U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1 to Form 10-Q)

ýFORM 10-Q

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

For the quarterly period ended SeptemberJune 30, 20192020

OR

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

For the transition period from ______________ to ______________

Commission File Number: 333-134991

ZZLL INFORMATION TECHNOLOGY, INC.

(Exact Name of Registrant as Specified in Its Charter)

(+852) 3705 1571

(Registrant’s Telephone Number, Including Country Code)

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Securities registered under Section 12(b) of the Exchange Act:

None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $0.0001 par value per share

(Title of Class)

Indicate by check mark whether the issuer (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) been subject to such filing requirements for the past 90 days. Yesý ☒ No¨ ☐

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). YesýYes☒ No¨ ☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes¨ ☐ Noý ☒

As of November 18, 2019,August 14, 2020, the Registrant had 20,277,448 shares of common stock issued and outstanding.

EXPLANATORY NOTE: The Company has included the XBRL Interactive Data Table 101 Exhibits with this amended filing.

ZZLL INFORMATION TECHNOLOGY, INC.

TABLE OF CONTENTS

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Special Note Regarding Forward-Looking Statements

Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of ZZLL Information Technology, Inc. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason. This Quarterly Report, and unless otherwise noted, the words "we," "our," "us," the "Company," "ZZLL" or “Icon” refers to ZZLL Information Technology, Inc.

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PART I - FINANCIAL INFORMATION

ITEM: 1 FINANCIAL STATEMENT

ZZLL INFORMATION TECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

See accompanying notes to unaudited consolidated financial statements

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ZZLL INFORMATION TECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

*All shares outstanding for all periods have been retroactively restated to reflect ZZLL’s 1-for-50 reverse stock split, which was effective on October 5, 2017.

See accompanying notes to unaudited consolidated financial statements

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ZZLL INFORMATION TECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’DEFICIT AND COMPREHENSIVE INCOME

(Unaudited)

*All shares outstanding for all periods have been retroactively restated to reflect ZZLL’s 1-for-50 reverse stock split, which was effective on October 5, 2017.

ZZLL INFORMATION TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

See accompanying notes to unaudited consolidated financial statements

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ZZLL INFORMATION TECHNOLOGY, INC. AND SUBSIDIARIES

See accompanying notes to unaudited consolidated financial statements

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ZZLL INFORAMTION TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 ORGANIZATION AND BASIS OF PRESENTATION

ZZLL Information Technology, Inc. (“The Company”(the “Company”) was incorporated under the laws of the State of Nevada on September 9, 2005 under the name of JML Holdings, Inc. The Company merged with Baoshinn International Express, Inc. (“BSIE”) on March 31,June 30, 2006 by acquiring all of the issued and outstanding common stock of BSIE in a share exchange transaction. We issued 16,500,000 shares of our common stock in exchange for 100% of the issued and outstanding shares of BSIE common stock. The transaction was accounted for as a recapitalization of BSIE whereby BSIE is deemedchanged its name to be the accounting acquirer and is deemed to have adopted our capital structure.

OnGreen Standard Technologies, Inc. on June 17, 2015, Baoshinn Corporation has been amended to the name “Green Standard Technologies, Inc.”.

2005. On May 27, 2016, the Company changed its name with the State of Nevada from Green Standard Technologies, Inc. to “ZZLL Information Technology, Inc.”

On May 27, 2016, ZZLL Information Limited acquired 4,992,500 common shares of the Company through a private Common Stock Purchase Agreement for investment purposes in the ordinary course of business. The aggregate number and percentage of common shares of the Issuer beneficially owned by Mr. Wei Liang is 4,992,500 common shares, or approximately 26.662% of the 18,725,003 issued common shares.

On June 14, 2016, Wei Liang (“Mr. Liang”) was appointed to serve as a member of the Board of Directors of ZZLL Information Technology, Inc.

