[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements](index=6&type=section&id=ITEM%201%20FINANCIAL%20STATEMENTS) The company's financial statements show a net loss for the six months ended June 30, 2022, and a working capital deficit raising going concern doubts - The company incurred a net loss of **$2.76 million** for the six months ended June 30, 2022, with an accumulated deficit of **$96.79 million** and a working capital deficit of **$8.00 million**, raising substantial doubt about its ability to continue as a going concern[27](index=27&type=chunk) Condensed Consolidated Balance Sheet Data (Unaudited) | Balance Sheet Items | June 30, 2022 (USD) | Dec 31, 2021 (USD) | | :--- | :--- | :--- | | **Assets** | | | | Total current assets | 26,996,491 | 27,303,566 | | Total non-current assets | 68,548,150 | 58,712,016 | | **Total assets** | **95,544,641** | **86,015,582** | | **Liabilities & Equity** | | | | Total current liabilities | 34,995,042 | 34,378,887 | | Total non-current liabilities | 622,087 | 380,345 | | **Total liabilities** | **35,617,129** | **34,759,232** | | **Total stockholders' equity** | **59,927,512** | **51,256,350** | Condensed Consolidated Statements of Operations (Unaudited) | Income Statement Items | Six Months Ended June 30, 2022 (USD) | Six Months Ended June 30, 2021 (USD) | | :--- | :--- | :--- | | Net revenues | 27,523,610 | 7,112,647 | | Gross profit | 1,905,021 | 495,630 | | Operating (loss) income | (2,592,654) | (2,692,741) | | Net (loss) income | (2,756,457) | (2,658,758) | | Net (loss) attributable to common shareholders | (2,714,624) | (2,462,478) | | (Loss) per common share - Basic and diluted | (0.06) | (0.12) | Condensed Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Items | Six Months Ended June 30, 2022 (USD) | Six Months Ended June 30, 2021 (USD) | | :--- | :--- | :--- | | Net cash used in operating activities | (8,200,350) | (8,838,680) | | Net cash used in investing activities | (3,853,678) | (7,542,063) | | Net cash provided by financing activities | 10,386,343 | 13,882,092 | | Net (decrease) in cash and cash equivalents | (1,667,685) | (2,498,651) | | Cash and cash equivalents at end of period | 378,697 | 1,445,606 | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=33&type=section&id=ITEM%202%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses diversified operations, noting revenue growth offset by losses and strained liquidity, raising going concern issues - The company's primary business is carried out by several subsidiaries and VIEs, focusing on black tea, synthetic fuels, imported beef, chemicals (formaldehyde, urea-formaldehyde glue), refueling devices, and online game/advertising services[149](index=149&type=chunk) Results of Operations Comparison (Three Months Ended June 30) | (In Thousands of USD) | 2022 | 2021 | Change ($ Thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net revenues | 15,544 | 4,876 | 10,668 | 219% | | Gross profit | 742 | 290 | 452 | 156% | | Operating (loss) | (1,493) | (1,111) | (382) | 34% | | Net (loss) | (1,495) | (1,167) | (328) | 28% | Results of Operations Comparison (Six Months Ended June 30) | (In Thousands of USD) | 2022 | 2021 | Change ($ Thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net revenues | 27,524 | 7,113 | 20,411 | 287% | | Gross profit | 1,905 | 495 | 1,410 | 285% | | Operating (loss) | (2,592) | (2,693) | 101 | (4)% | | Net (loss) | (2,756) | (2,659) | (97) | 4% | - As of June 30, 2022, the company had cash and cash equivalents (including restricted cash) of **$0.38 million**, down from **$1.13 million** at the end of 2021[164](index=164&type=chunk) - The debt-to-assets ratio improved slightly from **40.41%** to **37.28%**[164](index=164&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=ITEM%203%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company indicated this section is not applicable for the current reporting period - No quantitative and qualitative disclosures about market risk were provided, as the company deemed it not applicable[173](index=173&type=chunk) [Controls and Procedures](index=37&type=section&id=ITEM%204%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls were ineffective as of June 30, 2022, but financial statements are fairly presented - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were not effective as of June 30, 2022[174](index=174&type=chunk) - Despite the ineffective controls, management believes the financial statements in this Form 10-Q fairly present the company's financial position, results of operations, and cash flows in all material respects[175](index=175&type=chunk) - There were no changes in internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[177](index=177&type=chunk) [PART II - OTHER INFORMATION](index=38&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=38&type=section&id=ITEM%201%20LEGAL%20PROCEEDINGS) The company's subsidiary is a defendant in a lawsuit, resulting in a temporary freeze of its cash - A lawsuit has been filed by Wuxi Suxin Natural Gas Utilization Co., Ltd. against defendants including the company's subsidiary, Anhui Ansheng Petrochemical Equipment Co., Ltd[178](index=178&type=chunk) - Due to the lawsuit, Anhui Ansheng's available cash of **$79,044** was temporarily frozen by the court[178](index=178&type=chunk) [Risk Factors](index=38&type=section&id=ITEM%201A%20RISK%20FACTORS) No material changes to previously disclosed risk factors were reported in this Quarterly Report - As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in the Company's registration statement Form S3/A as filed with the SEC on April 25, 2022[179](index=179&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=ITEM%202%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company conducted unregistered equity sales, including a $7 million private placement and using proceeds for working capital - On January 13, 2022, the company sold **7 million** shares of common stock for **$7 million** ($1.00 per share) in a private placement[180](index=180&type=chunk) - On April 8, 2022, the company issued **7.5 million** shares of common stock to acquire 100% of Allinyson Ltd. in a share exchange agreement[181](index=181&type=chunk) - The proceeds from the private placement are intended to be used as working capital for the operation of subsidiaries and VIEs[182](index=182&type=chunk) [Defaults Upon Senior Securities](index=38&type=section&id=ITEM%203%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reports that this item is not applicable - Not applicable[182](index=182&type=chunk) [Mine Safety Disclosures](index=38&type=section&id=ITEM%204%20MINE%20SAFETY%20DISCLOSURES) The company reports that this item is not applicable - Not applicable[182](index=182&type=chunk) [Other Information](index=38&type=section&id=ITEM%205%20OTHER%20INFORMATION) No other information was disclosed for this reporting period - None[182](index=182&type=chunk) [Exhibits](index=39&type=section&id=ITEM%206%20EXHIBITS) This section lists exhibits filed, including certifications from executive officers and Inline XBRL documents List of Exhibits | Exhibit No. | Description | | :--- | :--- | | 31.1 | Certification of Principal Executive Officer (Section 302) | | 31.2 | Certification of Principal Financial Officer (Section 302) | | 32.1 | Certification of Principal Executive Officer (Section 906) | | 32.2 | Certification of Principal Financial Officer (Section 906) | | 101.INS | Inline XBRL Instance Document | | 101.SCH | Inline XBRL Taxonomy Extension Schema Document | | 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | | 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | | 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | 104 | Cover Page Interactive Data File | [Signatures](index=40&type=section&id=SIGNATURES) The report was duly signed on August 12, 2022, by the Chief Executive Officer and Chief Financial Officer - The report was duly signed on August 12, 2022, by Bin Zhou, Chief Executive Officer and Chairman, and Lili Hu, Chief Financial Officer[186](index=186&type=chunk)