Overview

As of December 31, 2022, the Company had two business lines, which are the commodities trading business and supply chain management services.





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Commodities Trading Business





The commodity trading business primarily involves purchasing non-ferrous metal
products, such as aluminum ingots, copper, silver, and gold, from metal and
mineral suppliers and then selling to customers. In connection with the
Company's commodity sales, in order to help customers to obtain sufficient funds
to purchase various metal products and also help metal and mineral suppliers to
sell their metal products, the Company launched its supply chain management
service in December 2019. The Company primarily generates revenues from bulk
non-ferrous commodity products, and from providing related supply chain
management services in the PRC.



The Company sources bulk commodity products from non-ferrous metal and mines or
its designated distributors and then sells to manufacturers who need these
metals in large quantities. The Company works with suppliers in the sourcing of
commodities. Major suppliers include various metal and mineral suppliers such as
Kunsteel Group, Baosteel Group, Aluminum Corporate of China Limited, Yunnan
Benyuan, Yunnan Tin, and Shanghai Copper. The Company's target customers include
large infrastructure companies such as China National Electricity, Datang Power,
China Aluminum Foshan International Trade, Tooke Investment (China), CSSC
International Trade Co., Ltd., Shenye Group, and Keliyuan.

Supply Chain Management Services





We offer a distribution service to bulk suppliers of precious metals by acting
as a sales intermediary, procuring small to medium-sized buyers through our own
professional sales team and channels and distributing to them the bulk precious
metals of the suppliers. Upon the execution of a purchase order from our sourced
buyers, we charge the suppliers with a commission fee ranging from 1% to 2% of
the distribution order, depending on the size of the order. For the year ended
December 31, 2022, the Company earned commodity distribution commission fees of
$1,391,903 from facilitating such sales transactions with twenty third party
customers. For the year ended December 31, 2021, the Company earned commodity
distribution commission fees of $3,180,227 from facilitating such sales
transactions with thirty-four third party customers.



Competition



The Company mainly competes against other large domestic commodity metal product
trading service providers such as Xiamen International Trade and Yijian Shares.
Currently, the principal competitive factors in the non-ferrous metal
commodities trading business are price, product availability, quantity, service,
and financing terms for purchases and sales of commodities.

Applicable Government Regulations





Shenzhen Baiyu Jucheng has obtained all material approvals, permits, licenses
and certificates required for our metal product trading operations, including
registrations from the local business and administrative department authorizing
the purchase of raw materials.



Recent developments

(1) Settlement of Convertible Promissory Notes






The Company settled convertible promissory notes of $125,000 on December 30,
2022, $125,000 on January 10, 2023, $125,000 on January 18, 2023, $200,000 on
January 18, 2023, $250,000 on February 2, 2023, $200,000 on February 3, 2023,
$175,000 on February 8, 2023, $250,000 on February 15, 2023 and $250,000 on
March 2, 2023, respectively and issued 148,399, 147,824, 147,475, 235,960,
292,987, 234,389, 205,090, 292,987 and 279,567 shares of the Company's common
stock on January 6, 2023, January 12, 2023, January 18, 2023, January 19, 2023,
February 3, 2023, February 6, 2023, February 8, 2023, February 15, 2023, and
March 2, 2023, respectively.

(2) January Private Placement


On January 9, 2023, the Company entered into a certain securities purchase
agreement with Ms. Huiwen Hu, an affiliate of the Company, and certain other
purchasers who are non-U.S. Persons, pursuant to which the Company agreed to
sell an aggregate of 35,000,000 shares of its common stock, at a purchase price
of $1.21 per share ("January 2023 PIPE"). The gross proceeds to the Company from
the January 2023 PIPE was $42.35 million. Since Ms. Huiwen Hu is an affiliate of
the Company, the January 2023 PIPE has been approved by the Audit Committee as
well as the Board of Directors of the Company.

(3) Settlement of Restated Agreement






The Company issued to White Lion Capital, LLC 489,306 shares of the Company's
common stock on January 20, 2023 at a purchase price of 80% of the lowest daily
volume-weighted average price of the Company's common stock during the valuation
period as defined in the Restated Agreement (the "Purchase Price") and issued
200,000 shares of the Company's common stock on February 1, 2023 at the Purchase
Price, pursuant to the Restated Agreement dated December 12, 2022. The Company
received relevant proceeds of $400,182.47 and $158,890.50, respectively, in

2023.



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Key Factors Affecting Our Results of Operation

The commodities trading industry is also experiencing decreasing demand as a result of China's overall economic slowdown. We expect competition in commodities trading business to persist and intensify.





