The information contained in this quarter report on Form 10-Q is intended to update the information contained in our Form 10-K dated March 31, 2022, for the year ended December 31, 2021 and presumes that readers have access to, and will have read, the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.

The following discussion contains certain statements that may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, "Management's Discussion and Analysis of Financial Condition and Results of Operations." These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarter report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Form S-1/A registration statement, filed on June 3, 2021, in the section entitled "Risk Factors" for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this quarter report on Form 10-Q. The following should also be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto that appear elsewhere in this report.





Company Overview

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

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

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

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

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





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Results of operations



For the nine months ended September 30, 2022 and 2021, the Company has generated
a revenue of $53,674 and $65,958, respectively. Breakdown of revenue as
following:



                                        Three months ended           Nine months ended
                                           September 30                September 30
                                         2022          2021         2022          2021
BCBF Business Sales Revenue           $    9,736     $  6,266     $  34,562     $  65,958
Percentage towards Total Revenue              34 %        100 %          64 %         100 %

Online Business Revenue               $   19,112     $      -     $  19,112     $       -
Percentage towards Total Revenue              66 %          0 %          36 %           0 %
Total Revenue                         $   28,848     $  6,266     $  53,674     $  65,958

BCBF Business Cost of Sales               (5,566 )     (3,212 )     (19,813 )     (35,047 )
Online Business Cost of Sales                  -            -             -             -
Total Cost of Sales                   $   (5,566 )   $ (3,212 )   $ (19,813 )   $ (35,047 )

BCBF Business Gross Profit                 4,170        3,054        14,749        30,911
Online Business Gross Profit              19,112            -        19,112             -
Total Gross Profit                    $   23,282     $  3,054     $  33,861     $  30,911

Gross Profit Margin                           81 %         49 %          63 %          47 %

BCBF Business Gross Profit Margin             43 %         49 %          43 %          47 %
Online Business Gross Profit Margin          100 %          - %         100 %           - %

For the three months ended September 30, 2022, the Company has experience significant improvement in total revenue due to the establishment of new business segment, which is the online retailing business through e-commerce platform. For the nine months ended September 30, 2022, the revenue of BCBF trading business has been reduced because the sales of BCBF have decreased. For the three months and nine months ended September 30, 2022, the BCBF trading business segment contributed 34% and 64% of the total revenue respectively while the online retailing business segment contributed 66% and 36% of the total revenue respectively.

Three months ended September 30, 2022 and 2021

The Company generated revenue in the amount of $28,848 for the three months ended September 30, 2022 while the cost of revenue for was $5,566, which resulted in gross profit of $23,282 and a gross margin of 81%. For the three months ended September 30, 2022, the Company generated revenue from BCBF trading business in the amount of $9,736 while the cost of revenue for was $5,566, which resulted in gross profit of $4,170 and a gross margin of 43%. For the three months ended September 30, 2022, the Company generated revenue from online business in the amount of $19,112 while the cost of revenue for was none, which resulted in gross profit of $19,112 and a gross margin of 100%.

The Company generated revenue in the amount of $6,266 for the three months ended September 30, 2021 while the cost of revenue for was $3,212, which resulted in gross profit of $3,054 and a gross margin of 49%.

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

The general and administrative expenses for the three months ended September 30, 2022 and 2021 were $42,061 and $115,182 respectively, primarily related to salary and social contribution, storage and logistic expenses, lease expenses, audit fees and consultancy fees. The general and administrative expenses have been reduced because the consultancy fee has decreased significantly as the business consultancy fee is being charged one-time off only.

As result, the Company incurred an operating loss of $18,779 and $112,128 for the three months ended September 30, 2022 and 2021, respectively.

Nine months ended September 30, 2022 and 2021

The Company generated revenue in the amount of $53,674 for the nine months ended September 30, 2022 while the cost of revenue was $19,813, which resulted in gross profit of $33,861 and a gross margin of 63%. For the nine months ended September 30, 2022, the Company generated revenue from BCBF trading business in the amount of $34,562 while the cost of revenue for was $19,813, which resulted in gross profit of $14,749 and a gross margin of 43%. For the nine months ended September 30, 2022, the Company generated revenue from online business in the amount of $19,112 while the cost of revenue for was none, which resulted in gross profit of $19,112 and a gross margin of 100%.

The Company generated revenue in the amount of $65,958 for the nine months ended September 30, 2021 while the cost of revenue was $35,047, which resulted in gross profit of $30,911 and a gross margin of 47%.

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

The general and administrative expenses for the nine months ended September 30, 2022 and 2021 were $114,460 and $183,004 respectively, primarily related to salary and social contribution, storage and logistic expenses, lease expenses, audit fees and consultancy fees. The general and administrative expenses have been reduced because the consultancy fee has decreased significantly as the business consultancy fee is being charged one-time off only.

As result, the Company incurred an operating loss of $80,599 and $152,093 for the nine months ended September 30, 2022 and 2021, respectively.

Liquidity and Capital Resources

Nine months ended September 30, 2022 and 2021

Cash Used In Operating Activities

For the nine months ended September 30, 2022, the Company used $80,982 in operating activity, of which primarily consist of net loss, increase in prepayment, decrease in other payables and accrued liabilities and reduction in lease liability contra by amortization and decrease in inventories.

For the nine months ended September 30, 2021, the Company used $150,296 in operating activity, of which primarily consist of net loss, increase in inventories, decrease in other payables and accrued liabilities and reduction in lease liability offsetting by amortization and decrease in prepayment, deposits and other receivables.

Cash Used In Investing Activities

For the nine months ended September 30, 2022 and 2021, the Company did not generate nor used any cash in investing activities.

Cash Provided by Financing Activities

For the nine months ended September 30, 2022, the Company has received cash provided by director amounted $61,076.

For the nine months ended September 30, 2021, the Company has received cash provided by financing activities in the amount of $140,964, of which consist of $26,964 advancement from director pertaining to expenses paid on behalf and $114,000 proceed pertaining to public offering.





Foreign Currency

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

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





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

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

The amount of cash denominated in RMB is approximately CNY51,837 (Equivalent to USD 7,285) as of September 30, 2022.

Off-balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as of September 30, 2022.





Contractual Obligations

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





Critical Accounting Policies

Recent accounting pronouncements

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

The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company's consolidated financial statements.

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