UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10
General
Form for Registration of Securities of Small Business Issuers Under Section 12(g) of the Securities Exchange Act of 1934
Shentang
International, Inc.
(Exact Name Of Company As Specified In Its Charter)
Nevada
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33-148545
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(State
of Incorporation)
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(I.R.S.
Employer Identification No.)
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3445
Lawrence Ave., Oceanside, NY
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11572
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(Address
of Principal Executive Offices)
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(ZIP
Code)
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Company’s
Telephone Number, Including Area Code: (310) 734-2626
Securities
to be Registered Under Section 12(g) of the Act: Common Stock, $0.001
(Title of Class)
Indicate
by check mark whether the Company is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer ☐
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Accelerated
filer ☐
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Non-accelerated
filer ☐
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Smaller
reporting company ☒
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(Do
not check if a smaller reporting company)
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Emerging
growth company ☐
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If
an emerging growth company, indicate by check mark if the Company 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 ☐
TABLE
OF CONTENTS
PART
I
ITEM
1. DESCRIPTION OF BUSINESS
Some
of the statements contained in this registration statement on Form 10 of Shentang International, Inc. (hereinafter the “Company”,
“we” or the “Company”) discuss future expectations, contain projections of our plan of operation or financial
condition or state other forward-looking information. In this registration statement, forward-looking statements are generally
identified by the words such as “anticipate”, “plan”, “believe”, “expect”, “estimate”,
and the like. Forward-looking statements involve future risks and uncertainties, there are factors that could cause actual results
or plans to differ materially from those expressed or implied. These statements are subject to known and unknown risks, uncertainties,
and other factors that could cause the actual results to differ materially from those contemplated by the statements. The forward-looking
information is based on various factors and is derived using numerous assumptions. A reader, whether investing in the Company’s
securities or not, should not place undue reliance on these forward-looking statements, which apply only as of the date of this
Registration Statement. Important factors that may cause actual results to differ from projections include, for example:
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the success or failure of Management’s efforts to implement
the Company’s plan of operation;
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the ability of the Company to fund its operating expenses;
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the ability of the Company to compete with other companies
that have a similar plan of operation;
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the effect of changing economic conditions impacting
our plan of operation;
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the ability of the Company to meet the other risks as
may be described in future filings with the SEC.
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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 issued 27,000,000 shares of common stock, with par value $0.001 for par value for services valued at
$27,000, to the Company’s Chief Executive Officer, David Lazar.
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 and 100% of the issued and outstanding preferred shares 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 June 30, 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.
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.
ITEM
1A. RISK FACTORS
Forward-Looking
Statements
This
registration statement on Form 10 contains forward-looking statements that are based on current expectations, estimates, forecasts
and projections about us, our future performance, the market in which we operate, our beliefs and our Management’s assumptions.
In addition, other written or oral statements that constitute forward-looking statements may be made by us or on our behalf. Words
such as “expects”, “anticipates”, “targets”, “goals”, “projects”, “intends”,
“plans”, “believes”, “seeks”, “estimates”, variations of such words and similar expressions
are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve
certain risks, uncertainties and assumptions that are difficult to predict or assess. Therefore, actual outcomes and results may
differ materially from what is expressed or forecast in such forward-looking statements.
Any
investment in our shares of common stock involves a high degree of risk. You should carefully consider the following information
about these risks, together with the other information contained in this annual report before you decide to invest in our common
stock. Each of the following risks may materially and adversely affect our business objective, plan of operation and financial
condition. These risks may cause the market price of our common stock to decline, which may cause you to lose all or a part of
the money you invested in our common stock. We provide the following cautionary discussion of risks, uncertainties and possible
inaccurate assumptions relevant to our business plan. In addition to other information included in this annual report, the following
factors should be considered in evaluating the Company’s business and future prospects.
The
Company has a limited operating history and very limited resources.
Since
being acquired through custodial proceedings, the Company’s operations have been limited to seeking a potential business combination
and has had no revenues from operations. Investors will have no basis upon which to evaluate the Company’s ability to achieve
the Company’s business objective, which is to effect a merger, capital stock exchange and/or acquire an operating business. The
Company will not generate any revenues until, at the earliest, after the consummation of a business combination or acquiring an
operating business.
Our
auditors have expressed substantial doubt about our ability to continue as a going concern.
As
of December 31, 2017, we had zero cash and cash equivalents and an accumulated deficit of $nil. As of June 30, 2018, we had $10,000
cash and cash equivalents and an accumulated deficit of $632,568. Our audited financial statements for the years ended December
31, 2017 and December 31, 2016, 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.
Since
the Company has not yet selected a particular target industry or target business with which to complete a business combination,
the Company is unable to ascertain the merits or risks associated with any particular business or industry.
Since
the Company has not yet identified a particular industry or prospective target business, there is no basis for investors to evaluate
the possible merits or risks of the target business which the Company may ultimately acquire. If the Company completes a business
combination with a financially unstable company or an entity in its development stage, the Company may be affected by numerous
risks inherent in the operations of those entities. Although the Company’s Management intends to evaluate the risks inherent in
a particular industry or target business, the Company cannot assure you that it will properly ascertain or assess all of the significant
risk factors. There can be no assurance that any prospective business combination will benefit shareholders or prove to be more
favorable to shareholders than any other investment that may be made by shareholders and investors.
Unspecified
and unascertainable risks
There
is no basis for shareholders to evaluate the possible merits or risks of potential business combination. To the extent that the
Company effects a business combination with a financially unstable operating company or an entity that is in its early stage of
development or growth, the Company will become subject to numerous risks. If the Company effects a business combination with an
entity in a high-risk industry, the Company will become subject to the currently unascertainable risks of that industry. Although
Management will endeavor to evaluate the risks inherent in a particular business or industry, there can be no assurance that Management
will properly ascertain or assess all such risks that the Company perceived at the time of the consummation of a business combination.
It
is likely that the Company’s current sole officer and director will resign upon consummation of a business combination and the
Company will have only limited ability to evaluate the Management of the target business.
The
Company’s ability to successfully effect a business combination will be dependent upon the efforts of the Company’s Management.
The future role of Management in the target business cannot presently be ascertained. Although it is possible that Management
may remain associated with the target business following a business combination, it is likely that the Management of the target
business will remain in place. Although the Company intends to closely scrutinize the management of a target business in connection
with evaluating the desirability of effecting a business combination, the Company cannot assure you that the Company’s assessment
of Management will prove to be correct.
Dependence
on key personnel
The
Company is dependent upon the continued services of Management. To the extent that his services become unavailable, the Company
will be required to obtain other qualified personnel and there can be no assurance that it will be able to recruit qualified persons
upon acceptable terms.
The
Company’s sole officer and director may allocate his time to other businesses activities, thereby causing conflicts of interest
as to how much time to devote to the Company’s affairs. This could have a negative impact on the Company’s ability to consummate
a business combination in a timely manner, if at all.
The
Company’s officer and director is not required to commit his full time to the Company’s affairs, which may result in a conflict
of interest in allocating his time between the Company’s business and other businesses. The Company does not intend to have any
full-time employees prior to the consummation of a business combination. Management of the Company is engaged in other business
endeavors and is not obligated to contribute any specific number of his hours per week to the Company’s affairs. Mr. Lazar owes
fiduciary duties to Zongchai Machinery, Inc. and Melt, Inc., of which he is the sole officer and director. Zongchai Machinery,
Inc. and Melt, Inc. are corporations engaged in a substantially similar business as the Company.
