UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-K
(Mark One)
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the year ended December 31, 20192020
or
| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
(Exact name of registrant as specified in its charter) |
Delaware
| 37-1863750 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
311-7, Tianyu Building, 11 Guangming Road Dongcheng District, Beijing, China 100051 (Address of Principal Executive Offices, including zip code) +86 (10) 65014177 (Registrant’s telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: 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 requirements for the past 90 days. 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 requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T ( 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes 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. (Check one): Large accelerated filer ☐ Accelerated filer Non-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 by Rule 12b-2 of the Act). Yes As of 4 Market for Registrant’s Common Equity and Related Stockholder Matters Management’s Discussion and Analysis of Financial Condition and Results of Operations Changes in and Disagreements with Accountants on Accounting and Financial Disclosures Security Ownership of Certain Beneficial Holders and Management CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS · our ability to establish our business in China and implement our business plan; · acceptance of our health-related products and services that we expect to develop and promote; · our ability to retain key employees; · adverse changes in general market conditions for health-related 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 pandemic in China and around the world). The forward-looking statements contained in this Overview We We are a development stage company and have extremely limited financial resources. We have not commenced operation nor have we established a source of equity or debt financing. Our Effective November 6, 2020, our name was changed to We plan to operate in We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item. ITEM 1B. UNRESOLVED STAFF COMMENTS None. We do not own or lease any property and use the office space provided We are not ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS (a) Market Our common stock is quoted on OTC Pink market operated by the OTC Markets under the symbol “SKMT.” There has been very limited trading in our shares of common stock. We cannot assure you that there will be an active market in the future for our common stock. (b) Holders As of (c) (d) Securities authorized for issuance under equity compensation plans We currently do not have any equity compensation plans. (e) Recent Sales of Unregistered Securities None. Not applicable. ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This discussion summarizes the significant factors affecting the operating results, financial condition, liquidity and cash flows of the Company for the fiscal year ended December 31, Except for historical information, the matters discussed in this section are forward-looking statements that involve risks and uncertainties and are based upon judgments concerning various factors that are beyond the Company’s control. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report. We plan to operate in the We Results of Operations We did not generate any revenue for years ended December 31, 2020 and 2019 and do not expect to generate any revenue until we commence our business plan. General and Administrative Expenses Going Concern The future of our company is dependent upon our ability to implement our new business plans and initiatives and our ability to generate positive net profits from implementation of our business plans. Management plans to seek additional funding through either equity or debt financings from its principal stockholder to support its operations for the As the Company is currently a shell company, its operating expenses Liquidity and Capital Resources Net cash Cash Flows from Financing Activities For the year ended December 31, Year ended December 31, 2018 Year ended December 31, 2019 Operating Activities Investing Activities Financing Activities Net Effect on Cash We Critical Accounting Policies Involving Management Estimates and Assumptions Off-Balance Sheet Arrangements We do not have ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Page Financial Statements for the Years Ended December 31, 2020 and 2019 9 Balance Sheets 10 11 12 13 14 To the shareholders and the board of directors of Opinion on the Financial Statements We have audited the accompanying balance sheets of Chengda Technology Co. Ltd. (formerly New Leap, Inc.) (the "Company") as of December 31, The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 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 audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits 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 audits 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 audits 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 audits provide a reasonable basis for our opinion. /s/ B F Borgers CPA PC We have served as the Company’s auditor since 2017. Lakewood, Colorado Chengda Technology Co., Ltd. (Formerly New Leap, Inc.) December 31, December 31, 2020 2019 ASSETS Current Assets: Cash Total Current Assets Total Assets LIABILITIES AND STOCKHOLDERS' DEFICIT Account payable to related party Accrued liabilities Promissory note payable to stockholder Total Current Liabilities Total Liabilities Stockholders’ Deficit: Preferred stock; $0.0001 par value, 5,000,000 shares authorized, none issued and outstanding Common stock; $0.0001 par value, 50,000,000 shares authorized, 10,204,000 shares issued and outstanding Additional paid-in capital Accumulated deficit Total Stockholders’ Deficit Total Liabilities and Stockholders’ Deficit December 31, December 31, 2019 2018 ASSETS Current assets: Cash and cash equivalents (Note 3) Total Current assets Total assets LIABILITIES AND STOCKHOLDERS’ DEFICIT Current Liabilities: Account payable to related party Other accounts payable (Note 5) Promissory note payable to shareholder (Note 6) Total current liabilities Total Liabilities Commitments and contingencies (Note 7) Stockholders’ Deficit: Preferred stock; $0.0001 par value, 5,000,000 shares authorized, none issued and outstanding Common stock; $0.0001 par value, 50,000,000 shares authorized, 10,204,000 shares issued and outstanding as of December 31, 2019 and as of December 31, 2018 Addition paid-in capital Accumulated deficit Total stockholder’s deficit Total liabilities and stockholders’ deficit The accompanying notes are an integral part of (Formerly New Leap, Inc.) For The Year Ended December 31, 2020 2019 Operating expenses: General and administrative expenses Total operating expenses Loss from operations Net loss Basic & diluted net income per share * * Weighted average number of ordinary shares-basic and diluted ____________ * Less than $0.01 Year ended 31, December 2019 Year ended 31, December 2018 Revenues Cost of revenues Gross profit Selling, General and Administrative expenses Loss from operations Other income, net Loss before provision for income taxes Income tax expense Net Loss Other Comprehensive loss Loss per share (Note 4) Basic and diluted Weighted average common shares outstanding: Basic and diluted The accompanying notes are an integral part of Common shares Additional paid-in Accumulated Total shareholders’ Number Amount capital deficit deficit Balance as of December 31, 2017 Issued shares Shareholder contribution Net loss Balance as of December 31, 2018 Shareholder contribution Net loss Balance as of December 31, 2019 Chengda Technology Co., Ltd. (Formerly New Leap, Inc.) For The Year Ended December 31, 2020 2019 Cash flows from operating activities: Net loss Adjustments to reconcile net loss to net cash used in operating activities: Contributed services Changes in assets and liabilities: Accrued liabilities Net cash used in operating activities Cash flows from investing activities: Cash flows from financing activities: Advances from related parties Capital contributions from stockholder Net cash provided by financing activities Net decrease in cash Cash, beginning of period Cash, end of period Supplemental cash flow information Forgiveness of promissory notes by stockholder Forgiveness of payable due to related party Cash paid for interest expense Cash paid for income tax The accompanying notes are an integral part of (Formerly New Leap, Inc.) Statements of Changes in Stockholders’ Equity Year ended December 31, 2019 Year ended December 31, 2018 Cash flow from operating activities: Net loss Adjustments to reconcile net loss to net cash used in operating activities: Contributed services Changes in operating assets and liabilities: Increase (decrease) in account payables Net cash used in operating activities Changes in investment activities Cash flow from financing activities: Common Stock Issued for cash Promissory note from shareholder Net cash provided by