10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

or

[  ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-50559

SCIENTIFIC ENERGY INC.

(Exact name of registrant as specified in its charter)

Utah                                                                   87-0680657

(State or other jurisdiction of incorporation or organization         (I.R.S. Employer Identification No.)

27 Weldon Street, Jersey City, New Jersey             07306

(Address of principal executive offices)                  (Zip Code)

(852) 2530-2089

(Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes [X]     No [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes   [X ]    No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes [   ]     No    [X]

Securities registered pursuant to Section 12(b) of the Act:  None.

Applicable Only to Corporate Issuers

Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 114,915,852 shares of common stock, par value $0.01, as of November 12, 2019.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of September 30, 2019 (unaudited) and December 31, 2018	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2019 and 2018 (unaudited)	4
	Condensed Consolidated Statement of Stockholders’ Deficit for the Nine Months Ended September  30, 2019 (unaudited)	5
	Condensed Consolidated Statement of Stockholders’ Deficit for the Nine Months September 30, 2018 (unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018 (unaudited)	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Conditions and Results of Operations	12
Item 3.	Quantitative and  Qualitative Disclosure about Market Risk	12
Item 4.	Controls and Procedures	12
PART II – OTHER INFORMATION
Item 6.	Exhibits	13
SIGNATURES		13

Item 1.    Financial Statements

SCIENTIFIC ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
	September 30, 2019	December 31, 2018
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$          86,024	$         153,041
Prepaid expense and other receivables	2,800	7,087
Total current assets	88,824	160,128
Non-current assets:
Property, plant and equipment, net	2,079	1,263
Right to use assets, net	34,683	-
Deposits	20,182	20,264
Total non-current assets	56,944	21,527
Total assets	$        145,768	$         181,655
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$    1,156,727	$      1,154,007
Lease liability	34,683	-
Note payable	223,000	100,000
Stock subscription payables	565,599	347,000
Total current liabilities	1,980,009	1,601,007
Stockholders' deficit:
Preferred stock: par value $0.01 per share; 25,000,000 shares authorized, none issued and outstanding	-	-
Common stock: par value $0.01 per share, 500,000,000 shares authorized, 114,915,852 shares issued and outstanding as of September 30, 2019 and December 31, 2018	1,149,159	1,149,159
Additional paid in capital	5,734,030	5,734,030
Accumulated deficit	(8,708,570)	(8,295,259)
Accumulated other comprehensive loss	(8,860)	(7,282)
Total stockholders' deficit	(1,834,241)	(1,419,352)
Total liabilities and stockholders' deficit	$        145,768	$         181,655
See the accompanying notes to the unaudited condensed consolidated financial statements

SCIENTIFIC ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
	Three Months ended September 30, 2019	Three Months ended September 30, 2018	Nine Months ended September 30, 2019	Nine Months ended September 30, 2018
REVENUE	$                       -	$                     -	$                           -	$                           -
COST OF REVENUE	-	-	-	-
GROSS PROFIT	-	-	-	-
OPERATING EXPENSES:
Selling, general and administrative expenses	132,555	87,287	407,695	220,704
Depreciation	245	133	530	199
Total operating expenses	132,800	87,420	408,225	220,903
NET LOSS FROM OPERATIONS	(132,800)	(87,420)	(408,225)	(220,903)
Other income (expense):
Interest (expense) income	(2,614)	(435)	(5,086)	(725)
Net loss before provision for income taxes	(135,414)	(87,855)	(413,311)	(221,628)
Income taxes	-	-	-	-
NET LOSS	$             (135,414)	$          (87,855)	$            (413,311)	$             (221,628)
OTHER COMPREHENIVE LOSS:
Foreign translation (loss) gain	(457)	384	(1,578)	(581)
Comprehensive loss	$             (135,871)	$          (87,471)	$            (414,889)	$             (222,209)
Net loss per common share, basic and diluted	$               (0.001)	$            (0.001)	$                (0.004)	$                 (0.002)
Weighted average common shares outstanding, basic and diluted	114,915,852	114,915,852	114,915,852	114,915,852
See the accompanying notes to the unaudited condensed consolidated financial statements

SCIENTIFIC ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
NINE MONTHS ENDED SEPTEMBER 30, 2019
	Common stock
	Shares	Amount	Additional Paid- in Capital	Accumulated Deficit	Other Comprehensive Income (loss)	Total
Balance, December 31, 2018	114,915,852	$1,149,159	$       5,734,030	$ (8,295,259)	$             (7,282)	$      (1,419,352)
Foreign currency transaction loss	-	-	-	-	(215)	(215)
Net loss	-	-	-	(132,552)	-	(132,552)
Balance, March 31, 2019 (unaudited)	114,915,852	1,149,159	5,734,030	(8,427,811)	(7,497)	(1,552,119)
Foreign currency transaction loss	-	-	-	-	(906)	(906)
Net loss	-	-	-	(145,345)	-	(145,345)
Balance, June 30, 2019 (unaudited)	114,915,852	1,149,159	5,734,030	(8,573,156)	(8,403)	(1,698,370)
Foreign currency transaction loss	-	-	-	-	(457)	(457)
Net loss	-	-	-	(135,414)	-	(135,414)
Balance, September 30, 2019 (unaudited)	114,915,852	$ 1,149,159	$        5,734,030	$  (8,708,570)	$              (8,860)	$       (1,834,241)
See the accompanying notes to the unaudited condensed consolidated financial statements

SCIENTIFIC ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
NINE MONTHS ENDED SEPTEMBER 30, 2018
	Common stock
	Shares	Amount	Additional Paid-in Capital	Accumulated Deficit	Other Comprehensive Income (loss)	Total
Balance, December 31, 2017	114,915,852	$1,149,159	$   5,734,030	$       (7,952,355)	$            (6,043)	$(1,075,209)
Foreign currency transaction loss	-	-	-	-	(254)	(254)
Net loss	-	-	-	(96,736)	-	(96,736)
Balance, March 31, 2018 (unaudited)	114,915,852	1,149,159	5,734,030	(8,049,091)	(6,297)	(1,172,199)
Foreign currency transaction loss	-	-	-	-	(711)	(711)
Net loss	-	-	-	(37,037)	-	(37,037)
Balance, June 30, 2018 (unaudited)	114,915,852	1,149,159	5,734,030	(8,086,128)	(7,008)	(1,209,947)
Foreign currency transaction gain	-	-	-	-	384	384
Net loss	-	-	-	(87,855)	-	(87,855)
Balance, September 30, 2018 (unaudited)	114,915,852	$ 1,149,159	$    5,734,030	$        (8,173,983)	$             (6,624)	$(1,297,418)
See the accompanying notes to the unaudited condensed consolidated financial statements

SCIENTIFIC ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	Nine months ended September 30, 2019	Nine months ended September 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$              (413,311)	$                      (221,628)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	530	199
Deposits	66	(5,600)
Prepaid expenses and other receivables	4,280	(2,425)
Accounts payable and accrued expenses	2,720	2,506
Net cash used in operating activities	(405,715)	(226,948)
CASH FLOWS FROM INVESTING ACTIVITY
Purchase of equipment	(1,346)	(1,595)
Net cash used in investing activities	(1,346)	(1,595)
CASH FLOWS FROM FINANCING ACTIVITY
Proceeds from note payable	123,000	35,000
Proceeds from subscription received	218,599	242,855
Net cash provided by financing activity	341,599	277,855
Effect of currency rate changes on cash	(1,555)	(538)
Net (decrease) increase in cash and cash equivalents	(67,017)	48,774
Cash and cash equivalents, beginning of period	153,041	54,200
Cash and cash equivalents, end of period	$                  86,024	$                        102,974
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid	$                    5,138	$                             725
Income taxes paid	$                            -	$                                 -
Non cash financing activities:
Record right to use assets upon adoption of ASC 842	$                  75,313	$                                 -
Record lease liabilities upon adoption of ASC 842	$                   75,313	$                                 -
See the accompanying notes to the unaudited condensed consolidated financial statements

SCIENTIFIC ENERGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES

Scientific Energy, Inc., (the "Company") was incorporated under the laws of the State of Utah on May 30, 2001.  Prior to August 2011, the Company was principally devoted to the buying and selling of various types and grades of graphite, such as medium- and high-carbon graphite, high-purity graphite, micro-powder graphite and expandable graphite.   In August 2011, the Company decided to engage in a business of e-commerce platform. Currently the Company is in the process of developing a website, which provides an e-commerce platform, where registered members can exchange goods and services.

On March 28, 2006, the Company set up a wholly-owned subsidiary, PDI Global Limited (“PDI”), which was incorporated in the British Virgin Islands in order to engage in a business of e-commerce platform.

In January 2008, the Company entered into a joint venture agreement with China Resources Development Group Ltd., a Hong Kong company.  Under the agreement, a joint venture company, Kabond Investments Ltd (the “JVC”), was established in Hong Kong, and the Company invested $39.6 million Hong Kong dollars (approximately $5.09 million) into the JVC for 72% of the JVC’s capital shares, and China Resources Development Group Ltd., jointly with its partner, invested $15.4 million Hong Kong dollars (approximately $1.98 million) into the JVC to receive 28% of the JVC’s capital shares.  In December 2008, all equity interest of the JVC owned by the Company was sold to a third party for $39.6 million Hong Kong dollars (approximately $5,109,743).

