WEDOTALK INC. - Quarter Report: 2010 September (Form 10-Q)

f10q0910_shentang.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________

FORM 10-Q

_______________

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

For the Quarterly Period Ended September 30, 2010

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

For the transition period from __________

	SHENTANG INTERNATIONAL, INC.
	(Exact name of registrant as specified in Charter)

Nevada		333-148545
(State or other jurisdiction of incorporation or organization)		(Commission File No.)		(IRS Employee Identification No.)

7/F Shenping Liyuan Bldg, 3 Longcheng BeiLu, Longgang Central City,

Longgang District, Shenzhen 518116, People’s Republic of China

(Address of Principal Executive Offices)

_______________

(206) 202-3226

(Issuer Telephone number)

_______________

(Former Name or Former Address if Changed Since Last Report)

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days. Yes x No o

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer o Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.

Yes o No x

State the number of shares outstanding of each of the issuer’s classes of common equity, as of November 12, 2010: 20,000,000 shares of common stock.

SHENTANG INTERNATIONAL, INC.

FORM 10-Q

September 30, 2010

INDEX

PART I-- FINANCIAL INFORMATION

Item 1.	Financial Statements	F-1-F-11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	7
Item 4T.	Controls and Procedures	7

PART II-- OTHER INFORMATION

Item 1	Legal Proceedings	8
Item 1A.	Risk Factors	8
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	8
Item 3.	Defaults Upon Senior Securities	8
Item 4.	(Removed & Reserved)	8
Item 5.	Other Information	8
Item 6.	Exhibits	8

SIGNATURE

PART 1 – FINANCIAL INFORMATION

Item 1. Financial Statements

Shentang International Inc. and Subsidiaries

Consolidated Financial Statements

September 30, 2010 (Unaudited)

TABLE OF CONTENTS

		Page


Consolidated balance sheets		F-1
Consolidated statements of operations and comprehensive income		F-2
Consolidated statements of cash flows		F-3
Notes to consolidated financial statements		F-4~11

Shentang International Inc. and Subsidiaries

Consolidated Balance Sheets

	September 30,		December 31,
	2010		2009
	Unaudited
Assets
Current assets:
Cash and cash equivalents	$	18,392	$	11,513
Accounts receivable, net		2,450,933		2,673,034
Other receivables		22,472		394,357
Inventory		176,881		260
Prepaid expenses		-		4,874
Total current assets		2,668,678		3,084,038

Prepayment to related parties for acquisition		1,445,849		861,244
Property and equipment, net		24,600		26,637
Total assets	$	4,139,127	$	3,971,919

Liabilities and Stockholders’ Equity
Current liabilities:
Accruals and other payables	$	116,148	$	139,054
Short-term borrowings		156,691		-
Income taxes payable		9,335		-
Total current liabilities		282,174		139,054

Commitments and Contingencies

Stockholders’ equity:
Common stock ($0.001 par value; 190,000,000 shares authorized, 20,000,000 shares issued and outstanding)		20,000		20,000
Additional paid-in capital		556,833		556,833
Unappropriated retained earnings		3,269,450		3,257,701
Accumulated other comprehensive income / (loss)		10,670		(1,669	)
Total stockholders’ equity		3,856,953		3,832,865

Total Liabilities and Stockholders’ Equity	$	4,139,127	$	3,971,919

See notes to consolidated financial statements

F-1

Shentang International Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income

	Three months ended September 30,						Nine months ended September 30,
	2010			2009			2010			2009
	Unaudited			Unaudited			Unaudited			Unaudited

Sales	$	1,322,923		$	2,788,824		$	1,941,519		$	4,134,187
Cost of sales		780,350			1,540,730			1,101,691			2,405,521
Gross margin		542,573			1,248,094			839,828			1,728,666

