The following discussion and analysis of our financial condition and results of
operations for the years ended
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
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.
8 Results of operations
Years ended
Revenue increased from
Cost of revenue increased from
As result, the Company enjoyed a higher gross profit,
The general and administrative expenses for the year ended
Increase in general and administrative expenses is primarily caused by increase
in consultancy fee amounted
As result, the Company incurred an operating loss of
9
Liquidity and Capital Resources
Years ended
Cash Used In Operating Activities
For the year ended
For the year ended
Cash Used In Investing Activities
For the year ended
For the year ended
Cash Provided by Financing Activities
For the year ended
For the year ended
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
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
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
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
The amount of cash denominated in RMB is approximately
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
Contractual Obligations
As a smaller reporting company, we are not required to provide the aforementioned information.
Critical Accounting Policies
Recent accounting pronouncements
In
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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