The following discussion and analysis of our Company's financial condition and
results of operations should be read in conjunction with our unaudited condensed
consolidated financial statements and the related notes included elsewhere in
the report. This discussion contains forward-looking statements that involve
risks and uncertainties. Actual results and the timing of selected events could
differ materially from those anticipated in these forward-looking statements as
a result of various factors. See "Cautionary Note Concerning Forward-Looking
Statements" on page 2.



The description of our business included in this quarterly report is summary in
nature and only includes material developments that have occurred since the
latest full description. The full discussion of the history and general
development of our business is included in "Item 1. Description of Business"
section of the Company's Annual Report on Form 10-K filed with the SEC on March
25, 2021, which section is incorporated by reference.



Currency and exchange rate



Unless otherwise noted, all currency figures quoted as "U.S. dollars", "dollars"
or "US$" refer to the legal currency of the United States. References to "Hong
Kong Dollar" are to the Hong Kong Dollar, the legal currency of the Hong Kong
Special Administrative Region of the People's Republic of China. Throughout this
report, assets and liabilities of the Company's subsidiaries are translated into
U.S. dollars using the exchange rate on the balance sheet date. Revenue and
expenses are translated at average rates prevailing during the period. The gains
and losses resulting from translation of financial statements of foreign
subsidiaries are recorded as a separate component of accumulated other
comprehensive income within the statement of stockholders' equity.



Overview



We were incorporated under the laws of the State of Delaware on March 6, 2014,
under the name "Jovanovic-Steele, Inc." Our name was changed to Baja Custom
Designs, Inc. on October 26, 2017. On May 8, 2020, we acquired Luduson Holding
Company Limited, a limited liability company organized under the laws of British
Virgin Islands ("LHCL"). As a result of our acquisition of LHCL, we entered into
the business-to-business gaming technology industry.



We, through our operating subsidiaries, are a business-to-business gaming
technology company that provides events marketing strategies with a combination
of digital interactive solutions and content production services in Hong Kong.
In digital marketing industry, we offer business-to-business digital marketing
solutions on our proprietary and secure network, which accommodates a wide range
of devices and theme-based gaming content, including multi-touch table, body
motion sensing, indoor positioning device and electronic circuit system,
together with the customized game contents, as an integrated marketing solution.
We, through our subsidiaries, are principally engaged in developing and granting
a right-to-use digital entertainment - interactive game software and providing
system development consultancy and maintenance services to our customers and
interactive games installations in shopping mall events, exhibitions and brand
promotions.



We provide our business customers in the entertainment industry with a full line
of custom-made interactive gaming services. In this entertainment segment, we
offer a customized device box with a library of self-developed interactive game
content such as sport-themed social games, motion-sensing action games, logic
and puzzle games, original IP character education games for children, etc., to
meet with our business customers' operational use or business-to-business social
solutions.



Our goal is to provide innovative and effective interactive solution services to
satisfy diverse marketing needs. We are committed to working at a high-quality
standard to address the needs of differing budgets. We provide services to a
wide range of customers across different industry segments and regions.







  19






We are not a Hong Kong operating company but a Nevada holding company with
operations conducted through our wholly owned subsidiaries based in Hong Kong.
This structure presents unique risks as our investors may never directly hold
equity interests in our Hong Kong subsidiary and will be dependent upon
contributions from our subsidiaries to finance our cash flow needs. Further, in
light of the recent statements and regulatory actions by the PRC government,
such as those related to Hong Kong's national security, the PRC's trend of
increased oversight and control of Hong Kong, the promulgation of regulations
prohibiting foreign ownership of Chinese companies operating in certain
industries, which are constantly evolving, and anti-monopoly concerns, we may be
subject to the risks of uncertainty of any future actions of the PRC government
in this regard including the risk that the PRC government could disallow our
holding company structure, which may result in a material change in our
operations, including our ability to continue our existing holding company
structure, carry on our current business, accept foreign investments, and offer
or continue to offer securities to our investors. These adverse actions could
value the value of our common stock to significantly decline or become
worthless. We may also be subject to penalties and sanctions imposed by the PRC
regulatory agencies, including the Chinese Securities Regulatory Commission, if
we fail to comply with such rules and regulations, which could adversely affect
the ability of the Company's securities to continue to trade on the
Over-the-Counter Bulletin Board, which may cause the value of our securities to
significantly decline or become worthless.