Operating expenses
Research and development expenses		11,134			31,506			36,031			81,165
Selling expenses		2,867			156,354			12,395			331,503
General and administrative expenses		228,338			519,455			774,838			586,292
		242,339			707,315			823,264			998,960

Operating income		300,234			540,779			16,564			729,706

Other income / (expense)
Financial income / (expense)		1,939			(2,382	)		4,520			(5,486	)
Income before income tax expense		302,173			538,397			21,084			724,220

Income tax expense		(9,335	)		(11,390	)		(9,335	)		(11,390	)
Net income		292,838			527,007			11,749			712,830
Foreign currency translation gain		9,310			413			12,339			849
Comprehensive income	$	302,148		$	527,420		$	24,088		$	713,679

Earnings per share – basic and diluted	$	0.015		$	0.027		$	0.001		$	0.038

Weighted average number of shares outstanding - basic and diluted		20,000,000			19,570,000			20,000,000			18,600,000

See notes to consolidated financial statements

F-2

Shentang International Inc. and Subsidiaries

Consolidated Statements of Cash Flows

	Nine Months Ended September 30,
	2010			2009
	Unaudited			Unaudited
Cash flows from operating activities
Net income	$	11,749		$	712,830
Adjustments to reconcile net income to cash provided by operating activities
Depreciation		3,938			-
Bad debt provision		368,854			-
Changes in operating assets and liabilities
Accounts receivable		(146,753	)		(790,020	)
Other receivables		371,885			(107,502	)
Inventory		(176,621	)		22,347
Prepaid expenses		4,874			8,512
Accounts payable		-			(20,306	)
Accruals and other payables		(22,906	)		137,911
Income tax payable		9,335			11,390
Loan to a director		-			(402,117	)
Amount due to a director		-			(15,255	)
Net cash provided by / (used in) operating activities		424,355			(442,210	)

Cash flows from investing activities
Prepayment to related parties for acquisition		(572,550	)		-
Purchases of office equipment		(1,901	)		(27,888	)
Net cash used in investing activities		(574,451	)		(27,888	)

Cash flows from Financing activities
Proceeds from short-term borrowings		179,075			-
Repayment of short-term borrowings		(22,384	)		-
Proceeds from cash contribution from a stockholder		-			468,253
Net cash provided by financing activities		156,691			468,253

Effect of foreign currency exchange rate fluctuation on cash and cash equivalents		284			751

Net increase / (decrease) in cash and cash equivalents		6,879			(1,094)
Cash and cash equivalents at beginning of the period		11,513			14,085
Cash and cash equivalents at end of the period	$	18,392		$	12,991


Supplemental disclosure of cash flow information:
Cash paid during the period for
Interest	$	(2,853	)	$	-
Income tax	$	-		$	-

See notes to consolidated financial statements

F-3

Shentang International Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

NOTE 1 - ORGANIZATION AND NATURE OF OPERATIONS

(a) Nature of Business

Shentang International Inc. (“Shentang”), incorporated in the State of Nevada in June 2007, through its subsidiaries (collectively the “Company”), designs and sells glass products that comprise festival gifts, home decorations and exclusive craftworks. Boom Spring International Limited (“Boom Spring”) is mainly responsible for the sales of glass products to international markets, while Shengtang Glass Craftworks Design Limited (“Shengtang Glass”) is responsible for designing and purchasing glass products from certain suppliers in the PRC.

(b) Organization

Shentang owns 100% shares of Boom Spring, a BVI company set up in October 2007. Boom Spring owns 100% equity interest of Shengtang Glass. Through a series of stock exchanges, stock split, reverse stock splits and increase in authorized shares conducted in 2009, Shentang has 190,000,000 authorized shares and 20,000,000 shares issued and outstanding effective on October 21, 2009.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)Basis of Presentation

The unaudited interim consolidated financial statements (“consolidated financial statements”) have been prepared in accordance with the accounting policies described in the Company’s Form 10-K filed on April 15, 2010 (“2009 Form 10-K”), and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. These consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s 2009 Form 10-K.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of consolidated financial position as of September 30, 2010, and consolidated results of operations, and cash flows for the interim period presented have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.

