541     $    303,979     $    (283,438 )
Net income (loss)            $ (25,801,332 )   $    663,422     $ (26,464,754 )

The revenue for the year ended December 31, 2020 decreased by $15,431,847 to $14,355,341 compared with the same period in 2019. The decrease is mainly due to the effects of COVID-19 causing a decrease in demand and consequently the pricing in this period.

Cost of goods sold for the year ended December 31, 2020 decreased by $13,988,726 to $14,281,300 compared with the same period in 2019. The decrease is mainly due to the effects of COVID-19 causing a decrease in revenue in this period.






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Operating expenses for the year ended December 31, 2020 increased by $2,227,741 to $3,086,862 compared with the same period in 2019. The increase is mainly due to an increase in professional fees and stock-based compensations.

Other expense for the year ended December 31, 2020 increased by $23,077,330 to $22,767,970 compared with the same period in 2019. The increase is mainly due to interest expense and change in fair value of derivative liabilities related to convertible notes.

Net loss for the year ended December 31, 2020 was $25,801,332 compared to net income of $663,422 in the same period in 2019. The change is mainly due to an increase in operating expenses and other expense.





For the year ended December 31, 2020 and 2019 our results of operations segment,
are as follows:



                                                                                Total
Year Ended December 31, 2020         Holding Company       Oil and gas       Consolidated
Revenue                             $               -     $  14,355,341     $   14,355,341
Cost of goods sold                                  -       (14,281,300 )      (14,281,300 )
Operating expenses                         (3,041,551 )         (45,311 )       (3,086,862 )
Other expenses                            (22,767,970 )               -        (22,767,970 )
Provision for income taxes                          -           (20,541 )          (20,541 )
Net income (loss)                   $     (25,809,521 )   $       8,189     $  (25,801,332 )




Year Ended December 31,        Holding          Oil and         Nutritional          Total
2019                           Company            gas            Services        Consolidated
Revenue                       $        -     $  29,273,552     $     513,636     $  29,787,188
Cost of goods sold                     -       (27,845,382 )        (424,644 )     (28,270,026 )
Operating expenses              (160,678 )         (70,878 )        (627,565 )        (859,121 )
Other income (expenses)         (227,408 )         (28,863 )         565,631           309,360
Provision for income taxes             -          (326,443 )          22,464          (303,979 )
Net income (loss)             $ (388,086 )   $   1,001,986     $      49,522     $     663,422




Holding Company



                                     Year Ended
                                    December 31,               Change
                                 2020           2019           Amount
Revenue                      $          -     $       -     $          -
Operating expenses           $  3,041,551     $ 160,678     $  2,880,873
Other expense                $ 22,767,970     $ 227,408     $ 22,540,562
Provision for income taxes   $          -     $       -     $          -
Net loss                     $ 25,809,521     $ 388,086     $ 25,421,435

Operating expense mainly consists of professional fees for ongoing regulatory requirements and compensation for our management. The increase in operating expense is primarily due to an increase in our management fee and professional fee.

Other expense mainly consists of interest expense and change in fair value of derivative liability from convertible notes.






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Oil and Gas



                                      Year Ended
                                     December 31,                 Change
                                 2020             2019            Amount
Revenue                      $ 14,355,341     $ 29,273,552     $ (14,918,211 )
Cost of goods sold           $ 14,281,300     $ 27,845,382     $ (13,564,082 )
Gross profit                 $     74,041     $  1,428,170     $  (1,354,129 )
Operating expenses           $     45,311     $     70,878     $     (25,567 )
Other income (expense)       $          -     $     28,863     $     (28,863 )
Provision for income taxes   $     20,541     $    326,443     $    (305,902 )
Net income (loss)            $      8,189     $  1,001,986     $    (993,797 )

The decrease in revenue is primarily due to the COVID-19 lockdown. The decrease in cost of goods sold is primarily due to a decrease in revenue. The percentage of gross profit decreased from 4.9% in 2019 to 0.5% in 2020.





Nutritional Services



                                 Year Ended
                                December 31,           Change
                             2020        2019          Amount
Revenue                      $   -     $ 513,636     $ (513,636 )
Cost of goods sold           $   -     $ 424,644     $ (424,644 )
Gross profit                 $   -     $  88,992     $  (88,992 )
Operating expenses           $   -     $ 627,565     $ (627,565 )
Other income (expense)       $   -     $ 565,631     $ (565,631 )
Provision for income taxes   $   -     $       -     $        -
Net income (loss)            $   -     $  27,058     $  (27,058 )

On January 1, 2020, the Company deconsolidated Admall. As a result, there was no operation of Nutritional services in 2020.

Liquidity and Capital Resources

The following table provides selected financial data about our Company as of December 31, 2020 and 2019, respectively.





Working Capital

The following table provides selected financial data about our Company as of December 31, 2020 and 2019, respectively.





                               December 31,       December 31,         Change
                                   2020               2019             Amount
Cash                           $     185,948     $      277,629     $     (91,681 )

Current Assets                 $  10,129,206     $    8,934,627     $   1,194,579
Current Liabilities            $ 20, 245,188     $    2,341,177     $  17,904,011
Working Capital (Deficiency)   $ (10,115,982 )   $    6,593,450     $ (16,709,432 )

The increase in working capital deficiency was primarily attributed to an increase in current liabilities offset by an increase in current assets. The increase in current assets was primarily attributed to an increase in purchase deposit for inventory. The increase in current liabilities was primarily attributed to an increase in derivative liabilities.






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Cash Flow



                                                       Year Ended
                                                      December 31,               Change
                                                   2020           2019           Amount
Cash Flows provided by (used in) operating
activities                                      $ (903,260 )   $  492,144     $ (1,395,404 )

Cash Flows used in investing activities $ (20,044 ) $ (614 ) $ (19,430 ) Cash Flows provided by (used in) financing activities

$  827,944     $ (469,480 )   $  1,297,424

Effects on changes in foreign exchange rate $ 3,679 $ (1,812 ) $ 5,491 Net change in cash during period

$  (91,681 )   $   20,238     $   (111,919 )

Cash Flow from Operating Activities

During the year ended December 31, 2020, our Company used $903,260 in operating activities, compared to $492,144 provided by operating activities during the year ended December 31, 2019. The increase in cash used in operation activities is primarily due to an increase in operating expenses.

Cash Flow from Investing Activities

During the year ended December 31, 2020 and 2019, we used $20,044 and $614 in investing, respectively. For the year ended December 31, 2020, the amount of $20,044 relates to the available cash of the subsidiary deconsolidated during the year. For the year ended December 31, 2019, the Company used $614 for the purchase of property.

Cash Flow from Financing Activities

During the year ended December 31, 2020 and 2019, our Company received $827,944 from financing activities and used $469,480 in financing activities, respectively. For the year ended December 31, 2020, the Company received $912,000 from convertible notes and $2,500 from loans from related parties, and repaid loans from related parties for $23,556 and convertible notes for $63,000. For the year ended December 31, 2019, the Company received $310,000 from convertible notes and $214,846 from loans from related parties, and repaid loans from related parties for $994,326.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company's discussion and analysis of its financial condition and operating results require the Company's management to make judgments, assumptions and estimates that affect the amounts reported. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates, and such differences may be material.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

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