SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
For
the fiscal year ended
For the transition period from ____________________ to _____________________
Commission
File No.
(Exact name of registrant as specified in its charter)
| (State
or other jurisdiction of incorporation or organization) |
(I.R.S.
Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | None | None |
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 requirement for the past 90 days.
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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).
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer ☐ | Accelerated filer ☐ |
Smaller
reporting company Emerging
Growth company |
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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12(b)-2 of the Exchange Act). Yes ☐
The
aggregate market value of the common voting stock held by non-affiliates of the Registrant as of the last business day for the Registrants
most recently completed third fiscal quarter was approximately $
As of December 1, 2021, there were shares of common stock, par value $0.001 per share issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980). Not Applicable
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Table of Contents
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (the “Report”), including, without limitation, statements under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our ability to consummate any acquisition or other business combination and any other statements that are not statements of current or historical facts. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to:
| ● | our ability to establish our business in China and implement our business plan; |
| ● | acceptance of our products and services that we expect to market; |
| ● | our ability to retain key employees; |
| ● | adverse changes in general market conditions for hazardous waste disposal products and services in China; |
| ● | our ability to continue as a going concern; |
| ● | our future financing plans; and |
| ● | our ability to address and as necessary adapt to changes in foreign, cultural, economic, political and financial market conditions which could impair our future operations and financial performance (including, without limitation, the changes resulting from the global novel coronavirus outbreak of 2019-2021 in China and around the world). |
The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Our financial statements are stated in United States dollars ($US) and are prepared in accordance with United States Generally Accepted Accounting Principles.
In this annual report, unless otherwise specified, all references to “common stock” refer to the common shares in our capital stock.
As used in this annual report, the terms “we,” “us,” “our,” “Summit” and “Summit Networks” mean Summit Networks Inc, unless the context clearly indicates otherwise.
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PART I
ITEM 1. BUSINESS
Corporate Background and General Business Overview
Summit Networks Inc. (together with its subsidiary, the “Company”) was incorporated under the laws of the State of Nevada on July 8, 2014. Originally, the Company was formed to engage in the development and operation of a business engaged in the distribution of glass craft products produced in China. On May 8, 2018, we acquired Real Capital Limited, a Hong Kong company (“Real Capital”), to seek opportunities in the food and beverage industry. On March 31, 2019, the Company entered into a Share Purchase Agreement (the “Real Capital SPA”) pursuant to which it sold its interests in Real Capital. The closing of the Real Capital SPA occurred on April 10, 2019.
On July 17, 2019, the Company received FINRA approval to effect a 10-for-1 stock dividend to holders of its common stock as of June 1, 2019, the record date for the dividend. As a result, common stock figures, share capital, additional paid in capital, and earnings per share information have been retroactively adjusted to reflect the stock dividend.
On May 8, 2020, Sumnet (Canada) Inc. (“Sumnet (Canada)”) was incorporated in Canada. Sumnet (Canada) issued all its ordinary shares to the Company on May 8, 2020 so that Sumnet (Canada) became the wholly owned subsidiary of Company. On July 29, 2020, Smith Barney Enterprises Limited (“Smith Barney”) was incorporated in the British Virgin Islands. Smith Barney issued all its ordinary shares to the Company on July 29, 2020 so that Smith Barney became the wholly owned subsidiary of Company. On August 28, 2020, Green Energy (HK) Limited (“Green Energy”) was incorporated in Hong Kong. Green Energy issued all its ordinary shares to Smith Barney on August 28, 2020 so that Green Energy became the wholly owned subsidiary of Smith Barney. On September 27, 2020, Beijing Asian League Wins Technology Co., Ltd. (“Beijing ALW”) was incorporated in People’s Republic of China. Green Energy subscribed all capital stock of Beijing ALW on September 27, 2020 so that Beijing ALW became the wholly owned subsidiary of Green Energy.
On January 20, 2021, Beijing ALW and Green Energy entered into a series of contractual agreements (the “VIE Agreement”) with Hengshui Jingzhen Environmental Company Limited (“Hengshui Jingzhen”, or the “VIE”), whereby Beijing ALW gained control over Hengshui Jingzhen, a P.R. China company, which provides integrated hazardous waste management services, including collecting, transferring, disposing, and recycling of hazardous waste, primarily in Hebei, China. On March 29, 2021, the board of directors and a majority shareholder of the Company approved the termination of the VIE Agreements with Hengshui Jingzhen. On the same date, Beijing ALW, Hengshui Jingzhen, and Hengshui Jingzhen’s shareholders entered into a Termination Agreement (the “Termination Agreement”) to terminate all existing VIE Agreements signed on January 20, 2021. Pursuant to the Termination Agreement, all of the rights and obligations under the existing VIE Agreements were terminated and the Company no longer had control of Hengshui Jingzhen.
Currently, we are in the early stage of development of our new business plan which involves acting as an international agent through our wholly-owned subsidiaries, Smith Barney, Green Energy and Beijing ALW, for a Chinese environmental company, Hengshui Jingzhen Environmental Technology Company Limited of Hebei, China (“Hengshui”), to market its environmental technologies, equipment and products and to develop projects utilizing its environmental technologies, equipment and products in worldwide markets. Hengshui provides solutions for the disposal of hazardous waste, pollution treatment equipment and supplies fossil fuels made from industrial waste. It is a company that focuses on providing solutions for environmental protection, especially on recycling and exploitation of hazardous waste. It possesses technology in connection with hazardous waste collection, disposal and utilization, in order to handle hazardous waste more efficiently and regenerate energy from waste. However, to date, our activities have been limited to capital formation, organization and development of a business plan.
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We are presently evaluating the optimal corporate and legal structures in China necessary to establish our business or to acquire and/or invest in existing environmental technology businesses. We aim to start marketing the environmental equipment and solutions in 2022 across the China, Japan, the Southeast Asia and the United States. The services and products that we plan to market include disposal of hazardous waste, pollution treatment equipment and fossil fuels made from industrial waste. We desire to market Hengshui’s products by acquiring businesses in possession of the waste conversion technology, organizing conferences nationwide with potential enterprise client in need of waste disposal services, and partnering with local environmental protection ventures to expand Hengshui’s outreach to hundreds of factories across China. However, our plan to operate in the hazardous waste disposal industry may be adversely impacted by the outbreak of coronavirus, which was first reported to have surfaced in Wuhan, China, in December 2019, and is now continuing to spread throughout other parts of the world. Although China has made great efforts to contain the spread of the virus and had brought the outbreak under control, the economy, financial market and businesses in China have been suffering from the pandemic.
On January 20, 2021, the Company changed its fiscal year-end from July 31 to September 30.
ITEM 1A. RISK FACTORS
Not applicable to a smaller reporting company.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Our principal executive offices are located at S101-5289 Cambie Street, Vancouver BC V5Z 0J5 Canada.
ITEM 3. LEGAL PROCEEDINGS
We are not currently involved in any material legal proceedings nor are we aware of any pending or potential legal actions.
ITEM 4. MINE SAFETY DISCLOSURE
Not applicable.
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PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
Our common stock is quoted on OTC Pink market operated by the OTC Markets under the symbol “SNTW.” There has been very limited trading in our shares of common stock to date. We cannot assure you there will be an active market in the future for our common stock, but we plan to work to create an active market.
As of September 30, 2022, there were 62,049,990 shares of common stock issued and outstanding and held by a total of 88 shareholders of record.
