Item
1. Business
FORWARD
LOOKING STATEMENTS
This
annual report on Form 10-K (the “Annual Report”) contains certain forward-looking statements. All statements other
than statements of historical fact are “forward-looking statements” for purposes of these provisions, including any
projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management
for future operation; any statements concerning proposed new products, services, or developments; any statements regarding future
economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing. Such
forward-looking statements are subject to inherent risks and uncertainties, and actual results could differ materially from those
anticipated by the forward-looking statements.
These
forward-looking statements involve significant risks and uncertainties, including, but not limited to, the following: competition,
promotional costs and the risk of declining revenues. Our actual results could differ materially from those anticipated in such
forward-looking statements as a result of a number of factors. These forward-looking statements are made as of the date of this
filing, and we assume no obligation to update such forward-looking statements. The following discusses our financial condition
and results of operations based upon our audited financial statements which have been prepared in conformity with accounting principles
generally accepted in the United States. It should be read in conjunction with our financial statements and the notes thereto
included elsewhere herein.
Although
we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United
States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our
consolidated financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States
Generally Accepted Accounting Principles.
In
this annual report, unless otherwise specified, all dollar amounts are expressed in United States Dollars (US$) and all references
to “common shares” refer to the common shares in our capital stock.
As
used in this annual report, the terms “we,” “us,” “our,” the “Company,” “Shentang”
and “our company” mean Shentang International, Inc. and its consolidated subsidiaries, unless otherwise indicated.
Corporate
Background
Our
Corporate History and Background
General
Background of the Company
Shentang
International, Inc. (“we” or the “Company”) was incorporated in the State of Nevada on June 29, 2007.
We were an exploration stage company engaged in the exploration of mineral resource properties.
On
July 22, 2009, the Company conducted a 1-to-10 stock split (the “Stock Split”) of the issued and outstanding common
stock, so the Company’s issued and outstanding shares increased from 1,670,000 to 16,700,000 with par value of $0.001. Immediately
after the Stock Split on July 22, 2009, the Company entered into a Share Exchange Agreement (the “Exchange Agreement”)
with Boom Spring, Inc. (“Boom Spring”), and the shareholders of Boom Spring. Pursuant to the terms of the Exchange
Agreement, the shareholders of Boom Spring transferred to the Company all of the equity interest of Boom Spring in exchange for
12,000,000 outstanding shares of the Company and 33,300,000 newly issued shares of the Company (the “Share Exchange”).
As a result of the Share Exchange, Boom Spring became a wholly owned subsidiary of the Company and the Company became a holding
company with issued and outstanding common stock of 50,000,000 with par value of $0.001.
Pursuant
to a board resolution dated October 21, 2009, the Company increased its authorized number of common stock from 50,000,000 to 190,000,000,
and conducted a 2-for-5 reverse stock split (the “Reverse Stock Split”) of the issued and outstanding common stock.
After the Reverse Stock Split, the Company’s issued and outstanding shares changed from 50,000,000 to 20,000,000 with par
value of $0.001 effective on October 21, 2009. This reverse stock split also gave retroactive effect in the balance sheet as of
December 31, 2008 and the computation of basic and diluted EPS is adjusted retroactively for all period presented accordingly.
The
Company had exclusive use of the core technologies, including hollow/solid glass processing technology, pure manual glass rod
processing technology, wire processing technology and painting processing technology. It developed “Yi Fan Feng Shun”
liquor vessel with the brand of Wu Liang Ye. The Company was engaged in expanding in the international market. The Company also
planned to build or acquire its own production capacity to meet the demand in the domestic Chinese market by purchasing or acquiring
new equipment of machine-made glass producing. The objective of the Company was to become a large-scaled glass craftwork supplier
and further develop its innovational technology.
On
May 11, 2018, the eight judicial District Court of Nevada appointed Custodian Ventures, LLC as custodian for Shentang International
Inc., proper notice having been given to the officers and directors of Shentang International, Inc. There was no opposition.
On
May 16, 2018, the Company filed a certificate of revival with the state of Nevada, appointing David Lazar as, President, Secretary,
Treasurer and Director.
On
May 31, 2018, the Company obtained a promissory note in amount of $7,500 from its custodian, Custodian Ventures, LLC, the managing
member being David Lazar. The note bears an interest of 3% and all unpaid interest and principal is due within 180 days following
written demand.
