This discussion summarizes the significant factors affecting the operating
results, financial condition, liquidity and cash flows of the Company and its
subsidiary for the fiscal years ended
Except for historical information, the matters discussed in this section are forward looking statements that involve risks and uncertainties and are based upon judgments concerning various factors that are beyond the Company's control. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report.
Currency and exchange rate
Unless otherwise noted, all currency figures quoted as "
Impact of COVID-19 on our business
The outbreak of COVID-19 that started in late
Management believes that COVID-19 could continue to have a material impact on its financial results for the first half of calendar year 2021 and could cause the potential impairment of certain assets. To mitigate the overall financial impact of COVID-19 on the Company's business, management has worked closely with its service centers to enhance their marketing and promotion activities during the second quarter of 2021 that were designed to generate sales in the second, third and fourth quarters of 2021.
9 Table of Contents Results of Operations
Our audited consolidated financial statements have been prepared on a going
concern basis, which assumes that we will be able to continue to operate in the
future in the normal course of business. In our audited consolidated financial
statements for the year ended
The success of our business strategy is dependent in part upon the availability of additional capital resources on terms satisfactory to management as we are not generating sufficient revenues from our business operations. Our sources of capital in the past have included advance from stockholders and affiliates. There can be no assurance that we can raise such additional capital resources on satisfactory terms. We believe that our current cash and other sources of liquidity discussed above are adequate to support operations for at least the next 12 months. We anticipate continuing to rely on equity sales of our common shares and shareholder loans in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our plan of operations.
Comparison of the years ended
The following table sets forth certain operational data for the years endedDecember 31, 2020 and 2019: Years ended December 31, 2020 2019 Revenues$ 2,017,343 $ 196,423 Cost of revenue (1,141,823 ) (116,447 ) Gross profit 875,520 79,976 Total operating expenses (170,351 ) (36,147 ) Income before Income Taxes 705,169 43,829 Income tax credit (expense) 1,276 (6,129 ) Net income 706,445 37,700
Revenue. We generated revenues of
During the year ended
Revenues Percentages of Accounts (US$) Revenues Receivable (US$) Hu Cheng Jewellery (HK) Limited$ 1,892,306 94 % - Total:$ 1,892,306 94 % -
During the year ended
Cost of Revenue. Cost of revenue for the year ended
During the year ended
Revenues Percentages of Accounts (US$) Revenues Receivable (US$) Erica Jewellery Company Limited$ 1,052,857 92 % - Total:$ 1,052,857 92 % - 10 Table of Contents
During the year ended
Revenues Percentages of Accounts (US$) Revenues Receivable (US$) Alfonso Jew Manufacturing Co.$ 112,618 97 % - Total:$ 112,618 97 % -
Gross Profit. We achieved a gross profit of
Operating Expenses. We incurred operating expenses of
Income Tax Credit (Expense). Our income tax credit for the year ended
Net Income. We incurred a net income of
Liquidity and Capital Resources
As of
We believe that our current cash and other sources of liquidity discussed below are adequate to support general operations for at least the next 12 months.
Years endedDecember 31, 2020 2019
Net cash provided by operating activities
- (38,525 ) Net cash provided by financing activities - -
Net Cash Provided by Operating Activities.
For the year ended
For the year ended
For the year ended
For the year ended
11 Table of Contents
Net Cash Provided by Financing Activities.
For the years ended
Off-Balance Sheet Arrangements
We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as shareholders' equity, or that are not reflected in our financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.
Critical Accounting Policies and Estimates
We prepare our financial statements in conformity with accounting principles
generally accepted by
We believe that our accounting policies involve a higher degree of judgment and complexity in their application and require us to make significant accounting estimates. Accordingly, the policies we believe are the most critical to understanding and evaluating our consolidated financial condition and results of operations are summarized in "Note 3 - Summary of Significant Accounting Policies" in the notes to our consolidated financial statements.
Recent Accounting Pronouncements
See "Note 2 - Summary of Significant Accounting Policies" in the notes to our consolidated financial statements for a discussion of recent accounting pronouncements.
The Company believes that other recent accounting pronouncement will not have a material effect on the Company's consolidated financial position, results of operations and cash flows.
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