NOTES TO FINANCIAL STATEMENTS
Note 1 – Organization and basis of accounting
Basis of Presentation and Organization
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, the shareholders of Boom Spring, and the Company. 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 18, 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 payable to the Company 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.
On July 2, 2018, the Company terminated
its registration with the Securities and Exchange Commission (the “SEC”).
On August 2, 2018, the Company filed a Form 10-12G, and on September
18, 2018, the Company filed the Amendment No. 1 to Form 10-12G which went effective on October 1, 2018.
On November 19, 2019, the Company board
of directors determined that it is their best interest to redeem the 27,000,000 shares of common stock, held by Custodian Ventures,
LLC. In addition, the company elected to cancel and return to the shareholder the promissory note dated May 31, 2018 in the principal
amount of $7,500. The company shall also pay the additional amount of $19,168.97 by issuance of a promissory note and cancel interest
of $331.03 due on the May 31, 2018 note. The promissory note dated November 19, 2019, in the amount of $19, 168.97 is due and payable
in full within one hundred eight (180) days following written demand by the holder and bears an interest rate of 3% per annum.
On April 29, 2020, Shentang International,
Inc. (the “Company”) entered into and closed the transaction contemplated by a stock purchase agreement (the “Stock
Purchase Agreement”) between the Company, Plentiful Limited, a Samoan company (the “Purchaser”), and Custodian
Ventures, LLC, a Wyoming limited liability company (the “Principal”) controlled by David Lazar, an individual
(together with the Principal, the “Seller”), the controlling shareholder of the Company. Pursuant to the Stock Purchase
Agreement, Purchaser purchased 10,000,000 shares of preferred stock (the “Shares”) of the Company from the Principal.
The full purchase price set forth in the Stock Purchase Agreement is $240,000, or $0.024, per share. Upon the closing, $225,000
of the purchase price was paid to Principal, and the balance of $15,000 will be paid once the Company’s common stock has
received full DTC eligibility approval, subject to the condition that such approval must be obtained by June 5, 2020, or a later
date as agreed by Purchaser. The Company’s common stock and preferred stock have different voting rights whereby one share
of common stock is entitled to one (1) vote and one share of preferred stock is entitled to one hundred (100) votes. The Shares
represent approximately 98% of the Company’s outstanding voting power as of the closing. Accordingly, as a result of the
transaction, Purchaser became the controlling shareholder of the Company.
In connection with the closing of the stock
purchase transaction, on April 29, 2020, David Lazar, the sole director of the Company, submitted his resignation letter, pursuant
to which he resigned from all offices of the Company that he held effective as of the closing of the stock purchase transaction
and from the board of directors effective ten (10) days following the filing of Schedule 14f-1 with the SEC. The resignation of
Mr. Lazar was not in connection with any known disagreement with the Company on any matter. Upon the closing of the stock purchase
transaction, on April 29, 2020, Lei Xu was appointed as a director of the Company and for the offices previously held by Mr. Lazar,
effective as of the closing of the stock purchase transaction.
The accompanying financial statements are
prepared on the basis of accounting principles generally accepted in the United States of America (“GAAP”). The Company
is a development stage enterprise devoting substantial efforts to establishing a new business, financial planning, raising capital,
and research into products which may become part of the Company’s product portfolio. The Company has not realized significant
sales through since inception. A development stage company is defined as one in which all efforts are devoted substantially to
establishing a new business and, even if planned principal operations have commenced, revenues are insignificant.
The accompanying financial statements have
been prepared assuming the continuation of the Company as a going concern. The Company has not yet established an ongoing source
of revenues sufficient to cover its operating costs and is dependent on debt and equity financing to fund its operations. Management
of the Company is making efforts to raise additional funding until a registration statement relating to an equity funding facility
is in effect. While management of the Company believes that it will be successful in its capital formation and planned operating
activities, there can be no assurance that the Company will be able to raise additional equity capital, or be successful in the
development and commercialization of the products it develops or initiates collaboration agreements thereon. The accompanying financial
statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets
or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going
concern.
Note 2 – Summary of significant accounting policies
Cash and Cash Equivalents
For purposes of reporting within the statements
of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all
highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.
Fair Value Measurement
The Company values its convertible notes and amounts due to
related partings and short term loans payable under FASB ASC 820 which defines fair value, establishes a framework for measuring
fair value, and expands disclosures about fair value measurements.
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The
Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions
about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated,
or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes
a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable
inputs (level 3 measurement).
The three levels of the fair value hierarchy are as follows:
Level 1 – Quoted prices are available in active markets
for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability
occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial
instruments such as exchange-traded derivatives, marketable securities and listed equities.
Level 2 - Valuations for assets and liabilities that can be
obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities.
The Company’s principal markets for these securities are the secondary institutional markets, and valuations are based on
observable market data in those markets.
Level 3 – Pricing inputs include significant inputs that
are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result
in management’s best estimate of fair value. The Company uses Level 3 to value its derivative instruments.
Employee Stock-Based Compensation
The Company accounts for stock-based compensation
in accordance with ASC 718 Compensation - Stock Compensation (“ASC 718”). ASC 718 addresses all forms of share-based
payment (“SBP”) awards including shares issued under employee stock purchase plans and stock incentive shares. Under
ASC 718 awards result in a cost that is measured at fair value on the awards’ grant date, based on the estimated number of
awards that are expected to vest and will result in a charge to operations.
Subsequent Event
The Company evaluated subsequent events through the date when
financial statements are issued for disclosure consideration.