Dividends
We have never paid nor declared any dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future. We plan to retain any future earnings for use in our business. Any decision as to the future payment of dividends will depend on our earnings and financial position and such other facts as the Board of Directors deem relevant.
Securities Authorized for Issuance Under Equity Compensation Plans
We have not adopted an equity compensation plan and no securities have been authorized or reserved for issuance under any equity compensation plan.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
ITEM 6. SELECTED FINANCIAL DATA
Not Applicable to a smaller reporting company.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OR RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward- looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Report. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
This section provides management’s discussion of the financial condition, changes in financial condition and results of operations of Summit Networks, Inc. with specific information on results of operations and liquidity and capital resources. It includes management’s interpretation of our financial results, the factors affecting these results, the major factors expected to affect future operating results and future investment and financing plans. This discussion should be read in conjunction with our consolidated financial statements and notes thereto.
Several factors exist that could influence our future financial performance and some of those are discussed below and elsewhere in this report. They should be considered in connection with evaluating forward-looking statements contained in this report or otherwise made by us or on our behalf since these factors could cause actual results and conditions to differ materially from those set out in such forward-looking statements.
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Cautionary Statement for the Purposes of the Safe Harbor under the Private Securities Litigation Reform Act of 1995
The statements contained in this Annual Report on Form 10-K may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact included in this Report are forward-looking statements made in good faith by us and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. When used in this Report, or any other of our documents or oral presentations, the words “anticipate”, “believe”, “estimate”, “expect”, “forecast”, “goal”, “intend”, “objective”, “plan”, “projection”, “seek”, “strategy” or similar words are intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements relating to our strategy, operations, markets, services, and other factors all of which are difficult to predict and many of which are beyond our control. Accordingly, while we believe these forward-looking statements to be reasonable, there can be no assurance that they will approximate actual experience or that the expectations derived from them will be realized. Further, we undertake no obligation to update or revise any of our forward-looking statements whether as a result of new information, future events or otherwise.
Background
Summit Networks Inc. (together with its subsidiary, the “Company”) was incorporated under the laws of the State of Nevada on July 8, 2014. Originally, the Company was formed to engage in the distribution of glass craft products produced in China. On May 8, 2018, we acquired Real Capital Limited, a Hong Kong company (“Real Capital”), to seek opportunities in the food and beverage industry. On March 31, 2019, the Company entered into a Share Purchase Agreement (the “Real Capital SPA”) pursuant to which it sold its interests in Real Capital. The closing of the Real Capital SPA occurred on April 10, 2019.
Results of Operations
During the year ended September 30, 2022 and 2021, we generated no revenues. Our operating expenses for the same periods were comprised of general and administrative expenses of $108,205 and $572,682, respectively, resulting in net loss of $108,205 for the year ended September 30, 2022 compared to a net loss of $ 454,074 for the year ended September 30, 2021. Our general and administrative expenses consisted of mainly professional fees for the year ended September 30, 2021, and consisted of mainly management fees, chief executive fees and director fees for the year ended September 30, 2020. The decrease of general and administrative expenses was mainly due to the decrease of management fees, chief executive fees and director fees.
Our total assets as of September 30, 2022 were $8,829.
As of September 30, 2022, the Company had 62,049,990 shares of common stock issued and outstanding.
As of September 30, 2022 and 2021, there are a total of $579,000 and $579,000 in amounts respectively, due to related parties and shareholders were interest free, unsecured and payable on demand.
Even if we are able to obtain sufficient number of service agreements at the end of the twelve months’ period, there is no guarantee that we will be able to attract and more importantly, retain enough customers to cover our expenditures. If we are unable to generate a significant amount of revenue, then it would materially affect our financial condition.
Based on our current operating plan, we may need to obtain additional financing to operate our business for the next twelve months. Additional financing, whether through public or private equity or debt financing, or if available, may be on terms unacceptable to us.
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Liquidity and Capital Resources
As for the year ended September 30, 2022 and 2021, the Company had a negative cash flow of $72,049 and $211,725, respectively. The Company’s principal sources and uses of funds were as follows:
For the year ended September 30, 2022, the Company used $72,049 in cash for operations as compared to $385,189 for the year ended September 30, 2021, respectively. Such decrease was primarily due to lower net loss in year ended September 30, 2022. The net cash provided by the financing activities for the year ended September 30, 2022 was nil, as compared to $179,000 from related parties for the year ended September 30, 2021. Such decrease was a result of fewer advances from the related parties.
The Company’s financial statements have been prepared on a going-concern basis which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company’s liquidity and capital needs relate primarily to working capital and other general corporate requirements. The Company’s operations do not currently provide cash flow. To date, the Company has funded its operations by advances from related parties. The business will require significant amounts of capital in the near term to sustain operations and make the investments it needs to continue operations and execute its longer-term business plan. As of September 30, 2022, we had $8,829 in cash and the outstanding liabilities were $771,167. As of September 30, 2021 we had cash of $80,878 and there were outstanding liabilities of $738,333. The working capital deficits were $762,338 and $654,133, for September 30, 2022 and 2021, respectively. These factors raise substantial doubt about our ability to continue as a going concern as discussed in the footnotes to our financial statements. The Company will be unable to conduct its planned operations unless we obtain financing in the near term to meet the needs of our on-going operations, generate future revenue from operations and/or obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. In order to implement its business plan, management’s plan includes raising capital by equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. If we issue equity or equity equivalents to raise additional funds, our existing stockholders will experience substantial dilution and the new holders of securities may have rights, preferences and privileges senior to those of our existing stockholders. Management also cannot provide any assurance that unforeseen circumstances will not increase the need for the Company to raise additional capital on an immediate basis. There can be no assurance that we will be able to continue to raise funds if at all, or on terms acceptable to the Company in which case the Company may be unable to continue its operations or to meet its obligations. If adequate capital is not available when needed, we will be required to significantly modify our business model or cease operations.
On March 11, 2020 the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containments and mitigation measures worldwide. The Company is monitoring this closely, and although operations have not been materially affected by the coronavirus outbreak to date, the ultimate severity of the outbreak is uncertain. Operations of the Company are ongoing. Further the uncertain nature of the spread of COVID-19 globally may impact our business operations due to the quarantine of employees, customers, and third-party service providers.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements 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 investors.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of Summit Networks Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Summit Networks Inc (the “Company”) as of September 30, 2022, the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year then ended September 30, 2022 and the related notes to the consolidated financial statements and schedule (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2022 and the results of its operations and its cash flows for the year ended September 30, 2022 in conformity with accounting principles generally accepted in the United States of America.
Substantial doubt about the Company’s ability to continue as a going concern
As discussed in Note 2 to the financial statements the accompanying consolidated financial statements and notes have been prepared assuming that the Company will continue as a going concern. The Company had limited operations during the period from July 8, 2014 (date of inception) to September 30, 2022 resulting in accumulated deficit of $1,218,255 and has not generated any revenue. There is no guarantee that Company will generate revenue and net income in the future. At September 30, 2022, the Company had a working capital deficiency of $762,338. The cash used in operating activities were $72,049. These factors, among others, raise substantial doubt regarding the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2 to the accompanying financial statements. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
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.
Critical Audit Matter
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/
We have served as the Company’s auditor since 2021.
January 5, 2023
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SUMMIT NETWORKS INC.