financing activities NET CASH DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS AT END OF PERIOD Shares Shares amount Additional paid-in capital Accumulated Deficit Total equity Balance as of January 1, 2019 Net loss Contributions from stockholders Balance as of December 31, 2019 Net loss Contributions from stockholders Forgiveness of related party loan Forgiveness of stockholder’s promissory note Balance as of December 31, 2020 The accompanying notes are an integral part of (Formerly New Leap, Inc.) December 31, 2020 Chengda Technology Co., Ltd., (formerly known as New Leap, Inc.) (the On August 12, 2020, pursuant to a Stock Purchase Agreement (the “SPA”) entered into by and between Xin Jiang (the “Purchaser”) and Itzhak Ostashinsky (the “Seller”), a controlling stockholder as well as Chief Executive Officer, Chief Financial Officer, President, Secretary and director of the Company, the Seller sold to the Purchaser 8,000,000 shares of common stock, par value $0.0001 per share, of the Company, representing 78.4% of the total issued and outstanding shares of common stock as of August 24, 2020, in consideration of $251,177 in cash from the Purchaser’s personal funds (the “Transaction”). In connection with the Transaction, the Seller resigned as Chief Executive Officer, Chief Financial Officer, President, Secretary and director of the Company, effective immediately upon the consummation of the Transaction. Xin Jiang was then appointed as Chief Executive Officer, Chief Financial Officer, President, Secretary and director of the Company. The Transaction resulted in a change in control of the Company. Effective November 6, 2020, the Company’s name was changed to “Chengda Technology Co., Ltd.” through the filing with the Secretary of State of the State of Delaware a Certificate of Amendment to the Certificate of Incorporation of the Company, which was approved by the Company’s Board of Directors. After the change in control, the Company plans to implement a new business plan. The Company plans to operate in the field of NOTE 2 – GOING CONCERN The accompanying financial statements have been prepared in conformity with United States generally accepted accounting principles (“U.S. GAAP”), which contemplate continuation of the Company as a going concern. As a start-up, the Company has not generated any revenues and has accumulated losses through December 31, 2020. The Company currently has limited working capital and does not expect to generate revenues in the near term. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management anticipates that the Company will be dependent, for the near future, on additional financing to fund operating expenses, primarily loans and/or capital contribution from its principal stockholder. As the Company is a shell company, its operating expenses are limited. Management believes that the financing from its principal stockholder will provide it with the funding to continue as a going concern. These financial statements have been prepared assuming that the Company will continue as a going NOTE Basis of Presentation The Company’s financial statements have been prepared in accordance with Use of Estimates The preparation of Recent Accounting Pronouncements333-219776(Commission File Number)37-1863750(IRS Employer Identification No.)8 Derech Hameshi St., Ganei Tikva, Israel 5591179(Address of principal executive offices)+(972)-50-7844477(Registrant’s telephone number, including area code)¨ ☐ No x☒¨ ☐ No x☒ x ☒ No ¨☐x ☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the 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. ¨¨¨☐xx☒x☒x ☒ No ¨☐State theThe aggregate market value of the voting and non-voting common equitystock held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity,shares on the OTC markets as of the last business day of the registrant’s most recently completed second fiscal quarter.Not available as shares have yet to begin trading.June 30, 2020 was approximately $2,115,750.March 27, 2020April 15, 2021 there were 10,204,000 shares of common stock outstanding.Documents Incorporated By Reference: None. 7575757575868697118129131613161518161917191720182019212022 2 There areThis Annual Report on Form 10-K (the “Report”), including, without limitation, statements in this annual report that are not historical facts.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”forward-looking statements can be identified by the use of forward-looking terminology, such as “believe,including the words “believes,” “hope,“estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “anticipate,“will,” “potential,” “projects,” “predicts,” “continue,” or “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy” and similar expressions. You should be aware that these forward-looking statements are subject to risks and uncertainties that are beyond our control. For a discussion of these risks, you should read this entire Registration Statement carefully, especially the risks discussed under “Risk Factors.” Although management believes that the assumptions underlying the forward looking statements includedor, in this Registration Statement are reasonable, they do not guarantee our future performance, and actual results could differ from those contemplated by these forward looking statements. The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, andeach case, their negative or other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipatedvariations or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. In the light of these risks and uncertainties, therecomparable terminology. There can be no assurance that theactual 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 events contemplated byany 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:Registration Statement will in fact transpire. YouReport are cautionedbased 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 place undue reliance onbe materially different from those expressed or implied by these forward-looking statements, which speak only asstatements. Should one or more of their dates.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 do not undertake anyno obligation to update or revise any forward-looking statements.statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. 3 Table of Contents are an emerging growth company as definedwere incorporated in Section 2(a)(19)the State of the Securities Act. We will continue to be an emerging growth company until: (i) the last day of our fiscal year during which we had total annual gross revenues of $1,070,000,000 or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act; (iii) the date on which we have, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or (iv) the date on which we are deemed to be a large accelerated filer, as defined in Section 12b-2 of the Exchange Act.As an emerging growth company, we are exempt from:Section 14A (a) and (b) of the Exchange Act, which requires companies to hold stockholder advisory votes on executive compensation and golden parachute compensation;The requirement to provide in any registration statement periodic report or other report to be filed with the Securities and Exchange Commission, certain modified executive compensation disclosure under Item 402 of Regulation S-K or selected financial data under Item 301 of Regulation S-K for any period before the earliest audited period presented in our initial registration statement;Compliance with new or revised accounting standards until those standards are applicable to private companies;The requirement under Section 404(b) of the Sarbanes-Oxley Act of 2002 to provide auditor attestation of our internal controls and procedures; andAny Public Company Accounting Oversight Board ("PCAOB") rules regarding mandatory audit firm rotation, or an expanded auditor report and any other PCAOB rules subsequently adopted, unless the Securities and Exchange Commission determines the new rules are necessary for protecting the public.We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the Jumpstart Our Business Startups Act.New Leap was incorporated in Delaware on June 1, 2017. Most of the activity through December 31, 2019 involved incorporation efforts, preparation for the Company’s public Offering and building our website.financial statements include a note emphasizing the uncertainty of our ability to remain a going concern.New Leap focusesoriginal business focused on an online market and community connecting private U.S.United States companies and companies which are publicly traded in the U.S. (both U.S. and foreign incorporated) with potential investors from all over the world, except for U.S. residents. Theresidents, with a goal is to provideof providing these companies with exposure to as many potential investors from outside the U.S. as possible, while providing those potential investors with different investment opportunities in the foregoing companies. Potential investors will be able to click on any company they would like to know more about and get access to its marketing information and legal and financial disclosures.New Leap plansPursuant to match up potential