This Quarterly Report on Form 10-Q (the "Form 10-Q") contains "forward-looking statements," within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Exchange Act. Forward-looking statements can be identified by the use of forward-looking terminology, such as "estimates," "projects," "plans," "believes," "expects," "anticipates," "intends," or the negative thereof or other variations thereon, or by discussions of strategy that involve risks and uncertainties These statements reflect management's current beliefs and are based on information now available to it. Accordingly, these statements are subject to certain risks, uncertainties and contingencies that could cause the Company's actual results, performance or achievements in 2018 and beyond to differ materially from those expressed in, or implied by, such statements. Such statements, include, but are not limited to, statements contained in this Form 10-Q relating to the Company's business, financial performance, business strategy, recently announced transactions and capital outlook. Important factors that could cause actual results to differ materially from those in the forward-looking statements include: a continued decline in general economic conditions nationally and internationally; decreased demand for our products and services; market acceptance of our products; the impact of any litigation or infringement actions brought against us; competition from other providers and products; the inability to raise capital to fund continuing operations; changes in government regulation; the ability to complete customer transactions, and other factors relating to our industry, our operations and results of operations and any businesses that may be acquired by us. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned. Readers of this Form 10-Q should not place undue reliance on any forward-looking statements. Except as required by federal securities laws, the Company undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties.
You should read the following discussion and analysis of the financial condition and results of operations of the Company together with the financial statements and the related notes presented in Item 1 of this Form 10-Q.
1. Consolidated revenues are generated from business activities as follows:
1.1. The Organic fertilizer of HSA
From
So from
1.2 Cattle farms (MEIJI) & (JHMC)
From
So from
1.3 Plantation of (JHST)
From
So from
1
1.4
1.5
The project developments (or Technology engineering consulting and services) works are carried out by CA on aquaculture related projects and by SIAF and MEIJI on non-aquaculture and agriculture projects:
Back Ground and history
A summary of each business division and operations is described below:
Businesses Division:
? Fishery Division refers to the operations of Capital Award Inc. ("Capital
Award" or "CA") covering its engineering, technology and consulting service
management of fishery farms, technology transfers and seafood sales and
marketing, where;
Capital Award generates revenues from providing engineering consulting services
as turnkey contractors to owners and developers of fishery projects that are
being designed and engineered into turnkey contracts by Capital Award in
(A). Engineering and Technology Services; via Consulting and Service Contracts
("CSC's") for the development, construction, and supply of plant and equipment,
and management of fishery (and prawn or shrimp) farms and related business
operations. From
(B). Seafood Sales from CA's projected farms; became a discontinued segment of
operations from
? Corporate & Others Division refers to the trading segment of business operations of the Group named internally under corporate division ofSino Agro Food, Inc. , including import/export business and consulting and service operations provided to projects that are not included in the above categories, and not limited to corporate affairs. Over the years up until end of fiscal year 2019 the corporate division imported mainly live seafood fromSouth Africa countries,Vietnam ,Thailand , Russian and other nearby countries and frozen beef fromAustralia andSouth America countries; however it is due to the interruptions and adverse impacts caused by the Pandemic COVID-19 made it impossible and unprofitable to continue the imports of live seafood, and the poor political relationship betweenChina andAustralia in 2020 induced high risks on the imports of Australian beef. The Corporate's trading division based on standalone figures ended up with a loss of over$1.6 million and$ 0 as at 31.12 2020 and30.09.2021 respectively.
Leasing and subcontracting of operations:
Over the years, there has been significant capital expenditures (CPE) and working capital (WC) required for and employed on the developments, expansion and operations of the minor operational activities that we managed to fund while our two core businesses (in the Cattle and beef of SJAP and the Fishery of CA) were generating sufficient cash flows and incomes, however after the collapse of the SJAP's business from 2016 and the poor performances of the Mega farms from 2017 ("Crises") for reasons mentioned in the earlier
chapters and the previous Ks and Qs reports, the Company is no longer in the
position to support and to finance the growth of these minor operational
businesses in the way as they were before the Crises, therefore in order that
capital spending could be kept within an affordable level, the Company decided
to lease and sub-contract the following operations to their respective
operational managements from
? The operation ofHunan Shenghua A Power Agriculture Co. Ltd. ("HSA") is in manufacturing and sales of organic fertilizer. From1st October 2019 the Company contracted out its manufacturing and sales of organic fertilizer to its operational management; as such income of HSA is derived mainly from said management contract. ? Plantation Division refers to the operations of Jiangmen CityHeng Sheng Tai Agriculture Development Co. Ltd. ("JHST") in theHU Plantation business where dragon fruit flowers (dried and fresh), crops of vegetables and immortal vegetables (dried) are sold to wholesale and retail markets. JHST's financial statements are consolidated into the financial statements ofMacau EIJI Company Ltd. ("MEIJI") as one entity. From1st October 2019 the Company contracted out its plantation operation to its operational management; as such income of JHST is derived mainly from said management contract. 2 ? Cattle Farm Division refers to the operations ofCattle Farm 1 under JiangmenCity Hang Mei Cattle Farm Development Co. Ltd ("JHMC") where cattle are sold live to third party livestock wholesalers who sell them mainly toGuangzhou andBeijing livestock wholesale markets. The financial statements of JHMC are consolidated into MEIJI as one entity along with MEIJI's operation in the consulting and service for development of other cattle farms (e.g.,Cattle Farm 2) or related projects. From1st October 2019 the Company contracted out its cattle operation to its operational management; as such incomes of JHMC are derived mainly from said management contract.
Investments in equity investees:
SJAP: Up until
TWL: Up until
Somehow, the extremely poor operational performances of its
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