CONSOLIDATED BALANCE SHEETS
(Audited)
| September 30, | ||||||||
| 2022 | 2021 | |||||||
| ASSETS | ||||||||
| Current Asset: | ||||||||
| Cash & cash equivalents | $ | $ | ||||||
| Total Current Asset | ||||||||
| Non-Current Asset: | ||||||||
| Fixed assets, net | ||||||||
| Total Non-Current Asset | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES & STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accounts payable - related party | ||||||||
| Due to related party | ||||||||
| Total Current Liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ Deficit: | ||||||||
| Preferred stock, $ par value, shares authorized; share issued and outstanding | ||||||||
| Common stock, $ par value, shares authorized; issued and outstanding as of September 30,2022 and 2021, respectively. | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Deficit | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
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SUMMIT NETWORKS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Audited)
| For years ended September 30, | ||||||||
| 2022 | 2021 | |||||||
| Revenue | $ | $ | ||||||
| Operating Expenses: | ||||||||
| General and administrative expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Debt forgiveness by related parties | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Basic Net loss per share | $ | ( | ) | $ | ( | ) | ||
| Diluted Net loss per share | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of common shares outstanding | ||||||||
| Diluted weighted average number of common shares outstanding | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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SUMMIT NETWORKS INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT
(Audited)
| Common Stock | Additional Paid-in | Accumulated | ||||||||||||||||||
| Shares | Amount | Capital | Deficit | Total | ||||||||||||||||
| Balance, September 30, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Share-based compensation | ||||||||||||||||||||
| Cancellation of common shares issued in connection with acquisition | ( | ) | ( | ) | ||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance, September 30, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance, September 30, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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SUMMIT NETWORKS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Audited)
| For years ended | ||||||||
| September 30, | ||||||||
| 2022 | 2021 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Debt forgiveness by related parties | ( | ) | ||||||
| Depreciation of fixed assets | ||||||||
| Share-based compensation expenses | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Accounts payable - related parties | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITY: | ||||||||
| Acquisition of fixed assets | $ | $ | ( | ) | ||||
| Net cash used in investing activity | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITY: | ||||||||
| Advance from related party | $ | $ | ||||||
| Net cash generated from financing activity | ||||||||
| Net decrease in cash | ( | ) | ( | ) | ||||
| Cash at beginning of year | ||||||||
| Cash at end of year | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Income Taxes | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
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SUMMIT NETWORKS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Summit
Networks Inc. (together with its subsidiary, the “Company”) was incorporated under the laws of the State of
On May 8, 2020, Sumnet (Canada) Inc. (“Sumnet (Canada)”) was incorporated in Canada. Sumnet (Canada) issued all its ordinary shares to the Company on May 8, 2020, so that Sumnet (Canada) became the wholly owned subsidiary of Company. On July 29, 2020, Smith Barney Enterprises Limited (“Smith Barney”) was incorporated in the British Virgin Islands. Smith Barney issued all its ordinary shares to the Company on July 29, 2020, so that Smith Barney became the wholly owned subsidiary of Company. On August 28, 2020, Green Energy (HK) Limited (“Green Energy”) was incorporated in Hong Kong. Green Energy issued all its ordinary shares to Smith Barney on August 28, 2020 so that Green Energy became the wholly owned subsidiary of Smith Barney. On September 27, 2020, Beijing Asian League Wins Technology Co., Ltd. (“Beijing ALW”) was incorporated in People’s Republic of China. Green Energy subscribed all capital stock of Beijing ALW on September 27, 2020 so that Beijing ALW became the wholly owned subsidiary of Green Energy.
On January 20, 2021, Beijing ALW and Green Energy entered into a series of contractual agreements (the “VIE Agreement”) with Hengshui Jingzhen Environmental Company Limited (“Hengshui Jingzhen”, or the “VIE”), whereby Beijing ALW gained control over Hengshui Jingzhen, a P.R. China company, which provides integrated hazardous waste management services, including collecting, transferring, disposing, and recycling of hazardous waste, primarily in Hebei, China. On March 29, 2021, the board of directors and a majority shareholder of the Company approved the termination of the VIE Agreements with Hengshui Jingzhen. On the same date, Beijing ALW, Hengshui Jingzhen, and Hengshui Jingzhen’s shareholders entered into a Termination Agreement (the “Termination Agreement”) to terminate all existing VIE Agreements signed on January 20, 2021. Pursuant to the Termination Agreement, all of the rights and obligations under the existing VIE Agreements were terminated and the Company no longer had control of Hengshui Jingzhen. See NOTE 4. EXECUTION AND TERMINATION OF VIE AGREEMENTS.
On
July 17, 2019,
Management has evaluated the effect of the recent and ongoing outbreak of the coronavirus disease 2019 (the “COVID- 19”), which was declared a pandemic by the World Health Organization in March 2020. Although the ultimate disruption caused by the outbreak is uncertain, it may not have significant impact on the Company’s financial position, operations and cash flows.
On January 20, 2021, the Company changed its fiscal year-end from July 31 to September 30.
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NOTE 2. GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
The
Company had limited operations during the period from July 8, 2014 (date of inception) to September 30, 2022, resulting in accumulated
deficit of $
At
September 30, 2022, the Company had a working capital deficiency of $
The ability of the Company to continue as a going concern is dependent on the undertaking of its shareholders to provide continuing financial support to enable the Company to meet its liabilities as and when they fall due.
The Company actively looks for new business opportunities, and its operating expenses are solely relied on loans from the shareholders.
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Consolidation
The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (GAAP).
Use of Estimates
The preparation of condensed consolidated 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 disclosures of contingent assets and liabilities at the date of consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash
and cash equivalents are on deposit with financial institutions without any restrictions. As of September 30, 2022 and 2021, cash equivalents
amounted to $
Fixed Assets
Property, plant and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related capitalized assets.
Related parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
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Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes”. The asset and liability method provide that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.
Fair Value
ASC 740 provides guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. If the Company determines that an uncertain tax position exists in which the Company could incur income taxes, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities. A liability for uncertain tax positions would then be recorded if the Company determined it is more likely than not that a position would not be sustained upon examination or if a payment would have to be made to a taxing authority and the amount is reasonably estimable. The Company does not believe any uncertain tax positions exist that would result in the Company having a liability to the taxing authorities. The Company classifies interest and penalties related to unrecognized tax benefits, if and when required, as part of interest expense and other expense in the statements of operations. As of September 30, 2021, September 30, 2020 and July 31, 2020, the Company did not have any amounts recorded pertaining to uncertain tax positions.
Fair Value Measurements
The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.
The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:
Level 1 - quoted prices in active markets for identical assets or liabilities
Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 - inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The Company has no assets or liabilities valued at fair value on a recurring basis.
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Recent Accounting Pronouncements
The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date. The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
NOTE 4. EXECUTION AND TERMINATION OF VIE AGREEMENTS
On January 20, 2021, Beijing ALW and Green Energy entered into a series of contractual arrangements, including Equity Pledge Agreement, Exclusive Technology Development, Consulting and Services Agreement, Exclusive Option Agreement, and Irrevocable Power of Attorney (collectively, the “VIE Agreements”) with Hengshui Jingzhen, whereby Beijing ALW gained control over Hengshui Jingzhen, a P.R. China company, which provides integrated hazardous waste management services, including collecting, transferring, disposing, and recycling of hazardous waste, primarily in Hebei, China. This transaction was accounted for as a reverse merger in which the Company was the legal acquirer and Hengshui Jingzhen was the accounting acquirer.
