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 December 31, 2022, and 2021. The discussion and analysis that follows should be read together with the section entitled "Cautionary Note Concerning Forward-Looking Statements" and our consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this annual report on Form 10-K.

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 "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.

Impact of COVID-19 on our business

The outbreak of COVID-19 that started in late January 2020 in the PRC has negatively affected our business. In March 2020, the World Health Organization declared COVID-19 as a pandemic and has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities in China and the U.S. in the subsequent months. Given the rapidly expanding nature of the COVID-19 pandemic, and because substantially all of the Company's business operations and its workforce are concentrated in China, the Company's business, results of operations, and financial condition for calendar year 2020 have been adversely affected.

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.

To resume normal operations in the second quarter of 2021, we believe that the Company can generate sufficient cash flow over the next 12 months to implement the revised business plan.











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Results of Operations

We are not required to obtain permission from the Chinese authorities to operate or to issue securities to foreign investors.

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 December 31, 2022, it has included a note about our ability to continue as a going concern due to consecutive quarterly losses from operations in 2021 as a result of COVID-19. Business closures in Hong Kong and limitations on business operations arising from COVID-19 has significantly disrupted our ability to generate revenues and cash flow during the fiscal year 2022.

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 December 31, 2022 and December 31, 2021

The following table sets forth certain operational data for the years ended December 31, 2022 and 2021:





                             Years ended December 31,
                               2022             2021
Revenues, net              $     52,361     $  1,001,438
Cost of revenue                  (7,663 )       (230,840 )
Gross profit                     44,698          770,598
Total operating expenses       (467,651 )     (5,214,194 )
Other (expenses) income          86,535                -
Loss before Income Taxes       (336,418 )     (4,443,596 )
Income tax expense                    -          (90,993 )
Net loss                       (336,418 )     (4,534,589 )










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Revenue. We generated revenues of $52,361 and $1,001,438 for the years ended December 31, 2022 and 2021. The significant decrease is due to the decrease in business volume due to downturn economy under the pandemic, respectively.

During the year ended December 31, 2022, the following customers accounted for 10% or more of our total net revenues:





                                                                Accounts
                           Revenues       Percentages of       Receivable
                             (US$)           Revenues            (US$)
Ease Audio Group Limited   $  52,361                 100%     $     19,211
                  Total:   $  52,361                 100%     $     19,211

During the year ended December 31, 2021, the following customers accounted for 10% or more of our total net revenues:





                                                                                    Accounts
                                              Revenues        Percentages of       Receivable
                                               (US$)             Revenues            (US$)
Ease Audio Group Limited                    $    693,304                  70%     $  2,427,487
Yu Lin Nuo Ya Interactive Entertainment
Company Limited                                  154,067                  15%        1,509,812
Shenzhen Jiu Sheng Optoelectronic Comm
Tech Co., Ltd                                    154,067                  15%        1,164,531
                                   Total:   $  1,001,438                 100%     $  5,101,830

All customers are located in the PRC and Hong Kong.

Cost of Revenue. Cost of revenue for the year ended December 31, 2022, was $7,663, and as a percentage of net revenue, approximately 14.6%. Cost of revenue for the year months ended December 31, 2021, was $230,840, and as a percentage of net revenue, approximately 23.0%. Cost of revenue decreased primarily as a result of the decrease in our business volume.

Gross Profit. We achieved a gross profit of $44,698 and $770,598 for the years ended December 31, 2022 and 2021, respectively. The decrease in gross profit is primarily attributable to the decrease in our business volume.

Operating Expenses. We incurred operating expenses of $467,651 and $5,214,194 for the years ended December 31, 2022, and 2021, respectively. Operating expenses for the year ended December 31, 2022, consisted of $72,581 of professional fees, $116,667 of debt discount and $278,403 of general and administrative expenses. Operating expenses for the year ended December 31, 2021, consisted of $4,977,996 in allowance for doubtful accounts, $88,932 of professional fees and $147,266 of general and administrative expenses. The decrease in general and administrative expenses is attributable to a significant decrease in allowance for doubtful accounts.

Income Tax Expense. Our income tax expenses for the years ended December 31, 2022 and 2021 was $0 and $90,993, respectively.

Net Loss. We incurred a net loss of $336,418 and $4,534,589 for the years ended December 31, 2022 and 2021, respectively. The decrease in net loss is primarily attributable to the decrease in our business volume and a significant allowance for doubtful accounts.