The consolidated financial statements include the financial statements of Shentang International and its subsidiaries, Boom Spring and Shengtang Glass. All significant inter-company transactions and balances have been eliminated upon consolidation.

F-4

(b) Use of estimations

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of these consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Management bases these estimates on historical experiences and the best information available at the time the estimates are made; however actual results could differ from those estimates. US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, contingencies and results of operations. While management has based their assumptions and estimates on the facts and circumstances existing as of September 30, 2010, actual amounts may differ from these estimates. Significant estimates by management include, but are not limited to, the valuation of trade receivables and other receivables, the estimation of useful lives of property and equipment.

Cash includes currency on hand and demand deposits with banks or other financial institutions. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of six months or less.

No cash and cash equivalents are restricted as to withdrawal or usage.

(d) Accounts receivable

Accounts receivable are recognized and carried at original sales amounts less an allowance for uncollectible accounts, as needed.

Accounts receivable are reviewed periodically as to whether they are past due based on contractual terms and their carrying values have become impaired. An allowance for doubtful accounts is recorded in the period in which loss is determined to be probable based on an assessment of specific evidence indicating doubtful collection, historical experience, account balance aging and prevailing economic conditions. Accounts receivable balances are written off after all collection efforts have been exhausted. The Company does not have any off-balance-sheet credit exposure related to its customers. As of September 30, 2010 and December 31, 2009, a balance of US$368,854 and nil allowances for doubtful accounts were provided, respectively.

(e) Other receivables

Other receivables represent various advances to certain employees and unrelated parties for business purposes and receivables from staffs due to the cash collected from customers by staffs. The Company has full oversight and control over the advanced accounts. As of September 30, 2010 and December 31, 2009, no allowance for doubtful accounts was required on other receivables.

F-5

(f) Inventory

Inventories, which mainly comprised of the raw materials for research and development purpose, and the merchandises, are stated at the lower of cost or market. Cost is determined using the weighted average method. Where there is evidence that the utility of inventories, and their disposal in the ordinary course of business, will be less than cost, whether due to physical deterioration, obsolescence, changes in price levels, or other causes, a provision is recorded for the difference with charges to cost of sales.

As of September 30, 2010, the balance of inventory represented the merchandises in transit.

(g) 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.

(h) Revenue recognition

The Company recognizes revenue in accordance with “ASC Topic 605”. All of the following criteria must exist in order for the Group to recognize revenue: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) price to the buyer is fixed or determinable; and (4) collectability is reasonably assured.

Delivery does not occur until products have been shipped to the customers, risk of loss has transferred to the customers and customers’ acceptance has been obtained, or the Company has objective evidence that the criteria specified in customers’ acceptance provisions have been satisfied. The sales price is not considered to be fixed or determinable until all contingencies related to the sale have been resolved.

(i) Taxation

(i) Income tax

Shentang is subject to the United States of America Tax laws at a tax rate of up to 35%. No provision for US federal income tax has been made as the Company had no US taxable income for the three and nine months ended September 30, 2010 and 2009. The Company believes that its earnings are permanently invested in PRC.

Boom Spring, being incorporated in the BVI, is governed by the income tax law of the BVI and is subject to BVI’s income tax. According to current BVI income tax law, there is no applicable income tax for Boom Spring.

Shengtang Glass, being incorporated in the PRC, is governed by the income tax law of the PRC and is subject to PRC’s enterprise income tax. The applicable income tax rate for Shengtang Glass is 25%.

F-6

(ii) Value added tax

Sales of Shengtang Glass are subject to the PRC’s Value added tax (“VAT”). Shengtang Glass has qualified as an ordinary value-added taxpayer and the applicable tax rate for domestic sales is 17% commencing October 1, 2008. Input VAT on purchases of raw materials, fuel, utilities and other production materials (merchandise, transportation costs) can be deducted from output VAT. VAT payable is the difference between output and deductible input VAT.