On June 24, 2016, ZZLL TechnologyApril 23, 2013, the Company formed a wholly owned subsidiary, Syndicore Asia Limited acquired 4,895,000 common shares(“SAL”), under the laws of Hong Kong. SAL has limited operating activities since incorporation except for holding the ownership interest in Hunan Syndicore Asia Limited (“HSAL”), an e-Commerce company organized under the laws of the Company through a private Common Stock Purchase Agreement for investment purposes in the ordinary coursePeople’s Republic of business. The aggregate number and percentage of common shares of the Issuer beneficially owned by Mr. Wei Zhu is 4,895,000 common shares, or approximately 26.142% of the 18,725,003 issued common shares.China (the “PRC”).

On August 18, 2016, the Company through SAL entered into a Joint Venture Agreement (“JVA”) with Network Service Management Limited a Hong Kong company (“NSML”) in the formation ofto form Z-Line International E-Commerce Company Limited (“Z-Line”), a under the laws of Hong Kong based e-Commerce company.Kong. The Company through SAL owned 55% and NSML owned 45% of the equity interests of Z-Line. On October 8, 2019, the Company acquired the remaining 45% equity interests of Z-Line that providesfrom NSML and Z Line became a wholly owned subsidiary of the Company. Z-Line was formed to become an e-Commerce company providing consumer-to-consumer, business-to-consumer and business-to-business-sales services via web portals. Z-Line has had limited operating activities since incorporation.

On August 25, 2016 and September 20, 2016, the Company issued 6,696,500 common shares and 32,000,000 common shares to the officer respectively. The issuance with an aggregate of 38,696,500 common shares in lieu of $193,483 compensation to the officer under an option resolved in 2013 to pay the officer by common stock in lieu of cash at a rate of $0.005 per share.

On November 10 and December 1, 2016, the Company further issued 1,000,000 common shares and 15,400,000 common shares to the officer respectively. The issuance with an aggregate of 16,400,000 common shares in lieu of $82,000 compensation to the officer under an option resolved in 2013 to pay the officer by common stock in lieu of cash at a rate of $0.005 per share.

Effective on October 5, 2017, the Company executed a reverse stock split pursuant to which fifty (50) sharesDescription of the Company’s Common Stock, par value $0.0001 per share, issued and outstanding, was reclassified as and changed, into one (1) share of the Company’s outstanding Common Stock.

On October 13, 2017, the Company issued 15,753,500 common shares to the officer. The issuance of 15,753,500 common shares was in lieu of $78,768 in compensation due to the officer under an option granted in 2013 to pay the officer by common stock in lieu of cash at a rate of $0.005 per share.

On December 12, 2017, the Company issued 2,022,500 shares of units consisting of its common stock and a warrant (the “Units”).  The units were issued to five shareholders at a rate of $0.04 per Unit. The warrant exercise price is $0.05 for one common share valid for a two years period after the subscription date. The total consideration for the issuance was $80,900.

On January 31, 2018, the Company issued 475,000 units consisting of its common stock and a warrant (the “Units”) to two shareholders at a rate of $0.04 per Unit. The warrant exercise price is $0.05 for one common share and it is valid for a two years period after the subscription date. The total consideration for the issuance was $19,000.

On March 23, 2018, the Company issued 550,000 units consisting of shares of its common stock and a warrant (the “Units”) to three shareholders at a rate of $0.04 per Unit. The warrant exercise price is $0.05 for one common share and it is valid for a two years period after the subscription date. The total consideration for the issuance was $22,000.

