WEDOTALK INC. - Quarter Report: 2020 June (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED:  June 30, 2020

☐   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

For the transition period from __________ to __________

Commission File Number: 000-55973

SHENTANG INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

House 1E1, Zhuoyue Weigang North

Nanshan District, Shenzhen, P.R. China 518000

 (Address of principal executive offices, Zip Code)

(+86) 138-2887-0006

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒       No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒       No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant 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 ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒     No ☐

The number of shares of registrant’s common stock outstanding as of August 12, 2020 was 20,000,000.

FORM 10-Q

SHENTANG INTERNATIONAL, INC.

June 30, 2020

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

SHENTANG INTERNTIONAL INC. AND SUBSIDIARIES

BALANCE SHEETS

(Unaudited)

The accompanying notes are an integral part of these financial statements.

SHENTANG INTERNTIONAL INC. AND SUBSIDIARIES

STATEMENTS OF OPERATIONS

(Unaudited)

The accompanying notes are an integral part of these financial statements.

SHENTANG INTERNTIONAL INC. AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

(Unaudited)

The accompanying notes are an integral part of these financial statements.

SHENTANG INTERNATIONAL INC

STATEMENT OF STOCKHOLDERS’ DEFICIT

(Unaudited)

Statement of Stockholders’ Deficit for the Six Months ended June 30, 2019

Statement of Stockholders’ Deficit for the Six Months ended June 30, 2020

SHENTANG INTERNTIONAL 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 18, 2018, the Company filed a certificate of revival with the state of Nevada, appointing David Lazar as, President, Secretary, Treasurer and Director.

On May 31, 2018, the Company obtained a promissory note payable to the Company in amount of $7,500 from its custodian, Custodian Ventures, LLC, the managing member being David Lazar. The note bears an interest of 3% and all unpaid interest and principal is due within 180 days following written demand.

On May 31, 2018, the Company issued 27,000,000 shares of common stock to Custodian Ventures, LLC at par for shares valued at $27,000 in exchange for settlement of a portion of a related party loan for amounts advanced to the Company in the amount of $19,500, and the promissory note issued to the Company in the amount $7,500.

On July 2, 2018, the Company terminated its registration with the Securities and Exchange Commission (the “SEC”).

On August 2, 2018, the Company filed a Form 10-12G, and on September 18, 2018, the Company filed the Amendment No. 1 to Form 10-12G which went effective on October 1, 2018. 

On November 19, 2019, the Company board of directors determined that it is their best interest to redeem the 27,000,000 shares of common stock, held by Custodian Ventures, LLC. In addition, the company elected to cancel and return to the shareholder the promissory note dated May 31, 2018 in the principal amount of $7,500. The company shall also pay the additional amount of $19,168.97 by issuance of a promissory note and cancel interest of $331.03 due on the May 31, 2018 note. The promissory note dated November 19, 2019, in the amount of $19, 168.97 is due and payable in full within one hundred eight (180) days following written demand by the holder and bears an interest rate of 3% per annum.

On April 29, 2020, Shentang International, Inc. (the “Company”) entered into and closed the transaction contemplated by a stock purchase agreement (the “Stock Purchase Agreement”) between the Company, Plentiful Limited, a Samoan company (the “Purchaser”), and Custodian Ventures, LLC, a Wyoming limited liability company (the “Principal”) controlled by David Lazar, an individual (together with the Principal, the “Seller”), the controlling shareholder of the Company. Pursuant to the Stock Purchase Agreement, Purchaser purchased 10,000,000 shares of preferred stock (the “Shares”) of the Company from the Principal. The full purchase price set forth in the Stock Purchase Agreement is $240,000, or $0.024, per share. Upon the closing, $225,000 of the purchase price was paid to Principal, and the balance of $15,000 will be paid once the Company’s common stock has received full DTC eligibility approval, subject to the condition that such approval must be obtained by June 5, 2020, or a later date as agreed by Purchaser. The Company’s common stock and preferred stock have different voting rights whereby one share of common stock is entitled to one (1) vote and one share of preferred stock is entitled to one hundred (100) votes. The Shares represent approximately 98% of the Company’s outstanding voting power as of the closing. Accordingly, as a result of the transaction, Purchaser became the controlling shareholder of the Company.