There may be prominent risks associated with our operations being in Hong Kong.
For example, as a U.S.-listed Hong Kong public company, we may face heightened
scrutiny, criticism and negative publicity, which could result in a material
change in our operations and the value of our common stock. It could also
significantly limit or completely hinder our ability to offer or continue to
offer securities to investors and cause the value of such securities to
significantly decline or be worthless. Additionally, changes in Chinese internal
regulatory mandates, such as the M&A rules, Anti-Monopoly Law, and the soon to
be effective Data Security Law, may target the Company's corporate structure and
impact our ability to conduct business in Hong Kong, accept foreign investments,
or list on an U.S. or other foreign exchange. For a detailed description of the
risks facing the Company and the offering associated with our operations in Hong
Kong, please refer to "Risk Factors - Risk Factors Relating to Our Operations in
Hong Kong" as disclosed in our Registration Statement on Form S-1 filed with the
Securities and Exchange Commission on October 29, 2021.



Our principal executive and registered offices are located at 17/F, 80 Gloucester Road, Wanchai, Hong Kong, telephone number +852-2119 1031.

Equity Line Purchase Agreements

Investment Agreement with Strattner Alternative Credit Fund LP





The Company is a party to an Investment Agreement dated as of April 6, 2021, or
the "Investment Agreement," with Strattner pursuant to which Strattner is
committed to purchase up to $5,000,000, or the "Strattner Total Commitment,"
worth of the Company's common stock, $0.0001 par value, over the 36-month term
of the Investment Agreement.



From time to time over the term of the Investment Agreement, commencing on the
trading day immediately following the date on which the initial registration
statement is declared effective by the Securities and Exchange Commission, or
the "Commission," as further discussed below, the Company may, in its sole
discretion, provide Strattner with written notices, or a "Strattner Put Notice,"
stating the amount of Common Shares of the Company that the Company intends to
sell to Strattner, or the "Strattner Put Amount," with each put subject to the
limitations discussed below. The maximum amount of common stock that the Company
shall be entitled to put to Strattner under any applicable put notice, or the
"Maximum Strattner Put Amount," shall be an amount of shares up to or equal to
200% of the average of the daily trading volume of our common stock for the ten
(10) consecutive trading days immediately prior to the applicable date on which
we make our put to Strattner, so long as such amount is at least $5,000 and does
not exceed $250,000, as calculated by multiplying the number of shares under our
put by the average daily volume weighted average price for the 10 consecutive
trading days immediately prior to the applicable date we submit our put to

Strattner.







  20






Once presented with a Strattner Put Notice, Strattner is required to purchase
the number of Strattner Put Shares underlying the Strattner Put Notice. The per
share purchase price for the Common Shares subject to a Strattner Put Notice
shall be equal to 85% of the lowest volume weighted average price of the Common
Shares during the five (5) consecutive trading days including and immediately
following the applicable Strattner Put Notice date, provided, however, an
additional 10% will be added to the discount of each Put if (i) the Company is
not DWAC eligible and (ii) an additional 15% will be added to the discount of
each Put if the Company is under DTC "chill" status on the applicable Strattner
Put Notice Date.