We have a limited operating history having just started our commodities trading
business in late December 2019. We believe our future success depends on our
ability to significantly increase sales as well as maintain profitability from
our operations. Our limited operating history makes it difficult to evaluate our
business and future prospects. You should consider our future prospects in light
of the risks and challenges encountered by a company with a limited operating
history in an emerging and rapidly evolving industry. These risks and challenges
include, among other things,



  ? our ability to continue our growth as well as maintain profitability;

? preservation of our competitive position in commodities trading industry


        in China;

? our ability to implement our strategies and make timely and effective


        responses to competition and changes in customer preferences; and




    ?   recruitment, training and retaining of qualified managerial and other
        personnel.

Our business requires a significant amount of capital in large part due to needing to purchase a bulk volume of commodities, and expand our business in existing markets and to additional markets where we currently do not have operations.





Results of Operations

Year Ended December 31, 2022 as Compared to Year Ended December 31, 2021





                                                  For the Years Ended
                                                     December 31,                          Change
                                                2022               2021             Amount             %
Revenues
Sales of commodity products - third
parties                                    $  155,443,398     $  173,904,016     $ (18,460,618 )         (11 )%
Sales of commodity products - related
parties                                                 -         24,049,999       (24,049,999 )        (100 )%
Supply chain management services - third
parties                                         1,391,903          3,180,227        (1,788,324 )         (56 )%
Total revenue                                 156,835,301        201,134,242       (44,298,941 )         (22 )%

Cost of revenue Commodity product sales - third parties (155,789,519 ) (173,996,000 ) 18,206,481

           (10 )%
Commodity product sales - related
parties                                                 -        (24,045,511 )      24,045,511          (100 )%
Supply chain management services - third
parties                                            (7,525 )          (84,118 )          76,593           (91 )%
Total cost of revenue                        (155,797,044 )     (198,125,629 )      42,328,585           (21 )%

Gross profit                                    1,038,257          3,008,613        (1,970,356 )         (65 )%

Operating expenses
Selling, general, and administrative
expenses                                       (8,844,739 )       (8,137,481 )        (707,258 )           9 %
Share-based payment for service                   (44,000 )       (1,836,442 )       1,792,442           (98 )%
Total operating cost and expenses              (8,888,739 )       (9,973,923 )       1,085,184           (11 )%

Other income (expenses), net
Interest income                                17,035,200         10,079,776         6,955,424            69 %
Interest expenses                                (523,980 )         (313,965 )        (210,015 )          67 %
Amortization of beneficial conversion
feature relating to issuance of
convertible promissory notes                   (1,212,617 )       (1,463,883 )         251,266           (17 )%
Other income (expense), net                        59,088           (285,774 )         344,862          (121 )%
Total other income, net                        15,357,691          8,016,154         7,341,537            92 %

Loss from continuing operations before
income taxes                                    7,507,209          1,050,844         6,456,365           614 %

Income tax expenses                            (3,253,672 )

(1,991,201 ) (1,262,471 ) 63 %



Net income (loss)                          $    4,253,537     $     (940,357 )   $   5,193,894           552 %




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Revenue



For the years ended December 31, 2022 and 2021, we generated revenue from the
following two sources, including (1) revenue from sales of commodity products
and (2) revenue from supply chain management services. Total revenue decreased
by $44,298,941 or 22%, from $201,134,242 for the year ended December 31, 2021 to
$156,835,301 for the year ended December 31, 2022, among which revenue from
commodity trading, supply chain management services for 99.1% and 0.9%,
respectively, of our total revenue for the year ended December 31, 2022. The
decrease of revenue from sales of commodity products is mainly due to COVID-19,
as well as the depreciation of RMB against USD in 2022. For the year ended
December 31, 2022, our operations in Shanghai were temporarily affected due to
the sporadic outbreak of COVID-19, which resulted in a decrease in revenue. But
the extent to which COVID-19 affects our future results will depend on many
factors and future developments, including new information about COVID-19 and
any new government regulations which may emerge to contain the virus, among
others.

(1) Revenue from sales of commodity products

For the year ended December 31, 2022, the Company sold non-ferrous metals to twenty-nine third party customers at fixed prices, and earned revenues of $155,443,398 when the product ownership was transferred to its customers.





For the year ended December 31, 2021, the Company sold non-ferrous metals to
twenty-four third party customers and three related party customers at fixed
prices, and earned revenues when the product ownership was transferred to its
customers. The Company earned revenues of $173,904,016 and $24,049,999,
respectively, from sales of commodity products to twenty-four third party
customers and three related party customers.