In January 2009, the Company through its wholly-owned subsidiary, PDI, entered into a joint venture agreement with China Resources Development Group Ltd.  Under the agreement, the Company agreed to invest $43,040,000 Hong Kong dollars (approximately $5.55 million) into a joint venture company Sinoforte Ltd. in Hong Kong (“Sinoforte”).  The Company got 80% of Sinoforte's capital shares, and China Resources invested $10,222,000 Hong Kong dollars, approximately $1,318,967, and another investor invested  $538,000 Hong Kong dollars, or approximately $69,419, into Sinoforte for 19% and 1% of Sinoforte's capital shares, respectively.  The main business of Sinoforte was trading mineral products such as graphite produced in China.  In June 2009 and September 2009, respectively, China Resources and the other minority investor cancelled their investments in Sinoforte, and the full amount of their original investments was returned.  As a result, Sinoforte became a wholly-owned subsidiary of PDI.

On February 28, 2012, the Company set up a wholly-owned subsidiary, Makeliving Ltd., which was incorporated in the Cayman Islands in order to engage in a business of e-commerce platform.

On January 23, 2018, the Company entered into an agreement with Cityhill Limited, a wholly owned subsidiary of South Sea Petroleum Holdings Limited, a Hong Kong listed public company, pursuant to which parties agreed to establish a joint venture (the “Joint Venture”).  Each party owns 50% equity interest in the Joint Venture respectively.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying audited consolidated financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) have been made that are necessary to present fairly the financial position, and the results of its operations and its cash flows. Operating results as presented are not necessarily indicative of the results to be expected for a full year.

The Company's consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not generated significant revenues since 2011 and is unlikely to generate significant earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations. The management will seek to raise funds from shareholders.

The accompanying consolidated financial statements present the financial position and the results of operations of the Company and its 100% owned subsidiaries, Makeliving, Ltd. and PDI.  PDI, in turn, is the 100% owner and consolidates Sinoforte Limited.

All significant intercompany transactions and balances have been eliminated in consolidation.

Interim Financial Statements

The following (a) condensed consolidated balance sheet as of December 31, 2018, which has been derived from audited financial statements, and (b) the unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of results that may be expected for the year ending December 31, 2019. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on April 5, 2019.

The Company recognizes revenue when: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed or determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related revenue is recorded.

The Company defers any revenue for which the product has not been delivered or services have not been rendered or are subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or services have been rendered or no refund will be required.

Revenues on the sale of products, net of estimated costs of returns and allowance, are recognized at the time products are shipped to customers, legal title has passed, and all significant contractual obligations of the Company have been satisfied. Products are generally sold on open accounts under credit terms customary to the geographic region of distribution. The Company performs ongoing credit evaluations of the customers and generally does not require collateral to secure the accounts receivable.

The Company is exploring web based e-commerce to bring buyers and sellers together recognizing revenue as commissions on closed transactions.

Segment information

ASC 280-10 establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. ASC 280-10 also establishes standards for related disclosures about products and services and geographic areas.  Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance.  All sales and substantial assets of the Company are in China. The Company applies the management approach to the identification of our reportable operating segments as provided in accordance with ASC 280-10.  The information disclosed herein materially represents all of the financial information related to the Company’s principal operating segment.

Use of Estimates

The preparation of the consolidated 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 disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Concentration of Credit Risk

The Company’s financial instruments that are exposed to a concentration of credit risk are cash and accounts receivable.  Generally, the Company’s cash and cash equivalents in interest-bearing accounts may exceed FDIC insurance limits. The financial stability of these institutions is periodically reviewed by senior management.

As of September 30, 2019 and December 31, 2018, the Company maintained $39,365 and $87,465 in foreign bank accounts not subject to FDIC coverage.

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements.

Cash and Cash Equivalents

For purposes of the statements of cash flows, cash and cash equivalents include cash on hand and demand deposits held by banks.

Comprehensive Income (Loss)

The Company adopted Accounting Standards Codification subtopic 220-10, Comprehensive Income (“ASC 220-10”) which establishes standards for the reporting and displaying of comprehensive income and its components. Comprehensive income is defined as the change in equity of a business during a period from transactions and other events and circumstances from non-owners sources.  It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. ASC 220-10 requires other comprehensive income (loss) to include foreign currency translation adjustments.

Foreign Currency Translation

The Company translates the foreign currency consolidated financial statements into US Dollars (“USD”) using the year or reporting period-end or average exchange rates in accordance with the requirements of Accounting Standards Codification subtopic 830-10, Foreign Currency Matters (“ASC 830-10”).  Assets and liabilities of these subsidiaries were translated at exchange rates as of the balance sheet date.  Revenues and expenses are translated at average rates in effect for the periods presented.

The consolidated financial statements were presented in US Dollars except as other specified.

The cumulative translation adjustment is included in the accumulated other comprehensive gain (loss) within stockholders’ equity (deficit).  Foreign currency transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the consolidated results of operations.

The exchange rates used to translate amounts in HKD into US Dollars for the purposes of preparing the consolidated financial statements were as follows:

	September 30, 2019	December 31, 2018
Exchange rate on balance sheet dates
USD : HKD exchange rate	7.8391	7.8307
	Nine Months ended September 30, 2019	Nine Months ended September 30, 2018
Average exchange rate for the period
USD : HKD exchange rate	7.8384	7.8405

Property, plant and equipment

The estimated useful lives of property, plant and equipment are as follows:
Office equipment	3 years
Furniture and fixtures	3 years
Vehicles	4 years

The Company evaluates the carrying value of items of property, plant and equipment to be held and used whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  The carrying value of an item of property, plant and equipment is considered impaired when the projected undiscounted future cash flows related

to the asset are less than its carrying value.  The Company measures impairment based on the amount by which the carrying value of the respective asset exceeds its fair value.  Fair value is determined primarily using the projected future cash flows discounted at a rate commensurate with the risk involved.

Fair Value Measurements

ASC Topic 820 defines fair value, establishes a framework for measuring fair value and enhances disclosure requirements for fair value measurements. This topic does not require any new fair value measurements. ASC Topic 820 defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC Topic 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 —	Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 —	Other inputs that is directly or indirectly observable in the marketplace.
Level 3 —	Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Earnings (Loss) Per Share

Earnings Per Share (‘EPS”) is computed by dividing net income available to common stockholders by the weighted average number of common stock shares outstanding during the year.  Diluted EPS is computed by dividing net income available to common stockholders by the weighted average number of common stock shares outstanding during the year plus potential dilutive instruments such as stock options and warrants.  

The effect of stock options on diluted EPS is determined through the application of the treasury stock method, whereby proceeds received by the Company based on assumed exercises are hypothetically used to repurchase the Company's common stock at the average market price during the period.  The Company has no stock options, warrants or other potentially dilutive instruments outstanding at September 30, 2019 and December 31, 2018.

Recent Accounting Pronouncements

In February 2016, the FASB established ASC Topic 842, Leases (Topic 842), by issuing ASU No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The Company adopted the new standard on January 1, 2019.

The new standard provides a number of optional practical expedients in transition. The Company has elected the ‘package of practical expedients’, which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter is not applicable to the Company.

The new standard had a material effect on the Company’s financial statements. The most significant effects of adoption relate to (1) the recognition of new ROU assets and lease liabilities on its balance sheet for real estate operating leases; and (2) providing significant new disclosures about its leasing activities.

Upon adoption, the Company recognized additional operating lease liabilities of approximately $95,000 based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The Company also recognized corresponding ROU assets of approximately $95,000.

The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. Beginning in 2019, the Company changed to its disclosed lease recognition policies and practices, as well as to other related financial statement disclosures due to the adoption of this standard. See Note 5.

The Company has considered all other new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information.

 NOTE 3 – GOING CONCERN

As shown in the accompanying consolidated financial statements, the Company has generated a net loss of $413,311 and an accumulated deficit of $8,708,570 as of September 30, 2019. The Company also experienced insufficient cash flows from operations and will be required continuous financial support from the shareholders. The Company will need to raise capital to fund its operations until it is able to generate sufficient revenue to support the future development. Moreover, the Company may be continuously raising capital through the sale of debt and equity securities.

The Company’s ability to achieve these objectives cannot be determined at this stage. If the Company is unsuccessful in its endeavors, it may be forced to cease operations. These consolidated financial statements do not include any adjustments that might result from this uncertainty which may include adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

These factors have raised substantial doubt about the Company’s ability to continue as a going concern. There can be no assurances that the Company will be able to obtain adequate financing or achieve profitability. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 4 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment as of September 30, 2019 and December 31, 2018 is summarized as follows:

Schedule of Property, Plant and Equipment

	September 30, 2019			December 31, 2018
		(unaudited)
Office furniture and  fixtures	$	675		$	676
Office equipment		9,930			8,588
Vehicles		163,465			163,641
Less:  accumulated depreciation		(171,991	)		(171,642	)
Property, plant and equipment, net	$	2,079		$	1,263

Depreciation expense for the three and nine months ended September 30, 2019 was $245 and $530; and for the three and nine months ended September 30, 2018 was $133 and $199, respectively.

