Management's Discussion and Analysis of Financial Condition and Results of Operations





The following management's discussion and analysis should be read in conjunction
with the Company's Consolidated Financial Statements and Notes thereto contained
at the end of this Annual Report. Some of the statements contained in the
following discussion of our financial condition and results of operations refer
to future expectations or include other "forward-looking" information. Those
statements are subject to known and unknown risks, uncertainties and other
factors that could cause the actual results to differ materially from those
contemplated, including, but not limited to, those discussed in Part I, Item 1A
of this report under the heading "Risk Factors," which are incorporated herein
by reference. See "Special Note regarding Forward-Looking Statements" included
in this Annual Report for a discussion of factors to be considered when
evaluating forward-looking information detailed below. These factors could cause
our actual results to differ materially from the forward-looking statements.



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Impact of COVID-19



In early January of 2020, a novel coronavirus ("COVID-19") outbreak took place
in Wuhan, China. Subsequently, it has spread rapidly to Asia and other parts of
the world. The COVID-19 outbreak has resulted in widespread economic disruptions
in China, as well as stringent government measures by the Chinese government to
contain its transmissions including quarantines, travel restrictions, and
temporary closures of non-essential businesses in China and elsewhere.



At the end of 2020, the COVID-19 outbreak in China appears to be generally under
control and business activities have recovered on the whole. The outbreak became
more stabilized in China and other regions in the world. However, sporadic cases
continue to be found during the first half year of 2021 in China. In the second
quarter of 2021, a new Delta variant of COVID-19 had been found in certain
cities in China, which cause another outbreak, thus increasing risks and
possible further disruption to businesses. Therefore, certain of our consulting
services were suspended from April 2021 to August 2021. We have resumed these
consulting businesses from August 2021 in order to maintain diversified services
for our customers.




As of December 31, 2022, the COVID-19 pandemic continues to be dynamic, and
near-term challenges across the economy remain. Although vaccines are now being
distributed and administered across many parts of the world, new variants of the
virus have emerged and may continue to emerge that have shown to be more
contagious. We continue to adhere to applicable governmental and commercial
restrictions and to work to mitigate the impact of COVID-19 on our employees,
customers, communities, liquidity and financial position. The extent to which
the COVID-19 outbreak may impact the company's business, operations and
financial results from this point forward will depend on numerous evolving
factors that the company cannot accurately predict. Those factors include the
following: the duration and scope of the pandemic; governmental, business and
individuals' actions in response to the pandemic in the future; and any other
further development of the COVID-19 outbreak.



Substantially all of our revenues and operations are concentrated in China.
Consequently, our results of operations and financial performances have been
affected since 2020 and into 2022. Due to the government measures taken to
contain COVID-19, the offline activities of our PRC subsidiary were restricted
from late January to May 2020, resulting in cancellations or postponements of
the marketing efforts of our customers. In addition, due to widespread economic
disruptions during the outbreak, demand for our consulting services by small and
medium-sized enterprises were also adversely affected. Specifically, as a result
of government mandated closures of non-essential business in China, many of our
customers' business were suspended while others permanently closed their
businesses, which has had an adverse impact on our business and financial
condition and has hampered our ability to generate revenue and access usual
sources of liquidity on reasonable terms.

We achieved an operating revenue of $3,507,590 and $5,637,396 for the years ended December 31, 2022 and 2021, respectively, representing a decrease of approximately 37.8% from the prior year. COVID-19 has and may continue to adversely affect our financial and business performance.





Overview



Prior to the Transaction on May 15, 2019, we were inactive from 2007 to 2019,
and did not have any active business activities. In May of 2019, the new major
shareholders rejuvenated marketing consultancy services and e-commerce business
in China to the Company and its subsidiaries. EUBG is a holding company for its
operating subsidiaries. Our PRC subsidiary's operations in China are the primary
operations of the Company. While substantially all of our operations are located
in China, we currently do not, and we do not plan to use variable interest
entities to execute our business plan or to conduct our China-based operations.
However, because our operations are in China and our major shareholders are
located in China, there is always a risk that the Chinese government may in the
future seek to affect operations of any company with any level of operations in
China, including its ability to offer securities to investors, list its
securities on a U.S. or other foreign exchange, conduct its business or accept
foreign investment. If any or all of the foregoing were to occur, it could, in
turn, result in a material change in the Company's operations and/or the value
of its common stock and/or significantly limit or completely hinder its ability
to offer or continue to offer securities to investors and cause the value of
such securities to significantly decline or be worthless.