On March 29, 2021, due to changes of the Company’s business plan, the board of directors and a majority shareholder of the Company approved the termination of the VIE Agreements with Hengshui Jingzhen. On the same date, Beijing ALW, Hengshui Jingzhen, and Hengshui Jingzhen’s shareholders entered into a Termination Agreement to terminate all existing VIE Agreements signed on January 20, 2021. Pursuant to the Termination Agreement, all of the rights and obligations under the existing VIE Agreements were terminated and the Company had no control of Hengshui Jingzhen.
NOTE 5. FIXED ASSETS
Fixed assets consisted of the following:
September 30, | September 30, | |||||||
| Office furniture | $ | $ | ||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Fixed assets, net | nil | $ | ||||||
Depreciation
expense for the year ended September 30, 2022 and 2021 were $
NOTE 6. RELATED PARTY BALANCES AND TRANSACTIONS
Related Party Balances
(i) Accounts payable – related party
On
September 30, 2022 and 2021, accounts payable to related party of $
(ii) Amounts due to related parties:
As
of September 30, 2022 and 2021, the amounts due to the shareholders of the Company, Shuhua Liu and Chiu Kin Wong, were $
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Related Party Transactions
(i) Consulting Service Agreement
On
December 9, 2019, the Company signed a consulting service agreement (the “Service Agreement”) with Zenox Enterprises. The
agreement lasts until the Company is listed on the NASDAQ. Pursuant to the Service Agreement, Zenox Enterprises provided consulting services
with respect to the coordination and management of the Company’s financial reporting and other security listing activities. The
Compensation for the consulting services was based on hours and rates agreed-upon by both parties. On March 26, 2021, the Company paid
Zenox Enterprises $
The
Company rented a third party’s office facilities, including mailbox and office equipment, for the Company’s daily operations.
Zenox Enterprises paid $
NOTE 7. STOCKHOLDERS’ EQUITY
On July 8, 2019, the Company filed an Amended and Restated Articles of Incorporation (the “Restated Charter”) with the Secretary of State of the State of Nevada. Pursuant to the Restated Charter, the Company’s capital stock consists of shares, of which are designated common stock and are designated as preferred stock.
On
July 17, 2019,
On January 7, 2020, in connection with the MoralArrival Share Exchange Agreement, the Company issued shares of common stock to Ms. Liu. On November 11, 2020, the Share Exchange Agreement with MoralArrival was terminated and the shares issued to Ms. Liu were cancelled.
On
February 3, 2021, the Company issued shares of common stock to Catalpa Holdings, Inc., a third party, as compensation for its
consulting services. The fair value of
On
May 13, 2021, the Company issued shares of common stock to Mr. Jun Du, the Chief Operating Officer. The fair value of
As of September 30, 2022, the Company had shares of common stock issued and outstanding.
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NOTE 8. INCOME TAXES
The
reconciliation of income tax benefit at the U.S. statutory rate of
September 30, | September 30, | |||||||
| US statutory rate | % | % | ||||||
| Income tax benefit at statutory rate | $ | ( | ) | $ | ( | ) | ||
| Change in valuation allowance | ||||||||
| Income tax expense | $ | $ | ||||||
The tax effects of temporary differences that give rise to the Company’s net deferred tax assets are as follows:
September 30, | September 30, | |||||||
| Net operating loss carry forward | $ | $ | ||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax assets | $ | $ | ||||||
As
of September 30, 2022, the Company has approximately $
NOTE 9. SUBSEQUENT EVENTS
In accordance with FASB ASC 855-10 Subsequent Events, the Company has analyzed its operations subsequent to September 30, 2022, to the date these consolidated financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements, except as follow:
On November 30, 2022, the Company and Future Era Tech (“FET”) signed a master agreement for cooperation. The first trial order has also been executed by December 29, 2022.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
At the end of the period covered by this Annual Report on Form 10-K, an evaluation was carried out under the supervision of and with the participation of our management, including the Principal Executive Officer and the Principal Financial Officer of the effectiveness of the design and operations of our disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and the Principal Financial Officer have concluded that our disclosure controls and procedures were not effective in ensuring that: (i) information required to be disclosed by the Company in reports that it files or submits to the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in applicable rules and forms and (ii) material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.
Disclosure controls and procedures were not effective due primarily to a material weakness in the segregation of duties in the Company’s internal control of financial reporting as discussed below.
Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company (including its consolidated subsidiaries) and all related information appearing in our Annual Report on Form 10-K. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
Management conducted an evaluation of the design and operation of our internal control over financial reporting as of the end of the period covered by this report, based on the criteria in a framework developed by the Company’s management pursuant to and in compliance with the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, walkthroughs of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, management has concluded that our internal control over financial reporting was not effective, because management identified a material weakness in the Company’s internal control over financial reporting related to the segregation of duties as described below.
While the Company does adhere to internal controls and processes that were designed and implemented based on the COSO report, it is difficult with a very limited staff to maintain appropriate segregation of duties in the initiating and recording of transactions, thereby creating a segregation of duties weakness. Due to: (i) the significance of segregation of duties to the preparation of reliable financial statements; (ii) the significance of potential misstatement that could have resulted due to the deficient controls; and (iii) the absence of sufficient other mitigating controls, we determined that this control deficiency resulted in more than a remote likelihood that a material misstatement or lack of disclosure within the annual or interim financial statements may not be prevented or detected.
Management’s Remediation Initiatives.
Management has evaluated, and continues to evaluate, avenues for mitigating our internal controls weaknesses, but mitigating controls to completely mitigate internal control weaknesses have been deemed to be impractical and prohibitively costly, due to the size of our organization at the current time. Management expects to continue to use reasonable care in following and seeking improvements to effective internal control processes that have been and continue to be in use at the Company.
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Changes in internal controls over financial reporting
There were no changes in the Company’s internal control over financial reporting that occurred prior to the Company’s most recent financial quarter that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
The following table sets forth information regarding directors and officers. All directors hold office until the next annual meeting of stockholders or until their successors have been elected or qualified.
| Name | Age | Positions | Date First Appointed | |||
| Shuhua Liu | 49 | Chairwoman of the Board, Chief Executive Officer | June 17, 2019 | |||
| YiYi Huang | 35 | Chief Financial Officer, Director | May 21,2021 | |||
| Jun Du | 42 | Chief Operating Officer | February 1, 2021 | |||
| Chiu Kin Wong | 69 | Director | September 14, 2021 |
Shuhua Liu, age 49, has served as a Director of the Company since June 2019. She has also been serving as the President of Hebei Jingxin Group, a construction company in China, since 2015. Prior to that, Ms. Liu served as the Executive Deputy General Manager of Hebei Jingxin Group from 2010 to 2015. In 2016, Ms. Liu received her Bachelor of Arts degree from National Open University located in China. She received an and MBA degree from Business School Netherlands of Tsinghua University of Beijing in 2017.
Yi Yi Huang, age 35, served as a Project Manager at Shanghai Hantang Culture Development Co., Ltd from December 2016 to February 2019. Prior to that, she worked as a Project Manager at Socom Public Relations (Shanghai) Co., Ltd from September 2014 to August 2016. Ms. Huang worked as an Assistant Brand Manager at Queenix (Asia) Co., Ltd. from May 2012 to March 2014. She also worked as a Project Coordinator at Hewlett Packard Enterprise Hong Kong from November 2009 to April 2012. Ms. Huang obtained her bachelor’s degree in business administration with a major in marketing concentration from Hong Kong Shue Yan University in 2009.