investorscertain stock purchase agreement, entered into as of August 12, 2020, as amended, an individual investor purchased 1,500,000 shares of our common stock from all overour then majority stockholder and sole officer and director, Itzhak Ostashinsky, representing 78.4% of the world, except for U.S. residents with private U.S. companiesvoting securities of our company. Following this change of control, Xin Jiang was appointed to serve as our Chief Executive Officer, Chief Financial Officer, President, Secretary and companies which are publicly tradeddirector and we changed our business plan to engage in health-related business in the U.S. (both U.S. and foreign incorporated). The goal isPeople’s Republic of China.use“Chengda Technology Co., Ltd.” through the crowdfunding trendfiling with the Secretary of State of the State of Delaware a Certificate of Amendment to the Certificate of Incorporation, which was approved by our Board of Directors.order to make private investments in such companies more accessible to non-U.S. investors on one hand and allow easier access to capital for these companiesthe field of health-related products, with a focus on the other.developing and promoting selenium-infused mineral water and energy mattress. In addition, we plan to offer health services, including health assessments, health consultations, and health recoveries. We will not allow U.S. persons accessare currently evaluating the optimal approaches to implement these plans, including through mergers and acquisitions of health products or services companies in China. Due to the materials presented bydynamic nature and the companies offering their securities on our website. Anyone trying to gain access to the offering materials posted on our website will first need to fill out a questionnaire which will include a question about the country of residence. Anyone answering “U.S.A” or any of its states will be prohibited from gaining access to the page showing the offering materialsglobal impact of the presenting companies.COVID-19 pandemic, we cannot reasonably estimate the timeline to implement our business plans. We intendaim to start developing a website following completionthe health-related business in 2021 and the funds to finance the start-up of this offering. For this purposethe new business will primarily come from our intention is to use a third party vendor which can provide both design and programming services.major stockholder. 4 Table of ContentsAll securities will bear a legend indicating that the securities are "restricted securities" and may not be sold in the U.S. absent an effective registration statement under the Securities Act covering the resale of such securities or an available exemption from such registration requirement.New Leap will keep a complete audit trail of investments in the companies presenting on its website. Funds committed for an investment will be kept in an escrow account until the company’s funding goal is reached. Upon reaching such goal, funds will be transferred from the escrow account to the company’s bank account while simultaneously stock certificates will be delivered to the investors. Should the funding goal not be reached until the deadline of the offering, funds would immediately be returned to the investors.Business ModelNew Leap has two revenue models: Transaction Success Fees and Advertising Fees.Transaction Revenue ModelNew Leap's web platform would be designed to allow a meet up between potential interested investors and U.S. private companies and companies which are publicly traded in the U.S. (both U.S. and foreign incorporated) looking to raise funds via equity-based crowdfunding. Such companies interested in using our platform for such purpose will post their offering materials on our website so that potential investors having access to the website could review them and decide whether they are interested in participating in the offering by making an investment. We will receive a certain percentage ranging between 5% to 10% as a transaction success fee for each fundraising campaign that reaches its funding goal. This certain percentage will be applied to the total amount raised and will be paid out of the escrow account immediately upon completion of a transaction. We will be entitled to a transaction success fee only for fundraising campaigns that reach their funding goals as such goals are set by the companies launching these campaigns. We will not employ tiered funding goals.Advertising Revenue ModelNew Leap would also consider allowing advertising on its website. We expect that if we will manage to generate meaningful traffic to our website, various market participants will be interested in exploring advertising opportunities with us.Marketing & Growth StrategyNew Leap will grow the pool of companies looking to utilize its platform for equity-based crowdfunding by talking with, and presenting the opportunity to, startups and early stage companies as well as small more mature companies which need additional funds for growth, expansion and acquisitions. New Leap will grow its pool of potential investors looking to explore the investment opportunities presented on our website by advertising on economic portals which are widely followed by retail investors. New Leap will look for other channels for exposure such as writing columns about equity-based crowdfunding on widely-spread financial newspapers and websites.Market OverviewEquity-based crowdfunding refers to the pooling of small capital investments from a large number of investors to finance a new or expanding business venture. In return, those investors receive a small stake in the company and expect to earn a profit if the company succeeds. The concept of crowdfunding is not new. Charities, social groups, churches and non-profit organizations have raised funds using similar methods for many years. Websites such as Kickstarter and Indiegogo brought crowdfunding to the internet by allowing startup companies and entrepreneurs to accept monetary “donations” from project “backers.” The difference between these crowdfunding campaigns and those targeted by New Leap, however, is that investors using New Leap's web platform will be able to purchase a security interest in the company in which they are investing.The equity-based crowdfunding contemplated by New Leap will be made under Regulation S (Rules 901-905 of the Securities Act of 1933, as amended).5Table of ContentsCompetitionWe are currently not aware of other crowdfunding platforms focused on Regulation S offerings of securities. However, we consider U.S. investment-based crowdfunding platforms, which present companies offering securities based on Rule 506(c), Section 4(a)(6) and Regulation A+ of the Securities Act of 1933, as amended to be competitors to some extent.Regulatory EnvironmentThe enactment of the JOBS Act in 2012 led to numerous regulatory changes that support investment-based crowdfunding in the U.S. Since New Leap, however, plans to provide a web platform for securities offerings to be made outside the U.S., it will not have companies using its services rely on these post-JOBS Act regulatory changes, but rather rely on Regulation S, which excludes securities offerings made outside the U.S. from the purview of the registration requirements of Section 5 under the Securities Act of 1933, as amended. Companies using our web platform will be required, however, to meet the requirements of Regulation S promulgated under the Securities Act of 1933, as amended.Intellectual PropertyWe have no patents or trademarks.EmployeesAs of December 31, 2019, we had one employee which serves as our president, and chief executive officer, Mr. Ostashinsky. During calendar year ending December 31, 2020 (depending on financing and available working capital), Mr. Ostashinsky will devote at least ten (10) hours a week to us and may increase the number of hours as necessary. Mr. Ostashinsky is under no contractual agreement with the Company. However, our president, and chief executive officer’s current plan is to provide all administrative and planning work as well as initial marketing efforts on his own without any cash compensation while he seeks other sources of funding for the Company and its business plan.PropertyOur office and mailing address is 8 Derech Hameshi St., Ganei Tikva, Israel 5591179. The space is provided to us by Mr. Ostashinsky, who incurs no incremental costs as a result of our using the space. Therefore, he does not charge us for its use. There is no written lease agreement. The current use of the space property is minimal.LitigationWe are not party to any pending, or to our knowledge, threatened litigation of any type.6Table of Contents The Company utilizesOur principal executive offices are located at 311-7, Tianyu Building, 11 Guangming Road, Dongcheng District, Beijing, China 100051. rent-free by our President at 8 Derech Hameshi St., Ganei Tikva, Israel 5591179.sole officer and director free of charge.party tocurrently involved in any legal proceedings.proceedings nor are we aware of any pending or potential legal actions. 