Among other conditions, the Company is prohibited from issuing a Strattner Put
Notice if (i) the amount requested in such Strattner Put Notice exceeds Two
Hundred Fifty Thousand Dollars ($250,000), as calculated by multiplying the
Strattner Put Amount by the average daily VWAP for the ten (10) consecutive
trading days immediately prior to the applicable Strattner Put Notice Date, (ii)
the sale of Shares pursuant to such Strattner Put Notice would cause the Company
to issue or sell or Strattner to acquire or purchase an aggregate dollar value
of Shares that would exceed Five Million Dollars ($5,000,0000), or (iii) the
sale of Shares pursuant to the Strattner Put Notice would cause the Company to
sell or Strattner to purchase an aggregate number of shares of the Company's
common stock which would result in beneficial ownership by Strattner of more
than 9.99% of the Company's common stock (as calculated pursuant to Section
13(d) of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder). The Company cannot make more than one put in any
pricing period and must allow 10 days to elapse between the completion of the
settlement of any one put and the commencement of a pricing period for any other
put. The foregoing description of the Investment Agreement is qualified in its
entirety by reference to the Investment Agreement, which is filed as Exhibit
10.2 to this quarterly report and incorporated herein by reference.



Registration Rights Agreement with Strattner Alternative Credit Fund LP





In connection with the execution of the Investment Agreement, on April 6, 2021,
the Company and Strattner also entered into a Registration Rights Agreement, or
the "Strattner Registration Rights Agreement." Pursuant to the Registration
Rights Agreement, the Company has agreed to file an initial registration
statement, the "Registration Statement," with the Commission to register an
agreed upon number of Strattner Put Shares, on or prior to July 5, 2021, or the
"Filing Deadline," and have it declared effective on or before the 150th
calendar day the Company has filed the Registration Rights Agreement, or the
"Effectiveness Deadline." Notwithstanding anything to the contrary, the Company
is not obligated to file Registration Statements with respect to securities not
issued pursuant to the Investment Agreement.



If at any time all of the Registrable Securities (as defined in the Registration
Rights Agreement) are not covered by the initial Registration Statement, the
Company has agreed to file with the Commission one or more additional
Registration Statements so as to cover all of the Registrable Securities not
covered by such initial Registration Statement, in each case, as soon as
practicable, but in no event later than the applicable filing deadline for such
additional Registration Statements as provided in the Registration Rights
Agreement. The foregoing description of the Registration Rights Agreement with
Strattner is qualified in its entirety by reference to the Registration Rights
Agreement with Strattner, which is filed as Exhibit 10.3 to this quarterly
report and incorporated herein by reference.



Equity Purchase Agreement with Williamsburg Venture Holdings, LLC





The Company is a party to an Equity Purchase Agreement dated August 20, 2021, or
the "Equity Purchase Agreement," pursuant to which Williamsburg is committed to
purchase up to $30,000,000 worth of the Company's common stock, $0.0001 par
value, over the 36-month term of the Equity Purchase Agreement, or the
"Williamsburg Total Commitment". From time to time over the term of the Equity
Purchase Agreement, the Company may, in its sole discretion, provide
Williamsburg with written notices, or a "Williamsburg Put Notice," stating the
amount of Common Shares of the Company that the Company intends to sell to
Williamsburg, or the "Williamsburg Put Amount." Once presented with a
Williamsburg Put Notice, Williamsburg is required to purchase the number of
Williamsburg Put Shares underlying the Williamsburg Put Notice with each put
subject to the limitations discussed below.



The per share purchase price for the Williamsburg Put Shares shall be equal to
88% the lowest traded price of the Common Stock on the principal market during
the five (5) consecutive trading days immediately preceding the date which
Williamsburg received the Williamsburg Put Shares as DWAC Shares in its
brokerage account (as reported by Bloomberg Finance L.P., Quotestream, or other
reputable source).









  21





The exercise of each put option is subject to the following limitations:

(i) each investment amount must be at least than $25,000 and not in excess


           of an amount that equals the lesser of (i) 200% of the average 

daily


           trading volume, and (ii) $500,000;

(ii) the aggregate investment amount of all option puts shall not exceed

$30,000,000;

(iii) the lowest traded price of the Common Stock in the five trading days


           preceding the respective Put Date must exceed $0.01 per share; 

and

(iv) at least ten trading days must have lapsed since the most recent Put


           Notice.