If
Management’s other business affairs require him to devote more time to such affairs, it could limit his ability to devote time
to the Company’s affairs and could have a negative impact on the Company’s ability to consummate a business combination. Furthermore,
we do not have an employment agreement with Mr. Lazar. 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.
The
Company may be unable to obtain additional financing, if and when required, to complete a business combination or to fund the
operations and growth of the business combination target, which could compel the Company to restructure a potential business combination
transaction or to entirely abandon a particular business combination.
The
Company has not yet identified any prospective target business. If we require funds for a particular business combination, because
of the size of the business combination or otherwise, we will be required to seek additional financing, which may or may not be
available a terms and conditions satisfactory to the Company, if at all. To the extent that additional financing proves to be
unavailable when and if needed to consummate a particular business combination, we would be compelled to restructure the transaction
or abandon that particular business combination and seek an alternative target business candidate. In addition, if we consummate
a business combination, we may require additional financing to fund the operations or growth of the target business. The failure
to secure additional financing could have a material adverse effect on the continued development or growth of the target business.
The Company’s officer, director or stockholders are not required to provide any financing to us in connection with or after a
business combination.
It
is probable that the Company will only be able to enter into one business combination, which will cause us to be solely dependent
on such single business and a limited number of products or services.
It
is probable that the Company will enter into a business combination with a single operating business. Accordingly, the prospects
for the Company’s success may be:
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solely dependent upon the performance of a single operating business, or
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dependent upon the development or market acceptance of a single or limited number of products or services.
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In
this case, the Company will not be able to diversify the Company’s operations or benefit from the possible spreading of risks
or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different
industries or different areas of a single industry.
The
Company has limited resources and there is significant competition for business combination opportunities. Therefore, the Company
may not be able to enter into or consummate an attractive business combination.
The
Company expects to encounter intense competition from other entities having a business objective similar to the Company’s, including
venture capital funds, leveraged buyout funds and operating businesses competing for acquisitions. Many of these entities are
well established and have extensive experience in identifying and effecting business combinations directly or through affiliates.
Many of these competitors possess greater technical, human and other resources than the Company does and the Company’s financial
resources are limited when contrasted with those of many of these competitors. While the Company believes that there are numerous
potential target businesses that it could acquire, the Company’s ability to compete in acquiring certain sizable target businesses
will be limited by the Company’s limited financial resources and the fact that the Company will use its common stock to acquire
an operating business. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target
businesses.
The
Company may be unable to obtain additional financing, if required, to complete a business combination or to fund the operations
and growth of the target business, which could compel the Company to restructure a potential business transaction or abandon a
particular business combination.
We
may be required to seek additional financing. We cannot assure you that such financing would be available on acceptable terms,
if at all. If additional financing proves to be unavailable, we would be compelled to restructure the transaction or abandon that
particular business combination and seek an alternative target business. In addition, if we consummate a business combination,
we may require additional financing to fund the operations or growth of the target business. The failure to secure additional
financing could have a material adverse effect on the continued development or growth of the target business.
Financing
requirements to fund operations associated with reporting obligations under the Exchange Act.
The
Company has no revenues and is dependent upon the willingness of the Company’s Management to fund the costs associated with the
reporting obligations under the Exchange Act, other administrative costs associated with the Company’s corporate existence
and expenses related to the Company’s business objective. The Company is not likely to generate any revenues until the consummation
of a business combination, at the earliest. The Company believes that it will have available sufficient financial resources available
from its Management to continue to pay accounting and other professional fees and other miscellaneous expenses that may be required
until the Company commences business operations following a business combination.
We
are dependent upon interim funding provided by Management or an affiliated party to pay professional fees and expenses. Our Management
has provided funding, without formal agreement, as has been required to pay for accounting fees and other administrative expenses
of the Company.
The
Company does not currently engage in any business activities that provide cash flow. The costs of investigating and analyzing
potential business combination candidates and preparing and filing Exchange Act reports for what may be an unlimited period of
time will be paid by our sole officer and director, or an affiliated party notwithstanding the fact that there is no written agreement
to pay such costs. Mr. Lazar and/or an affiliated party have informally agreed to pay the Company’s expenses in the form of advances
that are unsecured, non-interest bearing. The Company intends to repay these advances when it has the cash resources to do so.
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.
Based
on Mr. Lazar’s resource commitment to fund our operations, we believe that we will be able to continue as a going concern until
such time as we conclude a business combination. During the next 12 months we anticipate incurring costs related to:
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filing of Exchange Act reports.
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franchise fees, registered agent fees, legal fees and accounting fees, and
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investigating, analyzing and consummating an acquisition or business combination.
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We
estimate that these costs will range from five to six thousand dollars per year, and that we will be able to meet these costs
as necessary through loans/advances from Management or affiliated parties until we enter into a business combination.
The
Company’s sole officer and director has a 57.45% common stock equity interest in the Company and thus is in a position to influence
certain actions requiring stockholder vote.
Management
has no present intention to call for an annual meeting of stockholders to elect new directors prior to the consummation of a business
combination. As a result, our current director will continue in office at least until the consummation of the business combination.
If there is an annual meeting of stockholders for any reason, the Company’s Management has broad discretion regarding proposals
submitted to a vote by shareholders as a consequence of Management’s significant equity interest. Accordingly, the Company’s Management
will continue to exert substantial control at least until the consummation of a business combination.
Broad
discretion of Management
Any
person who invests in the Company’s common stock will do so without an opportunity to evaluate the specific merits or risks of
any prospective business combination. As a result, investors will be entirely dependent on the broad discretion and judgment of
Management in connection with the selection of a prospective business combination. There can be no assurance that determinations
made by the Company’s Management will permit us to achieve the Company’s business objectives.
Reporting
requirements may delay or preclude a business combination
Pursuant
to the requirements of Section 13 of the Exchange Act, the Company is required to provide certain information about significant
acquisitions and other material events. The Company will continue to be required to file quarterly reports on Form 10-Q and annual
reports on Form 10-K, which annual report must contain the Company’s audited financial statements. As a reporting company under
the Exchange Act, following any business combination, we will be required to file a report on Form 8-K, which report contains
audited financial statements of the acquired entity. These audited financial statements must be filed with the SEC within 5 days
following the closing of a business combination. While obtaining audited financial statements is typically the responsibility
of the acquired company, it is possible that a potential target company may be a non-reporting company with unaudited financial
statements. The time and costs that may be incurred by some potential target companies to prepare such audited financial statements
may significantly delay or may even preclude consummation of an otherwise desirable business combination. Acquisition prospects
that do not have or are unable to obtain the required audited statements may not be appropriate for acquisition because we are
subject to the reporting requirements of the Exchange Act.
If
the Company is deemed to be an investment company, the Company may be required to institute burdensome compliance requirements
and the Company’s activities may be restricted, which may make it difficult for the Company to enter into a business combination.
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restrictions
on the nature of the Company’s investments; and
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restrictions
on the issuance of securities, which may make it difficult for us to complete a business combination.
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In
addition, we may have imposed upon us burdensome requirements, including:
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registration as an investment company;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations.
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The
Company does not believe that its anticipated principal activities will subject it to the Investment Company Act of 1940.