On
May 31, 2018, the Company issued 27,000,000 shares of common stock to Custodian Ventures, LLC at par for shares valued at $27,000
in exchange for settlement of a portion of a related party loan for amounts advanced to the Company in the amount of $19,500,
and the promissory note issued to the Company in the amount $7,500.
Mr.
Lazar is considered, and shall be treated as, a promoter for the Company.
Business
Objectives of the Company
Since
the custodial proceedings, the Company had no business operations. Management has determined to direct its efforts and limited
resources to pursue potential new business opportunities. The Company does not intend to limit itself to a particular industry
and has not established any particular criteria upon which it shall consider a business opportunity.
The
Company’s common stock is subject to quotation on the OTC Pink Sheets under the symbol SHNL. There is currently only a limited
trading market in the Company’s shares nor do we believe that any active trading market has existed for approximately the
last 5 years. There can be no assurance that there will be an active trading market for our securities following the effective
date of this registration statement under the Exchange Act. In the event that an active trading market commences, there can be
no assurance as to the market price of our shares of common stock, whether any trading market will provide liquidity to investors,
or whether any trading market will be sustained.
Management
of the Company (“Management”) would have substantial flexibility in identifying and selecting a prospective new business
opportunity. The Company is dependent on the judgment of its Management in connection with this process. In evaluating a prospective
business opportunity, we would consider, among other factors, the following:
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costs
associated with pursuing a new business opportunity;
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growth
potential of the new business opportunity;
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experiences,
skills and availability of additional personnel necessary to pursue a potential new business opportunity;
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necessary
capital requirements;
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the
competitive position of the new business opportunity;
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stage
of business development;
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the
market acceptance of the potential products and services;
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proprietary
features and degree of intellectual property; and
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the
regulatory environment that may be applicable to any prospective business opportunity.
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The
foregoing criteria are not intended to be exhaustive and there may be other criteria that Management may deem relevant. In connection
with an evaluation of a prospective or potential business opportunity, Management may be expected to conduct a due diligence review.
The
time and costs required to pursue new business opportunities, which includes negotiating and documenting relevant agreements and
preparing requisite documents for filing pursuant to applicable securities laws, can not be ascertained with any degree of certainty.
Management
intends to devote such time as it deems necessary to carry out the Company’s affairs. The exact length of time required
for the pursuit of any new potential business opportunities is uncertain. No assurance can be made that we will be successful
in our efforts. We cannot project the amount of time that our Management will actually devote to the Company’s plan of operation.
The
Company intends to conduct its activities so as to avoid being classified as an “Investment Company” under the Investment
Company Act of 1940, and therefore avoid application of the costly and restrictive registration and other provisions of the Investment
Company Act of 1940 and the regulations promulgated thereunder.
Company
is a Blank Check Company
At
present, the Company is a development stage company with no revenues, no assets and no specific business plan or purpose. The
Company’s business plan is to seek new business opportunities or to engage in a merger or acquisition with an unidentified
company. As a result, the Company is a “blank check company” and, as a result, any offerings of the Company’s
securities under the Securities Act of 1933, as amended (the “Securities Act”) must comply with Rule 419 promulgated
by the Securities and Exchange Commission (the “SEC”) under the Act. The Company’s Common Stock is a “penny
stock,” as defined in Rule 3a51-1 promulgated by the SEC under the Securities Exchange Act. The Penny Stock rules require
a broker-dealer, prior to a transaction in penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure
document that provides information about Penny Stocks and the nature and level of risks in the penny stock market.
The
broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its sales person in the transaction, and monthly account statements showing the market value of each Penny Stock
held in the customer’s account. In addition, the Penny Stock rules require that the broker-dealer, not otherwise exempt
from such rules, must make a special written determination that the Penny Stock is suitable for the purchaser and receive the
purchaser’s written agreement to the transaction. These disclosure rules have the effect of reducing the level of trading
activity in the secondary market for a stock that becomes subject to the Penny Stock rules. So long as the common stock of the
Company is subject to the Penny Stock rules, it may be more difficult to sell the Company’s common stock.
