ITEM 7.-MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
This Quarterly Report contains forward-looking statements
within the meaning of the federal securities laws. These include statements about our expectations, beliefs, intentions or strategies
for the future, which we indicate by words or phrases such as "anticipate," "expect," "intend," "plan,"
"will," "we believe," "management believes" and similar language. The forward-looking statements are based
on the current expectations of the Company and are subject to certain risks, uncertainties and assumptions, including those set forth
in the discussion under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this report.
Actual results may differ materially from results anticipated in these forward-looking statements. We base the forward-looking statements
on information currently available to us, and we assume no obligation to update them.
Investors are also advised to refer to the information
in our previous filings with the Securities and Exchange Commission (SEC), especially on Forms 10-K, 10-Q and 8-K, in which we discuss
in more detail various important factors that could cause actual results to differ from expected or historic results. It is not possible
to foresee or identify all such factors. As such, investors should not consider any list of such factors to be an exhaustive statement
of all risks and uncertainties or potentially inaccurate assumptions.
Overview
From
2018 to 2021, the Company focused in products and services that adopt IoT, cloud computing, mobile payments, Big Data, Blockchain
and AI, and other new and exciting business models that will create revolutionary products and services. 0n 20220 to 2021, the Company
has signed a total of USD 90,000 Note agreements with Sinoway International Corp. (“Sinoway”). This is in connection with
the new business venture between the Company and Sinoway relating to various technology platform development. In 2022, Sinoway has changed
its registered company name to Beneway Holdings Group. Beneway Holdings Group Ltd. is a global digital asset management platform,
creating a mega fintech new age banking platform that will not only simplify complex cross-border and local digital payments but also
create solutions for diversified payment ecosystem for all transactions end-to-end. Beneway’s core objective is to connect various
financial service providers comprising of digital wallets, electronic cards, P2P lenders, payment gateways and cross-border payments
providers who now can synergize on each other products and services targeting a much larger customer base and leveraging on the power
of economies of scale. Learn more about Beneway Holdings Group at their website www.benewaygroup.co
On
August 7, 2021, the Company has acquired 49% of the registered shares of Midas Touch Technology Co. Ltd., a digital asset management platform
registered in the U.K (company number 13088810), which was founded in 2020. The Company plans to combine the blockchain decentralized
financial DeFi technology and the Supply Chain Finance service to assist global buyers and sellers to completely eliminate capital turnover
challenges and complexities, while also providing investors with safer and more stable income. Midas Touch will implement smart contracts
that leverage digital assets for mortgages and lending in a safe, stable, fast and low-intervention risk SCF platform, allowing investors
worldwide to invest in fiat and crypto currencies EC, PSP, and its upstream and downstream supply chain using fiat and crypto currency
payments.
On
November 4, 2021, the Company signed a joint venture and partnered with Maninderpal Bhullar and Simon Eeu Yin How as directors of Beneway
(MY) Sdn. Bhd., the joint venture company. The company joins the group’s global marketing, leading a top technology team that will
enable SUIC to take full advantage of growth opportunities. Subsequently on November 21, 2021, the Company registered the joint venture
company named Beneway (MY) Sdn. Bhd. in which the company owns 35% of the shares.
The Company is working new businesses in various
fields through careful review and critical selection of new growth businesses. The Company is working to strengthen our core competencies
in high technology and blockchain related businesses, such as blockchain apps technology, fintech services, professional consultancy
for ICO’s, and other high potential critical blockchain projects.
Results of Operations
Three and Three Months ended March 31, 2022 and
2021.
Revenue
The Company recognized $86,000 and $33,000 of revenue
during the three months ended March 31, 2022 and 2021 respectively. Our revenues were generated from the I.T. management consulting services.
General and Administrative Expenses:
General and administrative expenses were $82,062 and
$20,695 for the three months ended March 31, 2022 and 2021, respectively. The increase was primarily due to professional expenses.
Interest expense
During the three months ended March 31, 2022 and 2021,
the Company had interest expense of $4,926 and $4,525 from convertible promissory note respectively.