NOTE 5 – RIGHT TO USE ASSETS AND LEASE LIABILITY

Effective June 1, 2018, the Company entered into a two-year lease for approximately 250 square feet in New York City, New York, expiring May 31, 2020 with monthly payments of $2,800 per month.  In addition, the Company entered into a two-year lease for office space of approximately 770 square feet in Hong Kong, expiring January 10, 2020, with monthly payments of approximately $4,371 per month. The Company has an option to extend the leases for an additional (option) terms.

In adopting ASC Topic 842, Leases (Topic 842), the Company has elected the ‘package of practical expedients’, which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter is not applicable to the Company.  In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 month or less.  In determining the length of the lease term to its long term lease, the Company determined it did not have an option to extend either lease.  At lease commencement dates, the Company estimated the lease liability and the right of use assets at present value using the Company’s estimated incremental borrowing rate of 8% and determined the initial present value, at inception, of $159,616.  On January 1, 2019, upon adoption of ASC Topic 842, the Company recorded right to use assets (net) of $95,111 and lease liability of $95,111.

Right to use assets is summarized below:

	September 30, 2019
New York	$	62,322
Hong Kong		97,291
Subtotal		159,613
Less accumulated depreciation		(124,930	)
Right to use assets, net	$	34,683

During the nine months ended September 30, 2019 and 2018, the Company recorded $54,932 and $39,088 as lease expense to current period operations.

Lease liability is summarized below:

	September 30, 2019
New York	$	21,743
Hong Kong		12,940
Total lease liability		34,683
Less: short term portion		(34,683	)
Long term portion	$	-

Maturity analysis under these lease agreements are as follows:

Nine months ended December 31, 2019	$	21,513
Year ended December 31, 2020		14,000
Total		35,513
Less:  Present value discount		(830	)
Lease liability	$	34,683

Lease expense for the three months ended September 30, 2019 was comprised of the following:

Operating lease expense	$	16,361
Short-term lease expense		1,959
	$	18,320

Lease expense for the nine months ended September 30, 2019 was comprised of the following:

Operating lease expense	$	49,082
Short-term lease expense		5,850
	$	54,932

NOTE 6 – NOTE PAYABLE

In May 2018, the Company issued an unsecured note payable for $35,000 bearing interest at 5.0% per annum, payable monthly and due on July 1, 2019.  The Company entered into an Extension Agreement in order to extend the due date of the note payable for all outstanding principal and accrued and unpaid interest due to November 18, 2020.

In November 2018, the Company issued an unsecured note payable for $65,000 bearing interest at 5.0% per annum, payable monthly and due on November 18, 2020.  

In July 2019, the Company issued an unsecured note payable for $123,000 bearing interest at 5.0% per annum, payable monthly and due on July 9, 2021.  

The above accrued interests are included in accrued expenses and payable on the maturity date.

NOTE 7 – STOCK SUBCRIPTION PAYABLES

During the nine months ended September 30, 2019, the Company received deposits of $218,599 (HK$1,716,000) from non-related parties with intentions to purchase the Company’s common stock.  However, the transactions have not yet completed and therefore have been classified outside of equity for financial statement presentation. The deposits received are non-interest bearing and due on demand, if the transaction does not consummate.

NOTE 8 – CAPITAL STOCK

The Company is authorized to issue 500,000,000 shares of common stock, $0.01 par value, and 25,000,000 shares of preferred stock, $0.01 par value.  As of September 30, 2019, and December 31, 2018, there were 114,915,852 shares of the Company’s common stock issued and outstanding, and none of the preferred shares were issued and outstanding.

On June 8, 2017, the Company issued 20,000,000 shares to Aspect Group Limited for net proceeds of $200,000.

As of September 30, 2019, Kelton Capital Group Ltd. owned 31,190,500 shares or 27.2% of the Company’s common stock, and Aspect Group Limited owned 20,000,000 shares, or 17.4% of the Company’s common stock. Other than Kelton Capital Group Ltd and Aspect Group Ltd, no person owns 5% or more of the Company’s issued and outstanding shares.

NOTE 9 – LOSS PER SHARE

The following table sets forth the computation of basic and diluted loss per common share for the three and nine months ended September 30, 2019 and 2018, respectively:

	Three Months Ended September 30, 2019		Three Months Ended September 30, 2018		Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
Numerator-basic and diluted
Net loss	$	(135,414)	$	(87,855)	$	(413,311)	$	(221,628)
Denominator
Weighted average number of common shares outstanding-basic and diluted	114,915,852		114,915,852		114,915,852		114,915,852
Loss per common share - basic and diluted	$	(0.001)	$	(0.001)	$	(0.004)	$	(0.002)

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Legal proceedings

As of September 30, 2019, the Company is not aware of any material outstanding claim and litigation against them.

NOTE 11 - SUBSEQUENT EVENTS

In accordance with ASC 855, “Subsequent Events,” the Company has evaluated subsequent events through the date of filing.  No material subsequent events were noted.

Item 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains certain forward-looking statements that involve risks and uncertainties.  We use words such as "anticipate," "believe," "expect," "future," "intend," "plan," and similar expressions to identify forward-looking statements. These statements are only predictions.  Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  You should not place undue reliance on these forward-looking statements, which apply only as of the date of this report.  Our actual results could differ materially from those anticipated in these forward-looking statements.

Overview

The Company conducts business primarily through its wholly owned subsidiary Sinoforte Ltd., a Hong Kong corporation.

Prior to August 2011, the Company operated primarily as a merchant, buying and selling various type and grades of graphite, such as medium- and high-carbon graphite, high-purity graphite, micro-powder graphite and expandable graphite. As a merchant, the Company acted as a reseller. It purchased graphite products in bulk, primarily from graphite producers, and resold them, either in bulk or in smaller quantities (in either case, without further processing), to various small and mid-sized customers.    

In August 2011, the Company started to engage in a business of e-commerce platform.  Currently the Company is in the process of developing a website, “Makeliving.com” ("Makeliving"), which provides an e-commerce platform, where registered members can exchange goods and services.

Makeliving will act both as a platform and as a conduit between those (individuals or companies) who desire to acquire goods and services and those (individuals or companies) who desire to offer goods and services.  Makeliving plans to charge a certain percentage fee for the transactions.  However, no revenues have been generated.  The website is now temporarily under maintenance. At the same time, the Company is considering new business models.

On January 23, 2018, the Company entered into an agreement with Cityhill Limited, a wholly owned subsidiary of South Sea Petroleum Holdings Limited, a Hong Kong listed public company, pursuant to which parties agreed to establish a joint venture (the “Joint Venture”). Each party owns 50% equity interest in the Joint Venture respectively.

The Venture Joint, with the support of blockchain technology, is to provide global trading service of physical gold for global customers. The parties contribute their respective experiences in blockchain technology and marketing. The Company will assist the Joint Venture in exploring the North America and Europe markets, while Cityhill will focus on the Asian markets.

Results of Operations

For the Three Months Ended September 30, 2019 Compared to the Three Months Ended September 30, 2018

Sales

For the three months ended September 30, 2019 and 2018, the Company generated no sales.  

Operating expenses

For the three months ended September 30, 2019 and 2018, the Company’s selling, general and administrative expenses were $132,800 compared to $87,420 for the same period of the previous year.  The increase is primarily the result of higher wages paid and other costs relating to business development.

Other Income (Expense)

For the three months ended September 30, 2019, the Company had $2,614 of interest expense relating to notes payable, as compared to $435 of interest expense for the same period last year.

Net Loss

For the three months ended September 30, 2019, we had a net loss of $135,414, or $(0.001) per share, as compared to a net loss of $87,855, or $(0.001) per share, for the same period of 2018.

For the Nine Months Ended September 30, 2019 Compared to the Nine Months Ended September 30, 2018

Sales

For the nine months ended September 30, 2019 and 2018, the Company generated no sales.  

Operating expenses

For the nine months ended September 30, 2019 and 2018, the Company’s selling, general and administrative expenses were $408,225 compared to $220,903 for the same period of the previous year.  The increase is primarily the result of higher wages paid and other costs relating to business development.

Other Income (Expense)

For the nine months ended September 30, 2019, the Company had $5,086 of interest expense relating to notes payable, as compared to $725 of interest expense for the same period last year.

Net Loss

For the nine months ended September 30, 2019, we had a net loss of $413,311, or $(0.004) per share, as compared to a net loss of $221,628, or $(0.002) per share, for the same period of 2018.

Liquidity and Capital Resources

As of September 30, 2019, the Company had cash and cash equivalents of $86,024 and a working capital deficit of $1,891,185.  For the nine months ended September 30, 2019, the Company used net cash of $405,715 from its operating activities primarily from our net loss of $413,311, adjusted depreciation of $530 for our decrease in prepaid expenses of $4,280, our decrease in deposits of $66 and our increase in accrued expenses of $2,720.  By comparison, net cash used by operating activities was $226,948 for the same period of 2018.

During the nine months ended September 30, 2019 and 2018, we used net cash in investing activities of $1,346 and $1,595, to purchase equipment.

During the nine months ended September 30, 2019, financing activities was comprised of stock subscription deposit of $218,599 and proceeds from issuance of note payable of $123,000 as compared to $277,855 financing activities for the same period last year.