(2) Revenue from supply chain management services






In connection with the Company's commodity sales, in order to help customers to
obtain sufficient funds to purchase various metal products and also help metal
and mineral suppliers sell their metal products, the Company launched its supply
chain management service business in December 2019, which primarily consisted of
commodity distribution services.

Commodity distribution service fees


The Company utilizes its strong sales and marketing expertise and customer
network to introduce customers to large metal and mineral suppliers, and
facilitate the metal product sales between the suppliers and the customers. The
Company merely acts as an agent in this type of transaction and earns a
commission fee based on the percentage of volume of metal products that
customers purchase. Commodity distribution service fees are recognized as
revenue when the Company successfully facilitates the sales transactions between
the suppliers and the customers. For the year ended December 31, 2022, the
Company earned commodity distribution commission fees of $1,391,903 from third
party vendors compared with $3,180,227 for the year ended December 31, 2021.



Cost of revenue



Our cost of revenue primarily includes cost of revenue associated with commodity
product sales and cost of revenue associated with management services of supply
chain. Total cost of revenue decreased by $42,328,585 or 21% from $198,125,629
for the year ended December 31, 2021 to $155,797,044 for the year ended December
31, 2022, primarily due to an decrease of $42,251,992 in cost of revenue
associated with commodity product sales. The cost of revenue increased is in
accordance to the increase in sales.

Cost of revenue associated with commodity trading

Cost of revenue primarily consists of purchase costs of non-ferrous metal products.

For the year ended December 31, 2022, the Company purchased non-ferrous metal products of $155,789,519 from twenty-nine third party vendors.





For the year ended December 31, 2021, the Company purchased non-ferrous metal
products of $173,996,000 from twenty-six third party vendors and $24,045,511
from eight related party vendors.



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Selling, general, and administrative expenses


Selling, general and administrative expenses increased from $8,137,481 for the
year ended December 31, 2021 to $8,844,739 for the year ended December 31, 2022,
representing an increase of $707,258, or 9%. Selling, general and administrative
expenses primarily consisted of salary and employee benefits, office rental
expense, amortizations of intangible assets and convertible promissory notes,
professional service fees and finance offering related fees. The increase was
mainly attributable to (1) amortization of intangible assets of $4,630,169 for
the year ended December 31, 2022 as compared to $3,927,961 for the year ended
December 31, 2021 and (2) amortization of convertible promissory notes of
$1,212,617 for the year ended December 31, 2022 as compared to $489,000 for the
year ended December 31, 2021.

Share-based payment for service





On December 16, 2022, the Company issued 300,000 shares of the Company's common
stock as compensation to a settlement and mutual release agreement with White
Lion Capital, LLC, a Nevada limited liability company, and recognized $324,000
share-based payment for service to profit. and charged back $280,000 share-based
payment for service to profit to a PR service provider.



On March 4, 2021, the Company issued 750,000 fully-vested warrants with an
exercise price of $0.01, with a five-year life, to an agent who was engaged to
complete the warrant waiver and exercise agreements. The Company applied
Black-Scholes model and determined the fair value of the warrants to be
$1,695,042. Significant estimates and assumptions used included stock price on
March 4, 2021 of $2.27 per share, risk-free interest rate of one year of 0.08%,
life of 5 years, and volatility of 71.57% for the year ended December 31, 2021.

On July 16, 2021, the Company issued 140,000 shares of the Company's common stock as compensation to a PR service provider for increasing the Company's visibility in the financial news community, and recognized $141,400 share-based payment for service to profit.





Interest income



Interest income was primarily generated from loans made to third parties and
related parties. For the year ended December 31, 2022, interest income was
$17,035,200 representing an increase of $6,955,424, or 69% from $10,079,776 for
the year ended December 31, 2021. The increase was due to the growth of loans
made to third party vendors for the year ended December 31, 2022.

Amortization of beneficial conversion feature and relative fair value of warrants relating to the issuance of convertible promissory notes


For the year ended December 31, 2022, the item represented the amortization of
beneficial conversion feature of $1,212,617 of the three convertible promissory
notes issued on March 4, 2021, October 4, 2021 and May 6, 2022.



For the year ended December 31, 2021, the item represented the amortization of
beneficial conversion feature of $1,463,883 of the three convertible promissory
notes issued on January 6, 2021, March 4, 2021 and October 4, 2021.