75Table of Contents Information.InformationThere is no established trading market for our shares.March 27, 2020,April 15, 2021, there were approximately 376 holders of record of our common stock.Dividends.DividendsThe Registrant hasWe have not paid any cash dividends to date and doesdo not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of our management to utilize all available funds for the development of the Registrant'sour business..(e) Performance graphAs a smaller reporting company as defined(f) Purchases of Equity Securities by Rule 12b-2 of the Securities Exchange Act of 1934 we are not required to provide the information under this item.On June 3, 2017 the Company sold 9,000,000 common shares to its President in exchange for a business plan at $0.001 per share. These shares were issued under Regulation S as they were offeredIssuer and sold outside the U.S. to a non-U.S. person.Proceeds raised from investors under the Company’s registration statement on Form S-1, which was declared effective on October 20, 2017 were used for general working capital purposes.ITEM 6. SELECTED FINANCIAL DATAAffiliated PurchasersAs a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 we are not required to provide the information under this item.None. 86Table of Contents 2019.2020. The discussion and analysis that follows should be read together with the section entitled “Forward Looking Statements” and our consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this annual report on Form 10-K.Company OverviewNew Leap plans to match up potential investors from all over the world, except for U.S. residents with private U.S. companies and companies which are publicly tradedWe were incorporated in the U.S. (both U.S.State of Delaware on June 1, 2017. We are a development stage company and foreign incorporated). The goal ishave extremely limited financial resources. We have not established a source of equity or debt financing. Our financial statements include a note emphasizing the uncertainty of our ability to useremain a going concern.crowdfunding trend in order to make private investments in such companies more accessible to non-U.S. investors on one hand and allow easier access to capital for these companiesfield of health-related products, with a focus on the other. developing and promoting selenium-infused mineral water and energy mattress. In addition, we plan to offer health services, including health assessments, health consultations, and health recoveries. will not allow U.S. persons accessare currently evaluating the optimal approaches to implement these plans, including through mergers and acquisitions of health companies in China. Due to the materials presented bydynamic nature and the companies offering their securities on our website. Anyone trying to gain access to the offering materials posted on our website will first need to fill out a questionnaire which will include a question about the country of residence. Anyone answering “U.S.A” or any of its states will be prohibited from gaining access to the page showing the offering materialsglobal impact of the presenting companies. We intendCOVID-19 pandemic, we cannot reasonably estimate the timeline to start developing a website following completion of this offering. For this purpose our intention is to use a third party vendor which can provide both design and programming services.All securities will bear a legend indicating that the securities are "restricted securities" and may not be sold in the U.S. absent an effective registration statement under the Securities Act covering the resale of such securities or an available exemption from such registration requirement.New Leap will keep a complete audit trail of investments in the companies presenting onimplement its website. Funds committed for an investment will be kept in an escrow account until the company’s funding goal is reached. Upon reaching such goal, funds will be transferred from the escrow account to the company’s bank account while simultaneously stock certificates will be delivered to the investors. Should the funding goal not be reached until the deadline of the offering, funds would immediately be returned to the investors.business plan.January 1, 2018 to December 31, 2018 compared to January 1, 2019 to December 31, 2019Selling, RevenuesSelling,During the years ended December 31, 2020 and 2019, we incurred $61,193 and $77,140 of general and administrative expenses, forrespectively. Our general and administrative expenses primarily consisted of auditor fees, officer’s contributed corporate administrative service costs, professional fees and filing fees, which are routine costs associated with a public company. The decrease in the general and administrative expenses in the year ended December 31, 2018 were $54,7742020 compared to $77,140the same period of last year was due to one-time expenses of approximately $22,000 incurred in 2019 in connection with obtaining eligibility to deposit our equity securities with DTC, which facilitates electronic trading of securities.year ended December 31, 2019. Thenext twelve months. However, there is no assurance that such funds will be available or available on acceptable terms. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. were consisted primarily of contributed servicesare limited. Management believes that the financing from its principal stockholder will provide it with the sole officer and director and costs associated with our statusfunding to continue as a public company.going concern. 97Table of Contents The following is a summary of the Company'sCash Flows from Operating Activitiesflows provided by (used in)used in operating investing, and financing activities was $23,583 for the year ended December 31, 2018 and2020, compared to net cash used in operating activities of $39,060 for the same period of 2019, represented a decrease of $15,477 in the net cash outflow in operating activities. This is due to the decrease of our net loss in year ended December 31, 2020 compared to the same period of 2019.2019:$ (18,901 ) $ (39,060 ) - - $ 31,954 $ 19,547 $ 13,053 $ (19,513 ) To date, most2020, net cash generated by financing activities was $22,089, representing advances and capital contributions from the Company’s former and current major stockholders to support the operations of our resources and work have been devotedthe Company. For the year ended December 31, 2019, net cash generated by financing activities was $19,547, representing advances from the former major stockholder to planning our business, completing our registration statement and building our website.support the Company’s operations.Private capital, if sought, we believe will be sought from former business associates of our presidentCommitments and chief executive officer or through private investors referred to us by those same business associates.If a market for our shares ever develops, of which there can be no assurances, we may use restricted shares of our common stock to compensate employees/consultants and independent contractors wherever possible. We cannot predict the likelihood or source of raising capital or funds that may be needed to complete the development of our business plan.Capital Expendituresare a public company and as such wepresently have incurred and will continue to incur significant expensesno material commitments for legal, accounting and related services. As a public entity, subject to the reporting requirements of the Exchange Act of 1934, we incur ongoing expenses associated with professional fees for accounting, legal and a host of other expenses including annual reports and proxy statements, if required. We estimate that these costs will range up to $50,000 per year over the next few years and may be significantly higher if our business volume and transactional activity increases but should be lower during our first year of being public because our overall business volume (and financial transactions) will be lower, and we will not yet be subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 until we exceed $250 million in market capitalization (if ever). These obligations will certainly reduce our ability and resources to expand our business plan and activities. We hope to be able to use our status as a public company to increase our ability to use noncash means of settling outstanding obligations (i.e. issuance of restricted shares of our common stock) and compensate independent contractors who provide professional services to us, although there can be no assurances that we will be successful in any of these efforts. We will also reduce compensation levels paid to management (if we attract or retain outside personnel to perform this function) if there is insufficient cash generated from operations to satisfy these costs.We hope to be able to use our status as a public company to enable us to use non-cash means of settling obligations and compensate persons and/or firms providing services to us, although there can be no assurances that we will be successful in any of those efforts. However, these actions, if successful, will