Until we are able to generate sufficient liquidity from operations, we intend to continue to fund operations from cash on-hand, and through private debt or equity placements of our securities. Our continued operations will depend on whether we are able to generate sufficient liquidity from operations and/or raise additional capital through such sources as equity and debt financings, collaborative and licensing agreements and strategic alliances. There can be no assurance that additional capital will become available or, if it does, that it will become available on acceptable terms, or that any additional capital we may obtain will be sufficient to meet our long-term needs. We currently have no commitments for any additional capital, both internally and externally.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Contractual Obligations

We lease our office space, approximately 250 square feet, in Jersey City, New Jersey, on a month-by-month basis. For the nine-month ended September 30, 2019, the rent was $650 per month.  We also have an office in Hong Kong, which is leased on a term of two years ending in January 2020. The space is approximately 770 square feet, and the rent is approximately $3,780 per month.

Critical Accounting Policies

In preparing the consolidated financial statements, we follow accounting principles generally accepted in the United States (“GAAP”).  GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, sales and expenses, and related disclosure of contingent assets and liabilities. We re-evaluate our estimates on an on-going basis.  Our estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances.  Actual results may differ from these estimates under different assumptions and conditions.  

We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently applied.  Our significant accounting policies are summarized in Note 1 to our consolidated financial statements.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

A smaller reporting company is not required to provide the information in this Item.

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, the Company conducted an evaluation, under the supervision and with the participation of the Company’s management including its principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")).  Based on this evaluation, the principal executive officer and principal financial officer concluded that, as of September 30, 2019, the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and that such information is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, in a manner that allows timely decisions regarding required disclosure.

Changes in Internal Controls over Financial Reporting

There was no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         None

Item 1A. Risk Factors

A smaller reporting company is not required to provide the information in this Item.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

         None

Item 3.  Defaults Upon Senior Securities

         None

Item 4.  Mine Safety Disclosures

         None

Item 5.  Other Information

         None

Item 6.  Exhibits and Reports

(a)    Exhibits:

Exhibit No.                

Title of Document

         31       Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

         32       Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101 INS       XBRL Instance Document

101SCH       XBRL Taxonomy Extension Schema Document

101 CAL      XBRL Taxonomy Extension Calculation Linkbase Document

101LAB       XBRL Taxonomy Extension Label Linkbase Document

101PRE        XBRL Taxonomy Extension Presentation Linkbase Document

101DEF        XBRL Taxonomy Extension Definition Linkbase Document.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SCIENTIFIC ENERGY, INC.

By: /s/ Stanley Chan

Stanley Chan

President and Chief Executive Officer

November 13, 2019

EX-31

Exhibit 31.1

CERTIFICATION

Pursuant to Rule 13a–14(a)/15d–14(a)

of the Securities Exchange Act, as amended.

I, Stanley Chan, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of Scientific Energy, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted  accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;   and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  November 13, 2019

/s/ Stanley Chan

Stanley Chan

Chief Executive Officer and Chief Financial Officer

(Principal Executive Officer and Principal Financial Officer)

EX-32

Exhibit 32.1

CERTIFICATION

Pursuant to 18 U.S.C. 1350, as adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Scientific Energy, Inc. (the "Company") for the quarter ended September 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Stanley Chan, the Chief Executive Officer and Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  November 13, 2019

/s/ Stanley Chan

Stanley Chan

Chief Executive Officer and Chief Financial Officer

(Principal Executive Officer and Principal Financial Officer)

XML

NOTE 5 - RIGHT TO USE ASSETS AND LEASE LIABILITY: Schedule of Lease Expenses (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Details
Operating lease expense	$ 16,361	$ 49,082
Short-term lease expense	1,959	5,850
Operating Leases, Rent Expense	$ 18,320	$ 54,932

XML

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Foreign Currency Translation: Schedule of Exchange Rates used for preparing the consolidated financial statements (Details)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Details
USD to HKD exchange rate on balance sheet date	7.8391		7.8307
Average exchange rate for the period	7.8384	7.8405

XML

NOTE 5 - RIGHT TO USE ASSETS AND LEASE LIABILITY (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018
Details
Recorded right to use assets (net)	$ 95,111	$ 95,111
Recorded lease liability	95,111	95,111
Recorded lease expense		54,932	$ 39,088
Operating lease expense	16,361	49,082
Short-term lease expense	1,959	5,850
Operating Leases, Rent Expense	$ 18,320	$ 54,932

XML

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Foreign Currency Translation (Policies)

9 Months Ended

Sep. 30, 2019

Policies

Foreign Currency Translation

Foreign Currency Translation

The Company translates the foreign currency consolidated financial statements into US Dollars (“USD”) using the year or reporting period-end or average exchange rates in accordance with the requirements of Accounting Standards Codification subtopic 830-10, Foreign Currency Matters (“ASC 830-10”).  Assets and liabilities of these subsidiaries were translated at exchange rates as of the balance sheet date.  Revenues and expenses are translated at average rates in effect for the periods presented.

The consolidated financial statements were presented in US Dollars except as other specified.

The cumulative translation adjustment is included in the accumulated other comprehensive gain (loss) within stockholders’ equity (deficit).  Foreign currency transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the consolidated results of operations.

The exchange rates used to translate amounts in HKD into US Dollars for the purposes of preparing the consolidated financial statements were as follows:

	September 30, 2019	December 31, 2018
Exchange rate on balance sheet dates
USD : HKD exchange rate	7.8391	7.8307
	Nine Months ended September 30, 2019	Nine Months ended September 30, 2018
Average exchange rate for the period
USD : HKD exchange rate	7.8384	7.8405

XML

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Use of Estimates (Policies)

9 Months Ended

Sep. 30, 2019

Policies

Use of Estimates

Use of Estimates

The preparation of the consolidated 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 disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

XML

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Recent Accounting Pronouncements (Policies)

9 Months Ended

Sep. 30, 2019

Policies

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In February 2016, the FASB established ASC Topic 842, Leases (Topic 842), by issuing ASU No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The Company adopted the new standard on January 1, 2019.

The new standard provides a number of optional practical expedients in transition. The Company has elected the ‘package of practical expedients’, which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter is not applicable to the Company.

The new standard had a material effect on the Company’s financial statements. The most significant effects of adoption relate to (1) the recognition of new ROU assets and lease liabilities on its balance sheet for real estate operating leases; and (2) providing significant new disclosures about its leasing activities.

Upon adoption, the Company recognized additional operating lease liabilities of approximately $95,000 based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The Company also recognized corresponding ROU assets of approximately $95,000.

The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. Beginning in 2019, the Company changed to its disclosed lease recognition policies and practices, as well as to other related financial statement disclosures due to the adoption of this standard. See Note 5.

The Company has considered all other new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information.

XML

NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES (Details)	9 Months Ended
	Sep. 30, 2019
Details
Entity Incorporation, State or Country Code	UT
Entity Incorporation, Date of Incorporation	May 30, 2001

XML

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Foreign Currency Translation: Schedule of Exchange Rates used for preparing the consolidated financial statements (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Schedule of Exchange Rates used for preparing the consolidated financial statements

	September 30, 2019	December 31, 2018
Exchange rate on balance sheet dates
USD : HKD exchange rate	7.8391	7.8307
	Nine Months ended September 30, 2019	Nine Months ended September 30, 2018
Average exchange rate for the period
USD : HKD exchange rate	7.8384	7.8405

XML

NOTE 5 - RIGHT TO USE ASSETS AND LEASE LIABILITY: Schedule of Lease Liability (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Schedule of Lease Liability

	September 30, 2019
New York	$	21,743
Hong Kong		12,940
Total lease liability		34,683
Less: short term portion		(34,683	)
Long term portion	$	-

XML

NOTE 11 - SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2019

Notes

NOTE 11 - SUBSEQUENT EVENTS

NOTE 11 - SUBSEQUENT EVENTS

In accordance with ASC 855, “Subsequent Events,” the Company has evaluated subsequent events through the date of filing.  No material subsequent events were noted.

XML

NOTE 7 - STOCK SUBCRIPTION PAYABLES

9 Months Ended

Sep. 30, 2019

Notes

NOTE 7 - STOCK SUBCRIPTION PAYABLES

NOTE 7 – STOCK SUBCRIPTION PAYABLES

During the nine months ended September 30, 2019, the Company received deposits of $218,599 (HK$1,716,000) from non-related parties with intentions to purchase the Company’s common stock.  However, the transactions have not yet completed and therefore have been classified outside of equity for financial statement presentation. The deposits received are non-interest bearing and due on demand, if the transaction does not consummate.

XML

NOTE 3 - GOING CONCERN

9 Months Ended

Sep. 30, 2019

Notes

NOTE 3 - GOING CONCERN

NOTE 3 – GOING CONCERN

As shown in the accompanying consolidated financial statements, the Company has generated a net loss of $413,311 and an accumulated deficit of $8,708,570 as of September 30, 2019. The Company also experienced insufficient cash flows from operations and will be required continuous financial support from the shareholders. The Company will need to raise capital to fund its operations until it is able to generate sufficient revenue to support the future development. Moreover, the Company may be continuously raising capital through the sale of debt and equity securities.