Net income
As a result of the foregoing, the Company generated
net income of $1,135 and $9,587 for the three months ended March 31, 2022 and 2021, respectively.
Liquidity and Capital Resources
We have funded our operations to date primarily through
operations, and non-related party loans and capital contributions. Due to our net loss and negative cash flow from operating activities,
there is substantial doubt about the Company’s ability to continue as a going concern. The Company’s management recognizes
that the Company must generate sales and obtain additional financial resources to continue to develop its operations.
As of March 31, 2022, we had a working capital deficit
of $55,032. Our current assets on March 31, 2022 were $391,228 primarily consisting of cash of $38,703, loans receivable of $50,000, accounts
receivable of $322,525 and Short Term Investment - Held-For-Trading $30,000. Our current liabilities were primarily composed of convertible
promissory notes of $287,000, accrued expenses and other current liabilities of $186,855, and short term debt of $172,734.
As of March 31, 2021, we had a working capital deficit
of $58,604. Our current assets on March 31, 2021 were $223,303 primarily consisting of cash of $20,303, loans receivable of $50,000, accounts
receivable of $173,000 and Short Term Investment - Held-For-Trading $30,000. Our current liabilities were primarily composed of convertible
promissory notes of $287,000, accrued expenses and other current liabilities of 98,505, and short term debt of $10,000.
Cash Flow from Operating Activities
Net cash provided (used) in operating activities was
$10,853 during the three months ended March 31, 2022 which consisted of our net earnings of $1,135 with a decrease of accounts receivable
of $16,500 increase in other receivables $4,070, increase in interest receivables of $1,110 and a change in accrued expenses of $221.
Net cash provided (used) in operating activities
was ($14,955) during the three months ended March 31, 2021 which consisted of our net earnings of $9,587 with an increase of accounts
receivable of $23,000, increase in other receivables $4,173, increase in interest receivables of $308, and a change in accrued expenses
of $2,927.
Cash Flow from Investing
Activities
Net cash used in investing
activities totaled $2,000 for the three months ended March 31, 2022 which was spent on the fees of SUIC Beneway USA Inc.
Net cash used in investing activities totaled $0 for the three months ended March 31, 2021.
Cash Flow from Financing
Activities
Net cash provided by financing activities totaled $0 of proceeds
from non-related party loans for the three months ended March 31, 2022.
Net cash provided by financing activities totaled $10,000 of
proceeds from non-related party loans for the three months ended March 31, 2021.
Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues, expenses,
results of operations, liquidity, capital expenditures or capital resources.
Inflation
We do not believe our business and operations
have been materially affected by inflation
Critical Accounting Policies and Estimates
This discussion and analysis of our financial condition
and results of operations are based on our financial statements that have been prepared under accounting principle generally accepted
in the United States of America. The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those estimates.
A summary of significant accounting policies is included
in Note 3 to the consolidated financial statements included in this Annual Report. Of these policies, we believe that the following items
are the most critical in preparing our financial statements.
Accounts Receivable and Allowance for Doubtful
Accounts
Accounts receivable are recorded at the invoiced amount,
net of an allowance for doubtful accounts. The Company follows paragraph 310-10-50-9 of the FASB Accounting Standards Codification to
estimate the allowance for doubtful accounts. The Company performs on-going credit evaluations of its customers and adjusts credit limits
based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information;
and determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and economic conditions.
Outstanding account balances are reviewed individually
for collectability. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in
the Company’s existing accounts receivable. Bad debt expense is included in general and administrative expenses, if any. Pursuant
to paragraph 310-10-50-2 of the FASB Accounting Standards Codification account balances are charged off against the allowance after all
means of collection have been exhausted and the potential for recovery is considered remote. The Company has adopted paragraph 310-10-50-6
of the FASB Accounting Standards Codification and determine when receivables are past due or delinquent based on how recently payments
have been received.