result in dilution of the ownership interests of existing shareholders, may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management’s ability to maintain control of the Company because the shares may be issued to parties or entities committed to supporting existing management. The Company may offer shares of its common stock to settle a portion of the professional fees incurred in connection with its registration statement. No negotiations have taken place with any professional and no assurances can be made as to the likelihood that any professional will accept shares in settlement of obligations due to them.As of December 31, 2018 and December 31, 2019 we owed $50,173 and $70,000, respectively. In 2019 such liabilities were primarily in connection with payment to service providers in relation to our status as a public company. There are no other significant liabilities at December 31, 2018 and December 31, 2019.As of December 31, 2018 and December 31, 2019, the Company had one note payable issued and outstanding to a related party with a total principle of $19,943 and $39,490, respectively. The note is payable on demand and bears no interest. The proceeds are being used for general working capital purposes.10Table of ContentsRecently Issued Accounting PronouncementsRefer to the notes to the financial statements for a complete description of recent accounting standards which we have not yet been required to implement and may be applicable to our operation, as well as those significant accounting standards that have been adopted during the current year.expenditures. The preparationOur discussion and analysis of our financial condition and results of operations is based on our financial statements. In preparing our financial statements in conformity with accounting principles generally accepted in the United StatesU.S. GAAP, we must make a variety of America ("US GAAP") requires management to make estimates judgments and assumptions that affect the reported amounts and related disclosures. See Note 3 of assets and liabilities, disclosure of contingent assets and liabilities at the date of theour financial statements and the reported amount of expenses during the reporting period. On an ongoing basis, we evaluate our estimates which are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the reported amount of expenses that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions. The following accounting policies require significant management judgments and estimates.We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There can be no assurance that actual results will not differ from these estimates.Going ConcernOur auditor has issued a "going concern" explanatory paragraph as part of his opinionincluded in the Audit Report dated March 27, 2020 for the fiscal year ended December 31, 2019.this Report. no outstandingany relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.Contractual ObligationsAs a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.financial arrangements. 118Table of Contents New Leap, Inc.December 31, 2019TABLE OF CONTENTSIndex to Financial StatementsF-1atas of December 31, 20192020 and December 31, 20182019F-2F-3F-4F-5F-6 12Table of ContentsReportReports of Independent Registered Public Accounting FirmFirmsNew Leap, Inc.Chengda Technology Co. Ltd.20192020 and 2018,2019, the statements of operations, and comprehensive income (loss), changes in shareholders’ deficit,stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2019,2020, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20192020 and 2018,2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2019,2020, in conformity with accounting principles generally accepted in the United States.GoingGoing concern uncertainty12 to the financial statements, the Company incurred recurring losses from operations, has net current liabilities and an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1.2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.March 27, 2020April 15, 20219 F-1Table of Contents$ — $ 1,494 — 1,494 $ — $ 1,494 $ — $ 25,000 18,550 5,510 — 39,490 18,550 70,000 18,550 70,000 — — 10,204 10,204 237,624 126,475 (266,378 ) (205,185 ) (18,550 ) (68,506 ) $ — $ 1,494 BALANCE SHEETS(Expressed in USD, except for the number of shares)$ 1,494 $ 21,007 $ 1,494 $ 21,007 $ 1,494 $ 21,007 $ 25,000 $ 25,000 5,510 5,230 39,490 19,943 $ 70,000 $ 50,173 $ 70,000 $ 50,173 - - $ 10,204 $ 10,204 126,475 88,675 (205,185 ) (128,045 ) $ (68,506 ) $ (29,166 ) $ 1,494 $ 21,007 thethese financial statements.F-210Table of ContentsSTATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)Statements of Operations(Expressed in USD, except for the number of shares)$ 61,193 $ 77,140 61,193 77,140 (61,193 ) (77,140 ) $ (61,193 ) $ (77,140 ) 10,204,000 10,204,000 $ - $ - - - - - 77,140 54,774 (77,140 ) (54,774 ) - - (77,140 ) (54,774 ) - - $ (77,140 ) $ (54,774 ) $ (77,140 ) $ (54,774 ) $ (0.01 ) $ (0.01 ) 10,204,000 10,087,000 thethese financial statements.statementsF-311Table of ContentsSTATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT(Expressed in USD, except for the number of shares)9,000,000 $ 9,000 $ 22,050 $ (73,271 ) $ (42,221 ) 1,204,000 1,204 28,825 - 30,029 - - 37,800 - 37,800 - - - (54,774 ) (54,774 ) 10,204,000 $ 10,204 $ 88,675 $ (128,045 ) $ (29,166 ) - - 37,800 - 37,800 - - - (77,140 ) (77,140 ) 10,204,000 $ 10,204 $ 126,475 $ (205,185 ) $ (68,506 ) $ (61,193 ) $ (77,140 ) 24,570 37,800 13,040 280 (23,583 ) (39,060 ) — — 10,229 19,547 11,860 — 22,089 19,547 (1,494 ) (19,513 ) 1,494 21,007 $ — $ 1,494 $ 49,719 — $ 25,000 — — — — — thethese financial statements.statementsF-412Table of ContentsSTATEMENTS OF CASH FLOWS(US$, except share data and per share data, or otherwise noted)(Expressed in USD, except for the number of shares)$ (77,140 ) $ (54,774 ) 37,800 37,800 280 (1,927 ) $ (39,060 ) $ (18,901 ) $ - $ - $ - $ 30,029 19,547 1,925 $ 19,547 $ 31,954 (19,513 ) 13,053 21,007 7,954 $ 1,494 $ 21,007 10,204,000 $ 10,204 $ 88,675 $ (128,045 ) $ (29,166 ) - - - (77,140 ) (77,140 ) - - 37,800 - 37,800 10,204,000 $ 10,204 $ 126,475 $ (205,185 ) $ (68,506 ) - - - (61,193 ) (61,193 ) - - 36,430 - 36,430 - - 25,000 - 25,000 - - 49,719 - 49,719 10,204,000 $ 10,204 $ 237,624 $ (266,378 ) $ (18,550 ) thethese financial statements.statementsF-513Table of ContentsNOTES TO FINANCIAL STATEMENTSNotes to Financial Statements(USD, except number of shares)NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESSNOTE 1 – ORGANIZATIONAL AND GOING CONCERN:“Company”"Company") was formedincorporated on June 1, 2017 as a Delaware corporation. During 2017 the Company issued 9,000,000 shares of its common stock in consideration for a business plan at $0.001 per share. The Company has yet to start operational or research and development activities.crowdfundinghealth-related products, with a focus on developing and promoting selenium-infused mineral water and energy mattress. Also, the Company plans to run an online platform for investments in private U.S. companiesoffer health services, including health assessments, health consultations, and companies which are publicly traded in the U.S. (both domestic and foreign).health recoveries. In JanuaryThe Company is currently evaluating the optimal approaches to implement these plans, including through mergers and February, 2018acquisitions of health companies in China. Due to the dynamic nature and the global impact of the COVID-19 pandemic, the Company issuedcannot reasonably estimate the timeline to implement its business plan. Until the Company is able to implement its business plan, the Company will remain a total of 1,204,000 shares of its common stock to various investors at a price of $0.025 per share. The shares were issued pursuant to the Company’s registration statement on Form S-1 which was declared effective by the SEC on October 20, 2017.shell company.concern. The Company has suffered cumulative lossesconcern and, negative cash flows from operations since inception. Until the Company will achieve profitability and revenues, which is uncertain, it intends to finance its operation through the issuance of its shares. These conditions give rise to substantial doubt about the Company’s ability to continue as a going concern. The financial statementsaccordingly, do not include any adjustments that maymight result from the outcome of this uncertainty.23 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of PresentationGenerally Accepted Accounting Principlesgenerally accepted accounting principles in the United States of America (“U.S. GAAP”) issued by Financial Accounting Standards Board (“FASB”). The Company’s fiscal year-end is December 31.the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods.period. Actual results could differ from those estimates. The Company currently does not have significant estimates and assumptions. 14
From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codifications (“ASC”) are communicated through issuance of an Accounting Standards Update. Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on our financial statements upon adoption.