The Company’s ability to achieve these objectives cannot be determined at this stage. If the Company is unsuccessful in its endeavors, it may be forced to cease operations. These consolidated financial statements do not include any adjustments that might result from this uncertainty which may include adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

These factors have raised substantial doubt about the Company’s ability to continue as a going concern. There can be no assurances that the Company will be able to obtain adequate financing or achieve profitability. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

XML

Document and Entity Information - $ / shares		9 Months Ended
	Nov. 12, 2019	Sep. 30, 2019
Details
Registrant CIK		0001276531
Fiscal Year End		--12-31
Document Type		10-Q
Document Quarterly Report		true
Document Period End Date		Sep. 30, 2019
Document Transition Report		false
Entity File Number		000-50559
Entity Registrant Name		SCIENTIFIC ENERGY INC.
Entity Incorporation, State or Country Code		UT
Entity Tax Identification Number		87-0680657
Entity Address, Address Line One		27 Weldon Street
Entity Address, City or Town		Jersey City
Entity Address, State or Province		NJ
Entity Address, Postal Zip Code		07306
Entity Address, Address Description		Address of principal executive offices
City Area Code		852
Local Phone Number		2530-2089
Phone Fax Number Description		Registrant's telephone number, including area code
Entity Current Reporting Status		Yes
Entity Interactive Data Current		Yes
Entity Filer Category		Non-accelerated Filer
Entity Small Business		true
Entity Emerging Growth Company		false
Entity Shell Company		false
Entity Common Stock, Shares Outstanding	114,915,852
Entity Listing, Par Value Per Share	$ 0.01
Amendment Flag		false
Document Fiscal Year Focus		2019
Document Fiscal Period Focus		Q3

XML

Condensed Consolidated Statement of Stockholders' Deficit (Unaudited) - USD ($)	Common Stock	Additional Paid-in Capital	Retained Earnings	AOCI Including Portion Attributable to Noncontrolling Interest	Total
Equity Balance, Starting at Dec. 31, 2017	$ 1,149,159	$ 5,734,030	$ (7,952,355)	$ (6,043)	$ (1,075,209)
Shares Outstanding, Starting at Dec. 31, 2017	114,915,852
Foreign currency transaction gain (loss)	$ 0	0	0	(254)	(254)
Net Income (Loss)	$ 0	0	(96,736)	0	(96,736)
Shares Outstanding, Ending at Mar. 31, 2018	114,915,852
Equity Balance, Ending at Mar. 31, 2018	$ 1,149,159	5,734,030	(8,049,091)	(6,297)	(1,172,199)
Foreign currency transaction gain (loss)	0	0	0	(711)	(711)
Net Income (Loss)	$ 0	0	(37,037)	0	(37,037)
Shares Outstanding, Ending at Jun. 30, 2018	114,915,852
Equity Balance, Ending at Jun. 30, 2018	$ 1,149,159	5,734,030	(8,086,128)	(7,008)	(1,209,947)
Foreign currency transaction gain (loss)	0	0	0	384	384
Net Income (Loss)	$ 0	0	(87,855)	0	(87,855)
Shares Outstanding, Ending at Sep. 30, 2018	114,915,852
Equity Balance, Ending at Sep. 30, 2018	$ 1,149,159	5,734,030	(8,173,983)	(6,624)	(1,297,418)
Equity Balance, Starting at Dec. 31, 2018	$ 1,149,159	5,734,030	(8,295,259)	(7,282)	(1,419,352)
Shares Outstanding, Starting at Dec. 31, 2018	114,915,852
Foreign currency transaction gain (loss)	$ 0	0	0	(215)	(215)
Net Income (Loss)	$ 0	0	(132,552)	0	(132,552)
Shares Outstanding, Ending at Mar. 31, 2019	114,915,852
Equity Balance, Ending at Mar. 31, 2019	$ 1,149,159	5,734,030	(8,427,811)	(7,497)	(1,552,119)
Equity Balance, Starting at Dec. 31, 2018	$ 1,149,159	5,734,030	(8,295,259)	(7,282)	(1,419,352)
Shares Outstanding, Starting at Dec. 31, 2018	114,915,852
Net Income (Loss)			(413,311)
Shares Outstanding, Ending at Sep. 30, 2019	114,915,852
Equity Balance, Ending at Sep. 30, 2019	$ 1,149,159	5,734,030	(8,708,570)	(8,860)	(1,834,241)
Equity Balance, Starting at Mar. 31, 2019	$ 1,149,159	5,734,030	(8,427,811)	(7,497)	(1,552,119)
Shares Outstanding, Starting at Mar. 31, 2019	114,915,852
Foreign currency transaction gain (loss)	$ 0	0	0	(906)	(906)
Net Income (Loss)	$ 0	0	(145,345)	0	(145,345)
Shares Outstanding, Ending at Jun. 30, 2019	114,915,852
Equity Balance, Ending at Jun. 30, 2019	$ 1,149,159	5,734,030	(8,573,156)	(8,403)	(1,698,370)
Foreign currency transaction gain (loss)	0	0	0	(457)	(457)
Net Income (Loss)	$ 0	0	(135,414)	0	(135,414)
Shares Outstanding, Ending at Sep. 30, 2019	114,915,852
Equity Balance, Ending at Sep. 30, 2019	$ 1,149,159	$ 5,734,030	$ (8,708,570)	$ (8,860)	$ (1,834,241)

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NOTE 8 - CAPITAL STOCK (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Common Stock, Shares Authorized	500,000,000	500,000,000
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	25,000,000	25,000,000
Preferred Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares, Outstanding	114,915,852	114,915,852
Transaction 1
Sale of Stock, Transaction Date	Jun. 08, 2017
Sale of Stock, Description of Transaction	Company issued 20,000,000 shares to Aspect Group Limited
Shares, Issued	20,000,000
Stock Issued	$ 200,000

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Property, plant and equipment: Schedule of Property, plant and equipment Useful Lives (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Schedule of Property, plant and equipment Useful Lives

The estimated useful lives of property, plant and equipment are as follows:
Office equipment	3 years
Furniture and fixtures	3 years
Vehicles	4 years

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NOTE 5 - RIGHT TO USE ASSETS AND LEASE LIABILITY: Schedule of Maturity Analysis under the Lease Agreements (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Schedule of Maturity Analysis under the Lease Agreements

Nine months ended December 31, 2019	$	21,513
Year ended December 31, 2020		14,000
Total		35,513
Less:  Present value discount		(830	)
Lease liability	$	34,683

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Concentration of Credit Risk (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Details
Deposits in foreign bank accounts not subject to FDIC coverage	$ 39,365	$ 87,465

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NOTE 10 - COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2019

Notes

NOTE 10 - COMMITMENTS AND CONTINGENCIES

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Legal proceedings

As of September 30, 2019, the Company is not aware of any material outstanding claim and litigation against them.

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NOTE 6 - NOTE PAYABLE

9 Months Ended

Sep. 30, 2019

Notes

NOTE 6 - NOTE PAYABLE

NOTE 6 – NOTE PAYABLE

In May 2018, the Company issued an unsecured note payable for $35,000 bearing interest at 5.0% per annum, payable monthly and due on July 1, 2019.  The Company entered into an Extension Agreement in order to extend the due date of the note payable for all outstanding principal and accrued and unpaid interest due to November 18, 2020.

In November 2018, the Company issued an unsecured note payable for $65,000 bearing interest at 5.0% per annum, payable monthly and due on November 18, 2020.  

In July 2019, the Company issued an unsecured note payable for $123,000 bearing interest at 5.0% per annum, payable monthly and due on July 9, 2021.  

The above accrued interests are included in accrued expenses and payable on the maturity date.

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Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Details
REVENUE	$ 0	$ 0	$ 0	$ 0
COST OF REVENUE	0	0	0	0
GROSS PROFIT	0	0	0	0
OPERATING EXPENSES:
Selling, general and administrative expenses	132,555	87,287	407,695	220,704
Depreciation	245	133	530	199
Total operating expenses	132,800	87,420	408,225	220,903
NET LOSS FROM OPERATIONS	(132,800)	(87,420)	(408,225)	(220,903)
Other income (expense):
Interest (expense) income	(2,614)	(435)	(5,086)	(725)
Net loss before provision for income taxes	(135,414)	(87,855)	(413,311)	(221,628)
Income taxes	0	0	0	0
NET LOSS	(135,414)	(87,855)	(413,311)	(221,628)
OTHER COMPREHENIVE LOSS:
Foreign translation (loss) gain	(457)	384	(1,578)	(581)
Comprehensive loss	$ (135,871)	$ (87,471)	$ (414,889)	$ (222,209)
Net loss per common share, basic and diluted	$ (0.001)	$ (0.001)	$ (0.004)	$ (0.002)
Weighted average common shares outstanding, basic and diluted	114,915,852	114,915,852	114,915,852	114,915,852

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2019

Notes

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying audited consolidated financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) have been made that are necessary to present fairly the financial position, and the results of its operations and its cash flows. Operating results as presented are not necessarily indicative of the results to be expected for a full year.

The Company's consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not generated significant revenues since 2011 and is unlikely to generate significant earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations. The management will seek to raise funds from shareholders.