Shengtang Glass has been approved to use the “exempt, credit, refund” method on glass craftworks and Christmas decorations exported providing a tax refund at the rate of 5% and 13%.

(iii) Deferred tax

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and any operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided to reduce the amount of deferred tax asset if it is considered more likely than not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

(j) Commitments and contingencies

In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations, product and environmental liability, and tax matters. In accordance with “ASC Topic 450”, the Company records accruals for such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Historically, the Company has not experienced any material service liability claims.

(k) Fair value of financial instruments

The carrying amounts reported in the consolidated balance sheets for accounts receivable, other receivables, accruals and other payables and short-term borrowings approximate their fair value because of the immediate or short-term maturity of these financial instruments.

F-7

(l) Recently enacted accounting standards

Since the filing of 2009 Form 10-K, the FASB issued ASU No. 2010-1 through No. 2010-26. These ASUs entail technical corrections to existing guidance or affect guidance related to specialized industries or entities and therefore have minimal, if any, impact on the Company.

NOTE 3 - ACCOUNTS RECEIVABLE, NET

	September 30,			December 31,
	2010			2009
	Unaudited
Accounts receivable	$	2,819,787		$	2,673,034
Allowance for doubtful accounts		(368,854	)		-
	$	2,450,933		$	2,673,034

The following table presents the movement of the allowance for doubtful accounts:

	September 30,			December 31,
	2010			2009
	Unaudited
Beginning allowance for doubtful accounts	$	-		$	-
Additions charged to bad debt expense		(368,854	)		-
	$	(368,854	)	$	-

NOTE 4 - OTHER RECEIVABLES

	September 30,		December 31,
	2010		2009
	Unaudited
Deposit (a)	$	-	$	219,677
VAT refund receivable		12,675		167,428
Petty cash advances to staff		5,014		7,252
Others		4,783		-
	$	22,472	$	394,357

(a)	As of December 31, 2009, the balance represents deposit to a customer of the Company for quality assurance, which was fully repaid in May 2010.

F-8

NOTE 5 - PREPAYMENT TO RELATED PARTIES FOR ACQUISITION

Pursuant to a letter of intent entered into by Shengtang Glass and the holder of Shenzhen Longgang Dunhuang Glasswork Factory (“Dunhuang”) (related party controlled by the same ultimate stockholder) dated December 21, 2009, and a letter of intent entered into by Shengtang Glass and the holder of Shenzhen Datang Glass Company Limited (“Datang”) (related party controlled by the same ultimate stockholder) dated December 21, 2009, Shengtang Glass is going to acquire the equity interest or production lines of Dunhuang and Datang in 2010. Accordingly, as of September 30, 2010, US$451,391 and US$994,458 were paid to Dunhuang and Datang respectively for the acquisition, when details of the acquisitions were mutually agreed respectively and the acquisitions are expected to take effect by the end of 2010.

NOTE 6 - SHORT-TERM BORROWINGS

On July 1, 2010, Shengtang Glass borrowed a bank loan of RMB1,200,000 (approximately US$179,075). The loan matures on June 30, 2011, and is repayable monthly with a principal amount of RMB50,000 (approximately US$7,461). The loan is unsecured and with an interest rate of 6.372% per annual.

NOTE 7 - TAXATION

(a) Income taxes

The components of income / (loss) before income tax expense is as follows:

	Three months ended September 30,				Nine months ended September 30,
	2010		2009		2010			2009
	Unaudited		Unaudited		Unaudited			Unaudited

BVI	$	130,231	$	367,284	$	(110,371	)	$	678,662
PRC		171,942		171,113		131,455			45,558
	$	302,173	$	538,397	$	21,084		$	724,220

No income taxes were reported for the income from BVI since the applicable income tax rate of Boom Spring was 0% according to BVI tax law.