Fair Value Measurement
The Company discloses fair value measurements forhas reviewed the recent accounting pronouncements and concluded that they were either not applicable or had no impact to the Company’s financial and non-financial assets and liabilities measured at fair value. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.statements.
The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data.
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
NOTE 3 – CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash, demand deposits and highly liquid investments with original maturities of three months or less. Cash and cash equivalents are carried at cost which approximates fair value. Cash and cash equivalents at December 31, 2019 included cash at the amount of $1,494.
NOTE 4 – EARNINGS (LOSS) PER SHARE CAPITAL
Loss per shareThere were no transactions of common stock and preferred stock during the years ended December 31, 2020 and 2019.
During the years ended December 31, 2020 and 2019, the former CEO and major stockholder, Itzhak Ostashinsk, contributed corporate administrative work services of $24,570 and $37,800, respectively, to the Company and these amounts were recorded as capital contributions. No additional shares of common stock were issued for these contributions.
During the fiscal year ended December 31, 2019 was $0.01. The basic loss per share is calculated by dividing2020, the Company’s net loss availableformer CEO and major stockholder, Itzhak Ostashinsk and the new CEO and major stockholder, Xin Jiang, made capital contributions of $1,510 and $10,350, respectively, to common shareholders by the weighted average numberCompany for working capital. No additional shares of common shares during the year. The diluted loss per share is calculated by dividing the Company’s net loss available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjustedstock were issued for any potentially dilutive debt or equity. Diluted earnings (loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items in the Company and the fact that the Company has a loss.these contributions.
NOTE 5 – OTHER ACCOUNTS PAYABLE
At December 31, 2019 the Company had “other accounts payable” at the amount of $5,510. That amount reflects payments due to service providers.
NOTE 6 – PROMISSORY NOTE PAYABLE TO SHAREHOLDER
The Company has an outstanding notePromissory notes payable provided byrepresented loans advanced from the Company’s former major shareholder and sole officer and director which is unsecured and bears no interest.stockholder to support the operations of the Company. The note is payable uponwas interest free and due on demand. TheAs of December 31, 2019, the outstanding balance under the note was $39,490 and $19,943 as of$39,490. During the year ended December 31, 2019 and December 31, 2018 respectively.
NOTE 7 – COMMITMENTS AND CONTINGENCIES
2020, an additional $10,229 was advanced from the former major stockholder to the Company. In June 2017, the Company engaged a legal counselAugust 2020, in order to receive legal services concerning the registration statement to be filedconnection with the Securities and Exchange Commission (“SEC”). According toTransaction, the agreement,former major stockholder forgave the fees will be paid if and only upon receiving the first $25,000 from external investors following the effectivenesspromissory note payable with a cumulated balance of the registration statement. Since this expense was probable it$49,719, which was recorded as a provision and as expenses amountingcapital contribution to $25,000 outstanding at December 31, 2019. The legal counsel is considered to be a related party - see also Note 9. The legal counsel has agreed to postpone this paymentthe Company. No additional shares of common stock were issued for the time being given the financial condition of the Company.these contributions.
NOTE 86 – COMMON STOCKRELATED PARTY TRANSACTIONS
Common Stock confers upon its holdersIn addition to the rights to receive notice to participatecapital contribution disclosed in Note 4 and votepromissory note forgiveness disclosed in general meetings of the Company, and the right to receive dividends if declared. At December 31, 2019Note 5, the Company had 10,204,000 common shares outstanding. The Company has 50,000,000 authorized common shares. During the fiscal year ended December 31, 2019 the Company did not issue any common shares. The expense incurred by the CEO and major shareholder on behalf and for the benefit of the Company forfollowing related party transactions during the years ended December 31, 20192020 and December 31, 2018 amounted to $37,800 and $37,800, respectively and was recorded as contribution to equity.
NOTE 9 –– TRANSACTION WITH RELATED PARTY2019:
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NOTE 107 – SUBSEQUENT EVENTS
In accordance with ASC 855-10 we have analyzed our operationsManagement has evaluated subsequent to December 31, 2019events pursuant to the requirements of ASC Topic 855, from the balance sheet date thesethrough the date when the financial statements were issued, and have determined that we do not have any materialno subsequent events occurred that would require adjustment to discloseor disclosure in thesethe financial statements.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There are not and have not been any disagreements between the Company and its accountants on any matter of accounting principles, practices or financial statement disclosure.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosureDisclosure controls and procedures. The term "disclosure controls and procedures", as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended ("Exchange Act"), meansprocedures are controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in theour reports it filesfiled or submitssubmitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC`sSEC’s rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in theour reports that it filesfiled or submitssubmitted under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers,our Certifying Officer or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Based on this evaluation,Under the supervision of our ChiefPrincipal Executive Officer and ChiefPrincipal Financial Officer concluded(the “Certifying Officer”), we evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2019,defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officer concluded that our disclosure controls and procedures arewere not effective at a reasonable assurance level and are designed to provide reasonable assurance thatas of the controls and procedures will meet their objectivesend of the period covered by this Report due to the material weaknesses describedweakness in our internal control over financial reporting discussed below. However, it should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
Management's Report on Internal Control Overover Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. 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 generally accepted accounting principles. TheOur internal controls for the Company are provided by executive management's review and approval of all transactions. Our internal control over financial reporting also includes those policies and procedures that:
(1) | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; | |
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(2) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management; and | |
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(3) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Management assessed the effectiveness of the Company'sour internal control over financial reporting as of December 31, 2019.2020. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations ("COSO") of the Treadway Commission in Internal Control-Integrated Framework. Management's assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of these controls.