The accompanying consolidated financial statements present the financial position and the results of operations of the Company and its 100% owned subsidiaries, Makeliving, Ltd. and PDI.  PDI, in turn, is the 100% owner and consolidates Sinoforte Limited.

All significant intercompany transactions and balances have been eliminated in consolidation.

Interim Financial Statements

The following (a) condensed consolidated balance sheet as of December 31, 2018, which has been derived from audited financial statements, and (b) the unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of results that may be expected for the year ending December 31, 2019. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on April 5, 2019.

The Company recognizes revenue when: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed or determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related revenue is recorded.

The Company defers any revenue for which the product has not been delivered or services have not been rendered or are subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or services have been rendered or no refund will be required.

Revenues on the sale of products, net of estimated costs of returns and allowance, are recognized at the time products are shipped to customers, legal title has passed, and all significant contractual obligations of the Company have been satisfied. Products are generally sold on open accounts under credit terms customary to the geographic region of distribution. The Company performs ongoing credit evaluations of the customers and generally does not require collateral to secure the accounts receivable.

The Company is exploring web based e-commerce to bring buyers and sellers together recognizing revenue as commissions on closed transactions.

Segment information

ASC 280-10 establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. ASC 280-10 also establishes standards for related disclosures about products and services and geographic areas.  Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance.  All sales and substantial assets of the Company are in China. The Company applies the management approach to the identification of our reportable operating segments as provided in accordance with ASC 280-10.  The information disclosed herein materially represents all of the financial information related to the Company’s principal operating segment.

Use of Estimates

The preparation of the consolidated 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 disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Concentration of Credit Risk

The Company’s financial instruments that are exposed to a concentration of credit risk are cash and accounts receivable.  Generally, the Company’s cash and cash equivalents in interest-bearing accounts may exceed FDIC insurance limits. The financial stability of these institutions is periodically reviewed by senior management.

As of September 30, 2019 and December 31, 2018, the Company maintained $39,365 and $87,465 in foreign bank accounts not subject to FDIC coverage.

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements.

Cash and Cash Equivalents

For purposes of the statements of cash flows, cash and cash equivalents include cash on hand and demand deposits held by banks.

Comprehensive Income (Loss)

The Company adopted Accounting Standards Codification subtopic 220-10, Comprehensive Income (“ASC 220-10”) which establishes standards for the reporting and displaying of comprehensive income and its components. Comprehensive income is defined as the change in equity of a business during a period from transactions and other events and circumstances from non-owners sources.  It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. ASC 220-10 requires other comprehensive income (loss) to include foreign currency translation adjustments.

Foreign Currency Translation

The Company translates the foreign currency consolidated financial statements into US Dollars (“USD”) using the year or reporting period-end or average exchange rates in accordance with the requirements of Accounting Standards Codification subtopic 830-10, Foreign Currency Matters (“ASC 830-10”).  Assets and liabilities of these subsidiaries were translated at exchange rates as of the balance sheet date.  Revenues and expenses are translated at average rates in effect for the periods presented.

The consolidated financial statements were presented in US Dollars except as other specified.

The cumulative translation adjustment is included in the accumulated other comprehensive gain (loss) within stockholders’ equity (deficit).  Foreign currency transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the consolidated results of operations.

The exchange rates used to translate amounts in HKD into US Dollars for the purposes of preparing the consolidated financial statements were as follows:

	September 30, 2019	December 31, 2018
Exchange rate on balance sheet dates
USD : HKD exchange rate	7.8391	7.8307
	Nine Months ended September 30, 2019	Nine Months ended September 30, 2018
Average exchange rate for the period
USD : HKD exchange rate	7.8384	7.8405

Property, plant and equipment

The estimated useful lives of property, plant and equipment are as follows:
Office equipment	3 years
Furniture and fixtures	3 years
Vehicles	4 years

The Company evaluates the carrying value of items of property, plant and equipment to be held and used whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  The carrying value of an item of property, plant and equipment is considered impaired when the projected undiscounted future cash flows related to the asset are less than its carrying value.  The Company measures impairment based on the amount by which the carrying value of the respective asset exceeds its fair value.  Fair value is determined primarily using the projected future cash flows discounted at a rate commensurate with the risk involved.

Fair Value Measurements

ASC Topic 820 defines fair value, establishes a framework for measuring fair value and enhances disclosure requirements for fair value measurements. This topic does not require any new fair value measurements. ASC Topic 820 defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC Topic 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 —	Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 —	Other inputs that is directly or indirectly observable in the marketplace.
Level 3 —	Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Earnings (Loss) Per Share

Earnings Per Share (‘EPS”) is computed by dividing net income available to common stockholders by the weighted average number of common stock shares outstanding during the year.  Diluted EPS is computed by dividing net income available to common stockholders by the weighted average number of common stock shares outstanding during the year plus potential dilutive instruments such as stock options and warrants.  

The effect of stock options on diluted EPS is determined through the application of the treasury stock method, whereby proceeds received by the Company based on assumed exercises are hypothetically used to repurchase the Company's common stock at the average market price during the period.  The Company has no stock options, warrants or other potentially dilutive instruments outstanding at September 30, 2019 and December 31, 2018.

Recent Accounting Pronouncements

In February 2016, the FASB established ASC Topic 842, Leases (Topic 842), by issuing ASU No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The Company adopted the new standard on January 1, 2019.

The new standard provides a number of optional practical expedients in transition. The Company has elected the ‘package of practical expedients’, which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter is not applicable to the Company.

The new standard had a material effect on the Company’s financial statements. The most significant effects of adoption relate to (1) the recognition of new ROU assets and lease liabilities on its balance sheet for real estate operating leases; and (2) providing significant new disclosures about its leasing activities.

Upon adoption, the Company recognized additional operating lease liabilities of approximately $95,000 based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The Company also recognized corresponding ROU assets of approximately $95,000.

The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. Beginning in 2019, the Company changed to its disclosed lease recognition policies and practices, as well as to other related financial statement disclosures due to the adoption of this standard. See Note 5.

The Company has considered all other new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information.

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NOTE 7 - STOCK SUBCRIPTION PAYABLES (Details)	9 Months Ended
	Sep. 30, 2019 USD ($)
Details
Revenue from Related Parties	$ 218,599

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Property, plant and equipment: Schedule of Property, plant and equipment Useful Lives (Details)	9 Months Ended
	Sep. 30, 2019
Office Equipment
The estimated useful lives of property, plant and equipment are as follows:	3 years
Furniture and Fixtures
The estimated useful lives of property, plant and equipment are as follows:	3 years
Vehicles
The estimated useful lives of property, plant and equipment are as follows:	4 years

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NOTE 5 - RIGHT TO USE ASSETS AND LEASE LIABILITY: Schedule of Right to Use Assets (Details)	Sep. 30, 2019 USD ($)
Details
Right to use assets - New York	$ 62,322
Right to use assets - Hong Kong	97,291
Right to use assets - Subtotal	159,613
Right to use assets - Less accumulated depreciation	(124,930)
Right to use assets, net	$ 34,683

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NOTE 6 - NOTE PAYABLE (Details)	9 Months Ended
	Sep. 30, 2019 USD ($)
In May 2018
Debt Instrument, Issuer	Company
Debt Instrument, Collateral	unsecured
Debt Instrument, Description	note payable
Debt Instrument, Face Amount	$ 35,000
Debt Instrument, Interest Rate, Stated Percentage	5.00%
Debt Instrument, Payment Terms	payable monthly
Debt Instrument, Maturity Date	Jul. 01, 2019
In November 2018
Debt Instrument, Issuer	Company
Debt Instrument, Collateral	unsecured
Debt Instrument, Description	note payable
Debt Instrument, Face Amount	$ 65,000
Debt Instrument, Interest Rate, Stated Percentage	5.00%
Debt Instrument, Payment Terms	payable monthly
Debt Instrument, Maturity Date	Nov. 18, 2020
In July 2019
Debt Instrument, Issuer	Company
Debt Instrument, Collateral	unsecured
Debt Instrument, Description	note payable
Debt Instrument, Face Amount	$ 123,000
Debt Instrument, Interest Rate, Stated Percentage	5.00%
Debt Instrument, Payment Terms	payable monthly
Debt Instrument, Maturity Date	Jul. 09, 2021

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Earnings (Loss) Per Share (Policies)

9 Months Ended

Sep. 30, 2019

Policies

Earnings (Loss) Per Share

Earnings (Loss) Per Share

Earnings Per Share (‘EPS”) is computed by dividing net income available to common stockholders by the weighted average number of common stock shares outstanding during the year.  Diluted EPS is computed by dividing net income available to common stockholders by the weighted average number of common stock shares outstanding during the year plus potential dilutive instruments such as stock options and warrants.  