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Liquidity and Capital Resources

As of December 31, 2022, we had cash and cash equivalents of $37,212, net accounts receivable of $19,211, deposits, prepayments and other receivables of $826,844, debt discount of $583,333 and amount due from a director of $24,840.

As of December 31, 2021, we had cash and cash equivalents of $290, net accounts receivable of $129,150, deposits, prepayments and other receivables of $827,971 and debt discount of $700,000.

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. It is expected to incur significantly greater expenses in the near future as we develop our product offerings or enter into strategic partnerships. We also expect our general and administrative expenses to increase as we expand our finance and administrative staff, add infrastructure, and incur additional costs related to being reporting act company, including directors' and officers' insurance and increased professional fees. We believe that we will require approximately $1 to 2 million over the next 12-24 months to implement our business plan. For the immediate future, we intend to finance our business expansion efforts through equity purchase by institutional banks, and loans from existing shareholders or financial institutions.

We have never paid dividends on our Common Stock. Our present policy is to apply cash to investments in product development, acquisitions or expansion; consequently, we do not expect to pay dividends on Common Stock in the foreseeable future.





Going Concern Uncertainties

Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders. Our sources of capital in the past have included the sale of equity securities, which include common stock sold in private transactions and public offerings, lease liability and short-term and long-term debts. In addition, with respect to the ongoing and evolving coronavirus (COVID-19) outbreak, which was designated as a pandemic by the World Health Organization on March 11, 2020, the outbreak has caused substantial disruption in international economies and global trades and if repercussions of the outbreak are prolonged, could have a significant adverse impact on our business. Given the addition political and public health challenges, our ability to obtain external financing or financing from existing shareholders to fund our working capital needs has been materially and adversely impacted, and there can be no assurance that we will be able to raise such additional capital resources on satisfactory terms. 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.

We require additional funding to meet its ongoing obligations and to fund anticipated operating losses. Our auditor has expressed substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on raising capital to fund its initial business plan and ultimately to attain profitable operations. These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.

We expect to incur marketing and professional and administrative expenses as well expenses associated with maintaining our filings with the Commission. We will require additional funds during this time and will seek to raise the necessary additional capital. If we are unable to obtain additional financing, we may be required to reduce the scope of our business development activities, which could harm our business plans, financial condition and operating results. Additional funding may not be available on favorable terms, if at all. We intend to continue to fund its business by way of equity or debt financing and advances from related parties. Any inability to raise capital as needed would have a material adverse effect on our business, financial condition and results of operations.











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If we cannot raise additional funds, we will have to cease business operations. As a result, our common stock investors might lose all of their investment.





                                                        Years ended December 31,
                                                          2022              2021

Net cash provided by (used in) operating activities $ 76,698 $ (4,982 ) Net cash used in investing activities

                                             -
Net cash used in financing activities                       (38,570 )       (14,560 )

Net Cash Provided by (Used in) Operating Activities.

For the year ended December 31, 2022, net cash provided by operating activities was $76,698, which consisted primarily of a net loss of $336,418, offset by a decrease in deposits, prepayments and other receivables of $1,127, a decrease in accounts receivables of $196,481, an increase in accrued expenses and other payables of $32,876, and depreciation of plant and equipment of $152,507 and debt discount of 116,667.

For the year ended December 31, 2021, net cash used in operating activities was $4,982, which consisted primarily of net loss of $4,534,589, depreciation of plant and equipment of $157,487, allowance for doubtful accounts of $4,977,996 and an increase of accrued expenses and other payables of $77,805 and tax payable of $86,638, offset by an increase in accounts receivable of $607,400, an increase in deposits, prepayments and other receivables of $162,919.

Net Cash Used In Investing Activities.

For the year ended December 31, 2022, there is no net cash provided by investing activities.

For the year ended December 31, 2021, there is no net cash provided by investing activities.

Net Cash (Used In) Provided by Financing Activities.

For the year ended December 31, 2022, net cash used in financing activities was $38,570, consisting primarily of advance to a director.

For the year ended December 31, 2021, net cash used in financing activities was $14,560, consisting primarily of advance to a director.

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.















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Critical Accounting Policies and Estimates

We prepare our financial statements in conformity with accounting principles generally accepted by the United States of America ("U.S. GAAP"), which require us to make judgments, estimates, and assumptions that affect our reported amount of assets, liabilities, revenue, costs and expenses, and any related disclosures. Although there were no material changes made to the accounting estimates and assumptions in the past three years, we continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates.

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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