NOTES TO (UNAUDITED) FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
The Company is a US holding
company incorporated in Nevada on March 31, 2016, which operates through the Company’s wholly-owned subsidiary Shengshi International
Holdings Co., Ltd. (“Shengshi International”), a Cayman Islands corporation incorporated on October 19, 2018.
The following is the
organizational structure of Shengshi International Holdings Co., Ltd. along with ownership detail and its subsidiaries:
Shengshi International
Holdings Co., Ltd. (the “Shengshi International”), was incorporated in the Cayman Islands on October 19, 2018. It is owned
by four individuals and four entities. Mr. Jin Xukai, owning 10% share, is the executive director. Mr. Liu Yanyu, owning 4.2% share, Mr.
Li Zhonglin, owning 4.5% share, Mr. Liu Bin, owning 4.33% share are the three directors. The following entities own the remaining shares
of Shengshi International: Shengshi Qianyuan Co., Ltd., founded on Oct. 12, 2018, whose director is Ms. Jiang Yanru, the ownership
percentage is 3.7%; Shengshi Xinguang Co., Ltd, founded on Oct. 10, 2018, whose director is Mr. Zhang Baozhu, the ownership percentage
is s 15%; Shengshi Jinhong Co., Ltd, founded on Oct. 2, 2018, whose director is Ms. Zhang Lina, the ownership percentage is 38.27%; and
Shengshi Huading Co., Ltd., founded on Oct. 9, 2018, whose director is Li Ying, the ownership percentage is 20%.
Shengshi Shengshun (Hong
Kong) Co., Ltd. (“Shengshi Hong Kong”), was established in Hong Kong Special Administrative Region of the People’s Republic
of China (the “PRC”) on September 18, 2018. It is 100% owned by Shengshi International.
Shengshi Yinghe (Shenzhen)
Technology Co. Ltd. (“Shengshi Yinghe”) was established as a wholly foreign-owned enterprise on November 08, 2018, in Shenzhen
City, Guangdong province, under the laws of the PRC. It is 100% owned by Shengshi Hong Kong.
Shenzhen Shengshi Elevator
Co., Ltd. (“Shenzhen Shengshi”), was incorporated on April 2, 2014, registered in Shenzhen City, Guangdong province, under
the laws of the PRC. The Company was established by Mr. Jin Xukai, the founder, president, chairman, chief designer, and the controlling
shareholder. It is 100% owned by Shengshi Yinghe.
Shenzhen Shengshi focuses
on elevator technology research and development, sales, maintenance, and installation. The company’s flagship product is an elevator
that adopts the technical principle of the world’s first “An embedded open nut track lifting system” and represents
a brand-new product direction and industrial innovation.
Sichuan Shengshi Elevator
Technology Co., Ltd. (“Sichuan Shengshi”), was incorporated on July 13, 2018, registered in Chengdu city, Sichuan province,
under the laws of the PRC, a wholly-owned subsidiary of Shenzhen Shengshi. Sichuan Shengshi has the same business scope and offers similar
products and services as the parent company.
The Company has been dormant since May 14, 2020.
On May 18, 2021, as a result of a receivership
in Clark County, Nevada, Case Number: A-21-827642-F, David Lazar was appointed receiver of the Company
The Company’s year-end is December 31.
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been
prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™”
(the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to be applied
by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”)
in the United States.
Management’s
Representation of Interim Financial Statements
The accompanying unaudited
financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange
Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual financial statements.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles
generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations,
and management believes that the disclosures are adequate to make the information presented not misleading. These financial statements
include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results
of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for
a full year. These financial statements should be read in conjunction with the audited financial statements and notes thereto on December
31, 2020, as presented in the Company’s Annual Report on Form 10-K.
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)
Use of Estimates
The preparation of consolidated
financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts
of revenue and expenses during the reporting period. Management makes these estimates using the best information available at the time
the estimates are made; however actual results could differ from those estimates. Significant items subject to such estimates and assumptions
include valuation of inventory, and recoverability of carrying amount, and the estimated useful lives of long-lived assets.
Income taxes
The Company accounts for income taxes under FASB
ASC 740, “Accounting for Income Taxes”. Under FASB ASC 740, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FASB ASC 740-10-05, “Accounting
for Uncertainty in Income Taxes” prescribes a recognition threshold and a measurement attribute for the financial statement
recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax
position must be more likely than not to be sustained upon examination by taxing authorities.
The amount recognized is measured as the largest
amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity
of its conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances have arisen that might cause it
to change its judgment regarding the likelihood of a tax position’s sustainability under audit.
Net Loss per Share
Net loss per common share is computed by dividing
net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260,
“Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income
by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are
determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.