The
Company has no “Independent Director”, so actions taken and expenses incurred by our officer and director on behalf
of the Company will generally not be subject to “Independent Review”.
Our
director owns shares of our common stock and, although no compensation will be paid to him for services rendered prior to or in
connection with a business combination, he may receive reimbursement for out-of-pocket expenses incurred by him in connection
with activities on the Company’s behalf such as identifying potential target businesses and performing due diligence on suitable
business combinations. There is no limit on the amount of these out-of-pocket expenses and there will be no review of the reasonableness
of the expenses by anyone other than our board of director, which consist of one directors who may seek reimbursement. If our
director will not be deemed “independent,” he will generally not have the benefit of independent director examining
the propriety of expenses incurred on our behalf and subject to reimbursement. Although the Company believes that all actions
taken by our director on the Company’s behalf will be in the Company’s best interests, the Company cannot assure the investor
that this will actually be the case. If actions are taken, or expenses are incurred that are actually not in the Company’s best
interests, it could have a material adverse effect on our business and plan of operation and the price of our stock held by the
public stockholders.
General
Economic Risks.
The
Company’s current and future business objectives and plan of operation are likely dependent, in large part, on the state of the
general economy. Adverse changes in economic conditions may adversely affect the Company’s business objective and plan of operation.
These conditions and other factors beyond the Company’s control include also, but are not limited to regulatory changes.
Risks
Related to Our Common Stock
The
Company’s shares of common stock are traded from time to time on the OTC Pink Sheet Market.
Our
common stock is traded on the OTC Pink Sheet Market from time to time. There can be no assurance that there will be a liquid trading
market for the Company’s common stock following a business combination. In the event that a liquid trading market commences, there
can be no assurance as to the market price of the Company’s shares of common stock, whether any trading market will provide liquidity
to investors, or whether any trading market will be sustained.
Our
common stock is subject to the Penny Stock Rules of the SEC and the trading market in our common stock is limited, which makes
transactions in our stock cumbersome and may reduce the value of an investment in our common stock.
The
Securities and Exchange Commission has adopted Rule 3a51-1 which establishes the definition of a “penny stock,” for
the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price
of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, Rule
15g-9 require:
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that a broker or dealer approve a person’s account for transactions in penny stocks; and
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the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
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In
order to approve a person’s account for transactions in penny stocks, the broker or dealer must:
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obtain financial information and investment experience objectives of the person; and
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make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
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The
broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating
to the penny stock market, which, in highlight form:
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sets forth the basis on which the broker or dealer made the suitability determination; and
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that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
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Generally,
brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make
it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.
Disclosure
also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the
commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to
be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny
stocks.
State
blue sky registration; potential limitations on resale of the Company’s common stock
The
holders of the Company’s shares of common stock registered under the Exchange Act and those persons who desire to purchase them
in any trading market that may develop in the future, should be aware that there may be state blue-sky law restrictions upon the
ability of investors to resell the Company’s securities. Accordingly, investors should consider the secondary market for the Company’s
securities to be a limited one.
It
is the intention of the Company’s Management following the consummation of a business combination to seek coverage and publication
of information regarding the Company in an accepted publication manual which permits a manual exemption. The manual exemption
permits a security to be distributed in a particular state without being registered if the Company issuing the security has a
listing for that security in a securities manual recognized by the state. However, it is not enough for the security to be listed
in a recognized manual. The listing entry must contain (1) the names of issuers, officers, and directors, (2) an issuer’s balance
sheet, and (3) a profit and loss statement for either the fiscal year preceding the balance sheet or for the most recent fiscal
year of operations. Furthermore, the manual exemption is a nonissuer exemption restricted to secondary trading transactions, making
it unavailable for issuers selling newly issued securities.
Most
of the accepted manuals are those published by Standard and Poor’s, Moody’s Investor Service, Fitch’s Investment Service, and
Best’s Insurance Reports, and many states expressly recognize these manuals. A smaller number of states declare that they “recognize
securities manuals” but do not specify the recognized manuals. The following states do not have any provisions and therefore
do not expressly recognize the manual exemption: Alabama, Georgia, Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee,
Vermont and Wisconsin.
Rule
144 Related Risks
The
SEC adopted amendments to Rule 144 which became effective on February 15, 2008. These Rule 144 amendments apply to securities
acquired both before and after that date. Generally, under the Rule 144 amendments, a person who has beneficially owned restricted
shares for at least six months would be entitled to sell their securities provided that: (i) such person is not deemed to
have been an affiliate at the time of, or at any time during the three months preceding, a sale; (ii) we are subject to and
are current in the Exchange Act periodic reporting requirements for at least 90 days before the sale; and (iii) if the
sale occurs prior to satisfaction of a one-year holding period, provided current information is available at the time of sale.
Persons
who have beneficially owned restricted shares for at least six months but who are affiliates at the time of, or at any time during
the three months preceding a sale, would be subject to additional restrictions, by which such person would be entitled to sell
within any three-month period only a number of securities that does not exceed the greater of either of the following: (i) 1%
of the total number of securities of the same class then outstanding; or (ii) the average weekly trading volume of such securities
during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale; provided, in each case,
that we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale. Such sales
by affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144.
These
Rule 144 related risks are subject to further restrictions in the event that the Exchange Act reporting company is deemed to be
a Shell Company, such as the Company.
Restrictions
on the Reliance of Rule 144 by Shell Companies or Former Shell Companies
Historically,
the SEC staff has taken the position that Rule 144 is not available for the resale of securities initially issued by companies
that are, or previously were, blank check companies, like us. The SEC has codified and expanded this position in the amendments
discussed above by prohibiting the use of Rule 144 for resale of securities issued by any shell companies (other than business
combination related shell companies) or any issuer that has been at any time previously a shell company. The SEC has provided
an important exception to this prohibition, however, if the following conditions are met:
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The issuer of the securities that was formerly a shell company has ceased to be a shell company;
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The issuer of the securities is
subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
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The issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and
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At least one year has elapsed from the time that the issuer filed current comprehensive disclosure with the SEC reflecting its status as an entity that is not a shell company.
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As
a result, it is likely that pursuant to Rule 144, stockholders who receive our restricted securities in a business combination
will not be able to sell our shares without registration until one year after we have completed our initial business combination.
Rule
145 Related Risk
Under
the new amendments, affiliates of a target company who receive registered shares in a Rule 145 business combination transaction,
and who do not become affiliates of the acquirer, will be able to immediately resell the securities received by them into the
public markets without registration (except for affiliates of a shell company as discussed in the following section). However,
those persons who are affiliates of the acquirer, and those who become affiliates of the acquirer after the acquisition, will
still be subject to the Rule 144 resale conditions generally applicable to affiliates, including the adequate current public
information requirement, volume limitations, manner-of-sale requirements for equity securities, and, if applicable, a Form 144
filing.