                                       61





On March 22, 2022, the PRC subsidiary learned that Beijing Jade Bird Culture and
Art Research Institute ("Jade Bird"), the KOL agency that the PRC subsidiary
works with to coordinate digital training related service, suspended its service
after receiving a notice from China National Personal Talent Training Network
("CNPTTN"), a PRC regulatory agency for the talent training, that until further
notice CNPTTN has suspended all recruitment services using CNPTTN's name from
January 30, 2022. As a result of CNPTTN's suspension, the PRC subsidiary has
also suspended its digital training related services with Jade Bird until
further notice. Jade Bird is an authorized licensee of CNPTTN. For the years
ended December 31, 2022 and 2021, the digital training related services with
Jade Bird represented 7.5% and 20.9% of our total revenue, or $262,799 and
$1,176,515, respectively.

Comparison of Results of Operations of the Years ended December 31, 2022 and 2021

The following table sets forth key components of our results of operations for the years ended December 31, 2022 and 2021:





                                          2022             2021
Revenue                               $  3,507,590     $  5,637,396
Cost of revenue                           (663,486 )     (1,827,082 )
Gross profit                             2,844,104        3,810,314
Selling expenses                           (40,165 )       (253,958 )
General and administrative expenses     (1,683,575 )     (1,668,432 )
Total other (expenses) income, net         (14,311 )        187,392
Income before income tax                 1,106,053        2,075,316
Income tax expense                        (701,435 )       (988,916 )
Net income                            $    404,618     $  1,086,400




Revenue and cost of revenue




During the year ended December 31, 2022, we generated revenue of $3,507,590
compared to $5,637,396 for the year ended December 31, 2021, representing a
decrease of $2,129,806 or 37.8% as compared with the prior year. The decrease
was mainly due to our consultancy services income, generated from clients who
engaged in online courses business, dropped by $2,701,529 as compared with last
year. This was because the end customers became more patience and cautious in
choosing online courses. Besides, we suspended the digital training services
with Jade Bird since March 22, 2022, resulted a drop of revenue by $913,716 or
77.7% in 2022. We continued to seek different business opportunities to
stabilize our income streams. In 2022, we started a new income stream, provides
consultancy services to a customer who engaged in live streaming business, which
contributed revenue of $1,252,854 during the year ended December 31, 2022.
However, this new income stream only compensated a part of the revenue reduction
in current year.




Cost of revenue was $663,486 for the year ended December 31, 2022 compared to
$1,827,082 for the year ended December 31, 2021, representing a decrease of
$1,163,596 or 63.7% as compared with last year. The decrease of cost of revenue
is mainly due to 1) direct operation costs of the digital training related
services dropped by $755,638 or 79% as compared with the prior year, which was
generally aligned with the drop of digital training related services of 77.7%;
2) direct staff cost dropped by $407, 958 or 46.6% as compared with the prior
year because certain senior staff were reassigned to focus on business
management.



As a result of the above, the gross profit was $2,844,104 for the year ended
December 31, 2022 compared to $3,810,314 for the year ended December 31, 2021,
representing a decreased of $966,210 or 25.4% as compared with the prior year.



                                       62





Selling expenses



During the year ended December 31, 2022, we incurred $40,165 selling expenses
compared to $253,958 for the year ended December 31, 2021, representing a
decrease of $213,793 or 84.2% as compared with the prior year. The decrease of
selling expenses was mainly due to the tightening of entertainment policies
during the year and the staff costs incurred in selling activities were dropped
by $134,696 or 88.9% for the year ended December 31, 2022.

General and administrative expenses


During the year ended December 31, 2022, we incurred $1,683,575 general and
administrative expenses compared to $1,668,432 for the year ended December 31,
2021, representing a slight increase of $15,143 or 0.9% as compared with the
prior year. Our general and administrative expenses consisted mainly of audit
fees, professional fees, payroll expenses and consultancy fees.