Inventories
Inventories consists of products purchased and are
valued at the lower of cost or net realizable value. Cost is determined on the weighted average cost method. The Company reduces inventories
for the diminution of value, resulting from product obsolescence, damage or other issues affecting marketability, equal to the difference
between the cost of the inventory and its estimated net realizable value. Factors utilized in the determination of estimated net realizable
value include (i) current sales data and historical return rates, (ii) estimates of future demand, (iii) competitive pricing pressures,
(iv) new product introductions, (v) product expiration dates, and (vi) component and packaging obsolescence.
The Company evaluates its current level of inventories
considering historical sales and other factors and, based on this evaluation, classify inventory markdowns in the income statement as
a component of cost of goods sold pursuant to Paragraph 420-10-S99 of the FASB Accounting Standards Codification to adjust inventories
to net realizable value. These markdowns are estimates, which could vary significantly from actual requirements if future economic conditions,
customer demand or competition differ from expectations.
Revenue Recognition
The Company’s revenue recognition policies are
in compliance with ASC 605 (Originally issued as Staff Accounting Bulletin (SAB) 104). Revenue is recognized at the date of shipment to
customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations
of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition
are satisfied are recorded as unearned revenue. Discounts provided to customers by the Company at the time of sale are
recognized as a reduction in sales as the products are sold. Sales taxes are not recorded as a component of sales.
The Company derives its revenues from sales contracts
with customers with revenues being generated upon the shipment of merchandise. Persuasive evidence of an arrangement is demonstrated via
sales invoice or contract; product delivery is evidenced by warehouse shipping log as well as a signed acknowledgement of receipt from
the customers or a signed bill of lading from the third party trucking company and title transfers upon shipment, based on free on board
(“FOB”) warehouse terms; the sales price to the customer is fixed upon acceptance of the signed purchase order or contract
and there is no separate sales rebate, discount, or volume incentive. When the Company recognizes revenue, no provisions are made for
returns because, historically, there have been very few sales returns and adjustments that have impacted the ultimate collection of revenues.
Net sales of products represent the invoiced value
of goods, net of value added taxes (“VAT”). The Company is subject to VAT which is levied on all of the Company’s products
at the rate of 5% on the invoiced value of sales. Sales or Output VAT is borne by customers in addition to the invoiced value of sales
and Purchase or Input VAT is borne by the Company in addition to the invoiced value of purchases to the extent not refunded for export
sales.
Foreign Currency Translation
The Company follows Section 830-10-45 of the FASB
Accounting Standards Codification (“Section 830-10-45”) for foreign currency translation to translate the financial statements
of the foreign subsidiary from the functional currency, generally the local currency, into U.S. Dollars. Section 830-10-45 sets out the
guidance relating to how a reporting entity determines the functional currency of a foreign entity (including of a foreign entity in a
highly inflationary economy), re-measures the books of record (if necessary), and characterizes transaction gains and losses. the assets,
liabilities, and operations of a foreign entity shall be measured using the functional currency of that entity. An entity’s functional
currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment,
or local currency, in which an entity primarily generates and expends cash.
The functional currency of each foreign subsidiary
is determined based on management’s judgment and involves consideration of all relevant economic facts and circumstances affecting
the subsidiary. Generally, the currency in which the subsidiary transacts a majority of its transactions, including billings, financing,
payroll and other expenditures, would be considered the functional currency, but any dependency upon the parent and the nature of the
subsidiary’s operations must also be considered. If a subsidiary’s functional currency is deemed to be the local currency,
then any gain or loss associated with the translation of that subsidiary’s financial statements is included in accumulated other
comprehensive income. However, if the functional currency is deemed to be the U.S. Dollar, then any gain or loss associated with the re-measurement
of these financial statements from the local currency to the functional currency would be included in the consolidated statements of comprehensive
income (loss). If the Company disposes of foreign subsidiaries, then any cumulative translation gains or losses would be recorded into
the consolidated statements of comprehensive income (loss). If the Company determines that there has been a change in the functional currency
of a subsidiary to the U.S. Dollar, any translation gains or losses arising after the date of change would be included within the statement
of comprehensive income (loss). Based on an assessment of the factors discussed above, the management of the Company determined the relevant
subsidiaries’ local currencies to be their respective functional currencies.