We
are a “Shell Company,” as defined in Rule 405 promulgated by the SEC under the Securities Act. A Shell Company is
one that has no or nominal operations and either: (i) no or nominal assets; or (ii) assets consisting primarily of cash or cash
equivalents. As a Shell Company, we are restricted in our use of Registrations on Form S-8 under the Securities Act; the lack
of availability of the use of Rule 144 by security holders; and the lack of liquidity in our stock.
Form
S-8
Shell
companies are prohibited from using Form S-8 to register securities under the Securities Act. If a company ceases to be a Shell
Company, it may use Form S-8 sixty calendar days, provided it has filed all reports and other materials required to be filed under
the Exchange Act during the preceding 12 months (or for such shorter period that it has been required to file such reports and
materials after the company files “Form 10 information,” which is information that a company would be required to
file in a registration statement on Form 10 if it were registering a class of securities under Section 12 of the Exchange Act.
This information would normally be reported on a current report on Form 8-K reporting the completion of a transaction that caused
the company to cease being a Shell Company.
Unavailability
of Rule 144 for Resale
Rule
144(i) “Unavailability to Securities of Issuers With No or Nominal Operations and No or Nominal Non-Cash Assets” provides
that Rule 144 is not available for the resale of securities initially issued by an issuer that is a Shell Company. We have identified
our company as a Shell Company and, therefore, the holders of our securities may not rely on Rule 144 to have the restriction
removed from their securities without registration or until the Company is no longer identified as a Shell Company and has filed
all requisite periodic reports under the Exchange Act for the period of twelve (12) months.
As
a result of our classification as a Shell Company, our investors are not allowed to rely on the “safe harbor” provisions
of Rule 144, promulgated pursuant to the Securities Act, so as not to be considered underwriters in connection with the sale of
our securities until one year from the date that we cease to be a Shell Company. This will likely make it more difficult for us
to attract additional capital through subsequent unregistered offerings because purchasers of securities in such unregistered
offerings will not be able to resell their securities in reliance on Rule 144, a safe harbor on which holders of restricted securities
usually rely to resell securities.
Very
Limited Liquidity of our Common Stock
Our
common stock occasionally trades on the OTC Pink Sheet Market, as there is no active market maker in our common stock. As a result,
there is only limited liquidity in our common stock.
We
will be deemed a blank check company under Rule 419 of the Securities Act
The
provisions of Rule 419 apply to registration statements filed under the Securities Act by a blank check company, such as the Company.
Rule 419 requires that a blank check company filing a registration statement deposit the securities being offered and proceeds
of the offering into an escrow or trust account pending the execution of an agreement for an acquisition or merger. While we are
not currently registering shares for an offering, we may do so in the future.
In
addition, an issuer is required to file a post-effective amendment to a registration statement upon the execution of an agreement
for an acquisition or merger. The rule provides procedures for the release of the offering funds, if any, in conjunction with
the post effective acquisition or merger. The obligations to file post-effective amendments are in addition to the obligations
to file Forms 8-K to report for both the entry into a material definitive (non-ordinary course of business) agreement and the
completion of the transaction. Rule 419 applies to both primary and re-sale or secondary offerings.
Within
five (5) days of filing a post-effective amendment setting forth the proposed terms of an acquisition, the Company must notify
each investor whose shares are in escrow, if any. Each such investor then has no fewer than 20 and no greater than 45 business
days to notify the Company in writing if they elect to remain an investor. A failure to reply indicates that the person has elected
to not remain an investor. As all investors are allotted this second opportunity to determine to remain an investor, acquisition
agreements should be conditioned upon enough funds remaining in escrow to close the transaction.
Effecting
a business combination
Prospective
investors in the Company’s common stock will not have an opportunity to evaluate the specific merits or risks of any of
the one or more business combinations that we may undertake A business combination may involve the acquisition of, or merger with,
a company which needs to raise substantial additional capital by means of being a publicly trading company, while avoiding what
it may deem to be adverse consequences of undertaking a public offering itself. These include time delays, significant expense,
loss of voting control and compliance with various Federal and State securities laws. A business combination may involve a company
which may be financially unstable or in its early stages of development or growth.