NOTE 3 - GOING CONCERN
As of September 30, 2021,
the Company had $-0- in cash and cash equivalents. The Company had a net loss of $282,189 for the nine months ended September 30, 2021,
and has negative working capital of $7,536,917 and an accumulated deficit of $9,269,458 on September 30, 2021. The Company’s principal
sources of liquidity have been cash provided by operating activities, as well as financial support from related parties. The Company’s
operating results for future periods are subject to numerous uncertainties and it is uncertain if the Company will be able to maintain
profitability and continue growth for the foreseeable future. If management is not able to increase revenue and/or manage operating expenses
in line with revenue forecasts, the Company may not be able to maintain profitability. These factors raise substantial doubt about the
Company’s ability to continue as a going concern.
The Company will focus
on improving operational efficiency and cost reduction, developing core cash-generating business, and enhancing marketing function. Actions
include developing more customers, as well as creating synergy using the Company’s resources.
The Company believes
that available cash and cash equivalents, the cash provided by its receiver, should enable the Company to meet presently anticipated cash
needs for at least the next 12 months after the date that the financial statements are issued and the Company has prepared the consolidated
financial statements on a going concern basis. If the Company encounters unforeseen circumstances that place constraints on its capital
resources, management will be required to take various measures to conserve liquidity, which could include, but not necessarily be limited
to, obtaining financial support from related parties, and controlling overhead expenses. Management cannot provide any assurance that
the Company’s efforts will be successful. The consolidated 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 outcome of these uncertainties.
NOTE 4 – LIABILITIES AND RELATED PARTY
NOTES PAYABLE
As of September 30, 2021, and December 30,
2020, there were $8,333,679 and $8,355,167
8,355,169 in liabilities on the Company’s balance sheet. The September 30, 2021 balance includes $32,189
in-demand loans advanced to the Company by David Lazar, the Company’s Court-appointed receiver. Except for this $32,189 and a
result of a receivership of the Company in Clark County, Nevada, Case Number: A-21-827642-F, the collectability of the liabilities
reflected on the Company’s balance sheet as of September 30, 2021, and December 31, 2020, is unknown
NOTE 5 – EQUITY
Common Stock
The Company has authorized 1,000,000,000 shares
of $0.001 par value, common stock. As of September 30, 2021, there were 603,970,000 shares of Common Stock issued and outstanding.
Preferred Stock
On July 28, 2021, the Company designated 10,000,000
shares of Series A Preferred Stock with a par value of $0.001. These shares were awarded to Custodian Ventures managed by David Lazar
in satisfaction of a judgment for $53,679 and services performed for the Company. These shares have the following rights:
Dividend Provisions.
Subject to the rights of any existing series of
Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, the holders
of shares of Series A Preferred Stock shall be entitled to receive dividends, out of any assets legally available therefor, upon any payment
of any dividend (payable other than in Common Stock or other securities and rights convertible into or entitling the holder thereof to
receive, directly or indirectly, additional shares of Common Stock of the Corporation) on the Common Stock of the Corporation, as and
if declared by the Board of Directors, as if the Series A Preferred Stock had been converted into Common Stock.
Liquidation Preference. In the event of any liquidation,
dissolution, or winding up of the Corporation, either voluntary or involuntary, the holders of the Series A Preferred Stock shall be entitled
to receive, prior and in preference to any distribution of any of the assets of the Corporation to the holders of Common Stock, or any
other series or class of common stock of the Corporation, whether now in existence or hereafter created by an amendment to the articles
of incorporation of the Corporation or by a certificate of designation.
Conversion.
The holders of the Series A Preferred Stock, shall
have conversion rights as follows (the “Conversion Rights”): (a) Right to Convert. Subject to Section 4(c), the holder of
issued and outstanding shares of Series A Preferred Stock shall be entitled to convert the Series A Preferred Stock, at the option of
the holder(s) thereof, at any time after the date of issuance of such shares, at the office of the Corporation or any transfer agent for
such stock, into such number of fully paid and nonassessable shares of Common Stock that are equal to ninety percent (90%), post conversion,
of the total number of issued and outstanding shares of Common Stock of the Corporation, as if all i) Series A Preferred Stock, ii) other
issued and outstanding classes or series of common or preferred stock of the Corporation convertible into Common Stock of the Corporation,
and iii) outstanding warrants, notes, indentures and/or other instruments, obligations or securities convertible into Common Stock of
the Corporation are converted (the “Conversion Shares”), with the shares of Series A Preferred Stock so converted to be converted
into the number of common shares equal to the Conversion Shares multiplied by the quotient of the number of the shares of Series A Preferred
Stock converted by a holder divided by the number of all Series A Preferred Stock issued and outstanding.
As of September 30, 2021, and December 31, 2020,
there were 10,000,000 and -0- Series A Preferred Shares outstanding respectively
NOTE 6 – COMMITMENTS AND CONTINGENCIES
The Company did not have any contractual commitments
as of September 30, 2021.
NOTE 7 – SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) management
has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined
that it does not have any material subsequent events to disclose in these financial statements.