Jun Du, age 42, served as our Chief Operating Officer since February 1, 2021. Mr. Du has served as a senior sales operation manager at Nilfisk Cleaning Equipment (Shanghai) Co. since January 2020. Prior to such time, he served as a senior product & marketing manager in APAC area for the same company from September 2015 to December 2019. He holds a Bachelor of Science degree in Business Management from University of East Anglia in Norwich, England. He also holds a Master of Science degree in Information Technology from the Lancaster Management School at Lancaster University. Mr. Du resigned from his position with the Company as COO in June, 2022.
Chiu Kin Wong, age 69, served as our director since September 14, 2021. Mr Wong is the founder and CEO of Shanghai Yi Long Shipping Co. Ltd, which is located in Shanghai and Super Dragon Shipping and Trading Ltd. which is located in Hong Kong. Mr. Wong graduated from Shanghai Honghu College in 1971.
Director Independence
We do not have any independent directors and we are not required to maintain a majority of independent directors under the rules that apply to companies whose shares are traded on OTC Markets.
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The Board and Committees
Our Board of Directors at this time does not maintain a separate audit, nominating or compensation committee. Functions customarily performed by such committees are performed by the Board as a whole. We are an early stage company with very limited operations, therefore our Board of Directors does not deem it necessary to have more than one director or a nominating or compensation committee. We have not paid any compensation to any officer or director. Decisions relating to director nominations or compensation can be made on a case by case basis by the Board of Directors. Our Board of Directors would consider any shareholder nominee at such time as it is made. Our Board of Directors does not believe that a defined policy with regard to the consideration of candidates recommended by stockholders is necessary at this time because it believes that, given the limited scope of our operations, a specific nominating policy would be premature and of little assistance until our business operations are at a more advanced level. There are no specific, minimum qualifications that the Board believes must be met by a candidate recommended by the Board of Directors. We do not pay any fee to any third party or parties to identify or evaluate or assist in identifying or evaluating potential nominees.
We have not adopted practices or polices regarding employee, officer and director hedging in accordance with Item 407(i) of Regulation S-K.
Legal Proceedings
To the knowledge of our management, there are no material proceedings to which any of our directors, officers or affiliates are a party adverse to our Company.
Code of Ethics
We intend at some point to adopt a code of ethics that applies to our officers, directors and employees. We will file copies of our code of ethics in a current report on Form 8-K. You will be able to review these documents by accessing our public filings at the SEC’s website at www.sec.gov. In addition, a copy of the code of ethics will be provided without charge upon request to us. We intend to disclose any amendments to or waivers of certain provisions of our code of ethics in a current report on Form 8-K.
ITEM 11. EXECUTIVE COMPENSATION
There are no current employment agreements between us and our directors and officers. We have never paid any compensation to any of our executive officers or directors. Our current officers have agreed to work with no remuneration until such time as we receive sufficient revenues necessary to provide management salaries. At this time, we cannot accurately estimate when sufficient revenues will occur that will allow us to begin paying this compensation, or what the amount of the compensation will be. The Company currently has no annuity, pension or retirement benefits proposed to be paid to our officers, directors or employees.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information, regarding the beneficial ownership of our common stock as of the date of this Annual Report by (i) each stockholder known by us to be the beneficial owner of more than 5% of our common stock, (ii) by each director and executive officer of our company and (iii) by all executive officers and directors of our company as a group. Each of the persons named in the table has sole voting and investment power with respect to common stock beneficially owned.
| Name and Address | Number of Shares Owned | Percentage of Shares Owned(1) | ||||||
| 5% Stockholders | ||||||||
| Hass Group, Inc. (2) | 42,753,504 | 68.87 | % | |||||
| Super Dragon Shipping & Trading Limited | 4,328,496 | 6.98 | % | |||||
| Directors and Officers | ||||||||
| Yi Yi Huang | 1,082,834 | 1.75 | % | |||||
| Directors and Officers as a Group | 1,082,834 | 1.75 | % | |||||
(1) Applicable percentage ownership is based on 62,049,990 shares outstanding on January 5, 2023. There are no options, warrants, rights, conversion privilege or similar right to acquire the common stock of the Company outstanding as of January 5, 2023.
(2) Juli Enterprises Inc., a company organized under the laws of British Virgin Islands, owns 100% of the shares of the Hass Group, Inc. Shuhua Liu, a citizen of people’s Republic of China is the owner and serves as the sole director of Juli Enterprises Inc. As such, both Juli Enterprises Inc. and Shuhua Liu may be deemed to be the beneficial owners of all shares of common stock held by the Hass Group, Inc.
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ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
On June 15, 2020, the Company entered into loan agreements with Shuhua Liu and Chiu Kin Wong for an aggregate loan of $400,000 with no interest. Shuhua Liu agreed to lend $280,000 to the Company and Chiu Kin Wong agreed to lend $120,000, both for the Company’s working capital in connection with going public, merger and acquisition. The Company agrees to repay the loan balance after its first financing activity. Shuhua Liu is the Chief Executive Officer and Director of the Company. Chiu Kin Wong is a shareholder of the Company. The amount of principal outstanding as of November 13, 2020 is $400,000. No principal or interest has been paid by the Company during the fiscal year ended September 30, 2021. During the period ended September 30, 2021, the company has borrowed $179,000 from its shareholders to pay certain expenses.
Advances From related parties
Our Board of Directors is responsible to approve all related party transactions. We have not adopted written policies and procedures specifically for related person transactions.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table presents the fees for professional audit services for the audit of our annual financial statements for the fiscal years ended September 30, 2022 and September 30, 2021 and fees billed for other services during those periods.
During the year ended September 30, 2022, Assentsure’s fees for the annual audit of our financial statements and the periodic reviews of the financial statements were $19,000.
September 30, 2022 | September 30, 2021 | |||||||
| Audit fees (1) | $ | 19,000 | $ | 10,000 | ||||
| Audit-related fees | - | 3,000 | ||||||
| Total Fees | $ | 19,000 | $ | 13,000 | ||||
(1) Audit fees consist of audit and review services, consent and review of documents filed with the SEC. For fiscal years ended September 30, 2022 and September 30, 2021, respectively.
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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this Report:
(1) Financial Statements
(2) Exhibits
We hereby file as part of this Report the exhibits listed in the attached Exhibit Index. Exhibits which are incorporated herein by reference can be retrieved from SEC website at www.sec.gov.
ITEM 16. FORM 10-K SUMMARY
Not applicable.
EXHIBIT INDEX
*Filed herewith
-24-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
SUMMIT NETWORKS INC.
| By: | /s/ Shuhua Liu |
Shuhua Liu
Chief Executive Officer and Director
| By: | /s/ YiYi Huang |
YiYi Huang
Chief Financial Officer
Date: January 6, 2023
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Exhibit 31.1
CERTIFICATION
OF CHIEF EXECUTIVE OFFICER
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Shuhua Liu, certify that:
1. I have reviewed this Form 10-K, of Summit Networks, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and Report financial information; and
(b) Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: January 6, 2023
/s/ Shuhua Liu
Shuhua Liu,
Chief Executive Officer
Exhibit 31.2
CERTIFICATION
OF CHIEF FINANCIAL OFFICER
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, YiYi Huang, certify that:
1. I have reviewed this Form 10-K, of Summit Networks, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and Report financial information; and
(b) Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: January 6, 2023
/s/YiYi Huang
YiYi Huang
Chief Financial Officer and Principal Accounting Officer
Exhibit 32.1
CERTIFICATION
OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the accompanying Annual Report on Form 10-K, of Summit Networks, Inc., Shuhua Liu, Chief Executive Officer, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:
1. Such Annual Report on Form 10-K, for the fiscal year ending September 30, 2022, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in such Annual Report on Form 10-K, for the fiscal year ending September 30, 2022, fairly presents, in all material respects, the financial condition and results of operations of Summit Networks, Inc.