The
Company has not identified a target business or target industry
The
Company’s effort in identifying a prospective target business will not be limited to a particular industry and the Company
may ultimately acquire a business in any industry Management deems appropriate. To date, the Company has not selected any target
business on which to concentrate our search for a business combination. While the Company intends to focus on target businesses
in the United States, it is not limited to U.S. entities and may consummate a business combination with a target business outside
of the United States. Accordingly, there is no basis for investors in the Company’s common stock to evaluate the possible
merits or risks of the target business or the particular industry in which we may ultimately operate. To the extent we effect
a business combination with a financially unstable company or an entity in its early stage of development or growth, including
entities without established records of sales or earnings, we may be affected by numerous risks inherent in the business and operations
of financially unstable and early stage or potential emerging growth companies. In addition, to the extent that we effect a business
combination with an entity in an industry characterized by a high level of risk, we may be affected by the currently unascertainable
risks of that industry. An extremely high level of risk frequently characterizes many industries which experience rapid growth.
In addition, although the Company’s Management will endeavor to evaluate the risks inherent in a particular industry or
target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
Sources
of target businesses
Our
Management anticipates that target business candidates will be brought to our attention from various unaffiliated sources, including
securities broker-dealers, investment bankers, venture capitalists, bankers and other members of the financial community, who
may present solicited or unsolicited proposals. Our Management may also bring to our attention target business candidates. While
we do not presently anticipate engaging the services of professional firms that specialize in business acquisitions on any formal
basis, we may engage these firms in the future, in which event we may pay a finder’s fee or other compensation in connection
with a business combination. In no event, however, will we pay Management any finder’s fee or other compensation for services
rendered to us prior to or in connection with the consummation of a business combination.
Selection
of a target business and structuring of a business combination
Management
owns 57.45% of the issued and outstanding shares of common stock of the Company, and will have broad flexibility in identifying
and selecting a prospective target business. In evaluating a prospective target business, our Management will consider, among
other factors, the following:
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financial
condition and results of operation of the target company;
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growth
potential;
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experience
and skill of Management and availability of additional personnel;
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capital
requirements;
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competitive
position;
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stage
of development of the products, processes or services;
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degree
of current or potential market acceptance of the products, processes or services;
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proprietary
features and degree of intellectual property or other protection of the products, processes or services;
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regulatory
environment of the industry; and
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costs
associated with effecting the business combination.
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These
criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular business combination will be
based, to the extent relevant, on the above factors as well as other considerations deemed relevant by our Management in effecting
a business combination consistent with our business objective. In evaluating a prospective target business, we will conduct a
due diligence review which will encompass, among other things, meetings with incumbent Management and inspection of facilities,
as well as review of financial and other information which will be made available to us.
We
will endeavor to structure a business combination so as to achieve the most favorable tax treatment to us, the target business
and both companies’ stockholders. However, there can be no assurance that the Internal Revenue Service or applicable state
tax authorities will necessarily agree with the tax treatment of any business combination we consummate.
The
time and costs required to select and evaluate a target business and to structure and complete the business combination cannot
presently be ascertained with any degree of certainty. Any costs incurred with respect to the identification and evaluation of
a prospective target business with which a business combination is not ultimately completed will result in a loss to us.
Probable
lack of business diversification
While
we may seek to effect business combinations with more than one target business, it is more probable that we will only have the
ability to effect a single business combination, if at all. Accordingly, the prospects for our success may be entirely dependent
upon the future performance of a single business. Unlike other entities which may have the resources to complete several business
combinations with entities operating in multiple industries or multiple areas of a single industry, it is probable that we will
lack the resources to diversify our operations or benefit from the possible spreading of risks or offsetting of losses. By consummating
a business combination with only a single entity, our lack of diversification may:
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subject
us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact
upon the particular industry in which we may operate subsequent to a business combination, and
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result
in our dependency upon the development or market acceptance of a single or limited number of products, processes or services.
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Limited
ability to evaluate the target business’ Management
We
cannot assure you that our assessment of the target business’ Management will prove to be correct. In addition, we cannot
assure you that the future Management will have the necessary skills, qualifications or abilities to man
age
a public company intending to embark on a program of business development. Furthermore, the future role of our director, if any,
in the target business cannot presently be stated with any certainty.
While
it is possible that our director will remain associated in some capacity with us following a business combination, it is unlikely
that he will devote his full efforts to our affairs subsequent to a business combination. Moreover, we cannot assure you that
our director will have significant experience or knowledge relating to the operations of the particular target business.
Following
a business combination, we may seek to recruit additional managers to supplement the incumbent Management of the target business.