The effect of stock options on diluted EPS is determined through the application of the treasury stock method, whereby proceeds received by the Company based on assumed exercises are hypothetically used to repurchase the Company's common stock at the average market price during the period.  The Company has no stock options, warrants or other potentially dilutive instruments outstanding at September 30, 2019 and December 31, 2018.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Comprehensive Income (Loss) (Policies)

9 Months Ended

Sep. 30, 2019

Policies

Comprehensive Income (Loss)

Comprehensive Income (Loss)

The Company adopted Accounting Standards Codification subtopic 220-10, Comprehensive Income (“ASC 220-10”) which establishes standards for the reporting and displaying of comprehensive income and its components. Comprehensive income is defined as the change in equity of a business during a period from transactions and other events and circumstances from non-owners sources.  It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. ASC 220-10 requires other comprehensive income (loss) to include foreign currency translation adjustments.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Segment information (Policies)

9 Months Ended

Sep. 30, 2019

Policies

Segment information

Segment information

ASC 280-10 establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. ASC 280-10 also establishes standards for related disclosures about products and services and geographic areas.  Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance.  All sales and substantial assets of the Company are in China. The Company applies the management approach to the identification of our reportable operating segments as provided in accordance with ASC 280-10.  The information disclosed herein materially represents all of the financial information related to the Company’s principal operating segment.

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NOTE 8 - CAPITAL STOCK

9 Months Ended

Sep. 30, 2019

Notes

NOTE 8 - CAPITAL STOCK

NOTE 8 – CAPITAL STOCK

The Company is authorized to issue 500,000,000 shares of common stock, $0.01 par value, and 25,000,000 shares of preferred stock, $0.01 par value.  As of September 30, 2019, and December 31, 2018, there were 114,915,852 shares of the Company’s common stock issued and outstanding, and none of the preferred shares were issued and outstanding.

On June 8, 2017, the Company issued 20,000,000 shares to Aspect Group Limited for net proceeds of $200,000.

As of September 30, 2019, Kelton Capital Group Ltd. owned 31,190,500 shares or 27.2% of the Company’s common stock, and Aspect Group Limited owned 20,000,000 shares, or 17.4% of the Company’s common stock. Other than Kelton Capital Group Ltd and Aspect Group Ltd, no person owns 5% or more of the Company’s issued and outstanding shares.

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NOTE 4 - PROPERTY, PLANT AND EQUIPMENT

9 Months Ended

Sep. 30, 2019

Notes

NOTE 4 - PROPERTY, PLANT AND EQUIPMENT

NOTE 4 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment as of September 30, 2019 and December 31, 2018 is summarized as follows:

Schedule of Property, Plant and Equipment

	September 30, 2019			December 31, 2018
		(unaudited)
Office furniture and  fixtures	$	675		$	676
Office equipment		9,930			8,588
Vehicles		163,465			163,641
Less:  accumulated depreciation		(171,991	)		(171,642	)
Property, plant and equipment, net	$	2,079		$	1,263

Depreciation expense for the three and nine months ended September 30, 2019 was $245 and $530; and for the three and nine months ended September 30, 2018 was $133 and $199, respectively.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2019

Policies

Basis of Presentation

Basis of Presentation

The accompanying audited consolidated financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) have been made that are necessary to present fairly the financial position, and the results of its operations and its cash flows. Operating results as presented are not necessarily indicative of the results to be expected for a full year.

The Company's consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not generated significant revenues since 2011 and is unlikely to generate significant earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations. The management will seek to raise funds from shareholders.

The accompanying consolidated financial statements present the financial position and the results of operations of the Company and its 100% owned subsidiaries, Makeliving, Ltd. and PDI.  PDI, in turn, is the 100% owner and consolidates Sinoforte Limited.

All significant intercompany transactions and balances have been eliminated in consolidation.

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NOTE 5 - RIGHT TO USE ASSETS AND LEASE LIABILITY: Schedule of Right to Use Assets (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Schedule of Right to Use Assets

	September 30, 2019
New York	$	62,322
Hong Kong		97,291
Subtotal		159,613
Less accumulated depreciation		(124,930	)
Right to use assets, net	$	34,683

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NOTE 9 - LOSS PER SHARE: Schedule of Computation of basic and diluted loss per common share (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Schedule of Computation of basic and diluted loss per common share

	Three Months Ended September 30, 2019		Three Months Ended September 30, 2018		Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
Numerator-basic and diluted
Net loss	$	(135,414)	$	(87,855)	$	(413,311)	$	(221,628)
Denominator
Weighted average number of common shares outstanding-basic and diluted	114,915,852		114,915,852		114,915,852		114,915,852
Loss per common share - basic and diluted	$	(0.001)	$	(0.001)	$	(0.004)	$	(0.002)

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NOTE 9 - LOSS PER SHARE: Schedule of Computation of basic and diluted loss per common share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Details
NET LOSS	$ (135,414)	$ (87,855)	$ (413,311)	$ (221,628)
Weighted average common shares outstanding, basic and diluted	114,915,852	114,915,852	114,915,852	114,915,852
Net loss per common share, basic and diluted	$ (0.001)	$ (0.001)	$ (0.004)	$ (0.002)

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Condensed Consolidated Balance Sheets (September 30, 2019 Unaudited) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 86,024	$ 153,041
Prepaid expense and other receivables	2,800	7,087
Total current assets	88,824	160,128
Non-current assets:
Property, plant and equipment, net	2,079	1,263
Right to use assets, net	34,683	0
Deposits	20,182	20,264
Total non-current assets	56,944	21,527
Total assets	145,768	181,655
Current liabilities:
Accounts payable and accrued expenses	1,156,727	1,154,007
Lease liability	34,683	0
Note payable	223,000	100,000
Stock subscription payables	565,599	347,000
Total current liabilities	1,980,009	1,601,007
Stockholders' deficit:
Preferred Stock, Value	0	0
Common Stock, Value	1,149,159	1,149,159
Additional paid in capital	5,734,030	5,734,030
Accumulated deficit	(8,708,570)	(8,295,259)
Accumulated other comprehensive loss	(8,860)	(7,282)
Total stockholders' deficit	(1,834,241)	(1,419,352)
Total liabilities and stockholders' deficit	$ 145,768	$ 181,655

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (413,311)	$ (221,628)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	530	199
Deposits	66	(5,600)
Prepaid expenses and other receivables	4,280	(2,425)
Accounts payable and accrued expenses	2,720	2,506
Net cash used in operating activities	(405,715)	(226,948)
CASH FLOWS FROM INVESTING ACTIVITY
Purchase of equipment	(1,346)	(1,595)
Net cash used in investing activities	(1,346)	(1,595)
CASH FLOWS FROM FINANCING ACTIVITY
Proceeds from subscription received	218,599	242,855
Net cash provided by financing activity	341,599	277,855
Proceeds from note payable	123,000	35,000
Effect of currency rate changes on cash	(1,555)	(538)
Net (decrease) increase in cash and cash equivalents	(67,017)	48,774
Cash and Cash Equivalents, at Carrying Value, Beginning Balance	153,041	54,200
Cash and Cash Equivalents, at Carrying Value, Ending Balance	86,024	102,974
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid	5,138	725
Income taxes paid	0	0
Non cash financing activities:
Record right to use assets upon adoption of ASC 842	75,313	0
Record lease liabilities upon adoption of ASC 842	$ 75,313	$ 0

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NOTE 4 - PROPERTY, PLANT AND EQUIPMENT: Schedule of Property and Equipment (March 31, 2019 Unaudited) (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Details
Office furniture and fixtures	$ 675	$ 676
Office equipment	9,930	8,588
Vehicles	163,465	163,641
Less: accumulated depreciation	(171,991)	(171,642)
Property, plant and equipment, net	$ 2,079	$ 1,263

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NOTE 5 - RIGHT TO USE ASSETS AND LEASE LIABILITY: Schedule of Maturity Analysis under the Lease Agreements (Details)	Sep. 30, 2019 USD ($)
Details
Lease Liability - Nine months ended December 31, 2019	$ 21,513
Lease Liability - Year ended December 31, 2020	14,000
Lease Liability - Total	35,513
Lease Liability - Less: Present value discount	(830)
Lease liability	$ 34,683

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Property, plant and equipment (Policies)

9 Months Ended

Sep. 30, 2019

Policies

Property, plant and equipment

Property, plant and equipment

The estimated useful lives of property, plant and equipment are as follows:
Office equipment	3 years
Furniture and fixtures	3 years
Vehicles	4 years

The Company evaluates the carrying value of items of property, plant and equipment to be held and used whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  The carrying value of an item of property, plant and equipment is considered impaired when the projected undiscounted future cash flows related to the asset are less than its carrying value.  The Company measures impairment based on the amount by which the carrying value of the respective asset exceeds its fair value.  Fair value is determined primarily using the projected future cash flows discounted at a rate commensurate with the risk involved.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Concentration of Credit Risk (Policies)

9 Months Ended

Sep. 30, 2019

Policies

Concentration of Credit Risk

Concentration of Credit Risk

The Company’s financial instruments that are exposed to a concentration of credit risk are cash and accounts receivable.  Generally, the Company’s cash and cash equivalents in interest-bearing accounts may exceed FDIC insurance limits. The financial stability of these institutions is periodically reviewed by senior management.

As of September 30, 2019 and December 31, 2018, the Company maintained $39,365 and $87,465 in foreign bank accounts not subject to FDIC coverage.

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements.