Application
of Rule 145 to Shell Companies
Public
resale of securities acquired by affiliates of acquirers and target companies in business combination transactions involving shell
companies will continue to be subject to restrictions imposed by Rule 145. If the business combination transaction is not
registered under the Securities Act, then the affiliates must look to Rule 144 to resell their securities (with the additional
Rule 144 conditions applicable to shell company securities). If the business combination transaction is registered under the Securities
Act, then affiliates of the acquirer and target company may resell the securities acquired in the transaction, subject to the
following conditions:
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The issuer must meet all of the conditions applicable to shell companies under Rule 144;
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After 90 days from the date of the acquisition, the affiliates may resell their securities subject to Rule 144’s volume limitations, adequate current public information requirement, and manner-of-sale requirements;
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After six months from the date of the acquisition, selling security-holders who are not affiliates of the acquirer may resell their securities subject only to the adequate current public information requirement of Rule 144; and
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After one year from the date of the acquisition, selling security-holders who are not affiliates or the acquirer may resell their securities without restriction.
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Application
of Rule 419 to Shell Companies
The
provisions of Rule 419 apply to registration statements filed under the Securities Act of 1933, as amended, by a blank check company.
Rule 419 requires that a blank check company filing such 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.
In
addition, the Company is required to file a post-effective amendment to the registration statement upon the execution of an agreement
for such acquisition or merger. The rule provides procedures for the release of the offering funds 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 non-ordinary course 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. Each 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.
You
May Not Be Entitled to Protections Normally Afforded to Investors of Bank Check Companies.
If
the net proceeds of an offering under the Securities Act of 1933 is used to complete a initial business combination with a target
business that has not been identified, and we will have net tangible assets in excess of $5,000,001 upon the successful consummation
of this offering and will file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are
exempt from rules promulgated by the SEC to protect investors of blank check companies such as Rule 419. Accordingly, investors
will not be afforded the benefits or protections of those rules which would, for example, completely restrict the transferability
of our securities, require us to complete our initial business combination within 18 months of the effective date of the initial
registration statement and restrict the use of interest earned on the funds held in the trust account.
Investors
will then not be entitled to protections normally offered to investors in Rule 419 blank check offerings.
Possible
Issuance of Additional Securities.
Our
Articles of Incorporation authorize the issuance of 190,000,000 shares of common stock, par value $0.001. As of July, 2018, we
had 47,000,000 shares issued and outstanding. We may be expected to issue additional shares in connection with our pursuit of
new business opportunities and new business operations. To the extent that additional shares of common stock are issued, our shareholders
would experience dilution of their respective ownership interests. If we issue shares of common stock in connection with our intent
to pursue new business opportunities, a change in control of the Company may be expected to occur. The issuance of additional
shares of common stock may adversely affect the market price of our common stock, in the event that an active trading market
commences.
Dividends
unlikely
The
Company does not expect to pay dividends for the foreseeable future because it has no revenues or cash resources. The payment
of dividends will be contingent upon the Company’s future revenues and earnings, if any, capital requirements and overall financial
conditions. The payment of any future dividends will be within the discretion of the Company’s board of directors as then constituted.
It is the Company’s expectation that future Management following a business combination will determine to retain any earnings
for use in its business operations and accordingly, the Company does not anticipate declaring any dividends in the foreseeable
future.
ITEM
2. FINANCIAL INFORMATION
Management’s
Plan of Operation
The
following discussion contains forward-looking statements. Forward-looking statements give our current expectations or forecasts
of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts.
They use of words such as “anticipate”, “estimate”, “expect”, “project”, “intend”,
“plan”, “believe”, and other words and terms of similar meaning in connection with any discussion of future
operating or financial performance. From time to time, we also may provide forward-looking statements in other materials we release
to the public.
Overview
The
Company’s current business objective is to seek a business combination with an operating company. We intend to use the Company’s
limited personnel and financial resources in connection with such activities. The Company will utilize its capital stock, debt
or a combination of capital stock and debt, in effecting a business combination. It may be expected that entering into a business
combination will involve the issuance of restricted shares of capital stock. The issuance of additional shares of our capital
stock:
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may significantly reduce the equity interest of our stockholders;
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will likely cause a change in control if a substantial number of our shares of capital stock are issued, and most likely will also result in the resignation or removal of our present officer and director; and
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may adversely affect the prevailing market price for our common stock.
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Similarly,
if we issued debt securities, it could result in:
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default and foreclosure on our assets if our operating revenues after a business combination were insufficient to pay our debt obligations;
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acceleration of our obligations to repay the indebtedness even if we have made all principal and interest payments when due if the debt security contained covenants that required the maintenance of certain financial ratios or reserves and any such covenants were breached without a waiver or renegotiations of such covenants;
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our immediate payment of all principal and accrued interest, if any, if the debt security was payable on demand; and
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our inability to obtain additional financing, if necessary, if the debt security contained covenants restricting our ability to obtain additional financing while such security was outstanding.
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Results
of Operations during the year ended December 31, 2017 as compared to the year ended December 31, 2016
We
have not generated any revenues during the years 2017 and 2016. We had total operating expenses of $nil during the years ended
December 31, 2017 and the year ended December 31, 2016. We incurred zero interest expense during both years ended December 31,
2017 and December 31, 2016. During the years ended December 31, 2017 and 2016, we had a net loss of $0.
Results
of Operations during the three and six months ended June 30, 2018, as compared to the three and six months ended June 30, 2017
We
have not generated any revenues during the three and six months ended June 30, 2018 and 2017. We had total operating expenses
of $55,735, related to general and administrative expenses during the three ended June 30, 2018 compared to total operating expenses
of $0 during the three months ended June 30, 2017. We had total operating expenses of $55,075, related to general and administrative
expenses during the six ended June 30, 2018 compared to total operating expenses of $0 during the six months ended June 30, 2017.
We incurred zero interest expense during three and six months ended June 30, 2018 and June 30, 2017. During the three months ended
June 30, 2018 and 2017, we had a net loss of $55,735 and $0, respectively mainly due to our general and administrative expenses.
During the six months ended June 30, 2018 and 2017, we had a net loss of $55,735 and $0, respectively mainly due to our general
and administrative expenses.
Liquidity
and Capital Resources
As
of June 30, 2018, the Company has no business operations and no cash resources other than that provided by Management. We are
dependent upon interim funding provided by Management or an affiliated party to pay professional fees and expenses. Our Management
and an affiliated party have agreed to provide funding as may be required to pay for accounting fees and other administrative
expenses of the Company until the Company enters into a business combination. The Company would be unable to continue as a going
concern without interim financing provided by Management. As of June 30, 2018, we had $10,000 in cash. As of December 31, 2017,
we had $0 in cash.
If
we require additional financing, we cannot predict whether equity or debt financing will become available at terms acceptable
to us, if at all. The Company depends upon services provided by Management and an affiliated party to fulfill its filing obligations
under the Exchange Act. At present, the Company has no financial resources to pay for such services.
The
Company does not currently engage in any business activities that provide cash flow. The costs of investigating and analyzing
business combinations, maintaining the filing of Exchange Act reports, the investigation, analyzing, and consummation of an acquisition
for an unlimited period of time will be paid from additional money contributed by David Lazar, our sole officer and director,
or an affiliated party.
During
the next 12 months we anticipate incurring costs related to:
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filing of Exchange Act reports.
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franchise fees, registered agent fees, legal fees and accounting fees, and
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investigating, analyzing and consummating an acquisition or business combination.
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We
estimate that these costs will be in the range of five to six thousand dollars per year, and that we will be able to meet these
costs as necessary, to be advanced/loaned to us by Management and/or an affiliated party.