Date: January 6, 2023
/s/ Shuhua Liu
Shuhua Liu
Chief Executive Officer
Exhibit 32.2
CERTIFICATION
OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the accompanying Annual Report on Form 10-K, of Summit Networks, Inc. for the fiscal year of September 30, 2022, I, YiYi Huang, Chief Financial Officer and Principal Accounting Officer of Summit Networks, Inc., hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:
1. Such Annual Report on Form 10-K, for the fiscal year ending September 30, 2022, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in such Annual Report on Form 10-K, for the fiscal year ending September 30, 2022, fairly presents, in all material respects, the financial condition and results of operations of Summit Networks, Inc.
Date: January 6, 2023
/s/ YiYi Huang
YiYi Huang
Chief Financial Officer and Principal Accounting Officer
CONSOLIDATED BALANCE SHEETS (Audited) - USD ($) |
Sep. 30, 2022 |
Sep. 30, 2021 |
|---|---|---|
| Current Asset: | ||
| Cash & cash equivalents | $ 8,829 | $ 80,878 |
| Total Current Asset | 8,829 | 80,878 |
| Non-Current Asset: | ||
| Fixed assets, net | 3,322 | |
| Total Non-Current Asset | 3,322 | |
| TOTAL ASSETS | 8,829 | 84,200 |
| Current Liabilities: | ||
| Accounts payable and accrued expenses | 176,167 | 143,333 |
| Accounts payable - related party | 16,000 | 16,000 |
| Due to related party | 579,000 | 579,000 |
| Total Current Liabilities | 771,167 | 738,333 |
| Commitments and Contingencies | ||
| Stockholders’ Deficit: | ||
| Preferred stock, $0.001 par value, 10,000,000 shares authorized; 0 share issued and outstanding | ||
| Common stock, $0.001 par value, 500,000,000 shares authorized; 62,049,990 issued and outstanding as of September 30,2022 and 2021, respectively. | 62,050 | 62,050 |
| Additional paid-in capital | 393,867 | 393,867 |
| Accumulated deficit | (1,218,255) | (1,110,050) |
| Total Stockholders’ Deficit | (762,338) | (654,133) |
| TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT | $ 8,829 | $ 84,200 |
CONSOLIDATED BALANCE SHEETS (Audited) (Parenthetical) - $ / shares |
Sep. 30, 2022 |
Sep. 30, 2021 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
| Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
| Preferred stock, shares issued | 0 | 0 |
| Preferred stock, shares outstanding | 0 | 0 |
| Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
| Common stock, shares authorized | 500,000,000 | 500,000,000 |
| Common stock, shares issued | 62,049,990 | 62,049,990 |
| Common stock, shares outstanding | 62,049,990 | 62,049,990 |
CONSOLIDATED STATEMENTS OF OPERATIONS (Audited) - USD ($) |
12 Months Ended | |
|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Income Statement [Abstract] | ||
| Revenue | ||
| Operating Expenses: | ||
| General and administrative expenses | 108,205 | 572,682 |
| Loss from operations | (108,205) | (572,682) |
| Debt forgiveness by related parties | 118,608 | |
| Net Loss | $ (108,205) | $ (454,074) |
| Basic Net loss per share | $ (0.00) | $ (0.01) |
| Diluted Net loss per share | $ (0.00) | $ (0.01) |
| Weighted average number of common shares outstanding | 62,049,990 | 61,908,894 |
| Diluted weighted average number of common shares outstanding | 62,049,990 | 61,908,894 |
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (Audited) - USD ($) |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Total |
|---|---|---|---|---|
| Beginning balance, value at Sep. 30, 2020 | $ 64,050 | $ 361,867 | $ (655,976) | $ (230,059) |
| Beginning balance, shares at Sep. 30, 2020 | 64,049,990 | |||
| Share-based compensation | $ 1,000 | 29,000 | 30,000 | |
| Share-based compensation, shares | 1,000,000 | |||
| Cancellation of common shares issued in connection with acquisition | $ (3,000) | 3,000 | ||
| Cancellation of common shares issued in connection with acquisition, shares | (3,000,000) | |||
| Net loss | (454,074) | (454,074) | ||
| Ending balance, value at Sep. 30, 2021 | $ 62,050 | 393,867 | (1,110,050) | (654,133) |
| Ending balance, shares at Sep. 30, 2021 | 62,049,990 | |||
| Net loss | (108,205) | (108,205) | ||
| Ending balance, value at Sep. 30, 2022 | $ 62,050 | $ 393,867 | $ (1,218,255) | $ (762,338) |
| Ending balance, shares at Sep. 30, 2022 | 62,049,990 |
ORGANIZATION AND DESCRIPTION OF BUSINESS |
12 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Accounting Policies [Abstract] | |
| ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Summit Networks Inc. (together with its subsidiary, the “Company”) was incorporated under the laws of the State of Nevada on July 8, 2014. Originally, the Company was formed to engage in the development and operation of a business engaged in the distribution of glass craft products produced in China. On May 8, 2018, the Company acquired Real Capital Limited, a Hong Kong company (“Real Capital”), to seek opportunities in the food and beverage industry. On March 31, 2019, the Company entered into a Share Purchase Agreement (the “Real Capital SPA”) pursuant to which it sold its interests in Real Capital. The closing of the Real Capital SPA occurred on April 10, 2019.
On May 8, 2020, Sumnet (Canada) Inc. (“Sumnet (Canada)”) was incorporated in Canada. Sumnet (Canada) issued all its ordinary shares to the Company on May 8, 2020, so that Sumnet (Canada) became the wholly owned subsidiary of Company. On July 29, 2020, Smith Barney Enterprises Limited (“Smith Barney”) was incorporated in the British Virgin Islands. Smith Barney issued all its ordinary shares to the Company on July 29, 2020, so that Smith Barney became the wholly owned subsidiary of Company. On August 28, 2020, Green Energy (HK) Limited (“Green Energy”) was incorporated in Hong Kong. Green Energy issued all its ordinary shares to Smith Barney on August 28, 2020 so that Green Energy became the wholly owned subsidiary of Smith Barney. On September 27, 2020, Beijing Asian League Wins Technology Co., Ltd. (“Beijing ALW”) was incorporated in People’s Republic of China. Green Energy subscribed all capital stock of Beijing ALW on September 27, 2020 so that Beijing ALW became the wholly owned subsidiary of Green Energy.
On January 20, 2021, Beijing ALW and Green Energy entered into a series of contractual agreements (the “VIE Agreement”) with Hengshui Jingzhen Environmental Company Limited (“Hengshui Jingzhen”, or the “VIE”), whereby Beijing ALW gained control over Hengshui Jingzhen, a P.R. China company, which provides integrated hazardous waste management services, including collecting, transferring, disposing, and recycling of hazardous waste, primarily in Hebei, China. On March 29, 2021, the board of directors and a majority shareholder of the Company approved the termination of the VIE Agreements with Hengshui Jingzhen. On the same date, Beijing ALW, Hengshui Jingzhen, and Hengshui Jingzhen’s shareholders entered into a Termination Agreement (the “Termination Agreement”) to terminate all existing VIE Agreements signed on January 20, 2021. Pursuant to the Termination Agreement, all of the rights and obligations under the existing VIE Agreements were terminated and the Company no longer had control of Hengshui Jingzhen. See NOTE 4. EXECUTION AND TERMINATION OF VIE AGREEMENTS.