Income taxes of US$9,335 and US$11,390 were reported for the income from Shengtang Glass based on the applicable income tax rate of 25% for the three and nine months ended respectively as of September 30, 2010 and 2009.

F-9

(b) Deferred taxes

The Company uses the asset and liability method of accounting for income taxes pursuant to Accounting for Income Taxes (“ASC Topic 740”). Under the asset and liability method of ASC Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carry forwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

During the period ended September 30, 2010, there were no material temporary differences for tax purpose, except for the allowance for doubtful accounts provided by Boom Spring (note 3). The balance of deferred tax assets was nil, since the applicable tax rate of Boom Spring was 0%.

NOTE 8 – EARNINGS PER SHARE

Basic and diluted earnings per share for each of the periods presented are calculated as follows:

	Three months ended September 30,				Nine months ended September 30,
	2010		2009		2010		2009
	Unaudited		Unaudited		Unaudited		Unaudited
Numerator
Net income	$	292,838		527,007		11,749		712,830

Denominator
Weighted average common shares outstanding used in computing basic and diluted earnings per share		20,000,000		19,570,000		20,000,000		18,600,000
Earnings Per Share	$	0.015	$	0.027	$	0.001	$	0.038

NOTE 9 - SEASONALITY

Our sales are subject to seasonal factors. We typically experience higher sales in the third and fourth quarters mainly for festival gifts for Christmas and Chinese Spring Festival while the sales in the first and second quarters of the year remain lower. Sales can also fluctuate during the course of a year for a number of other reasons, including product design, and the timing of promotional activities. As a result of these reasons, our operating results may fluctuate. In addition, the seasonality of our results may be affected by other unforeseen circumstances, such as production interruptions.

F-10

NOTE 10 - COMMITMENTS AND CONTINGENCIES

(a) Operating lease commitments

The corporate office of Shengtang Glass is located in the Longgang District, Shenzhen of China. The corporate office is 580 m2 and is leased from a third party. The lease is a 5-year lease starting from July 1, 2009 and ending June 30, 2014 with a monthly rental amounting to US$2,516.

The estimated rental payments for the three months ended December 31, 2010 will be US$7,532, while the annual rental payments for each of the years ended December 31, 2011, 2012, 2013 and 2014 will be US$30,126, US$30,126, US$30,126, and US$15,063 respectively.

Rental expense under this lease aggregated US$22,595 and US$7,548 for the nine months ended September 30, 2010 and 2009, respectively.

(b) Capital and other commitments

As of September 30, 2010, the Company did not have any significant capital and other commitments, long-term obligations, or guarantees.

Pursuant to the letters of intent entered into by Shengtang Glass and the holder of Dunhuang and Datang, respectively, dated December 21, 2009, Shengtang Glass is going to acquire the production lines, patents or equity interest of Dunhuang and Datang in 2010. As details of the acquisition, including the consideration and effective acquisition, are still under negotiation, there is a possibility that Shengtang Glass and the holder of Dunhuang and Datang might not reach final agreement on the acquisition. Based on management best estimation, the possibility of not reaching an agreement for the acquisition is less than probable as of September 30, 2010.

NOTE 11 - SUBSEQUENT EVENTS

Management has considered all events occurring after September 30, 2010, to the date the financial statements have been issued, and has determined that there are no such events that are material to the financial statements.

F-11

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion is an overview of the important factors that management focuses on in evaluating our business, financial condition and operating performance and should be read in conjunction with the financial statements included in this Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward looking statements as a result of any number of factors, including those set forth under the section entitled “Risk Factors” and elsewhere in this Form 10-Q.

CORPORATE INFORMATION AND BUSINESS DESCRIPTION

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.