On
June 30, 2018 and December 31, 2017, we have had $10,000 in current assets and $0 in current assets, respectively. As of June
30, 2018, we had $10,000 in liabilities and stockholders’ deficit, consisting of Notes payable-related party and a Loan
payable due to our CEO. As of December 31, 2017, we had $0 in liabilities.
We
had a negative cash flow from operations of $28,735 during the six months ended June 30, 2018, mainly due to a net loss of $55,735,
offset by an increase in stock based compensation of $27,000. We financed our negative cash flow from operations during the six
months ended June 30, 2018 through advances made by our CEO.
We
had $0 cash flow from operations during the six months ended June 30, 2017.The Company currently plans to satisfy its cash requirements
for the next 12 months through borrowings from its CEO or companies affiliated with its CEO and believes it can satisfy its cash
requirements so long as it is able to obtain financing from these affiliated parties. The Company expects that money borrowed
will be used during the next 12 months to satisfy the Company’s operating costs, professional fees and for general corporate purposes.
There is no written funding agreement between the Company and Mr. Lazar, our sole officer and director. 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.
The
Company has only limited capital. Additional financing is necessary for the Company to continue as a going concern. Our independent
auditors have unqualified audit opinion for the years ended December 31, 2017 and 2016 with an explanatory paragraph on going
concern.
Off-Balance
Sheet Arrangements
As
of June 30, 2018 and 2017, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation
S-K promulgated under the Securities Act of 1934.
Contractual
Obligations and Commitments
As
of June 30, 2018 and 2017, we did not have any contractual obligations.
Critical
Accounting Policies
Our
significant accounting policies are described in the notes to our financial statements for the six months ended June 30, 2018
and 2017, and are included elsewhere in this registration statement.
ITEM
3. DESCRIPTION OF PROPERTY
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.
ITEM
4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth information regarding the beneficial ownership of our common stock as of June 30, 2018. The information
in this table provides the ownership information for: each person known by us to be the beneficial owner of more than 5% of our
common stock; each of our directors; each of our executive officers; and our executive officers and directors as a group.
Beneficial
ownership has been determined in accordance with the rules and regulations of the SEC and includes voting or investment power
with respect to the shares. Unless otherwise indicated, the persons named in the table below have sole voting and investment power
with respect to the number of shares indicated as beneficially owned by them.
Name
of Beneficial Owner
|
|
Common
Stock
Beneficially
Owned (1)
|
|
Percentage
of
Common Stock
Owned (1)
|
David
Lazar
|
|
27,000,000
|
|
57.45%
|
3445
Lawrence Avenue
|
|
|
|
|
Oceanside,
NY 11572
|
|
|
|
|
Director
and Officer (1 person)
|
|
27,000,000
|
|
57.45%
|
|
|
|
|
|
Zhoming
Chen
C-22
World Trade Plaza
9
Fuhung Lu
Futian
Shenzen
Shenzen,
China
|
|
7,056,000
|
|
15.01%
|
(1)
|
Applicable percentage ownership is based on 3,319,245
shares of common stock outstanding as of June 30, 2018. Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common
stock that are currently exercisable or exercisable within 60 days of June 30, 2018 are deemed to be beneficially owned by the
person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as
outstanding for the purpose of computing the percentage ownership of any other person.
|
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS
The following table sets forth the names and ages of the member
of our Board of Director and our executive officers and the positions held by each.
Name
|
|
Age
|
|
Title
|
David Lazar
|
|
28
|
|
CEO and Chairman
|
David Lazar, 28, has been CEO and Chairman
of the Company since May 16, 2018. David Lazar is a private investor who brings seven (7) years of business experience. David has
a diverse knowledge of financial, legal and operations management; public company management, accounting, audit preparation, due
diligence reviews and SEC regulations.
Other expertise includes early stage company capital restructuring, debt financing, capital introductions, and mergers and acquisitions.
Mr. Lazar was selected to serve as a director due to his extensive knowledge of the capital markets, his judgment in assessing
business strategies and accompanying risks, and his expertise with emerging growth companies.
Our director holds office until the next
annual meeting of stockholders and until his successors have been duly elected and qualified. There are no agreements with respect
to the election of directors. We do not compensate our directors. Officers are appointed annually by the Board of Directors and
each executive officer serves at the discretion of the Board of Directors. We do not have any standing committees at this time.
Our director, officer or affiliates have not, within the past five years, filed any bankruptcy petition, been convicted in or
been the subject of any pending criminal proceedings, or is any such person the subject or any order, judgment or decree involving
the violation of any state or federal securities laws.
Section 16(a) Compliance
Section 16(a) of the Securities and Exchange
Act of 1934 requires the Company’s directors and executive officers, and persons who own beneficially more than ten percent (10%)
of the Company’s Common Stock, to file reports of ownership and changes of ownership with the Securities and Exchange Commission.
Copies of all filed reports are required to be furnished to the Company pursuant to Section 16(a). Once the Company becomes subject
to the Exchange Act of 1934, our office and director has informed us that he intends to file reports required to be filed under
Section 16(a).
ITEM 6. EXECUTIVE COMPENSATION
No executive compensation was paid during
the fiscal years ended December 31, 2017, 2016 and 2015. The Company has no employment agreement with any of its officers and directors.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS AND DIRECTOR INDEPENDENCE
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. The largest principal amount in advances during the quarter ended June
30, 2018 was $9,425 of legal fees. As of June 30, 2018, the Company owed a total of $31,235 to Mr. Lazar. As of June 30, 2018 and
2017, the Company owed $31,235 and $0, respectively in cash advances made by Mr. Lazar to the Company, which are unsecured, non-interest
bearing, and have no specific terms for repayment. 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.
ITEM 8. LEGAL PROCEEDING
None.
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE COMPANY’S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
Our common stock is currently quoted on
the OTC market “Pink Sheets” under the symbol SHNL. For the periods indicated, the following table sets forth the high
and low bid prices per share of common stock. The below prices represent inter-dealer quotations without retail markup, markdown,
or commission and may not necessarily represent actual transactions.
|
|
Price Range
|
|
Period
|
|
High
|
|
|
Low
|
|
Year Ended June 2016:
|
|
|
|
|
|
|
Third Quarter
|
|
$
|
.015
|
|
|
$
|
.015
|
|
Fourth Quarter
|
|
$
|
.015
|
|
|
$
|
.015
|
|
Year Ended June 30, 2017:
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
.015
|
|
|
$
|
.015
|
|
Second Quarter
|
|
$
|
.015
|
|
|
$
|
.015
|
|
Third Quarter
|
|
$
|
.015
|
|
|
$
|
.015
|
|
Fourth Quarter
|
|
$
|
.015
|
|
|
$
|
.015
|
|
First Quarter, March 2018
|
|
$
|
.05
|
|
|
$
|
.015
|
|
Second Quarter, June 2018
|
|
$
|
.38
|
|
|
$
|
0.04
|
|
As of June 30, 2018, our shares of common stock were held by
approximately 86 stockholders of record. The transfer agent of our common stock is Empire Stock Transfer. Phone (702) 818-5898.
Dividends
Holders of common stock are entitled to
dividends when, as, and if declared by the Board of Directors, out of funds legally available therefore. We have never declared
cash dividends on its common stock and our Board of Directors does not anticipate paying cash dividends in the foreseeable future
as it intends to retain future earnings to finance the growth of our businesses. There are no restrictions in our articles of incorporation
or bylaws that restrict us from declaring dividends.