Recent Accounting Pronouncements
In February 2016, the FASB issued an
accounting standards update for leases. The ASU introduces a lessee model that brings most leases on the balance sheet. The new
standard also aligns many of the underlying principles of the new lessor model with those in the current accounting guidance as
well as the FASB’s new revenue recognition standard. However, the ASU eliminates the use of bright-line tests in determining
lease classification as required in the current guidance. The ASU also requires additional qualitative disclosures along with specific
quantitative disclosures to better enable users of financial statements to assess the amount, timing, and uncertainty of cash flows
arising from leases. The pronouncement is effective for annual reporting periods beginning after December 15, 2019, and interim
periods within fiscal years beginning after December 15, 2020, for nonpublic entities using a modified retrospective approach.
Early adoption is permitted. The Company is still evaluating the impact that the new accounting guidance will have on its condensed
financial statements and related disclosures and has not yet determined the method by which it will adopt the standard.
Note 3 – Discontinued Operations
The Company has fully impaired all assets
since the shutdown of its operations in 2009 and has recorded the effects of this impairment as part of its discontinued operations.
With the absence of a substantial amount of the old records and the passage of the statute of limitations the company has recorded
a discontinued operations expense in 2018 the most current year since operations shutdown based on the accumulated records obtained
to date through the second quarter 2020.
Note 4 – Related Party Transactions
On May 31, 2018, the Company obtained a
promissory note payable to the Company in principal 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.
On November 19, 2019, the Company board
of directors determined that it is their best interest to redeem the 27,000,000 shares of common stock, held by Custodian Ventures,
LLC. In addition, the company elected to cancel and return to the shareholder the promissory note dated May 31, 2018 in the principal
amount of $7,500. The company shall also pay the additional amount of $19,168.97 by issuance of a promissory note and cancel interest
of $331.03 due on the May 31, 2018 note. The promissory note dated November 19, 2019, in the amount of $19, 168.97 is due and payable
in full within one hundred eight (180) days following written demand by the holder and bears an interest rate of 3% per annum.
On April 29, 2020, the Custodian Ventures LLC agreed to forgive all amounts owed on the November 19, 2019 promissory note of $19,168.97,
including accrued interest for a total of $19,522. As of June 30, 2020, $0 remains outstanding.
On April 29, 2020, Shentang International,
Inc. (the “Company”) entered into and closed the transaction contemplated by a stock purchase agreement (the “Stock
Purchase Agreement”) between the Company, Plentiful Limited, a Samoan company (the “Purchaser”), and Custodian
Ventures, LLC, a Wyoming limited liability company (the “Principal”) controlled by David Lazar, an individual
(together with the Principal, the “Seller”), the controlling shareholder of the Company. Pursuant to the Stock Purchase
Agreement, Purchaser purchased 10,000,000 shares of preferred stock (the “Shares”) of the Company from the Principal.
The full purchase price set forth in the Stock Purchase Agreement is $240,000, or $0.024, per share. Upon the closing, $225,000
of the purchase price was paid to Principal, and the balance of $15,000 will be paid once the Company’s common stock has
received full DTC eligibility approval, subject to the condition that such approval must be obtained by June 5, 2020, or a later
date as agreed by Purchaser. Accordingly, as a result of the transaction, Purchaser became the controlling shareholder of the Company.
On April 29, 2020, the Custodian Ventures
LLC agreed to forgive all amounts owed on the November 19, 2019 promissory note of $19,168.97, including accrued interest for a
total of $19,522 and the unsecured non interest bearing note in the amount of $72,284.
During the period January 01, 2020 thru
April 29, 2020, Custodian Ventures, LLC advanced a total of $14,130 to the Company for payment of registration, legal and accounting
fees. During the period April 30, 2020 thru June 30, 2020, Plentiful Limited paid a total of $10,900 consisting of legal fees,
transfer agent fees, registration fees, and audit and accounting fees on behalf of the Company. As of June 30, 2020, the company
had a loan payable remaining of $0 to Custodian Ventures, LLC. and $10,900 due to Plentiful Limited. This loan is unsecured, non-interest
bearing, and has no specific terms for repayment.
Note 5 – Notes payable
On May 31, 2018, the Company obtained a
promissory note in amount of $7,500 from its custodian, Custodian Ventures, LLC in exchange for services. The note bears an interest
of 3% and matures in 180 days from the date of issuance. During the three months period March 31, 2019, Custodian Ventures, LLC
advanced at total of $6,400 to the Company. On April 29, 2020, the Custodian Ventures LLC agreed to forgive all amounts owed on
the November 19, 2019 promissory note of $19,168.97, including accrued interest for a total of $19,522. As of June 30, 2020, $0
remains outstanding.
Note 6 – Common Stock
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.
On November 19, 2019, the Company board
of directors determined that it is their best interest to redeem the 27,000,000 shares of common stock, held by Custodian Ventures,
LLC. As of June 30, 2020 20,000,000 shares of common stock with par value of $0.001 remains outstanding.
Note 7 – Preferred stock
On November 07, 2019 the board of directors
approved the issuance of 10,000,000 shares of Series A preferred stock to Custodian Ventures, LLC, with a par value of $0.001 per
share for a total of $1,400,000 for consulting services to the company. As of June 30, 2020, 10,000,000 shares of preferred stock
valued at $1,400,000 remains outstanding.
Note 8 – Additional paid in capital
On April 29, 2020, the Custodian Ventures
LLC agreed to forgive all amounts owed on the November 19, 2019 promissory note of $19,168.97, including accrued interest for a
total of $19,522 as well as amounts owed on the unsecured, non interest bearing loan to Custodian Ventures LLC in the amount $72,284.
Since both loans are considered related party debt the total of $91,806 was recorded in additional paid in capital.
Note 9 – Subsequent Events
The Company evaluates events that occur
after the year-end date through the date the financial statements are available to be issued. Accordingly, management has evaluated
subsequent events through August 12, 2020, and has determined that there were no subsequent events, requiring adjustment to, or
disclosure in, the financial statements.