In connection with the closing of the stock purchase transaction, on April 29, 2020, David Lazar, the sole director of the Company, submitted his resignation letter, pursuant to which he resigned from all offices of the Company that he held effective as of the closing of the stock purchase transaction and from the board of directors effective ten (10) days following the filing of Schedule 14f-1 with the SEC. The resignation of Mr. Lazar was not in connection with any known disagreement with the Company on any matter. Upon the closing of the stock purchase transaction, on April 29, 2020, Lei Xu was appointed as a director of the Company and for the offices previously held by Mr. Lazar, effective as of the closing of the stock purchase transaction.

The accompanying financial statements are prepared on the basis of accounting principles generally accepted in the United States of America (“GAAP”). The Company is a development stage enterprise devoting substantial efforts to establishing a new business, financial planning, raising capital, and research into products which may become part of the Company’s product portfolio. The Company has not realized significant sales through since inception. A development stage company is defined as one in which all efforts are devoted substantially to establishing a new business and, even if planned principal operations have commenced, revenues are insignificant.

The accompanying financial statements have been prepared assuming the continuation of the Company as a going concern. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and is dependent on debt and equity financing to fund its operations. Management of the Company is making efforts to raise additional funding until a registration statement relating to an equity funding facility is in effect. While management of the Company believes that it will be successful in its capital formation and planned operating activities, there can be no assurance that the Company will be able to raise additional equity capital, or be successful in the development and commercialization of the products it develops or initiates collaboration agreements thereon. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

Note 2 – Summary of significant accounting policies

Cash and Cash Equivalents

For purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.

Fair Value Measurement

The Company values its convertible notes and amounts due to related partings and short term loans payable under FASB ASC 820 which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

The three levels of the fair value hierarchy are as follows:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

Level 2 - Valuations for assets and liabilities that can be obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities. The Company’s principal markets for these securities are the secondary institutional markets, and valuations are based on observable market data in those markets.

Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The Company uses Level 3 to value its derivative instruments.

Employee Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718 Compensation - Stock Compensation (“ASC 718”). ASC 718 addresses all forms of share-based payment (“SBP”) awards including shares issued under employee stock purchase plans and stock incentive shares. Under ASC 718 awards result in a cost that is measured at fair value on the awards’ grant date, based on the estimated number of awards that are expected to vest and will result in a charge to operations.

Subsequent Event

The Company evaluated subsequent events through the date when financial statements are issued for disclosure consideration.

Recent Accounting Pronouncements

In February 2016, the FASB issued an accounting standards update for leases. The ASU introduces a lessee model that brings most leases on the balance sheet. The new standard also aligns many of the underlying principles of the new lessor model with those in the current accounting guidance as well as the FASB’s new revenue recognition standard. However, the ASU eliminates the use of bright-line tests in determining lease classification as required in the current guidance. The ASU also requires additional qualitative disclosures along with specific quantitative disclosures to better enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The pronouncement is effective for annual reporting periods beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020, for nonpublic entities using a modified retrospective approach. Early adoption is permitted. The Company is still evaluating the impact that the new accounting guidance will have on its condensed financial statements and related disclosures and has not yet determined the method by which it will adopt the standard.

Note 3 – Discontinued Operations

The Company has fully impaired all assets since the shutdown of its operations in 2009 and has recorded the effects of this impairment as part of its discontinued operations. With the absence of a substantial amount of the old records and the passage of the statute of limitations the company has recorded a discontinued operations expense in 2018 the most current year since operations shutdown based on the accumulated records obtained to date through the second quarter 2020.

Note 4 – Related Party Transactions

On May 31, 2018, the Company obtained a promissory note payable to the Company in principal amount of $7,500 from its custodian, Custodian Ventures, LLC, the managing member being David Lazar. The note bears an interest of 3% and all unpaid interest and principal is due within 180 days following written demand.

On May 31, 2018, the Company issued 27,000,000 shares of common stock to Custodian Ventures, LLC at par for shares valued at $27,000 in exchange for settlement of a portion of a related party loan for amounts advanced to the Company in the amount of $19,500, and the promissory note issued to the Company in the amount $7,500.

On November 19, 2019, the Company board of directors determined that it is their best interest to redeem the 27,000,000 shares of common stock, held by Custodian Ventures, LLC. In addition, the company elected to cancel and return to the shareholder the promissory note dated May 31, 2018 in the principal amount of $7,500. The company shall also pay the additional amount of $19,168.97 by issuance of a promissory note and cancel interest of $331.03 due on the May 31, 2018 note. The promissory note dated November 19, 2019, in the amount of $19, 168.97 is due and payable in full within one hundred eight (180) days following written demand by the holder and bears an interest rate of 3% per annum. On April 29, 2020, the Custodian Ventures LLC agreed to forgive all amounts owed on the November 19, 2019 promissory note of $19,168.97, including accrued interest for a total of $19,522. As of June 30, 2020, $0 remains outstanding.