Securities Authorized for Issuance Under Equity Compensation
Plans
No equity compensation plan or agreements
under which our common stock is authorized for issuance has been adopted during the fiscal years ended June 30, 2018 and 2017.
ITEM 10. RECENT SALES OF UNREGISTERED
SECURITIES
On May 31, 2018, the Company issued 27,000,000 shares of common
stock, with par value $0.001 for par value for services valued at $34,500 to the Company’s Chief Executive Officer, David
Lazar.
The issuance was completed pursuant to
Section 4(a)(2) of the Securities Act.
ITEM 11. DESCRIPTION OF COMPANY’S SECURITIES
TO BE REGISTERED
The following statements relating to the
capital stock set forth the material terms of the Company’s securities; however, reference is made to the more detailed provisions
of our Certificate of Incorporation and by-laws, copies of which are filed herewith.
Common Stock
Our Certificate of Incorporation authorize
the issuance of 500,000,000 shares of common stock, par value $0.001. Our holders of shares of common stock are entitled to one
vote for each share on all matters to be voted on by the shareholders. Holders of common stock do not have cumulative voting rights.
Holders of common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the board of
directors in its discretion from legally available funds. In the event of a liquidation, dissolution or winding up of the Company,
the holders of common stock are entitled to share pro rata all assets remaining after payment in full of all liabilities. Holders
of common stock have no preemptive rights to purchase the Company’s common stock. There are no conversion or redemption rights
or sinking fund provisions with respect to the common stock.
Dividends
Dividends, if any, will be contingent upon
our revenues and earnings, if any, capital requirements and financial conditions. The payment of dividends, if any, will be within
the discretion of our board of directors. We intend to retain earnings, if any, for use in our business operations and accordingly,
the board of directors does not anticipate declaring any dividends prior to a business combination transaction, nor can there be
any assurance that any dividends will be paid following any business combination.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our articles of incorporation, by-laws
and director indemnification agreements provide that each person who was or is made a party or is threatened to be made a party
to or is otherwise involved (including, without limitation, as a witness) in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he or she is or was a director or an officer of Brenham or, in the
case of a director, is or was serving at our request as a director, officer, or trustee of another corporation, or of a partnership,
joint venture, trust or other enterprise, including service with respect to an employee benefit plan, whether the basis of such
proceeding is alleged action in an official capacity as a director, officer or trustee or in any other capacity while serving as
a director, officer or trustee, shall be indemnified and held harmless by us to the fullest extent authorized by the Nevada General
Corporation Law against all expense, liability and loss reasonably incurred or suffered by such.
Section 145 of the Nevada General Corporation
Law permits a corporation to indemnify any director or officer of the corporation against expenses (including attorney’s fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any action, suit or proceeding
brought by reason of the fact that such person is or was a director or officer of the corporation, if such person acted in good
faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, and,
with respect to any criminal action or proceeding, if he or she had no reason to believe his or her conduct was unlawful. In a
derivative action, ( i.e ., one brought by or on behalf of the corporation), indemnification may be provided only for expenses
actually and reasonably incurred by any director or officer in connection with the defense or settlement of such an action or suit
if such person acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best interests
of the corporation, except that no indemnification shall be provided if such person shall have been adjudged to be liable to the
corporation, unless and only to the extent that the court in which the action or suit was brought shall determine that the defendant
is fairly and reasonably entitled to indemnity for such expenses despite such adjudication of liability.
Pursuant to Section 102(b)(7) of the Nevada
General Corporation Law, Article Seven of our articles of incorporation eliminates the liability of a director to us for monetary
damages for such a breach of fiduciary duty as a director, except for liabilities arising:
|
●
|
from
any breach of the director’s duty of loyalty to us;
|
|
●
|
from
acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
|
|
●
|
under
Section 174 of the Nevada General Corporation Law; and
|
|
●
|
from
any transaction from which the director derived an improper personal benefit.
|
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the board of directors
of Shentang International, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated
balance sheets of Shentang International, Inc. as of December 31, 2017 and 2016, the related statements of operations, stockholders’
equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “financial
statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of
the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States.
Basis for Opinion
These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement, whether due to error or fraud.
Our audit included performing procedures
to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides
a reasonable basis for our opinion.
Substantial Doubt about the Company’s
Ability to Continue as a Going Concern
The accompanying financial statements
have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements,
the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company
continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company’s ability
to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this uncertainty.
/S/ BF Borgers CPA PC
BF Borgers CPA PC
We have served as the Company’s auditor
since 2018.
Lakewood, CO
August 1, 2018
SHENTANG INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
|
December 31,
2017
|
|
|
December 31,
2016
|
|
ASSETS
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
-
|
|
|
$
|
-
|
|
Total current assets
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
OTHER ASSETS:
|
|
|
|
|
|
|
|
|
Property & equipment, net
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
|
Accounts Payable and Accrued Expenses
|
|
$
|
-
|
|
|
$
|
-
|
|
Total current liabilities
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
Common stock, par value $0.001 per share; 190,000,000 shares authorized; 20,000,000 shares issued and outstanding in 2017 and 2016, respectively
|
|
|
20,000
|
|
|
|
20,000
|
|
Additional paid in capital
|
|
|
556,833
|
|
|
|
556,833
|
|
Accumulated deficit
|
|
|
(576,833
|
)
|
|
|
(576,833
|
)
|
Total stockholders’ equity
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
$
|
-
|
|
|
$
|
-
|
|
The accompanying notes are an integral part
of these financial statements.
SHENTANG INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS DECEMBER 31
|
|
2017
|
|
|
2016
|
|
REVENUES
|
|
$
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
Research and Development Costs
|
|
|
-
|
|
|
|
-
|
|
General and Administrative
|
|
|
-
|
|
|
|
-
|
|
Total operating expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
OTHER EXPENSE:
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
TOTAL OTHER INCOME (EXPENSE)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
$
|
-
|
|
|
$
|
-
|
|
The accompanying notes are an integral part
of these financial statements.
SHENTANG INTERNATIONAL INC. AND SUBSIDIARIES
STATEMENT OF STOCKHOLDERS’ EQUITY
(DEFICIT)
FOR THE PERIOD DECEMBER 31, 2017 AND
DECEMBER 31, 2016
|
|
Common Stock:
Shares
|
|
|
Common Stock: Amount
|
|
|
Additional Paid in Capital
|
|
|
Deficit Accum
|
|
|
Other Comprehensive Income
|
|
|
Totals
|
|
Balance – December 31, 2015
|
|
|
20,000,000
|
|
|
$
|
20,000
|
|
|
$
|
556,833
|
|
|
$
|
(576,833
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the period
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Balance - December 31, 2016
|
|
|
20,000,000
|
|
|
|
20,000
|
|
|
|
556,833
|
|
|
|
(576,833
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the period
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Balance December 31, 2017
|
|
|
20,000,000
|
|
|
$
|
20,000
|
|
|
$
|
556,833
|
|
|
$
|
(576,833
|
)
|
|
$
|
-
|
|
|
|
-
|
|
The accompanying notes are an integral part
of these financial statements.