On July 17, 2019, the Company received FINRA approval to effect a 10-for-1 stock dividend to holders of its common stock as of June 1, 2019, the record date for the dividend. As a result, common stock figures, share capital, additional paid in capital, and earnings per share information have been retroactively adjusted to reflect the stock dividend.
Management has evaluated the effect of the recent and ongoing outbreak of the coronavirus disease 2019 (the “COVID- 19”), which was declared a pandemic by the World Health Organization in March 2020. Although the ultimate disruption caused by the outbreak is uncertain, it may not have significant impact on the Company’s financial position, operations and cash flows.
On January 20, 2021, the Company changed its fiscal year-end from July 31 to September 30.
|
GOING CONCERN |
12 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| GOING CONCERN | NOTE 2. GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
The Company had limited operations during the period from July 8, 2014 (date of inception) to September 30, 2022, resulting in accumulated deficit of $1,218,255 and has not generated any revenue. There is no guarantee that Company will generate revenue and net income in the future.
At September 30, 2022, the Company had a working capital deficiency of $762,338. The cash used in operating activities were $72,049. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include adjustments that might result from the outcome of this uncertainty.
The ability of the Company to continue as a going concern is dependent on the undertaking of its shareholders to provide continuing financial support to enable the Company to meet its liabilities as and when they fall due.
The Company actively looks for new business opportunities, and its operating expenses are solely relied on loans from the shareholders.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Accounting Policies [Abstract] | |
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Consolidation
The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (GAAP).
Use of Estimates
The preparation of condensed consolidated 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 disclosures of contingent assets and liabilities at the date of consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents are on deposit with financial institutions without any restrictions. As of September 30, 2022 and 2021, cash equivalents amounted to $8,829 and $80,878, respectively.
Fixed Assets
Property, plant and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related capitalized assets.
Related parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes”. The asset and liability method provide that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.
Fair Value
ASC 740 provides guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. If the Company determines that an uncertain tax position exists in which the Company could incur income taxes, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities. A liability for uncertain tax positions would then be recorded if the Company determined it is more likely than not that a position would not be sustained upon examination or if a payment would have to be made to a taxing authority and the amount is reasonably estimable. The Company does not believe any uncertain tax positions exist that would result in the Company having a liability to the taxing authorities. The Company classifies interest and penalties related to unrecognized tax benefits, if and when required, as part of interest expense and other expense in the statements of operations. As of September 30, 2021, September 30, 2020 and July 31, 2020, the Company did not have any amounts recorded pertaining to uncertain tax positions.
Fair Value Measurements
The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.
The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:
Level 1 - quoted prices in active markets for identical assets or liabilities
Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 - inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The Company has no assets or liabilities valued at fair value on a recurring basis.
Recent Accounting Pronouncements
The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date. The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
|
EXECUTION AND TERMINATION OF VIE AGREEMENTS |
12 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Execution And Termination Of Vie Agreements | |
| EXECUTION AND TERMINATION OF VIE AGREEMENTS | NOTE 4. EXECUTION AND TERMINATION OF VIE AGREEMENTS
On January 20, 2021, Beijing ALW and Green Energy entered into a series of contractual arrangements, including Equity Pledge Agreement, Exclusive Technology Development, Consulting and Services Agreement, Exclusive Option Agreement, and Irrevocable Power of Attorney (collectively, the “VIE Agreements”) with Hengshui Jingzhen, whereby Beijing ALW gained control over Hengshui Jingzhen, a P.R. China company, which provides integrated hazardous waste management services, including collecting, transferring, disposing, and recycling of hazardous waste, primarily in Hebei, China. This transaction was accounted for as a reverse merger in which the Company was the legal acquirer and Hengshui Jingzhen was the accounting acquirer.
On March 29, 2021, due to changes of the Company’s business plan, the board of directors and a majority shareholder of the Company approved the termination of the VIE Agreements with Hengshui Jingzhen. On the same date, Beijing ALW, Hengshui Jingzhen, and Hengshui Jingzhen’s shareholders entered into a Termination Agreement to terminate all existing VIE Agreements signed on January 20, 2021. Pursuant to the Termination Agreement, all of the rights and obligations under the existing VIE Agreements were terminated and the Company had no control of Hengshui Jingzhen.
|
FIXED ASSETS |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FIXED ASSETS | NOTE 5. FIXED ASSETS
Fixed assets consisted of the following:
Depreciation expense for the year ended September 30, 2022 and 2021 were $3,322 and $2,214, respectively.
|
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RELATED PARTY BALANCES AND TRANSACTIONS |
12 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Related Party Transactions [Abstract] | |
| RELATED PARTY BALANCES AND TRANSACTIONS | NOTE 6. RELATED PARTY BALANCES AND TRANSACTIONS
Related Party Balances
(i) Accounts payable – related party
On September 30, 2022 and 2021, accounts payable to related party of $16,000 and $16,000, respectively, pertains to payable in respect to the office facility rental paid by Zenox Enterprises Inc. (“Zenox Enterprises”) on behalf of the Company. Zenox Enterprises is a Canadian company controlled by the Company’s former CFO. The amounts which were unsecured, non-interest bearing with no specific repayment terms.
(ii) Amounts due to related parties:
As of September 30, 2022 and 2021, the amounts due to the shareholders of the Company, Shuhua Liu and Chiu Kin Wong, were $579,000 and $579,000, respectively, which were unsecured, non-interest bearing with no specific repayment terms.
Related Party Transactions
(i) Consulting Service Agreement
On December 9, 2019, the Company signed a consulting service agreement (the “Service Agreement”) with Zenox Enterprises. The agreement lasts until the Company is listed on the NASDAQ. Pursuant to the Service Agreement, Zenox Enterprises provided consulting services with respect to the coordination and management of the Company’s financial reporting and other security listing activities. The Compensation for the consulting services was based on hours and rates agreed-upon by both parties. On March 26, 2021, the Company paid Zenox Enterprises $70,000 as compensation for its services. On March 20, 2021, the Company and Zenox Enterprises agreed to terminate the Service Agreement.
The Company rented a third party’s office facilities, including mailbox and office equipment, for the Company’s daily operations. Zenox Enterprises paid $2,000 monthly rent to the third party on behalf of the Company. On March 26, 2021, the Company reimbursed Zenox Enterprises $24,000 for its rental payments from February 2020 to January 2021. There is no written lease between the Company and the third party, and the rental can be ended by the Company anytime.
|
STOCKHOLDERS’ EQUITY |
12 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Equity [Abstract] | |
| STOCKHOLDERS’ EQUITY | NOTE 7. STOCKHOLDERS’ EQUITY
On July 8, 2019, the Company filed an Amended and Restated Articles of Incorporation (the “Restated Charter”) with the Secretary of State of the State of Nevada. Pursuant to the Restated Charter, the Company’s capital stock consists of shares, of which are designated common stock and are designated as preferred stock.
On July 17, 2019, the Company received FINRA approval to effect a 10-for-1 stock dividend to holders of its common stock as of June 1, 2019, the record date for the dividend. As a result, common stock figures, share capital, additional paid in capital, and earnings per share information have been retroactively adjusted for all periods presented to reflect the stock dividend.
