We are headquartered inFlushing, New York . After a series of acquisitions and dispositions in 2021 and 2020, our primary business, which is carried out by Jingshan Sanhe, Jilin Chuangyuan,Fast Approach Inc. and Xianning Bozhuang, is:
? To manufacture black tea products and distribute such products;
? To sell high-grade synthetic fuel products;
? To sell formaldehyde, urea-formaldehyde glue, methylal, and clean fuel oil;
? Multimedia design and online advertising services;
Going Concern
The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the Company has incurred a net loss of$2,462,478 for the six months endedJune 30, 2021 . As ofJune 30, 2021 , the Company had an accumulated deficit of$86,794,375 ; its net cash used in operating activities for the six months endedJune 30, 2021 was$8,838,680 .
The Company plans to continue its expansion and investments, which will require continued improvements in revenue, net income, and cash flows.
Results of Operations
Three Months Ended
The following table summarizes the results of our operations during the three-month periods endedJune 30, 2021 andJune 30, 2020 , respectively, and provides information regarding the dollar and percentage increase or (decrease) from the three-month period endedJune 30, 2021 compared to the three month
period endedJune 30, 2020 : Three months ended Increase / Increase / June 30, Decrease Decrease (In Thousands of USD) 2021 2020 ($) (%) Net revenues 4,876 471 4,405 934 Cost of revenues 4,586 288 4,298 1,493 Gross profit 290 184 106 58 Operating expenses:
Selling and marketing expenses 296 19 277 1464 General and administrative expenses 1,105 277 829 291 Operating loss (1,112 ) (112 ) (999 ) 891 Interest and other income 126 4
122 3050 Other expenses (2 ) (6 ) 4 (67 ) Interest expense - (3 ) 3 (100 ) Loss before tax (1,167 ) (118 ) (1,049 ) 892 Income tax expense - - - - Net loss (1,167 ) (118 ) (1,049 ) 892 Net Revenues. Our net revenues for the three months endedJune 30, 2021 amounted to$4.88 million , which represents an increase of approximately$4.41 million , or 934%, from 0.47 million for the three months endedJune 30, 2020 . This increase was attributable to the acquisition of certain subsidiaries and VIEs. Cost of Revenues. During the three months endedJune 30, 2021 , we experienced an increase in cost of revenue of$4.30 million or 1493%, in comparison to the three months endedJune 30, 2020 , from approximately$0.3 million to$4.59 million . This increase was related to the acquisition of certain subsidiaries and VIEs.
Gross Profit. Our gross profit increased by$0.12 million , or 58%, to$0.29 million for the three months endedJune 30, 2021 from$0.18 million for the three months endedJune 30, 2020 . This increase was mainly due to the reasons mentioned above, attributable to the acquisition of certain subsidiaries and VIEs. Operating Expenses Selling and Marketing Expenses. Our selling and marketing expenses increased by$0.28 million , or 1464%, to$ 0.30 million for the three months endedJune 30, 2021 from$0.02 million for the three months endedJune 30, 2020 . This increase was mainly due to our effort to expand our business. General and Administrative Expenses.We experienced an increase in general and administrative expense of$0.83 million from$0.28 million to approximately$1.11 million for the three months endedJune 30, 2021 , compared to the three months endedJune 30, 2020 . This increase was mainly due to the increase in professional service fees for the acquisition of the VIEs. 3 Net Loss Our net loss increased by$1.05 million , or 892%, to a net loss of$1.17 million for three months endedJune 30, 2021 from a net loss of$0.12 million for the three months endedJune 30, 2020 . Such increase was primarily the result of the acquisition of certain subsidiaries and VIEs
Six Months Ended