SHENTANG INTERNATIONAL INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
FOR THE PERIOD
DECEMBER 31, 2017 and DECEMBER 31, 2016
|
|
2017
|
|
|
2016
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
Net loss
|
|
$
|
-
|
|
|
$
|
-
|
|
Adjustments to reconcile net loss to net cash (used in) operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Changes in net assets and liabilities -
|
|
|
|
|
|
|
|
|
Accounts payable - trade
|
|
|
-
|
|
|
|
-
|
|
NET CASH USED IN OPERATING ACTIVITIES
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH USED IN INVESTING ACTIVITIES
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
CASH – BEGINNING OF PERIOD
|
|
|
0
|
|
|
|
0
|
|
CASH – END OF PERIOD
|
|
$
|
0
|
|
|
$
|
0
|
|
The accompanying notes are an integral part
of these financial statements.
SHENTANG INTERNATIONAL INC. AND SUBSIDIARIES
.
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD DECEMBER 31, 2017 and
DECEMBER 31, 2016
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,
Shentang International 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, Shentang International entered into a Share
Exchange Agreement (the “Exchange Agreement”) with Boom Spring, the shareholders of Boom Spring, and Shengtang. Pursuant
to the terms of the Exchange Agreement, the shareholders of Boom Spring transferred to Shentang International all of the equity
interest of Boom Spring in exchange for 12,000,000 outstanding shares of Shentang International and 33,300,000 newly issued shares
of Shentang International (the “Share Exchange”). As a result of the Share Exchange, Boom Spring became a wholly owned
subsidiary of Shentang International and Shentang International 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 give 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.
Hereinafter, Shentang
International, Boom Spring and Shengtang are collectively referred to as the “Company”.
Shengtang has
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 has successfully developed “Yi Fan Feng Shun”
liquor vessel with the brand of Wu Liang Ye. Shengtang is actively engaged in expanding in the international market. The Company
also plans to build or acquire its own production capacity to meet the demand in the domestic Chinese market by purchasing or acquiring
new equipments of machine-made glass producing. The objective of Shengtang is to become a large-scaled glass craftwork
supplier and further develop its innovational technology.
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 – Going Concern
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 3 – 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.
Revenue Recognition
The Company
recognize revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement,
acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions,
and collection of any related receivable is probable.
Property and equipment
Property
and equipment are stated at historical cost less accumulated depreciation and impairment. The historical cost of acquiring
an item of property and equipment includes the costs necessarily incurred to bring it to the condition and location necessary for
its intended use.
Income Taxes
The Company accounts for income taxes pursuant
to FASB ASC Topic 740,
Income Taxes
. Under FASB ASC Topic 740, deferred tax assets and liabilities are determined based
on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The
deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities
generating the differences.
The Company maintains a valuation allowance
with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing
the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current
period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward
period under the Federal tax laws.
Changes in circumstances, such as the Company
generating taxable income, could cause a change in judgment about the reliability of the related deferred tax asset. Any change
in the valuation allowance will be included in income in the year of the change in estimate.
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.
Estimates
The financial statements are prepared on
the basis of accounting principles generally accepted in the United States of America. The preparation of financial statements
in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities as of December 31, 2017 and 2016, and expenses for the years ended December 31, 2017
and 2016, and cumulative from inception. Actual results could differ from those estimates made by management.
Subsequent Event
The Company evaluated subsequent events
through the date when financial statements are issued for disclosure consideration.
Adoption of Recent Accounting Pronouncements
As of December 31, 2015, the Company
adopted guidance codified in ASU 2015-03,
Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation
of Debt Issuance Costs.
The guidance simplifies the presentation of debt issuance costs by requiring debt issuance costs to
be presented as a deduction from the corresponding liability, consistent with debt discounts. The recognition and measurement guidance
for debt issuance costs is not affected. Therefore, these costs will continue to be amortized as interest expense using the effective
interest method pursuant to ASC 835-30-35-2 through 35-3. The Company has applied this guidance retrospectively to all prior periods
presented in the Company’s financial statements.
The Company has implemented all new accounting
pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new
accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
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 consolidated
financial statements and related disclosures and has not yet determined the method by which it will adopt the standard.
In March 2016,
the FASB issued an accounting standards update that provides a new requirement to record all of the tax effects related to share-based
payments at settlement (or expiration) through the income statement. This pronouncement is effective for annual reporting periods
beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018, for nonpublic
entities. The Company is still evaluating the impact that the new accounting guidance will have on its consolidated financial statements
and related disclosures
In August 2016,
the FASB issued an accounting standards update addressing the classification and presentation of eight specific cash flow issues
that currently result in diverse practices. The amendments provide guidance in the presentation and classification of certain cash
receipts and cash payments in the statement of cash flows including debt prepayment or debt extinguishment costs, settlement of
zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement
of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity
method investees. This pronouncement is effective for annual reporting periods beginning after December 15, 2018, and interim
periods within fiscal years beginning after December 15, 2019, for nonpublic entities. The amendments in this ASU should be
applied using a retrospective approach. The Company is still evaluating the impact that the new accounting guidance will have on
its consolidated financial statements and related disclosures.
Note 4 – 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 2017 the most current year since operations shutdown based on the accumulated records obtained
to date through the second quarter 2018.
Note 5 – Subsequent Events
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 note bears an interest of 3% and matures in
180 days from the date of issuance.
On May 31, 2018, the Company issued 27,000,000
shares of common stock, with par value $0.001 for par value in cash for services, to David Lazar.
On July 11, 2018, the Custodian of the
Company commenced publication of a Notice of Meeting of Creditors for a creditor’s meeting to be held on July 11, 2018, at
the hour of 9:30 a.m., for purposes of identifying liabilities of the Company and for the Company’s creditors to present
claims and participate in the distribution of any remaining assets of the Company.
On July 11, 2018, the Custodian of the
Company conducted a meeting of creditors for purposes of identifying liabilities of the Company and for the Company’s creditors
to present claims and participate in the distribution of any remaining assets of the Company. No creditors of the Company attended
the meeting of creditors, filed a claim, or otherwise contacted Custodian.
S
HENTANG
INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
June 30,
2018
|
|
|
December 31,
2017
|
|
ASSETS
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
10,000
|
|
|
$
|
-
|
|
Total current assets
|
|
|
10,000
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
OTHER ASSETS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
10,000
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
Accounts Payable and Accrued Expenses
|
|
$
|
-
|
|
|
$
|
-
|
|
Related party notes payable
|
|
|
31,235
|
|
|
|
|
|
Notes Payable – Related Party
|
|
|
7,500
|
|
|
|
|
|
Total current liabilities
|
|
|
38,735
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
Common stock, par value $0.001 per share; 190,000,000 shares authorized; 47,000,000 and 20,000,000 shares issued and outstanding in June 30, 2018 and December 31, 2017, respectively
|
|
|
47,000
|
|
|
|
20,000
|
|
Additional paid in capital
|
|
|
556,833
|
|
|
|
556,833
|
|
Accumulated deficit
|
|
|
(632,568
|
)
|
|
|
(576,833
|
)
|
Total stockholders’ deficit
|
|
|
(24,735
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
$
|
10,000
|
|
|
$
|
-
|
|
The accompanying notes are an integral part
of these financial statements.