The Equity Purchase Agreement provides that the number of Williamsburg Put
Shares to be sold to Williamsburg shall not exceed the number of shares that
when aggregated together with all other shares of the Company's common stock
which Williamsburg is deemed to beneficially own, would result in Williamsburg
owning more than 4.99% of the Company's outstanding common stock (as calculated
pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder). The Equity Purchase Agreement
provides that any provision of the Investment Agreement may be amended or waived
only by an instrument in writing signed by the party to be charged with
enforcement. The foregoing description of the Equity Purchase Agreement is
qualified in its entirety by reference to the Equity Purchase Agreement, which
is filed as Exhibit 10.4 to this quarterly report and incorporated herein by
reference.


The Company has paid to Williamsburg a commitment fee equal in the form of 100,000 restricted shares of the Company's common stock (the "Williamsburg Initial Commitment Shares").

Registration Rights Agreement with Williamsburg Venture Holdings, LLC





In connection with the Equity Purchase Agreement, on August 20, 2021, the
Company and Williamsburg also entered into a Registration Rights Agreement, or
the "Williamsburg Registration Rights Agreement." Pursuant to the Williamsburg
Registration Rights Agreement, the Company has agreed to file an initial
registration statement, or the "Registration Statement," with the Commission to
register the Williamsburg Initial Commitment Shares and that number of
Williamsburg Put Shares as set forth in the Williamsburg Registration Rights
Agreement, within 90 days after the execution date, or the "Filing Deadline.".



If at any time all of the Registrable Securities (as defined in the Registration
Rights Agreement) are not covered by the initial Registration Statement, the
Company has agreed to file with the Commission one or more additional
Registration Statements so as to cover all of the Registrable Securities not
covered by such initial Registration Statement, in each case, as soon as
practicable, but in no event later than the applicable filing deadline for such
additional Registration Statements as provided in the Registration Rights
Agreement. The foregoing description of the Registration Rights Agreement with
Williamsburg is qualified in its entirety by reference to the Registration
Rights Agreement with Williamsburg, which is filed as Exhibit 10.5 to this
quarterly report and incorporated herein by reference.



Results of Operations.


Comparison of the three months ended September30, 2021 and 2020.

The following table sets forth certain operational data for the three months ended September 30, 2021 and 2020:





                                 Three Months Ended September 30,
                                  2021                    2020
Revenues                     $       269,922       $        1,824,479
Cost of revenue                      (34,280 )               (592,792 )
Gross profit                         235,642                1,231,687
Total operating expenses             (78,361 )               (455,833 )
Other income                               -                   (1,375 )
Income before Income Taxes           157,281                  774,479
Income tax expense                   (32,508 )                (49,191 )
Net income                           124,773                  725,288








  22





Revenue. We generated revenues of $269,922 and $1,824,479 for the three months ended September 30, 2021 and 2020. The significant decrease is due to the decrease in business volume in digital advertising income from our online entertainment portal from the weak economy amid COVID-19 pandemic.

During the three months ended September 30, 2021 and 2020, the following customers accounted for 10% or more of our total net revenues:





                                                Three Months ended September 30,        September
                                                              2021                       30, 2021
                                                                      Percentage         Accounts
Customer                                         Revenues            of revenues        receivable
Ease Audio Group Limited                       $    192,802                    72%     $  2,479,760
Yu Lin Nuo Ya Interactive Entertainment
Company Limited                                      38,560                    14%        1,473,355
Shenzhen Jiu Sheng Optoelectronic Comm Tech
Co., Ltd                                             38,560                    14%        1,140,444

                                      Total:   $    269,922                   100%     $  5,093,559




                                                Three months ended September 30,        September
                                                              2020                       30, 2020
                                                                      Percentage         Accounts
Customer                                         Revenues             of revenues       receivable
Ease Audio Group Limited                       $   1,302,010                   71%     $  1,245,736
Yu Lin Nuo Ya Interactive Entertainment
Company Limited                                      483,291                   26%          481,194
                                               $   1,785,301         $         97%     $  1,726,930

All of our major customers are located in Hong Kong and the PRC





Cost of Revenue. Cost of revenue for the three months ended September 30, 2021,
was $34,280, and as a percentage of net revenue, approximately 12.7%. Cost of
revenue for the three months ended September 30, 2020, was $592,792, and as a
percentage of net revenue, approximately 32.5%. Cost of revenue decreased
primarily as a result of the decrease in our business volume.