The Company’s authorized shares were 50,000,000 and the issued and outstanding shares were 1,670,000 with par value of $0.001 by July 22, 2009. 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 “Closing Date”), the Company entered into a Share Purchase Agreement and Share Exchange (the “Exchange Agreement”) with Boom Spring International Limited, a British Virgin Islands corporation (“Boom Spring”), the shareholders of Boom Spring (the “Boom Spring Shareholders”), and Shengtang Craft Design (Shenzhen) Co., Ltd. (“Shengtang Glass”)., a wholly foreign-owned enterprise established under the laws of People’s Republic of China, which is a wholly-owned subsidiary of Boom Spring On the Closing Date, pursuant to the terms of the Exchange Agreement, we acquired all the outstanding shares of Boom Spring (the “Interests”) from the Boom Spring Shareholders; and the Boom Spring Shareholders transferred and contributed all of their Interests to us. In exchange, our sole officer and director and majority shareholder transferred 12,000,000 shares, and we issued 33,300,000 shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”) to the Boom Spring Shareholders, their designees or assigns, which totals 90.6% of the issued and outstanding Common Stock of the Company on a fully-diluted basis as of and immediately after the Closing (the “Share Exchange”). Following the Share Exchange, Boom Spring became our wholly owned subsidiary, and there are 50,000,000 shares of Common Stock issued and outstanding. Pursuant to the terms of the Exchange Agreement, David Price resigned as the sole director and officer of the Company effective immediately at the Closing Date and Zhongmin Chen, Shaoping Lu, Rong Li, Hui Zhao, Chunyun Zhao and Shing Ho Eric Cheung were appointed as the new directors and officers of the Company.

This transaction closed on July 22, 2009.

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.

Prior to the Share Exchange on July 22, 2009, the Company had no assets, liabilities, or business operations of meaningful significance. Accordingly, the Share Exchange has been treated for accounting purposes as a recapitalization by the accounting acquirer, Boom Spring, and the financial statements reflect the assets, liabilities, and operations of Boom Spring from its inception on October 2, 2007 to December 31, 2009 and us thereafter. References to our company are with respect to Boom Spring to December 31, 2009 and us thereafter.

We operate our business through Shengtang Glass, the wholly-owned subsidiary of Boom Spring. Shengtang Glass is in the business of design, source for productions and sale of glass products that can be classified as festival gifts, home decorations and exclusive craftworks. All of the three categories of products are mainly made of glass tube and glass rod, and some of them combine the use of wire, shell and crystal. We have successfully distributed the glass products to overseas markets such as Europe, North America and Southeast Asia.

Shengtang Glass has exclusive use of the core technologies, includes hollow/solid glass processing technology, pure manual glass rod processing technology, wire processing technology and painting processing technology. We have also built its reputation among many of the well-known retailers such as WALMART, KOHL’S, TARGET, COSTCO, MACY’S, AG, CONNOR, LI&FUNG, LOWE’S, and HALLMARK. We are actively engaging in developing international market. Currently Shengtang Glass outsources the production to some domestic Chinese suppliers and does not have any production line, however, it plans to develop a production line to meet the demand in the domestic Chinese market through purchasing new equipments for machine-made glass producing. Our goal is to become a large-scaled glass craftwork supplier and further develop the innovational technology.

For the year ending December 31, 2010, we plan to build or acquire our own production lines to meet the demands of our existing customers. Meanwhile, we have the plan and initiatives to acquire other viable enterprises both upstream and downstream in our industry, with the goal of completing at least 2 such acquisitions.

RESULTS OF OPERATIONS

The following tables set forth key components of our results of operations for the periods indicated, in dollars.