On April 29, 2020, Shentang International, Inc. (the “Company”) entered into and closed the transaction contemplated by a stock purchase agreement (the “Stock Purchase Agreement”) between the Company, Plentiful Limited, a Samoan company (the “Purchaser”), and Custodian Ventures, LLC, a Wyoming limited liability company (the “Principal”) controlled by David Lazar, an individual (together with the Principal, the “Seller”), the controlling shareholder of the Company. Pursuant to the Stock Purchase Agreement, Purchaser purchased 10,000,000 shares of preferred stock (the “Shares”) of the Company from the Principal. The full purchase price set forth in the Stock Purchase Agreement is $240,000, or $0.024, per share. Upon the closing, $225,000 of the purchase price was paid to Principal, and the balance of $15,000 will be paid once the Company’s common stock has received full DTC eligibility approval, subject to the condition that such approval must be obtained by June 5, 2020, or a later date as agreed by Purchaser. Accordingly, as a result of the transaction, Purchaser became the controlling shareholder of the Company.

On April 29, 2020, the Custodian Ventures LLC agreed to forgive all amounts owed on the November 19, 2019 promissory note of $19,168.97, including accrued interest for a total of $19,522 and the unsecured non interest bearing note in the amount of $72,284.

During the period January 01, 2020 thru April 29, 2020, Custodian Ventures, LLC advanced a total of $14,130 to the Company for payment of registration, legal and accounting fees. During the period April 30, 2020 thru June 30, 2020, Plentiful Limited paid a total of $10,900 consisting of legal fees, transfer agent fees, registration fees, and audit and accounting fees on behalf of the Company. As of June 30, 2020, the company had a loan payable remaining of $0 to Custodian Ventures, LLC. and $10,900 due to Plentiful Limited. This loan is unsecured, non-interest bearing, and has no specific terms for repayment.

Note 5 – Notes payable

On May 31, 2018, the Company obtained a promissory note in amount of $7,500 from its custodian, Custodian Ventures, LLC in exchange for services. The note bears an interest of 3% and matures in 180 days from the date of issuance. During the three months period March 31, 2019, Custodian Ventures, LLC advanced at total of $6,400 to the Company. On April 29, 2020, the Custodian Ventures LLC agreed to forgive all amounts owed on the November 19, 2019 promissory note of $19,168.97, including accrued interest for a total of $19,522. As of June 30, 2020, $0 remains outstanding.

Note 6 – Common Stock

On May 31, 2018, the Company issued 27,000,000 shares of common stock to Custodian Ventures, LLC at par for shares valued at $27,000 in exchange for settlement of a portion of a related party loan for amounts advanced to the Company in the amount of $19,500, and the promissory note issued to the Company in the amount $7,500.

On November 19, 2019, the Company board of directors determined that it is their best interest to redeem the 27,000,000 shares of common stock, held by Custodian Ventures, LLC. As of June 30, 2020 20,000,000 shares of common stock with par value of $0.001 remains outstanding.

Note 7 – Preferred stock

On November 07, 2019 the board of directors approved the issuance of 10,000,000 shares of Series A preferred stock to Custodian Ventures, LLC, with a par value of $0.001 per share for a total of $1,400,000 for consulting services to the company. As of June 30, 2020, 10,000,000 shares of preferred stock valued at $1,400,000 remains outstanding.

Note 8 – Additional paid in capital

On April 29, 2020, the Custodian Ventures LLC agreed to forgive all amounts owed on the November 19, 2019 promissory note of $19,168.97, including accrued interest for a total of $19,522 as well as amounts owed on the unsecured, non interest bearing loan to Custodian Ventures LLC in the amount $72,284. Since both loans are considered related party debt the total of $91,806 was recorded in additional paid in capital.

Note 9 – Subsequent Events

The Company evaluates events that occur after the year-end date through the date the financial statements are available to be issued. Accordingly, management has evaluated subsequent events through August 12, 2020, and has determined that there were no subsequent events, requiring adjustment to, or disclosure in, the financial statements.

ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management’s discussion and analysis should be read in conjunction with our financial statements and the notes thereto and the other financial information appearing elsewhere in this report. Our financial statements are prepared in U.S. dollars and in accordance with U.S. GAAP.