Gross Profit. We achieved a gross profit of $235,642 and $1,231,687 for the three months ended September 30, 2021 and 2020, respectively. The decrease in gross profit is primarily attributable to the decrease in our business volume.





General and Administrative Expenses ("G&A"). We incurred G&A expenses of $78,361
and $455,833 for the three months ended September 30, 2021, and 2020,
respectively. The decrease in G&A is primarily attributable to the decrease

in
our professional fee.


Income Tax Expense. Our income tax expenses for the quarters ended September 30, 2021 and 2020 was $32,508 and $49,191, respectively.


Net Income. During the three months ended September 30, 2021, we incurred a net
income of $124,773, as compared to $725,288 for the same period ended September
30, 2020. The decrease in net income is primarily attributable to the decrease
in our business volume from the weak economy amid COVID-19 pandemic in Hong

Kong
and China.









  23





Comparison of the nine months ended September 30, 2021 and 2020.

The following table sets forth certain operational data for the nine months ended September 30, 2021 and 2020:





                                 Nine Months Ended September 30,
                                  2021                   2020
Revenues                     $       927,053       $       2,945,508
Cost of revenue                     (102,986 )              (743,860 )
Gross profit                         824,067               2,201,648
Total operating expenses            (181,215 )              (523,390 )
Other income                               -                  (1,341 )
Income before Income Taxes           539,080               1,676,917
Income tax expense                  (103,772 )              (178,846 )
Net income                           539,080               1,498,071



Revenue. We generated revenues of $927,053 and $2,945,508 for the nine months ended September 30, 2021 and 2020. The significant decrease is due to the decrease in business volume in digital advertising income from our online entertainment portal from the weak economy amid COVID-19 pandemic.

During the nine months ended September 30, 2021 and 2020, the following customers accounted for 10% or more of our total net revenues:





                                                 Nine Months ended September 30,        September
                                                              2021                       30, 2021
                                                                      Percentage         Accounts
Customer                                         Revenues            of revenues        receivable
Ease Audio Group Limited                       $    695,289                    74%     $  2,479,760
Yu Lin Nuo Ya Interactive Entertainment
Company Limited                                     115,882                    13%        1,473,355
Shenzhen Jiu Sheng Optoelectronic Comm Tech
Co., Ltd                                            115,882                    13%        1,140,444

                                      Total:   $    927,053                   100%     $  5,093,559




                                                                                          September
                                               Nine months ended September 30, 2020        30, 2020
                                                                       Percentage          Accounts
Customer                                         Revenues              of revenues        receivable
Ease Audio Group Limited                       $   2,268,849                     77%     $  1,245,736
Yu Lin Nuo Ya Interactive Entertainment
Company Limited                                      541,301                     18%          481,194
                                               $   2,810,150         $           95%     $  1,726,930

All of our major customers are located in Hong Kong and the PRC.





Cost of Revenue. Cost of revenue for the nine months ended September 30, 2021,
was $102,986, and as a percentage of net revenue, approximately 11.1%. Cost of
revenue for the nine months ended September 30, 2020, was $743,860, and as a
percentage of net revenue, approximately 25.3%. Cost of revenue decreased
primarily as a result of the decrease in our business volume.









  24






Gross Profit. We achieved a gross profit of $824,067 and $2,201,648 for the nine
months ended September 30, 2021 and 2020, respectively. The decrease in gross
profit is primarily attributable to the decrease in our business volume.