Total other (expense) income, net


During the year ended December 31, 2022, we incurred net other expenses of
$14,311 compared to net other income $187,392 for the year ended December 31,
2021. The difference of $201,703 was mainly due to exchange loss of $175,810
resulting from the exchange rate appreciation of HKD against RMB for the year
ended December 31, 2022. Our net other (expenses) income mainly consisted of
bank interest income, exchange rate differences and certain sundry incomes.




Income tax expense




During the year ended December 31, 2022, we incurred income tax expense of
$701,435 compared to $988,916 for the year ended December 31, 2021, representing
a decrease of $287,481 or 29.1% as compared with the prior year. The income tax
expenses were charged in China and Hong Kong.

For the year ended December 31, 2022, our income tax expenses comprised of current tax expenses and deferred tax expenses of $540,840 and $160,595, respectively, compared to current tax expenses and deferred tax expenses of $767,877 and $221,039 for the year ended December 31, 2021.





Net income

As a result of the above, we generated a net income of $404,618 and $1,086,400 for the year ended December 31, 2022 and 2021, respectively.

Liquidity and Capital Resources





Working Capital



                                                 December 31,
                                             2022            2021
Cash and cash equivalents                 $ 7,193,591     $ 7,649,129
Total current assets                        7,501,638       7,772,994
Total assets                                7,773,604       8,201,140
Total liabilities                             889,404       1,439,526
Retained earnings (accumulated deficit)        47,215        (357,403 )
Total equity                                6,884,200       6,761,614




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Cash flow



The following table sets forth a summary of our cash flows for the years
indicated:



                                                                 Years ended December 31,
                                                                   2022             2021

Net cash (used in) generated from operating activities $ (138,894 ) $ 451,663 Net cash (used in) generated from investing activities

                (9,704 )     3,289,189
Net cash used in financing activities                                 (3,492 )        (7,566 )
Effect of exchange rate changes on cash and cash equivalents        (303,448 )        69,373
Cash and cash equivalents, beginning of year                       7,649,129       3,846,470
Cash and cash equivalents, end of year                         $   7,193,591     $ 7,649,129

Cash (used in) generated from operating activities


Net cash used in operating activities for the year ended December 31, 2022 was
$138,894, as compared to net cash generated from operating activities of
$451,663 for the year ended December 31, 2021, representing a difference of
$590,557 or 130.8% as compared with the prior year. The decrease of operating
cash flows was mainly resulted from a combination of below operating activities
changes:



Net income was $404,618 for the year ended December 31, 2022, as compared to
$1,086,400 for the year ended December 31, 2021. The decrease of net income of
$681,782 or 62.8% was mainly due to the reduction of certain performance-based
arrangement consultancy services during the year which directly reduced our
operating cash inflow.



Deferred tax adjustment was $152,190 for the year ended December 31, 2022, as
compared to $293,366 for the year ended December 31, 2021. The difference was
mainly due to our PRC subsidiary generated net profits of $1,670,194 and
$1,931,000 respectively, for the year ended December 31, 2022 and 2021; while
the PRC subsidiary only distributed dividends of $3,120,921 to our Hong Kong
subsidiary in current year, representing a decrease of $1,475,615 as compared
with prior year.




Cash outflow of trade receivables was $176,709 for the year ended December 31,
2022, as compared to cash inflow of $137,165 for the year ended December 31,
2021. The cash outflow of $176,709 for the year ended December 31, 2022 was due
to longer settlement period used by our consultancy services customers.



Cash outflow of trade payables was $109,414 for the year ended December 31, 2022
as compared to cash inflow of $115,561 for the year ended December 31, 2021. The
cash inflow of $115,561 from trade payable for the year ended December 31, 2021
was resulted from the digital training related services. However, as the digital
training related services with Jade Bird was suspended since March 2022 and all
the account payables were settled during the year ended December 31, 2022, cash
outflow of $109,414 was resulted for the year.



Cash outflow of other payables and accrued liabilities was $19,555 for the year
ended December 31, 2022, as compared to cash outflow of $220,493 for the year
ended December 31, 2021. The cash outflow for the year ended December 31, 2022
and 2021 were due to the settlement of the accrued audit fee, consultancy fee
and professional fee during the years. Larger cash outflow was resulted in the
year ended December 31, 2021 because the Company filed a registration document
during the year and settled the service fees with the professional parties.