We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite
skills, knowledge or experience necessary to enhance the incumbent Management.
Our
auditors have expressed substantial doubt about our ability to continue as a going concern
Our
audited financial statements for the years ended December 31, 2018 and 2017, were prepared using the assumption that we will continue
our operations as a going concern. Our independent accountants in their audit report have expressed substantial doubt about our
ability to continue as a going concern. Our operations are dependent on our ability to raise sufficient capital or complete business
combination as a result of which we become profitable. Our financial statements do not include any adjustments that may result
from the outcome of this uncertainty. There is not enough cash on hand to fund our administrative expenses and operating expenses
for the next twelve months. Therefore, we may be unable to continue operations in the future as a going concern. If we cannot
continue as a viable entity, our stockholders may lose some or all of their investment in the Company’s shares of common
stock.
Competition
In
identifying, evaluating and selecting a target business, we expect to encounter intense competition from other entities having
a business objective similar to ours. Many of these entities are well established and have extensive experience identifying and
effecting business combinations, either directly or through affiliates. Many if not virtually most of these competitors possess
far greater financial, human and other resources compared to our resources. While we believe that there are numerous potential
target businesses that we may identify, our ability to compete in acquiring certain of the more desirable target businesses will
be limited by our limited financial and human resources. Our inherent competitive limitations are expected by Management to give
others an advantage in pursuing the acquisition of a target business that we may identify and seek to pursue. Further, any of
these limitations may place us at a competitive disadvantage in successfully negotiating a business combination. Our Management
believes, however, that our status as a reporting public entity with potential access to the United States public equity markets
may give us a competitive advantage over certain privately-held entities having a similar business objective in acquiring a desirable
target business with growth potential on favorable terms.
If
we succeed in effecting a business combination, there will be, in all likelihood, intense competition from existing competitors
of the business we acquire. In particular, certain industries which experience rapid growth frequently attract an increasingly
larger number of competitors, including those with far greater financial, marketing, technical and other resources than the initial
competitors in the industry in which we seek to operate. The degree of competition characterizing the industry of any prospective
target business cannot presently be ascertained. We cannot assure you that, subsequent to a business combination, we will have
the resources to compete effectively, especially to the extent that the target business is in a high-growth industry.
Employees
David
Lazar, our Chief Executive Officer, is our sole executive officer. Mr. Lazar is not obligated to devote any specific number of
hours per week and, in fact, intends to devote only as much time as he deem reasonably necessary to administer the Company’s
affairs until such time as a business combination is consummated. The amount of time he will devote in any time period will vary
based on the availability of suitable target businesses to investigate. We do not intend to have any full-time employees prior
to the consummation of a business combination.
Prior
to being granted custodianship of the Company, Mr. Lazar had no previous experience with blank check companies. Mr. Lazar has
also recently been granted custodianship of Melt, Inc. and Zhongchai Machinery, Inc., both of which are blank check companies
and both of which have recently filed a Form 10.
Conflicts
of Interest
The
Company’s Management is not required to commit its full time to the Company’s affairs. As a result, pursuing new business
opportunities may require a longer period of time than if Management would devote full time to the Company’s affairs. Management
is not precluded from serving as an officer or director of any other entity that is engaged in business activities similar to
those of the Company. Management has not identified and is not currently negotiating a new business opportunity for us. In the
future, Management may become associated or affiliated with entities engaged in business activities similar to those we intend
to conduct. In such event, Management may have conflicts of interest in determining to which entity a particular business opportunity
should be presented. In the event that the Company’s Management has multiple business affiliations, our Management may have
legal obligations to present certain business opportunities to multiple entities. In the event that a conflict of interest shall
arise, Management will consider factors such as reporting status, availability of audited financial statements, current capitalization
and the laws of jurisdictions. If several business opportunities or operating entities approach Management with respect to a business
combination, Management will consider the foregoing factors as well as the preferences of the Management of the operating company.
However, Management will act in what it believes will be in the best interests of the shareholders of the Company. The Company
shall not enter into a transaction with a target business that is affiliated with Management.
Description
of Property and Facilities
The
Company’s corporate office is located at 3445 Lawrence Avenue, Oceanside, NY 11572, which space is provided to us on
a rent-free basis. The Company believes that the office facilities are sufficient for the foreseeable future and this arrangement
will remain until we find a new business opportunity.