Based on this assessment, management has concluded that as of December 31, 2019,2020, our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles due to the existence of the following material weaknesses:
| · | Lack of segregation of duties |
| · | Lack of audit committee and independent directors |
| · | Management is dominated by a single individual without adequate compensating controls providing for multiple levels of supervision and review |
Although we are unable to meet the standards under COSO because of the limited resources available to a company of our size, we are committed to improving our financial organization. As funds become available, we will undertake to: (1) create a position to segregate duties consistent with control objectives, (2) increase our personnel resources and technical accounting expertise within the accounting function (3) appoint one or more independent directors to our board of directors who shall be appointed to a Company audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; and (4) prepare and implement sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of USU.S. GAAP and SEC disclosure requirements.
We will continue to monitor and evaluate the effectiveness of our disclosure controls and procedures and our internal control over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.allow.
This annual report does not include an attestation report of the Company'sour registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company'sour registered public accounting firm pursuant to temporary rules of the SEC that permit the Companyus to provide only management's report in this annual report.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’sour internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or is reasonably likely to materially affect, the Company’sour internal control over financial reporting.
None.
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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
The following table contains information as of December 31, 2019 as to each Directorregarding our sole officer and Executive Officer of the Company:director.
Name | Age | Title | ||
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| 72 | President, CEO, CFO, Secretary |
Itzhak OstashinskyXin Jiang – Mr. Itzhak OstashinskyMs. Jiang has served as our Chief Executive Officer, Chief Financial Officer, President, Secretary Treasurer and Director since August 2020. She served as Chairwoman of Crowd 4 Seeds,Chengda Technology Co., Ltd., a crowdfunding business, from April, 2014 to December, 2016. For more than 20 years Mr. Ostashinsky served in various key positionscompany engaged in the insurance industryproduction and sales of health supplements in Israel. Having served as the CEO of an Israeli insurance company and as a deputy CEO of two other Israeli insurance companies, Mr. Ostashinsky gained meaningful top-level experience in management, marketing, business development and investments. In addition, Mr. Ostashinsky led a group of investors in three different investments in Israeli biotechnology and medical device startups. In the past 5 years Mr. Ostashinsky has been an independent consultant providing marketing and business development consulting services. Mr. Ostashinsky holds a B.A. in Business Administration from Bar-Ilan University, Israel. Given Mr. Ostashinsky's top-level experience in management, marketing, business development and investments we concluded that he is suitable for serving as a director of the Company.
Itzhak Ostashinsky has served as our director and executive officerChina, since June 3, 2017.2020. Prior to that, Ms. Jiang was a vendor selling health products on Taobao, a leading online e-commerce marketplace in China, since 2016. From 2003 to 2016, Ms. Jiang worked at the Tianjin Municipal Archives Bureau. Prior to that she taught at various middle schools in China from 1976 to 2003, including Heilongjiang Fuyu Forest Machinery Factory Children's Middle School, Tianjin Petrochemical Fiber Factory Middle School, Tianjin Hexi District Xingguo School and Tianjin Nankai District Sixty Six Middle School (now known as Affiliated High School of Nankai University).
Family Relationships.Director Independence
None.We do not have any independent directors. We are not required to maintain a majority of independent directors under the rules applicable to companies that do not have securities listed or quoted on a national securities exchange or national quotation system.
InvolvementThe 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 Certain 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 director, officer | ||
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Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;
Being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
Being the subject of oraffiliate is a party adverse to any judicialour company or administrative order, judgment, decree or finding, not subsequently reversed, suspended or vacated relatinghas a material interest adverse to an alleged violation of any federal or state securities or commodities law or regulation, or any law or regulation respecting financial institutions or insurance companies, including but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail, fraud, wire fraud or fraud in connection with any business entity; orour company.
Being the subject of or a party to any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act, any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
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Board Committees and Audit Committee Financial Expert
We do not currently have a standing audit, nominating or compensation committee of the board of directors, or any committee performing similar functions. Our board of directors performs the functions of audit, nominating and compensation committees. As of the date of this annual report, no member of our board of directors qualifies as an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K promulgated under the Securities Act.
Director Nominations
As of December 31, 2019 we did not affect any material changes to the procedures by which our shareholders may recommend nominees to our board of directors. We have not established formal procedures by which security holders may recommend nominees to the Company’s board of directors.
Code of Ethics
We have yetintend at some point to adopt a code of ethics as we are stillthat applies to our officers, directors and employees. We will file copies of our code of ethics in the process of finalizing it.a current report on Form 8-K.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
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There isare no formalcurrent employment arrangement with Mr. Ostashinsky at this time. Mr. Ostashinsky’s compensation has not been fixed or based onagreements between us and our sole officer. We have never paid any percentage calculations. He will make all decisions determining the amount and timing of his compensation and, for the immediate future, has elected not to receive any compensation which permits us to meet our financial obligations. Mr. Ostashinsky’s compensation amount may be formalized if and when the Company completes this offering and obtains any future financing beyond the offering.
Grants of Plan-Based Awards Table
None of our named executive officers received any grants of stock, option awards or other plan-based awards during the period ended December 31, 2019 except as stated above. The Company has no activity with respect to these awards.
Options Exercised and Stock Vested Table
None of our named executive officers exercised any stock options, and no restricted stock units, if any, held by our named executive officers vested during the period ended December 31, 2019. The Company has no activity with respect to these awards.
Outstanding Equity Awards at Fiscal Year-End Table
None of our named executive officers had any outstanding stock or option awards as of December 31, 2019 that would be compensatory to the officer. The Company has not issued any awards to its named executive officers. The Company and its Board of Directors may grant awards as it sees fit to its employees as well as key consultants.
Compensation of Directors
During our fiscal year ended December 31, 2019, we did not provide compensation to any of our directors for serving as our director. We currently have no formal plan for compensating our directors for their services in their capacity as directors, although we may elect to issue stock options to such persons from time to time. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board ofexecutive officers or directors. Our boardcurrent officer has agreed to work with no remuneration until such time as we commence business operations and receive sufficient revenues necessary to provide management salaries. At this time, we cannot accurately estimate when sufficient revenues will occur to implement this compensation, or what the amount of directors may award special remunerationthe compensation will be. There are no annuity, pension or retirement benefits proposed to be paid to the officer or director or employees in the event of retirement at normal retirement date pursuant to any director undertaking any special services onpresently existing plan provided or contributed to by our behalf other than services ordinarily required of a director.company.