General and Administrative Expenses ("G&A"). We incurred G&A expenses of
$181,215 and $523,390 for the nine months ended September 30, 2021, and 2020,
respectively. The decrease in G&A is primarily attributable to the decrease

in
our professional fee.


Income Tax Expense. Our income tax expenses for the quarters ended September 30, 2021 and 2020 was $103,772 and $178,846, respectively.


Net Income. During the nine months ended September 30, 2021, we incurred a net
income of $539,080, as compared to $1,498,071 for the same period ended
September 30, 2020. The decrease in net income is primarily attributable to the
decrease in our business volume from the weak economy amid COVID-19 pandemic.



Liquidity and Capital Resources.

As of September 30, 2021, we had cash and cash equivalents of $60,618, accounts receivable of $5,098,954, deposits, prepayments and other receivables of $829,108.

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.





                                                           Nine Months Ended September 30,
                                                                2021               2020

Net cash provided by operating activities                  $       16,344       $   764,699
Net cash used in investing activities                                   -          (862,271 )
Net cash provided by (used in) financing activities        $       28,278
    $  (119,198 )

Net Cash Provided By Operating Activities.





For the nine months ended September 30, 2021, net cash provided by operating
activities was $16,344, which consisted primarily of a net income of $539,080,
depreciation of plant and equipment of $119,081, offset by an increase in
accounts receivables of $599,208, an increase in deposits, prepayments and other
receivables of $164,056, an increase in income tax payable of $103,772 and an
increase in accrued expenses and other payables of $17,675.



For the nine months ended September 30, 2020, net cash provided by operating
activities was $764,699, which consisted primarily of a net income of
$1,498,071, depreciation of plant and equipment of $7,348, stock-based
compensation expense of $325,000, an increase in tax payable of $179,689, an
increase in accrued expenses and other payable of $17,878 a decrease in lease
liabilities of $658, offset by an increase in accounts receivable of $1,003,875
and an increase in deposits, prepayments and other receivables of $258,754.

We expect to continue to rely on cash generated through financing from our existing shareholders and private placements of our securities, however, to finance our operations and future acquisitions.

Net Cash Used In Investing Activities.

For the nine months ended September 30, 2021, there is no net cash used in investing activities.











  25





For the nine months ended September 30, 2020, cash used in investing activities was $862,271 from the purchase of property, plant and equipment.

Net Cash Provided By (Used In) Financing Activities.

For the nine months ended September 30, 2021, net cash provided by financing activities was $28,278 consisting primarily of advances from a director.

For the nine months ended September 30, 2020, net cash used in financing activities was $119,198 consisting primarily of $186,084 dividend paid to the shareholder of the Company, offset by $16,500 advances from a director and proceeds from line of credit of $50,386.

Off-Balance Sheet Arrangements

We have no outstanding off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.

Critical Accounting Policies and Estimates.





The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires our management to make
assumptions, estimates and judgments that affect the amounts reported, including
the notes thereto, and related disclosures of commitments and contingencies, if
any. We have identified certain accounting policies that are significant to the
preparation of our financial statements. These accounting policies are important
for an understanding of our financial condition and results of operations.
Critical accounting policies are those that are most important to the
presentation of our financial condition and results of operations and require
management's subjective or complex judgment, often as a result of the need to
make estimates about the effect of matters that are inherently uncertain and may
change in subsequent periods. Certain accounting estimates are particularly
sensitive because of their significance to financial statements and because of
the possibility that future events affecting the estimate may differ
significantly from management's current judgments. We believe the following
accounting policies are critical in the preparation of our financial statements.



  · Basis of presentation



These accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP").





  · Use of estimates and assumptions




In preparing these consolidated financial statements, management makes estimates
and assumptions that affect the reported amounts of assets and liabilities in
the balance sheet and revenues and expenses during the period reported. Actual
results may differ from these estimates.



  · Basis of consolidation




The consolidated financial statements include the accounts of the Company and
its subsidiaries. All significant inter-company balances and transactions within
the Company have been eliminated upon consolidation.