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ZZLL INFORAMTION TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 DESCRIPTION OF BUSINESS

Syndicore Asia Limited – Video Syndication and E-CommerceThe Company

Syndicore Asia Limited (“SAL”) currently operates its business through its subsidiary HSAL. HSAL is an e-Commerce company operating through its self-developed online application “Bibishengjia”. Bibishengjia is a wholly owned subsidiary ofshopping search engine that concurrently searches many shopping sites, preliminarily based in China, including major shopping sites such as Taobao.com, Tmall.com, JD.com and Pinduoduo.com, and helps customers meet their one-stop online shopping needs. Bibishengjia also runs its own online shopping platforms - Bibi Mall and Lianlian Nongyuan Agricultural Products Store. Bibishengjia was launched on August 18, 2019 and is currently available for download at the Company formed under the laws of Hong Kong. SAL is an online media company that syndicates video in a cloud-based, multimedia conduit serving a growing global community of content creators, news outletsApple APP Store and leading brands. SAL will be a provider of syndicated video media to news organizations in the Asia Pacific region. In addition, SAL plans to aggregate content from the Asia Pacific region and provide it to news organizations around the world.other major mobile download stores.

On December 15, 2013, SAL entered into a Distribution Agreement (the “Distribution Agreement”) with SendtoNews Video, Inc., a British Columbia company (“STN”). Under the terms of the Distribution Agreement, SAL was granted an exclusive license to use, modify, edit, reproduce, distribute, feed, store, communicate, display, and transmit STN’s content in the Asia Pacific Territory (the “Content”). STN is the content provider for various worldwide sporting events. STN would also provide on-going assistance to SAL with regard to technical, administrative, and service-orientated issues relating to the delivery, utilization, transmission, storage and maintenance of the Content.

On January 20, 2014, SAL entered into a revised Distribution Agreement whereby STN has agreed to provide SAL transferrable rights for the use, reproduction, storage, display, and transmission of certain content subject to pre-approval in writing from STN. In addition, the revised Distribution Agreement includes changes to the revenue sharing terms, and adds a share of advertising revenue directly resulting from aggregated content by SAL within the territory.

On September 26, 2019, Syndicore Asia Limited (“SAL), a corporation incorporated and existing under the laws of Hong Kong, and a wholly owned subsidiary of ZZLL Information Technology, Inc. (traded in the OTC Market under the symbol “ZZLL”)Company, through SAL, entered into an Agreement (the “Pretech Agreement”) with Pretech International Co., Limited (“Pretech”), a company incorporated under the laws of Hong Kong.Kong (“HK”).  Pretech is a software, hardware and digital company that also specializes in the development and manufacture of consumer electronics. Under the terms of the Pretech Agreement, Pretech has agreed to act as SAL’s sales agent in order to make sales through the use of SAL’s software application (“App”) Bibishengjia.Bibishengjia. The Pretech has agreed to pay SAL $1 million for the use of Bibishengjia, and SAL has agreed to pay Pretech 5% of all sales made in Peoples Republic of China and Hong Kong through the use of the Bibishengjia App.  The term of the Agreement is for 24 months from the date the Agreement is entered into, extendable for another 24 months, unless a party decides to cancel at the end of the 24-month period. In addition, Technical, System, Security and Maintenance support shall last separately for 60 months total, subject to renegotiation.

ZZLL is developer and marketer of software and E-Commerce platforms in the Asia Pacific Region. In addition, they provide consumer-to-consumer, business-to-consumer and business-to-business-sales services via its web portals and the Bibishengjia APP.

Pretech is a software, hardware and digital company that also specializes in the development and manufacturing of consumer electronics. Pretech operates in both Hong Kong and the PRC, with a sister company located in Shenzhen, Guangdong Province, China.

SAL will strive to become a leading digital content provider for the Asia Pacific region, capitalizing on an explosively growing market with local, regional and national content that was previously unavailable in the area. This is a new and exciting market, and offers exciting opportunities for expansion and growth. There is no assurance, however, that SAL will be successful in its efforts.

On the other side of the distribution chain, we plan to create SAL’s own proprietary news partnerships to provide guaranteed content distribution in return for a corresponding share of advertising revenues to a news industry looking to supplement their rapidly declining traditional ad revenue with viable “digital-age” revenue.

-Digital ad spending is on the rise. It is forecasted to expand from $117.60 billion USD in 2013 to $173.12 billion USD in 2017. (Go-Globe.com)currently being performed.