Special Note Regarding Forward Looking Statements

In addition to historical information, this report contains forward-looking statements. We use words such as “believe,” “expect,” “anticipate,” “project,” “target,” “plan,” “optimistic,” “intend,” “aim,” “will” or similar expressions which are intended to identify forward-looking statements. Such statements include, among others, those concerning market and industry segment growth; any projections of earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those identified in our Annual Report on Form 10-K filed on February 21, 2020, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the SEC. These reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of operations and prospects. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation, except as required by law, to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.

Overview

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 Eighth Judicial District Court of Nevada appointed Custodian Ventures, LLC as custodian for Shentang International, Inc., proper notice having been given to the officers and directors of Shentang International, Inc. There was no opposition.

On May 18, 2018, the Company filed a certificate of revival with the state of Nevada, appointing David Lazar as, President, Secretary, Treasurer and Director.

On May 31, 2018, the Company obtained a promissory note in amount of $7,500 from its custodian, Custodian Ventures, LLC, the managing member being David Lazar. The note bears an interest of 3% and all unpaid interest and principal is due within 180 days following written demand.

On May 31, 2018, the Company issued 27,000,000 shares of common stock to Custodian Ventures, LLC at par for shares valued at $27,000 in exchange for settlement of a portion of a related party loan for amounts advanced to the Company in the amount of $19,500, and the promissory note issued to the Company in the amount $7,500.

On July 2, 2018, the Company terminated its registration with the U.S. Securities and Exchange Commission (the “SEC”).

On August 2, 2018, the Company filed a Form 10-12G, and on September 18, 2018, the Company filed the Amendment No. 1 to Form 10-12G which went effective on October 1, 2018. 

On November 19, 2019, the Company board of directors determined that it was in their best interest to redeem the 27,000,000 shares of common stock, held by Custodian Ventures, LLC. In addition, the Company elected to cancel and return to the shareholder the promissory note dated May 31, 2018 in the amount of $7,500. The Company shall also pay the additional amount of $19,168.97 by issuance of a promissory note and cancel all interest due on the May 31, 2018 note. The promissory note dated November 19, 2019, in the amount of $19,168.97 is due and payable in full within one hundred eight (180) days following written demand by the holder and bears an interest rate of 3% per annum.

On November 07, 2019 the board of directors approved the issuance of 10,000,000 shares of Series A preferred stock to Custodian Ventures, LLC, with a par value of $0.001 per share for a total of $1,400,000 for consulting services provided by Custodian Ventures, LLC to the Company. The Company’s common stock and preferred stock have different voting rights whereby one share of common stock is entitled to one (1) vote and one share of preferred stock is entitled to one hundred (100) votes.

On April 29, 2020, the Company entered into and closed the transaction contemplated by a stock purchase agreement (the “Stock Purchase Agreement”) between the Company, Plentiful Limited, a Samoan company (the “Purchaser”), and Custodian Ventures, LLC, a Wyoming limited liability company (the “Principal”) controlled by David Lazar, an individual (together with the Principal, the “Seller”), the controlling shareholder of the Company. Pursuant to the Stock Purchase Agreement, Purchaser purchased 10,000,000 shares of preferred stock (the “Shares”) of the Company from the Principal. The full purchase price set forth in the Stock Purchase Agreement is $240,000, or $0.024, per share. Upon the closing, $225,000 of the purchase price was paid to Principal, and the balance of $15,000 will be paid once the Company’s common stock has received full DTC eligibility approval, subject to the condition that such approval must be obtained by June 5, 2020, or a later date as agreed by Purchaser. The Shares represent approximately 98% of the Company’s outstanding voting power as of the closing. Accordingly, as a result of the transaction, Purchaser became the controlling shareholder of the Company.

In connection with the closing of the stock purchase transaction, on April 29, 2020, David Lazar, the sole director of the Company, submitted his resignation letter, pursuant to which he resigned from all offices of the Company that he held effective as of the closing of the stock purchase transaction and from the board of directors effective ten (10) days following the filing of Schedule 14f-1 with the SEC. The resignation of Mr. Lazar was not in connection with any known disagreement with the Company on any matter. Upon the closing of the stock purchase transaction, on April 29, 2020, Lei Xu was appointed as a director of the Company and for the offices previously held by Mr. Lazar, effective as of the closing of the stock purchase transaction. In addition, David Lazar signed a Loan Forgiveness and Cancellation Agreement with the Company, under which he agreed to forgive all of the indebtedness owed to him by the Company as of the closing of the stock purchase transaction.