  26






  · Accounts receivable




Accounts receivable are recorded at the invoiced amount and do not bear
interest, which are due within contractual payment terms, generally 30 to 90
days from completion of service. Credit is extended based on evaluation of a
customer's financial condition, the customer credit-worthiness and their payment
history. Accounts receivable outstanding longer than the contractual payment
terms are considered past due. Past due balances over 90 days and over a
specified amount are reviewed individually for collectibility. At the end of
fiscal year, the Company specifically evaluates individual customer's financial
condition, credit history, and the current economic conditions to monitor the
progress of the collection of accounts receivables. The Company will consider
the allowance for doubtful accounts for any estimated losses resulting from the
inability of its customers to make required payments. For the receivables that
are past due or not being paid according to payment terms, the appropriate
actions are taken to exhaust all means of collection, including seeking legal
resolution in a court of law. Account balances are charged off against the
allowance after all means of collection have been exhausted and the potential
for recovery is considered remote. The Company does not have any
off-balance-sheet credit exposure related to its customers.



  · Revenue recognition




The Company adopted Accounting Standards Codification ("ASC") 606 - Revenue from
Contracts with Customers" ("ASC 606"). Under ASC 606, a performance obligation
is a promise within a contract to transfer a distinct good or service, or a
series of distinct goods and services, to a customer. Revenue is recognized when
performance obligations are satisfied and the customer obtains control of
promised goods or services. The amount of revenue recognized reflects the
consideration to which the Company expects to be entitled to receive in exchange
for goods or services. Under the standard, a contract's transaction price is
allocated to each distinct performance obligation. To determine revenue
recognition for arrangements that the Company determines are within the scope of
ASC 606, the Company performs the following five steps:




         •    identify the contract with a customer;
         •    identify the performance obligations in the contract;
         •    determine the transaction price;
         •    allocate the transaction price to performance obligations in the
              contract; and

         •    recognize revenue as the performance obligation is satisfied.




  · Foreign currencies translation




Transactions denominated in currencies other than the functional currency are
translated into the functional currency at the exchange rates prevailing at the
dates of the transaction. Monetary assets and liabilities denominated in
currencies other than the functional currency are translated into the functional
currency using the applicable exchange rates at the balance sheet dates. The
resulting exchange differences are recorded in the consolidated statement of
operations.



The reporting currency of the Company is United States Dollar ("US$") and the
accompanying consolidated financial statements have been expressed in US$. In
addition, the Company's operating subsidiaries in Hong Kong and Seychelles
maintain their books and record in its local currency, Hong Kong Dollars ("S$"),
which is a functional currency as being the primary currency of the economic
environment in which their operations are conducted. In general, for
consolidation purposes, assets and liabilities of its subsidiaries whose
functional currency is not US$ are translated into US$, in accordance with ASC
Topic 830-30, " Translation of Financial Statement", using the exchange rate on
the balance sheet date. Revenues and expenses are translated at average rates
prevailing during the year. The gains and losses resulting from translation of
financial statements of foreign subsidiaries are recorded as a separate
component of accumulated other comprehensive income within the statements of
changes in stockholder's equity.









  27






  · Leases




The Company adopted Topic 842, Leases ("ASC 842"). At the inception of an
arrangement, the Company determines whether the arrangement is or contains a
lease based on the unique facts and circumstances present. Leases with a term
greater than one year are recognized on the balance sheet as right-of-use
("ROU") assets, lease liabilities and long-term lease liabilities. The Company
has elected not to recognize on the balance sheet leases with terms of one year
or less. Operating lease liabilities and their corresponding right-of-use assets
are recorded based on the present value of lease payments over the expected
remaining lease term. However, certain adjustments to the right-of-use asset may
be required for items such as prepaid or accrued lease payments. The interest
rate implicit in lease contracts is typically not readily determinable. As a
result, the Company utilizes its incremental borrowing rates, which are the
rates incurred to borrow on a collateralized basis over a similar term an amount
equal to the lease payments in a similar economic environment.