The following table summarizes the results of our operations during the six-month periods endedJune 30, 2021 andJune 30, 2020 , respectively, and provides information regarding the dollar and percentage increase or (decrease) from the six-month period endedJune 30, 2021 compared to the six month period endedJune 30, 2020 : Six months ended Increase / Increase / June 30, Decrease Decrease (In Thousands of USD) 2021 2020 ($) (%) Net revenues 7,113 1,306 5,806 445 Cost of revenues 6,617 1,140 5,477 480 Gross profit 495 166 329 198 Operating expenses: Selling and marketing expenses 521 27 494 1845 General and administrative expenses 2,668 699 1,968 278 Operating loss (2,693 ) (560 ) (2,133 ) 381 Interest and other income (36 ) 6 (42 ) (700 ) Other expenses (2 ) (149 ) 147 (100 ) Interest expense - (5 ) 5 (100 ) (Loss) income before tax (2,659 ) (707 ) (1,952 ) 276 Income tax expense/(income) - - Net (loss) income (2,659 ) (707 ) (1,952 ) 276 Net Revenues. Our net revenues for the six months endedJune 30, 2021 amounted to$7.11 million , which represents an increase of approximately$5.81 million , or 445%, from$1.31 million for the six months endedJune 30, 2020 . This increase was attributable to the acquisition of certain subsidiaries and VIEs. Cost of Revenues. During the six months endedJune 30, 2021 , we experienced an increase in cost of revenue of$5.48 million or 480%, in comparison to the six months endedJune 30, 2020 , from approximately$1.14 million to$6.62 million . This increase was related to the acquisition of certain subsidiaries and VIEs and in line with an increase in revenue. Gross Profit. Our gross profit increased by$0.33 million , or 198%, to$0.50 million for the six months endedJune 30, 2021 from$0.17 million for the six months endedJune 30, 2020 . This increase was mainly due to the reasons mentioned above, attributable to the acquisition of certain subsidiaries and VIEs. Operating Expenses Selling and Marketing Expenses. Our selling and marketing expenses increased by$0.49 million , or 1845%, to$0.52 million for the six months endedJune 30, 2021 from$0.03 million for the six months endedJune 30, 2020 . This increase was mainly due to our effort to expand our business. General and Administrative Expenses.We experienced an increase in general and administrative expense of$1.95 million from$0.70 million to approximately$2.67 million for the six months endedJune 30, 2021 , compared to the six months endedJune 30, 2020 . This cost increase was mainly due to the increase in professional service fees for the acquisition of the VIEs. Net Loss Our net loss increased by$1.95 million , or 276%, to a net loss of$2.66 million for six months endedJune 30, 2021 from a net loss of$0.71 million for the six months endedJune 30, 2020 . Such increase was primarily the result of the acquisition of certain subsidiaries and VIEs 4
Liquidity and Capital Resources
In assessing our liquidity, we monitor and analyze our cash-on-hand and our operating and capital expenditure commitments. Our liquidity needs are to meet our working capital requirements, operating expenses, and capital expenditure obligations. In the reporting period in the fiscal year 2021, our primary sources of financing have been cash generated from operations and private placements. OnJanuary 26, 2021 , the Company entered into a Securities Purchase Agreement, pursuant to which three individuals residing inthe People's Republic of China agreed to purchase an aggregate of 2,700,000 shares of the Company's common stock, par value$0.001 per share, for an aggregate purchase price of$6,750,000 , representing a purchase price of$2.50 per Share.
On
Management anticipates that our existing capital resources and anticipated cash flows from operations are adequate to satisfy our liquidity requirements for the next 12 months. Our primary capital needs have been to fund our working capital requirements. In the past, our primary sources of financing have been cash generated from operations and private placements. As ofJune 30, 2021 , we had cash and cash equivalents of$1.45 million compared to$3.45 million as ofDecember 31, 2020 . The debt to assets ratio was 24% and 17% as ofJune 30, 2021 andDecember 31, 2020 , We expect to continue to finance our operations and working capital needs in 2021 from cash generated from operations and, if needed, private financings. Suppose available liquidity is not sufficient to meet our operating and loan obligations as they come due. In that case, our plans include pursuing alternative financing arrangements or reducing expenditures as necessary to meet our cash requirements. However, there is no assurance that we will raise additional capital or reduce discretionary spending to provide liquidity if needed. We cannot be sure of the availability or terms of any alternative financing arrangements.
The following table provides detailed information about our net cash flow for all financial statement periods presented in this report.
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