Cash inflow of tax payables was $59,976 for the year ended December 31, 2022, as
compared to cash outflow of $563,979 for the year ended December 31, 2021. The
cash inflow of $59,976 for the year ended December 31, 2022 was mainly due to
the business reduction during the year and we provided current income tax of
$540,840, netting off with $497,678 income tax paid during the year. The cash
outflow of $563,979 for the year ended December 31, 2021 was mainly due to the
current income tax provision of $767,877, netting off with $1,326,242 income tax
paid during the prior year.



Cash outflow of contract liabilities was $204,164 for the year ended December
31, 2022 because the outstanding contract liabilities as at December 31, 2021
were all recognized as revenue during the year ended December 31, 2022. No
contract liabilities was recorded as at December 31, 2022.



                                       64





As we are continually to explore new business opportunities and new customers,
we expect to generate more cash inflows in the coming years. We continue to
monitor our level of operating expenses in order to maintain a positive cash
flow position.

Cash (used in) generated from investing activities


Net cash used in investing activities for the year ended December 31, 2022 was
$9,704 as compared net cash of $3,289,189 generated from investing activities
for the year ended December 31, 2021. The net cash used in investing activities
for the year ended December 31, 2022 was due to purchase of property, plant and
equipment. On September 29, 2022, the Company provided loans of $1,040,307 to
two independent vendors of the Company's consultancy business. As the loans were
fully repaid on October 18, 2022, the net cash (used in) generated from
investing activities was not impacted.



The net cash generated from investing activities for the year ended December 31,
2021 was mainly due to the redemption of debt products of $5,889,695 offset by
the acquisition of debt products of $2,789,855.

Cash used in financing activities


Net cash used in financing activities for the year ended December 31, 2022 was
$3,492, as compared to net cash of $7,566 used in financing activities for the
year ended December 31, 2021. The net cash used in financing activities for the
year ended December 31, 2021 was mainly due to the repayment of borrowings of
$128,656 offsetting against advance from a director of $121,090.



Future Capital Requirements



We believe that our ability to generate cash from operations are adequate to
fund working capital, capital spending and other cash needs for at least the
next 12 months. Our ability to generate adequate cash from operations in the
future, however, will depend on, among other things, our ability to successfully
implement our business strategies while continuing to tightly control our
expenses, and to manage the impact of changes to the PRC regulatory environment.
We can give no assurance that we will be able to successfully implement those
strategies and cost control initiatives, or successfully adjust to any changes
to PRC laws and regulations impacting our business. In addition, changes in our
operating plans, lower than anticipated sales, increased expenses, interest rate
increases, acquisitions or other events may cause us to seek additional debt or
equity financing in future periods. We can give no assurance that financing will
be available on acceptable terms or at all. Additional equity financing could be
dilutive to holders of the Company's common stock; debt financing, if available,
could impose additional cash payment obligations and additional covenants and
operating restrictions.



Contractual Obligations

We had the following contractual obligations and commercial commitments as of December 31, 2022:





                                        Less than
Contractual Obligations    Total         1 year         1-3 years       3-5 years       More than 5 years
Lease                       85,986          57,324          28,662               -                       -
TOTAL                     $ 85,986     $    57,324     $    28,662     $         -     $                 -

Critical Accounting Policies and Estimates


We regularly evaluate the accounting policies and estimates that we use to make
budgetary and financial statement assumptions. A complete summary of these
policies is included in the notes to our financial statements. In general,
management's estimates are based on historical experience, on information from
third party professionals, and on various other assumptions that are believed to
be reasonable under the facts and circumstances. Actual results could differ
from those estimates made by management. The discussion of our critical
accounting policies contained in Note 2 to our consolidated financial
statements, "Summary of Significant Accounting Policies," is incorporated herein
by reference.



                                       65

Recent Accounting Pronouncements

For further information on recently issued accounting pronouncements, see Note 2-Summary of Significant Accounting Policies in the accompanying notes to consolidated financial statements included herein at "Item 13, Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.

Off-Balance Sheet Arrangements

As of December 31, 2022 and 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a) (4) (ii) of Regulation S-K promulgated under the Securities Act of 1934.

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