In accordance with the guidance in ASC 842, components of a lease should be
split into three categories: lease components (e.g. land, building, etc.),
non-lease components (e.g. common area maintenance, consumables, etc.), and
non-components (e.g. property taxes, insurance, etc.). Subsequently, the fixed
and in-substance fixed contract consideration (including any related to
non-components) must be allocated based on the respective relative fair values
to the lease components and non-lease components.



Lease expense is recognized on a straight-line basis over the lease terms. Lease
expense includes amortization of the ROU assets and accretion of the lease
liabilities. Amortization of ROU assets is calculated as the periodic lease cost
less accretion of the lease liability. The amortized period for ROU assets is
limited to the expected lease term.



The Company has elected a practical expedient to combine the lease and non-lease
components into a single lease component. The Company also elected the
short-term lease measurement and recognition exemption and does not establish
ROU assets or lease liabilities for operating leases with terms of 12 months or
less.



  · Recent accounting pronouncements




From time to time, new accounting pronouncements are issued by the Financial
Accounting Standards Board (FASB), or other standard setting bodies and adopted
by the Company as of the specified effective date. Under the Jumpstart Our
Business Startups Act of 2012 (JOBS Act), the Company meets the definition of an
emerging growth company. The Company has elected to use the extended transition
period for complying with new or revised accounting standards pursuant to
Section 107(b) of the JOBS Act. Unless otherwise discussed, the impact of
recently issued standards that are not yet effective will not have a material
impact on the Company's financial position or results of operations upon
adoption.



Recently Adopted Accounting Pronouncements

The Company adopts all applicable, new accounting pronouncements as of the specified effective dates.


In September 2016, the FASB issued ASU No. 2016-13, Financial Instruments -
Credit Losses (Topic 326) ("ASU 2016-13"), which requires the immediate
recognition of management's estimates of current and expected credit losses. In
November 2018, the FASB issued ASU 2018-19, which makes certain improvements to
Topic 326. In April and May 2019, the FASB issued ASUs 2019-04 and 2019-05,
respectively, which adds codification improvements and transition relief for
Topic 326. In November 2019, the FASB issued ASU 2019-10, which delays the
effective date of Topic 326 for Smaller Reporting Companies to interim and
annual periods beginning after December 15, 2022, with early adoption permitted.
In November 2019, the FASB issued ASU 2019-11, which makes improvements to
certain areas of Topic 326. In February 2020, the FASB issued ASU 2020-02, which
adds an SEC paragraph, pursuant to the issuance of SEC Staff Accounting Bulletin
No. 119, to Topic 326. Topic 326 is effective for the Company for fiscal years
and interim reporting periods within those years beginning after December 15,
2022. Early adoption is permitted for interim and annual periods beginning
December 15, 2019. The Company is currently evaluating the potential impact of
adopting this guidance on the consolidated financial statements.









  28






On January 1, 2020, the Company adopted ASU No. 2017-04, "Intangibles and Other
(Topic 350): Simplifying the Test for Goodwill Impairment", which eliminates the
requirement to calculate the implied fair value of goodwill, but rather requires
an entity to record an impairment charge based on the excess of a reporting
unit's carrying value over its fair value. Adoption of this ASU did not have a
material effect on the consolidated financial statements.



On January 1, 2020, the Company adopted ASU No. 2018-13, Fair Value Measurements
(Topic 820): Disclosure Framework Changes to the Disclosure Requirements for
Fair Value Measurement. The amendments in this update modify the disclosure
requirements on fair value measurements in Topic 820. Adoption of this ASU did
not have a material effect on our consolidated financial statements.



All new accounting pronouncements issued but not yet effective are not expected
to have a material impact on our results of operations, cash flows or financial
position with the exception of the updated previously disclosed above, there
have been no new accounting pronouncements not yet effective that have
significance to the consolidated financial statements.

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