Shentang International Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income

	Three months ended September 30,						Nine months ended September 30,
	2010			2009			2010			2009
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

Sales	$	1,322,923		$	2,788,824		$	1,941,519		$	4,134,187
Cost of sales		780,350			1,540,730			1,101,691			2,405,521
Gross margin		542,573			1,248,094			839,828			1,728,666

Operating expenses
Research and development expenses		11,134			31,506			36,031			81,165
Selling expenses		2,867			156,354			12,395			331,503
General and administrative expenses		228,338			519,455			774,838			586,292
		242,339			707,315			823,264			998,960

Operating income		300,234			540,779			16,564			729,706

Other income / (expense)		1,939			(2,382	)		4,520			(5,486	)
Income before income tax expense		302,173			538,397			21,084			724,220

Income tax expense		(9,335	)		(11,390	)		(9,335	)		(11,390	)
Net income		292,838			527,007			11,749			712,830
Foreign currency translation gain		9,310			413			12,339			849
Comprehensive income	$	302,148		$	527,420		$	24,088		$	713,679

Earnings per share – basic and diluted	$	0.015		$	0.027		$	0.001		$	0.038

Weighted average number of shares outstanding - basic and diluted		20,000,000			19,570,000			20,000,000			18,600,000

Three months ended September 30, 2010 as compared to the three months ended September 30, 2009

Sales:

Sales experienced a decrease from $2,788,824 for the third quarter of 2009 to $1,322,923 for the third quarter of 2010, by $1,465,901 or 53%. The decrease is mainly due to slack demand in US market and decreased orders in the third quarter of 2010.

Cost of goods sold:

Cost of goods sold declined from $1,540,730 for the third quarter of 2009 to $780,350 for the third quarter of 2010, a decrease of $760,380 or 49%. The decrease is in line with good sales performance in the third quarter of 2010.

Gross margin:

Gross margin consequently dropped from $1,248,094 for the three months ended September 30, 2009 to $542,573 for the three months ended September 30, 2010. The decline of $705,521 or 57% is mainly due to lower sales volume.

Operating expenses:

Operating expenses decreased from $707,315 for the three months ended September 30, 2009 to $242,339 for the three months ended September 30, 2010. The decrease of $464,976 include a slight decline of $20,372 for research and development expenses, a decrease of $153,487 and $291,117 for selling expenses and general and administrative expenses, respectively.

The decrease in selling expenses was due to (1) less sales commission occurred in line with the sales volume and (2) the cancellation of marketing service contract with certain supplier in late 2009, such marketing service occurred $150K expenses in the second quarter of 2009. The decrease in general and administrative expenses is mainly resulted from significant professional fee recognized in the third quarter of 2009 in connection with the Company’s public offering process and OTCBB related expenses.

Operating income:

Operating income for the three months ended September 30, 2010 amounted to $300,234 compared to $540,779 for the three months ended September 30, 2009. The significant drop of $240,545 was mainly caused by the slack sales performance in the third quarter of 2010.

The nine months ended September 30, 2010 as compared to the nine months ended September 30, 2009

Sales:

Sales decreased from $4,134,187 for the nine months ended September 30, 2009 to $1,941,519 for the nine months ended September 30, 2010, a decrease of $2,192,668 or 53%. The decrease is mainly due to the continuing weakness in US market and decreased orders since the fourth quarter of 2009. With management continuous efforts in development of new customers, the Company has achieved some increment in the second quarter of 2010, while some of the customers decreased their orders in the third quarter of current year.

Cost of goods sold:

Cost of goods sold decreased from $2,405,521 for the nine months ended September 30, 2009 to $1,101,691 for the nine months ended September 30, 2010, a decrease of $1,303,830 or 54%. The decrease is mainly due to lower sales volume.

Gross margin:

Gross margin decreased from $1,728,666 for the nine months ended September 30, 2009 to $839,828 for the nine months ended September 30, 2010. The decrease of $888,838 or 51% is jointly resulted from (1) lower sales volume in the first quarter of current year, (2) increase of export sales refund rate from 5% to 13% by relevant government authorities, and (3) management efforts in negotiation with suppliers for favorable purchase price.