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NOTE 3 - GOING CONCERN (Details) - USD ($)	3 Months Ended						9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Dec. 31, 2018
Net Income (Loss)	$ (135,414)	$ (145,345)	$ (132,552)	$ (87,855)	$ (37,037)	$ (96,736)
Accumulated deficit	(8,708,570)						$ (8,708,570)	$ (8,295,259)
Retained Earnings
Net Income (Loss)	$ (135,414)	$ (145,345)	$ (132,552)	$ (87,855)	$ (37,037)	$ (96,736)	$ (413,311)

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NOTE 5 - RIGHT TO USE ASSETS AND LEASE LIABILITY: Schedule of Lease Liability (Details)	Sep. 30, 2019 USD ($)
Details
Lease Liability - New York	$ 21,743
Lease Liability - Hong Kong	12,940
Total lease liability	34,683
Lease Liability - Less: short term portion	(34,683)
Lease Liability - Long term portion	$ 0

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Fair Value Measurements (Policies)

9 Months Ended

Sep. 30, 2019

Policies

Fair Value Measurements

Fair Value Measurements

ASC Topic 820 defines fair value, establishes a framework for measuring fair value and enhances disclosure requirements for fair value measurements. This topic does not require any new fair value measurements. ASC Topic 820 defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC Topic 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 —	Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 —	Other inputs that is directly or indirectly observable in the marketplace.
Level 3 —	Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Cash and Cash Equivalents (Policies)

9 Months Ended

Sep. 30, 2019

Policies

Cash and Cash Equivalents

Cash and Cash Equivalents

For purposes of the statements of cash flows, cash and cash equivalents include cash on hand and demand deposits held by banks.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Interim Financial Statements (Policies)

9 Months Ended

Sep. 30, 2019

Policies

Interim Financial Statements

Interim Financial Statements

The following (a) condensed consolidated balance sheet as of December 31, 2018, which has been derived from audited financial statements, and (b) the unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of results that may be expected for the year ending December 31, 2019. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on April 5, 2019.

The Company recognizes revenue when: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed or determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related revenue is recorded.

The Company defers any revenue for which the product has not been delivered or services have not been rendered or are subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or services have been rendered or no refund will be required.

Revenues on the sale of products, net of estimated costs of returns and allowance, are recognized at the time products are shipped to customers, legal title has passed, and all significant contractual obligations of the Company have been satisfied. Products are generally sold on open accounts under credit terms customary to the geographic region of distribution. The Company performs ongoing credit evaluations of the customers and generally does not require collateral to secure the accounts receivable.

The Company is exploring web based e-commerce to bring buyers and sellers together recognizing revenue as commissions on closed transactions.

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NOTE 9 - LOSS PER SHARE

9 Months Ended

Sep. 30, 2019

Notes

NOTE 9 - LOSS PER SHARE

NOTE 9 – LOSS PER SHARE

The following table sets forth the computation of basic and diluted loss per common share for the three and nine months ended September 30, 2019 and 2018, respectively:

	Three Months Ended September 30, 2019		Three Months Ended September 30, 2018		Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
Numerator-basic and diluted
Net loss	$	(135,414)	$	(87,855)	$	(413,311)	$	(221,628)
Denominator
Weighted average number of common shares outstanding-basic and diluted	114,915,852		114,915,852		114,915,852		114,915,852
Loss per common share - basic and diluted	$	(0.001)	$	(0.001)	$	(0.004)	$	(0.002)

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NOTE 5 - RIGHT TO USE ASSETS AND LEASE LIABILITY

9 Months Ended

Sep. 30, 2019

Notes

NOTE 5 - RIGHT TO USE ASSETS AND LEASE LIABILITY

NOTE 5 – RIGHT TO USE ASSETS AND LEASE LIABILITY

Effective June 1, 2018, the Company entered into a two-year lease for approximately 250 square feet in New York City, New York, expiring May 31, 2020 with monthly payments of $2,800 per month.  In addition, the Company entered into a two-year lease for office space of approximately 770 square feet in Hong Kong, expiring January 10, 2020, with monthly payments of approximately $4,371 per month. The Company has an option to extend the leases for an additional (option) terms.

In adopting ASC Topic 842, Leases (Topic 842), the Company has elected the ‘package of practical expedients’, which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter is not applicable to the Company.  In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 month or less.  In determining the length of the lease term to its long term lease, the Company determined it did not have an option to extend either lease.  At lease commencement dates, the Company estimated the lease liability and the right of use assets at present value using the Company’s estimated incremental borrowing rate of 8% and determined the initial present value, at inception, of $159,616.  On January 1, 2019, upon adoption of ASC Topic 842, the Company recorded right to use assets (net) of $95,111 and lease liability of $95,111.

Right to use assets is summarized below:

	September 30, 2019
New York	$	62,322
Hong Kong		97,291
Subtotal		159,613
Less accumulated depreciation		(124,930	)
Right to use assets, net	$	34,683

During the nine months ended September 30, 2019 and 2018, the Company recorded $54,932 and $39,088 as lease expense to current period operations.

Lease liability is summarized below:

	September 30, 2019
New York	$	21,743
Hong Kong		12,940
Total lease liability		34,683
Less: short term portion		(34,683	)
Long term portion	$	-

Maturity analysis under these lease agreements are as follows:

Nine months ended December 31, 2019	$	21,513
Year ended December 31, 2020		14,000
Total		35,513
Less:  Present value discount		(830	)
Lease liability	$	34,683

Lease expense for the three months ended September 30, 2019 was comprised of the following:

Operating lease expense	$	16,361
Short-term lease expense		1,959
	$	18,320

Lease expense for the nine months ended September 30, 2019 was comprised of the following:

Operating lease expense	$	49,082
Short-term lease expense		5,850
	$	54,932

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NOTE 4 - PROPERTY, PLANT AND EQUIPMENT: Schedule of Property and Equipment (March 31, 2019 Unaudited) (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Schedule of Property and Equipment (March 31, 2019 Unaudited)

	September 30, 2019			December 31, 2018
		(unaudited)
Office furniture and  fixtures	$	675		$	676
Office equipment		9,930			8,588
Vehicles		163,465			163,641
Less:  accumulated depreciation		(171,991	)		(171,642	)
Property, plant and equipment, net	$	2,079		$	1,263

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NOTE 5 - RIGHT TO USE ASSETS AND LEASE LIABILITY: Schedule of Lease Expenses (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Schedule of Lease Expenses

Operating lease expense	$	16,361
Short-term lease expense		1,959
	$	18,320

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Condensed Consolidated Balance Sheets (September 30, 2019 Unaudited) - Parenthetical - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Details
Preferred Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	25,000,000	25,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	500,000,000	500,000,000
Common Stock, Shares, Issued	114,915,852	114,915,852
Common Stock, Shares, Outstanding	114,915,852	114,915,852

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NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES

9 Months Ended

Sep. 30, 2019

Notes

NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES

Scientific Energy, Inc., (the "Company") was incorporated under the laws of the State of Utah on May 30, 2001.  Prior to August 2011, the Company was principally devoted to the buying and selling of various types and grades of graphite, such as medium- and high-carbon graphite, high-purity graphite, micro-powder graphite and expandable graphite.   In August 2011, the Company decided to engage in a business of e-commerce platform. Currently the Company is in the process of developing a website, which provides an e-commerce platform, where registered members can exchange goods and services.

On March 28, 2006, the Company set up a wholly-owned subsidiary, PDI Global Limited (“PDI”), which was incorporated in the British Virgin Islands in order to engage in a business of e-commerce platform.

In January 2008, the Company entered into a joint venture agreement with China Resources Development Group Ltd., a Hong Kong company.  Under the agreement, a joint venture company, Kabond Investments Ltd (the “JVC”), was established in Hong Kong, and the Company invested $39.6 million Hong Kong dollars (approximately $5.09 million) into the JVC for 72% of the JVC’s capital shares, and China Resources Development Group Ltd., jointly with its partner, invested $15.4 million Hong Kong dollars (approximately $1.98 million) into the JVC to receive 28% of the JVC’s capital shares.  In December 2008, all equity interest of the JVC owned by the Company was sold to a third party for $39.6 million Hong Kong dollars (approximately $5,109,743).

In January 2009, the Company through its wholly-owned subsidiary, PDI, entered into a joint venture agreement with China Resources Development Group Ltd.  Under the agreement, the Company agreed to invest $43,040,000 Hong Kong dollars (approximately $5.55 million) into a joint venture company Sinoforte Ltd. in Hong Kong (“Sinoforte”).  The Company got 80% of Sinoforte's capital shares, and China Resources invested $10,222,000 Hong Kong dollars, approximately $1,318,967, and another investor invested  $538,000 Hong Kong dollars, or approximately $69,419, into Sinoforte for 19% and 1% of Sinoforte's capital shares, respectively.  The main business of Sinoforte was trading mineral products such as graphite produced in China.  In June 2009 and September 2009, respectively, China Resources and the other minority investor cancelled their investments in Sinoforte, and the full amount of their original investments was returned.  As a result, Sinoforte became a wholly-owned subsidiary of PDI.

On February 28, 2012, the Company set up a wholly-owned subsidiary, Makeliving Ltd., which was incorporated in the Cayman Islands in order to engage in a business of e-commerce platform.

On January 23, 2018, the Company entered into an agreement with Cityhill Limited, a wholly owned subsidiary of South Sea Petroleum Holdings Limited, a Hong Kong listed public company, pursuant to which parties agreed to establish a joint venture (the “Joint Venture”).  Each party owns 50% equity interest in the Joint Venture respectively.