On January 7, 2020, in connection with the MoralArrival Share Exchange Agreement, the Company issued shares of common stock to Ms. Liu. On November 11, 2020, the Share Exchange Agreement with MoralArrival was terminated and the shares issued to Ms. Liu were cancelled.
On February 3, 2021, the Company issued shares of common stock to Catalpa Holdings, Inc., a third party, as compensation for its consulting services. The fair value of 500,000 was determined to be $ and was recognized as stock- based compensation for the year ended September 30, 2021.
On May 13, 2021, the Company issued shares of common stock to Mr. Jun Du, the Chief Operating Officer. The fair value of 500,000 was determined to be $ and was recognized as stock-based compensation for the year ended September 30, 2021.
As of September 30, 2022, the Company had shares of common stock issued and outstanding.
|
INCOME TAXES |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INCOME TAXES | NOTE 8. INCOME TAXES
The reconciliation of income tax benefit at the U.S. statutory rate of 21% for the year ended September 30, 2022, September 30, 2021 to the Company’s effective tax rate is as follows:
The tax effects of temporary differences that give rise to the Company’s net deferred tax assets are as follows:
As of September 30, 2022, the Company has approximately $1,148,552 of net operating losses (“NOL”) carryovers to offset taxable income, if any, in future years. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax assets relating to the NOL period because it is more likely than not that all of the deferred tax assets will not be realized.
|
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SUBSEQUENT EVENTS |
12 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS | NOTE 9. SUBSEQUENT EVENTS
In accordance with FASB ASC 855-10 Subsequent Events, the Company has analyzed its operations subsequent to September 30, 2022, to the date these consolidated financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements, except as follow:
On November 30, 2022, the Company and Future Era Tech (“FET”) signed a master agreement for cooperation. The first trial order has also been executed by December 29, 2022. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
12 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Accounting Policies [Abstract] | |
| Basis of Presentation and Consolidation | Basis of Presentation and Consolidation
The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (GAAP).
|
| Use of Estimates | Use of Estimates
The preparation of condensed consolidated 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 disclosures of contingent assets and liabilities at the date of consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
|
| Cash and Cash Equivalents | Cash and Cash Equivalents
Cash and cash equivalents are on deposit with financial institutions without any restrictions. As of September 30, 2022 and 2021, cash equivalents amounted to $8,829 and $80,878, respectively.
|
| Fixed Assets | Fixed Assets
Property, plant and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related capitalized assets.
|
| Related parties | Related parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
|
| Income Taxes | Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes”. The asset and liability method provide that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
|
| Net loss per share |
The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.
|
| Fair Value | Fair Value
ASC 740 provides guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. If the Company determines that an uncertain tax position exists in which the Company could incur income taxes, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities. A liability for uncertain tax positions would then be recorded if the Company determined it is more likely than not that a position would not be sustained upon examination or if a payment would have to be made to a taxing authority and the amount is reasonably estimable. The Company does not believe any uncertain tax positions exist that would result in the Company having a liability to the taxing authorities. The Company classifies interest and penalties related to unrecognized tax benefits, if and when required, as part of interest expense and other expense in the statements of operations. As of September 30, 2021, September 30, 2020 and July 31, 2020, the Company did not have any amounts recorded pertaining to uncertain tax positions.
|
| Fair Value Measurements | Fair Value Measurements
The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.
The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:
Level 1 - quoted prices in active markets for identical assets or liabilities
Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 - inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The Company has no assets or liabilities valued at fair value on a recurring basis.
|
| Recent Accounting Pronouncements | Recent Accounting Pronouncements
The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date. The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
|
FIXED ASSETS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of fixed assets |
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of reconciliation of income tax benefit |
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| Schedule of deferred tax assets |
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ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) |
12 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Accounting Policies [Abstract] | |
| State of incorporation | NV |
| Date of incorporation | Jul. 08, 2014 |
| Stock split, description | the Company received FINRA approval to effect a 10-for-1 stock dividend to holders of its common stock as of June 1, 2019, the record date for the dividend. |
GOING CONCERN (Details Narrative) - USD ($) |
12 Months Ended | |
|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
| Accumulated deficit | $ 1,218,255 | $ 1,110,050 |
| Working capital deficiency | 762,338 | |
| Cash used in operating activities | $ 72,049 | $ 385,189 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) |
Sep. 30, 2022 |
Sep. 30, 2021 |
|---|---|---|
| Accounting Policies [Abstract] | ||
| Cash equivalents | $ 8,829 | $ 80,878 |
FIXED ASSETS (Details) - USD ($) |
Sep. 30, 2022 |
Sep. 30, 2021 |
|---|---|---|
| Property, Plant and Equipment [Line Items] | ||
| Fixed assets, gross | $ 5,536 | $ 5,536 |
| Less: Accumulated depreciation | (5,536) | (2,214) |
| Fixed assets, net | 3,322 | |
| Furniture and Fixtures [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Fixed assets, gross | $ 5,536 | $ 5,536 |
FIXED ASSETS (Details Narrative) - USD ($) |
12 Months Ended | |
|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Property, Plant and Equipment [Abstract] | ||
| Depreciation expense | $ 3,322 | $ 2,214 |
RELATED PARTY BALANCES AND TRANSACTIONS (Details Narrative) - USD ($) |
12 Months Ended | |||
|---|---|---|---|---|
Sep. 30, 2022 |
Jan. 31, 2021 |
Sep. 30, 2021 |
Mar. 26, 2021 |
|
| Related Party Transaction [Line Items] | ||||
| Accounts payable related party | $ 16,000 | $ 16,000 | ||
| Amounts due to shareholders | 579,000 | $ 579,000 | ||
| Zenox Enterprises [Member] | ||||
| Related Party Transaction [Line Items] | ||||
| Compensation paid for services | $ 70,000 | |||
| Payments for rent | $ 2,000 | |||
| Reimburshment of rent | $ 24,000 | |||
INCOME TAXES (Details) - USD ($) |
12 Months Ended | |
|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Income Tax Disclosure [Abstract] | ||
| US statutory rate | 21.00% | 21.00% |
| Income tax benefit at statutory rate | $ (22,723) | $ (95,356) |
| Change in valuation allowance | 22,723 | 95,356 |
| Income tax expense | ||
INCOME TAXES (Details 1) - USD ($) |
Sep. 30, 2022 |
Sep. 30, 2021 |
|---|---|---|
| Income Tax Disclosure [Abstract] | ||
| Net operating loss carry forward | $ 255,039 | $ 232,316 |
| Valuation allowance | (255,039) | (232,316) |
| Net deferred tax assets |
INCOME TAXES (Details Narrative) - USD ($) |
12 Months Ended | |
|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Income Tax Disclosure [Abstract] | ||
| U.S. statutory rate income tax benefit percentage | 21.00% | 21.00% |
| Net operating losses carryforward | $ 1,148,552 | |
SUBSEQUENT EVENTS (Details Narrative) |
1 Months Ended |
|---|---|
Nov. 30, 2022 | |
| Subsequent Event [Member] | |
| Subsequent Event [Line Items] | |
| Shares purchased, description | FET purchased 5 million shares for $0.04 and acquired the independent management rights and management rights of the company’s subsidiary, SUMNET. FET mainly operates clean energy methanol flameless boilers, as well as the research and development and sales of automated production lines. By December 29, the $200,000 investment had been fully credited to the transaction. |