The following table sets forth as of March 27, 2020, certain information, with regard toregarding the record and beneficial ownership of the Company’sour common stock as of the date of this Annual Report by (i) each personstockholder known to the Companyby us to be the record or beneficial owner of more than 5% or more of the Company’sour common stock, (ii) by each director and executive officer of the Company,our company and (iii) each of the named executive officers, and (iv)by all executive officers and directors of the Companyour company as a group:group. Each of the persons named in the table has sole voting and investment power with respect to common stock beneficially owned. The business address of each person listed below is 311-7, Tianyu Building, 11 Guangming Road, Dongcheng District, Beijing, China 100051.
Name of Beneficial Owner | Number of Shares Owned (1) | Percentage of Outstanding Shares of Common Stock (2) |
Itzhak Ostashinsky | 8,995,000 | 88.15% |
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| Percentage |
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| Number of |
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Name and Address |
| Shares Owned |
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| Owned |
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5% Stockholders |
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Zhou Sun |
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| 2,101,960 |
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| 21 | % |
Xin Jiang |
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| 8,000,000 |
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| 78 | % |
Directors and Officers |
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Xin Jiang |
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| 8,000,000 |
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| 78 | % |
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| 19 | |
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Our officeDuring the years ended December 31, 2020 and mailing address is 8 Derech Hameshi St., Ganei Tikva, Israel 5591179. The space is provided2019, our former CEO and major stockholder, Itzhak Ostashinsk, contributed corporate administrative work services of $24,570 and $37,800, respectively, to us bythe Company and these amounts were recorded as capital contributions. During the year ended December 31, 2020, Mr. Ostashinsky. Mr. Ostashinsky incurs no incremental costs as a resultOstashinsk and our new CEO and major stockholder, Xin Jiang, made capital contributions of us using$1,510 and $10,350, respectively, to the space. Therefore, he does not charge usCompany for its use. There is no written lease agreement.
The Company issued 9,000,000working capital. No shares of its common stock were issued for these contributions. During the years ended December 31, 2020 and 2019, Mr. Ostashinsk extended loans under a promissory note to its president chief executive officer and chief financial officer, Mr. Ostashinsky, in consideration for a business plan.
The Company has an outstanding note payable provided bysupport the major shareholder and sole officer and director which is unsecured and bears no interest.operations of the Company. The note is payable uponwas interest free and due on demand. TheAs of December 31, 2019, the outstanding balance under the note was $19,943 and $39,490 as of$39,490. During the year ended December 31, 2018 and2020, an additional $10,229 was advanced from the former major stockholder to the Company. In August 2020, in connection with the Change of Control, Mr. Osttashinksk forgave the promissory note payable with a cumulated balance of $49,719, which was recorded as a capital contribution to the Company.
As at December 31, 2019, respectively.
The Company obtains legal services fromwe had a related party. The related party ispayable balance of $25,000 due to the son of Mr. Osttashinksk. The balance was interest free and due on demand. In August 2020, the major shareholder and provides legal advice$25,000 related party payable balance was forgiven by the related party in connection with the Change of Control. Therefore, the forgiven amount was recorded as a capital contribution to the Company. As of December 31, 2018 and December 31, 2019 the liability amounted to $25,000.
Our former officer and director, Itzhak Ostashinsky, is a promoterprovided office space until the consummation of the Company. He receives no considerationChange of Control. We did not pay any rent to Mr. Ostashinsky for his promotional activities. His related-party transactions with the Company are described aboveoffice space. Following the Change in this Item 13.
Corporate GovernanceControl, Ms. Jiang, our now sole executive officer and Director Independence.director, provides office space to us free of charge.
The Company has not:
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Nor:
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Given the natureOur Board of the Company’s business, its limited stockholder baseDirectors is responsible to approve all related party transactions. We have not adopted written policies and the current composition of management, the board of directors does not believe that the Company requires any corporate governance committees at this time.
As of the date hereof, the entire board serves as the Company’s audit committee.procedures specifically for related person transactions.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Independent Public Accountants
On July 11, 2017, we engaged B F Borgers CPA PC (“BFB”) as our independent registered public accounting firm. The appointment of BFB was approved by our Board of Directors. Duringfollowing table presents the fiscal year ended December 31, 2019, we did not consult with BFB on (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type offees for professional audit opinion that may be rendered on the Company's financial statements, and BFB did not provide either a written report or oral advice to the Company that was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue; or (ii) the subject of any disagreement, as defined in Item 304 (a)(1)(iv) of Regulation S-K and the related instructions, or a reportable event within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K.
Audit Fees
The fees involved withservices for the audit by BFB of theour annual financial statements for the year ended December 31, 2019 are $5,000. Other than that, the Company paid $4,500 to BFB for the review of all interim financial statements during 2019, $4,500 for the previous audit for the year ended December 31, 2018 and $4,500 for the review of all interim financial statements during 2018.
Audit-Related Fees
During thefiscal years ended December 31, 2020 and 2019 and December 31, 2018, our principal accountant did not render audit-related services to us.
Tax Fees
During the year ended December 31, 2019 and December 31, 2018, our principal accountant did not render services to us for tax compliance, tax advice or tax planning.
All Other Fees
During the year ended December 31, 2019 and December 31, 2018 there were no fees billed for products andother services provided by the principal accountant other thanduring those set forth above.periods.
Currently, we have no independent audit committee. Our full board of directors functions as our audit committee and is comprised of one director who is not considered to be "independent" in accordance with the requirements of Rule 10A-3 under the Exchange Act. Our audit committee’s pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approve all accounting related activities prior to the performance of any services by any accountant or auditor.
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| December 31, 2020 |
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| December 31, 2019 |
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Audit fees |
| $ | 9,700 |
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| $ | 10,000 |
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Audit-related fees |
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| 0 |
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| 0 |
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Tax fees |
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| 0 |
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| 0 |
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All other fees |
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| 0 |
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| 0 |
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Total Fees |
| $ | 9,700 |
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| $ | 10,000 |
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| Table of Contents |
ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) | The following documents are filed as a part of this Report: |
1. | Financial Statements. The |
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2. | Financial Statement Schedule(s): |
All schedules are omitted for the reason that the information is included in the financial statements or the notes thereto or that they are not required or are not applicable. |
All schedules are omitted for the reason that the information is included in the financial statements or the notes thereto or that they are not required or are not applicable.
3. | Exhibits: |
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* Filed herewith.
** Furnished herewith.
(1) Incorporated herein by reference from the Company’sour Form S-1 filed with the Securities and Exchange Commission on August 8, 2017.
(2) Incorporated herein by reference from our Current Report on Form 8-K filed with the Securities and Exchange Commission on November 9, 2020.
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In accordance with Section 13 or 15(d) of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
April 15, 2021 | ||
/s/ | ||
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Chief Executive Officer, Chief Financial Officer and President | ||
(Principal Executive Officer and Principal Financial and Accounting Officer) |
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