Operating expenses:

Operating expenses increased from $998,960 for the nine months ended September 30, 2009 to $823,264 for the Nine months ended September 30, 2010. The increase of $175,696 include a decrease of $45,134 for research and development expenses, a decrease of $319,108 for selling expenses, and an increase of $188,546 for general and administrative expenses.

The decrease in selling expenses was due to (1) less sales commission occurred in line with the sales volume and (2) the cancellation of marketing service contract with certain supplier in late 2009, such marketing service occurred $150K expenses in the second quarter of 2009. The increase in general and administrative expenses is mainly resulted from substantial provision for doubtful accounts based on prudent estimation by management in current year.

Operating income:

Operating income for the nine months ended September 30, 2010 amounted to $729,706, compared to income from operations of $16,564 for the Nine months ended September 30, 2009. The substantial drop of $713,142 was jointly due to the slack sales performance and the incremental increase of general and administration expenses.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2010, our balance of cash and cash equivalents was $18,392, comparing to $11,513 as of December 31, 2009.

Our primary uses of cash have been for selling and marketing expenses, employee compensation, new product development, working capital, and perspective business acquisitions. The main sources of cash have been from the financing of purchase orders and the factoring of accounts receivable. All funds received have been expended in the furtherance of growing the business and establishing the brand portfolios. The following trends are reasonably likely to result in a material decrease in our liquidity over the near to long term:

	An increase in working capital requirements to finance higher level of accounts receivable;
	Addition of administrative and sales personnel as the business grows;
	Increases in advertising, public relations and sales promotions for existing and new brands as the company expands within existing markets or enters new markets;
	Development of new brands to complement our celebrity portfolio;
	Prepayment for perspective business and assets acquisitions; and
	The cost of being a public company and the continued increase in costs due to governmental compliance activities.

The following summarizes the key components of the Company’s cash flows for the nine months ended September 30, 2010 and 2009.

	Nine months ended September 30,
	2010			2009
	(Unaudited)			(Unaudited)
Net cash provided by / (used in) operating activities	$	424,355		$	(442,210	)
Net cash used in investing activities		(574,451	)		(27,888	)
Net cash provided by financing activities		156,691			468,253
Effect of exchange rate fluctuation on cash and cash equivalents		284			751
Net increase / (decrease) in cash and cash equivalents	$	6,879		$	(1,094	)

The Company generated its cash flow mainly from operating activities and financing activities from certain bank in China for the nine months ended September 30, 2010. The Company believes the cash flows from operating activities for the next twelve months will be sufficient to sustain current level of operations.

OFF-BALANCE SHEET ARRANGEMENTS

There are no off-balance sheet arrangements between us and any other entity that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

A summary of significant accounting policies is included in Note 2 to the unaudited consolidated financial statements for the nine months ended September 30, 2010. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our Company's operating results and financial condition.

Recently issued accounting standards

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable because we are a smaller reporting company.

Item 4T. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”),of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Controls

There have been no changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2010 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors

Not applicable because we are a smaller reporting company.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. (Removed & Reserved).

Item 5. Other Information.

Effective September 18, 2010, our board of directors accepted the resignation of Shaoping Lu as a member of the Board of Directors of the Company. The resignation was due to personal reasons and was not a result of any disagreements relating to the Company’s operations, policies or practices.

Item 6. Exhibits.

Exhibit No.		Description

31.1		Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002

32.1		Certification of Chief Executive Officer pursuant to Section 906 of Sarbanes Oxley Act of 2002

32.1		Certification of Chief Financial Officer pursuant to Section 906 of Sarbanes Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

		SHENTANG INTERNATIONAL, INC.
Dated: November 15, 2010
	By:	/s/ Zhongmin Chen
		Zhongmin Chen President, Chief Executive Officer and Chairman of the Board of Directors

Dated: November 15, 2010	By:	/s/ Rong Li
		Rong Li
		Interim Chief Financial Officer and Principal Accounting Officer