SHENTANG INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
For the three months ended
|
|
|
For the six months ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related party professional fees – Common stock
|
|
|
34,500
|
|
|
|
-
|
|
|
|
34,500
|
|
|
|
-
|
|
Legal fees
|
|
|
9,425
|
|
|
|
|
|
|
|
9,425
|
|
|
|
|
|
Registration fees
|
|
|
11,810
|
|
|
|
-
|
|
|
|
7,810
|
|
|
|
-
|
|
Total operating expense
|
|
|
55,735
|
|
|
|
-
|
|
|
|
55,735
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(55,735
|
)
|
|
|
-
|
|
|
|
(55,735
|
)
|
|
|
-
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Foreign exchange (gain) loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total other income (expense)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net loss
|
|
$
|
(55,735
|
)
|
|
$
|
-
|
|
|
$
|
(55,735
|
)
|
|
$
|
-
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translations
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss
|
|
$
|
(55,735
|
)
|
|
$
|
-
|
|
|
$
|
(55,735
|
)
|
|
$
|
-
|
|
Net loss per common share – basic and diluted
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
Weighted average common shares outstanding – basic and diluted
|
|
|
23,219,400
|
|
|
|
21,000,000
|
|
|
|
23,219,400
|
|
|
|
21,000,000
|
|
The accompanying notes are an integral part
of these financial statements.
SHENTANG INTERNATIONAL INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
For the Six Months Ended
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(55,735
|
)
|
|
$
|
-
|
|
Adjustments to reconcile net loss to net cash (used in) operating activities:
|
|
|
|
|
|
|
|
|
Shares issued for services
|
|
|
27,000
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Changes in net assets and liabilities -
|
|
|
|
|
|
|
|
|
Accounts payable - trade
|
|
|
-
|
|
|
|
-
|
|
NET CASH USED IN OPERATING ACTIVITIES
|
|
|
(28,735
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH USED IN INVESTING ACTIVITIES
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds from Notes Payable
|
|
|
7,500
|
|
|
|
|
|
Proceeds from Related party loan
|
|
|
31,235
|
|
|
|
|
|
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
|
|
38,735
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH
|
|
|
10,000
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
CASH – BEGINNING OF PERIOD
|
|
|
0
|
|
|
|
0
|
|
CASH – END OF PERIOD
|
|
$
|
10,000
|
|
|
$
|
0
|
|
The accompanying notes are an integral part
of these financial statements.
SHENTANG INTERNATIONAL INC. AND SUBSIDIARIES
.
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 16, 2018, the Company filed a certificate
of revival with the state of Nevada, appointing David Lazar as, President, Secretary, Treasurer and Director.
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 – Going Concern
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 3 – 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.
Revenue Recognition
The Company
recognize revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement,
acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions,
and collection of any related receivable is probable.
Property and equipment
Property
and equipment are stated at historical cost less accumulated depreciation and impairment. The historical cost of acquiring
an item of property and equipment includes the costs necessarily incurred to bring it to the condition and location necessary for
its intended use.
Income Taxes
The Company accounts for income taxes pursuant
to FASB ASC Topic 740,
Income Taxes
. Under FASB ASC Topic 740, deferred tax assets and liabilities are determined based
on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The
deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities
generating the differences.
The Company maintains a valuation allowance
with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing
the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current
period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward
period under the Federal tax laws.
Changes in circumstances, such as the Company
generating taxable income, could cause a change in judgment about the reliability of the related deferred tax asset. Any change
in the valuation allowance will be included in income in the year of the change in estimate.
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.
Estimates
The financial statements are prepared on
the basis of accounting principles generally accepted in the United States of America. The preparation of financial statements
in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities as of December 31, 2015 and 2014, and expenses for the years ended December 31, 2015
and 2014, and cumulative from inception. Actual results could differ from those estimates made by management.
Subsequent Event
The Company evaluated subsequent events through the date when
financial statements are issued for disclosure consideration.
Adoption of Recent Accounting Pronouncements
As of December 31, 2015, the Company adopted
guidance codified in ASU 2015-03,
Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt
Issuance Costs.
The guidance simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented
as a deduction from the corresponding liability, consistent with debt discounts. The recognition and measurement guidance for debt
issuance costs is not affected. Therefore, these costs will continue to be amortized as interest expense using the effective interest
method pursuant to ASC 835-30-35-2 through 35-3. The Company has applied this guidance retrospectively to all prior periods presented
in the Company’s financial statements.
The Company has implemented all new accounting pronouncements
that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements
that have been issued that might have a material impact on its financial position or results of operations.
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 consolidated
financial statements and related disclosures and has not yet determined the method by which it will adopt the standard.
In March 2016, the FASB issued an accounting
standards update that provides a new requirement to record all of the tax effects related to share-based payments at settlement
(or expiration) through the income statement. This pronouncement is effective for annual reporting periods beginning after December 15,
2017, and interim periods within fiscal years beginning after December 15, 2018, for nonpublic entities. The Company is still
evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures
In August 2016, the FASB issued an
accounting standards update addressing the classification and presentation of eight specific cash flow issues that currently result
in diverse practices. The amendments provide guidance in the presentation and classification of certain cash receipts and cash
payments in the statement of cash flows including debt prepayment or debt extinguishment costs, settlement of zero-coupon debt
instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims,
proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity method investees.
This pronouncement is effective for annual reporting periods beginning after December 15, 2018, and interim periods within
fiscal years beginning after December 15, 2019, for nonpublic entities. The amendments in this ASU should be applied using
a retrospective approach. The Company is still evaluating the impact that the new accounting guidance will have on its consolidated
financial statements and related disclosures.
Note 4 – 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 2018.
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.
Note 6 – Common Stock
On May 31, 2018, the Company issued 27,000,000
shares of common stock, with par value $0.001 for par value for services valued at $27,000 to the Company’s Chief Executive
Officer, David Lazar.
Note 7 – Subsequent Events
On July 11, 2018, the Custodian of the Company commenced publication
of a Notice of Meeting of Creditors for a creditor’s meeting to be held on July 11, 2018, at the hour of 9:30 a.m., for purposes
of identifying liabilities of the Company and for the Company’s creditors to present claims and participate in the distribution
of any remaining assets of the Company.
On July 11, 2018, the Custodian of the Company conducted a meeting
of creditors for purposes of identifying liabilities of the Company and for the Company’s creditors to present claims and
participate in the distribution of any remaining assets of the Company. No creditors of the Company attended the meeting of creditors,
filed a claim, or otherwise contacted Custodian.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
In its two most recent fiscal years, the
Company has had no disagreements with its independent accountants.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit No.
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Description
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2
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Notice of Entry of Order, dated May 11, 2018, Case No.: A-18-772247-P.
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3.1
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Certificate of Incorporation – (Incorporated by reference from Form 10-KSB for fiscal year ended December 31, 2004, Exhibit 3.1)
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3.2
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By-laws (Incorporated by reference from Form 10-KSB for fiscal year ended December 31, 2004, Exhibit 3.2)
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3.3
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Amendment to Certificate of Incorporation – Change of Name (Incorporated by reference from Form 8-K, Current Report, Event dated August 19, 2009, Exhibit 3.1)
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3.4
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Certificate of Revival with the state of Nevada, dated May 16, 2018, appointing David Lazar as, President, Secretary, Treasurer and Director.
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23
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Consent of Independent Auditor
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SIGNATURES
Pursuant to the requirements of Section
12 of the Securities Exchange Act of 1934, the Company has duly caused this amended registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date: August 2, 2018
Shentang International, Inc.
/s/
David Lazar
38
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