Cash Flows and Capital Resources





We have financed our operations primarily through shareholder contributions,
cash flow from operations, borrowings from third parties and related parties,
and equity financing through private placement and public offerings of our
securities.

As reflected in the accompanying audited consolidated financial statements, for the year ended December 31, 2022, the Company reported cash inflows of $4,335,359 from operating activities. As of December 31, 2022, the Company positive working capital of about $87 million.





During the year ended December 31, 2022, the Company entered into additional
private placement agreements with certain private investors and issued
13,000,000 shares of common stock for $45,500,000, 11,420,000 shares of common
stock for $11,420,000, and 50,000,000 shares of common stock for $57,500,000,
respectively, and sold unsecured senior convertible promissory notes in the
aggregate principal amount of $3,000,000.

The total gross proceeds from these transactions were $117.42 million. The Company expects to use the proceeds from the equity financing as working capital to expand its commodity trading business.

Based on the foregoing capital market activities, the management believes that the Company will continue as a going concern in the following 12 months.





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Statement of Cash Flows

The following table sets forth a summary of our cash flows. For the years ended December 31, 2022 and 2021, respectively:





                                                                     For the Years Ended
                                                                         December 31,
                                                                    2022              2021
Net Cash Provided by Operating Activities                      $    4,335,359     $   8,034,010
Net Cash Used in Investing Activities                            (125,537,746 )     (71,520,955 )
Net Cash Provided by Financing Activities

117,390,265 64,118,618 Effect of exchange rate changes on cash and cash equivalents 394,111

           979,382
Net increase in cash and cash equivalents                          (3,418,011 )       1,611,055
Cash at beginning of period                                         4,311,068         2,700,013
Cash from continuing operations                                $      893,057     $   4,311,068

Net Cash Provided by Operating Activities





During the year ended December 31, 2022, we had a cash inflow from operating
activities of $4,335,359, a decrease of $3,698,651 from a cash inflow of
$8,034,010 for the year ended December 31, 2021. We incurred a net income for
the year ended December 31, 2022 of $4,253,537, an increase of $5,193,894 from
the year ended December 31, 2021, during which we recorded a net loss of
$940,357.



In addition to the change in profitability, the decrease in net cash provided by
operating activities was the result of several factors, including: (1) non cash
effects adjustments, including amortization of intangible assets of $4,630,169,
amortization of beneficial conversion feature of convertible promissory notes of
$1,212,617, amortization of discount on convertible promissory notes of
$434,333, and interest expenses for convertible promissory notes of $465,201;
(2) a decrease of $4,497,189 of advances from customers due to a purchase
payment in advance to store goods recent competitive market; (3) a decrease of
$3,162,561 of due to accounts payable; and (4) a decrease of $3,507,517 of

other
current liabilities.

Net Cash Used in Investing Activities


Net cash used in investing activities for the year ended December 31, 2022 was
$125,537,746 as compared to net cash used in investing activities of $71,520,955
for the year ended December 31, 2021.



The cash used in investing activities for the year ended December 31, 2022 was
for the loans disbursed to third parties of $109,106,926, collected loans from
third partis of $70,150,111 and collected loans from related partis of
$10,448,662. As of December 31, 2022, the Company payed for Tongdow Internet
Technology acquisition of $96,638,468.

Net Cash Provided by Financing Activities





During the year ended December 31, 2022, the cash provided by financing
activities was mainly attributable to cash raised from certain private
placement, specifically, the Company entered into certain private placement
agreements with certain private investors and issued 13,000,000 shares of common
stock for $45,500,000, 11,420,000 shares of common stock for $11,420,000, and
50,000,000 shares of common stock for $57,500,000, respectively, and sold
unsecured senior convertible promissory notes in the aggregate principal amount
of $3,000,000.



Contractual Obligations



As of December 31, 2022, the Company had one lease arrangement with an unrelated
third party with a monthly rental fee of approximately $8,202. The lease term
was within 23 months, which will be due in November 2024. As of the date of this
report, the Company cannot reasonably assess whether it will renew the lease
term. The lease commitment was as following table:



                                          Less than
                             Total         1 year         1-2 years       Thereafter
Contractual obligations:
Operating lease (1)        $ 188,650     $    98,426     $    90,224     $          -
Total                      $ 188,650     $    98,426     $    90,224     $          -





We do not have any off-balance sheet arrangements as of December 31, 2022.




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Critical Accounting Policies

Please refer to Note 2 of the Consolidated Financial Statements included in this Form 10-K for details of our critical accounting policies.

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