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 is expected that entering into a business combination may involve the issuance of restricted shares of capital stock.

Shentang International, Inc. has administrative offices located at House 1E1, Zhuoyue Weigang North, Nanshan District, Shenzhen, P.R. China 518000.

The Company’s fiscal year end is December 31.

Critical Accounting Policies and Estimates 

Our condensed financial statements are prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. We base our estimates and judgments on historical experience and other factors that we believe to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known, even for estimates and judgments that are not deemed critical.

Going Concern

The accompanying financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern. The Company has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. These conditions raise substantial doubt as to our ability to continue as a going concern.

Results of Operations 

For the three months ended June 30, 2020 compared to the three months ended June 30, 2019.

Revenue

For the three months ending June 30, 2020, the Company generated $0 in revenues. For the three months ended June 30, 2019, the Company generated $0 in revenues.

Expenses

For the three months ended June 30, 2020, we incurred operating expenses of $20,068 compared to $3,488 for the three months ended June 30, 2019. The increase is mainly due to filing fees and expenses associated with the Company obtaining DTC eligibility.

Net loss

For the three months ended June 30, 2020 we incurred a net loss of $20,355 compared to a net loss of $5,969 for the three months ended June 30, 2019. The increase is due to filing fees and expenses associated with the Company obtaining DTC eligibility.

For the six months ended June 30, 2020 compared to the six months ended June 30, 2019.

Revenue

For the six months ending June 30, 2020, the Company generated $0 in revenues. For the six months ended June 30, 2019, the Company generated $0 in revenues.

Expenses

For the six months ended June 30, 2020, we incurred operating expenses of $30,598 compared to $15,103 for the six months ended June 30, 2019. The increase is due to filing fees and expenses associated with the Company obtaining DTC eligibility as well as increased legal fees.

Net loss

For the six months ended June 30, 2020 we incurred a net loss of $30,885 compared to $14,829 for the six months ended June 30, 2019. The increase is due to filing fees and expenses associated with the Company obtaining DTC eligibility as well as increased legal fees.

Liquidity and Capital Resources

As of June 30, 2020, 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 our controlling shareholder to pay professional fees and expenses. Our Management and our controlling shareholder 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, 2020, we had $0 in cash. As of June 30, 2019, 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 our controlling shareholder 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 Lei Xu, our sole officer and director, or our controlling shareholder.

During the next 12 months we anticipate incurring costs related to:

We believe that we will be able to meet these costs as necessary, to be advanced/loaned to us by Management and/or our controlling shareholder.

On June 30, 2020 and June 30, 2019, we have had $0 in current assets and $0 in current assets, respectively. As of June 30, 2020, we had $22,118 in liabilities, consisting of amounts due to related party and accrued expenses. As of June 30, 2019, we had $42,238 in liabilities.

We had a negative cash flow from operations of $28,624 during the six months ended June 30, 2020. We financed our negative cash flow from operations during the six months ended June 30, 2020 through advances made by David Lazar from January 1, 2020 through April 29, 2020 and company related expenses paid for by Plentiful Limited, our controlling shareholder, for April 30, 2020 through June 30, 2020. We had $0 cash flow from operations during the six months ended June 30, 2019. 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 Ms. Lei Xu, our sole officer and director.

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, 2019 and 2018 with an explanatory paragraph on going concern.

Off-Balance Sheet Arrangements

As of June 30, 2020 and 2019, 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 a smaller reporting company, the Company is not required to provide this information.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Pursuant to Rule 13a-15(b) under the 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 the Company’s 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 June 30, 2020. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2020 due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review.

Management is in the process of determining how best to change our current system and implement a more effective system to insure that information required to be disclosed in the reports that we file or submit under the Exchange Act have been recorded, processed, summarized and reported accurately. Our management intends to develop procedures to address the current deficiencies to the extent possible given limitations in financial and manpower resources. While management is working on a plan, no assurance can be made at this point that the implementation of such controls and procedures will be completed in a timely manner or that they will be adequate once implemented.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during the six months ended June 30, 2020, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II

ITEM 1.  LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. We are currently not aware of any legal proceedings or claims that would require disclosure under Item 103 of Regulation S-K. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

ITEM 1A. RISK FACTORS 

Not applicable.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Other than as previously disclosed in current reports on Form 8-K, there were no unregistered sales of equity securities or repurchase of common stock during the period covered by this report.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION

None.

Item 6. Exhibits

The following exhibits are filed as part of this report or incorporated by reference.

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 thereunto duly authorized.

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