-The increase in worldwide digital ad spending is led by the Asia-Pacific region and specifically China.

-China is estimated to reach 33% of the world’s total ad spending by 2017. (Infographic)NOTE 2 GOING CONCERN

-Branded video content reaches nearly half (46%) of all internet users. More than half of these people (54%) go on to click through to the brand’s website (Econsultancy)

-80% of internet users recall watching a video ad on a website they visited in the past 30 days; 46% took some action after viewing the ad (Online Publishers Association)

-Video promotion is over 6 times more effective than print and online (b2bmarketing.net)

-Dr. James McQuivey of Forrester Research says a minute of video is worth 1.8 million words

-90% of information transmitted to the brain is visual, and visuals are processed 60,000X faster in the brain than text (3M Corporation & Zabisco)

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ZZLL INFORAMTION TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 DESCRIPTION OF BUSINESS – CONTINUED

Syndicore Asia Limited – Video Syndication and E-Commerce Company – Continued

Management believes that SAL’s customers will be willing to pay a “premium CPM” because:

- The ability to sponsor exclusive, highly sought-after short form video content

- Deep, creative advertising opportunities – other than rudimentary logo/banner overlays and pre-roll

- Premium positioning

- Unprecedented transparency and near real-time performance metrics to evaluate their investment

- Securing sponsorships with related enterprises

- Stronger control over distribution to help target intended audience.

- Other segments of the market are also benefiting. The high and rapidly increasing popularity of social media platforms such as Facebook, YouTube, and Twitter are expected to revolutionize the marketing strategies employed in areas such as the pharmaceuticals industry. There, in addition to marketing, an increasing number of pharma players have also begun leveraging these platforms to enhance consumer relationships and improve brand management, based on the market intelligence generated by monitoring and analyzing user-generated content. The ability to incorporate consumer feedback to develop new products is also expected to initiate a strategic shift in the operational model of pharma companies. Social media involvements are expected to increase product sales, especially those of OTC drugs, in the long term. Novartis for instance has already begun using YouTube and Facebook to enhance the sales for its OTC drugs such as Comtrex, Orofar and Bufferin. Johnson &Johnson, one of the first pharma giants to enter the social media space, has used online platforms for crisis management – when the company recalled its products (Tylenol and Benadryl tablets) it used social websites to apologize to consumers for irregularities in its manufacturing plant found during FDA inspection.

SAL’s exclusive distribution agreement with SendtoNews Video Incorporated (“STN”) for the Asia Pacific region includes major markets such as Japan, China and India. SAL now has distribution rights of online content for some of the world’s leading sports organizations with the same highlights, player interviews and other fan-interest content. SAL, being the exclusive provider in the Asia Pacific region for highly sought after content, offers deep market exposure with unprecedented efficiency and metrics-driven transparency. On the other side of the distribution chain, we will create SAL’s own proprietary news partnerships to provide guaranteed content distribution in return for a corresponding share of advertising revenues to a News industry looking to supplement their rapidly declining traditional ad revenue with viable “digital-age” revenue.

SAL is also in the startup phase and is in the process of entering into arrangements and agreements to implement the current business plan. Syndicore Asia Limited is devoting its resources to establishing the new business, and its planned operations have not yet fully commenced.

Green Standard Technologies Enterprises, Inc. (F/K/A Green Standard Technologies, Inc.)

On August 1, 2014, the Company formed Green Standard Technologies, Inc. (“GSTE”) as a wholly owned subsidiary incorporated under the law of the state of Nevada. The Company’s second line of business is carried out by this subsidiary.

GSTE is in the medical and recreation marijuana industry, and the establishment of a website will be used to further their business by providing visions with medical and recreational marijuana resource.

During the year 2017, GSTE was inactive, no longer had a useful purpose, and provided no revenue to the Company. On Dec 29, 2017, for the best interest of the Company, the Board decided to eliminate all costs in connection with GSTE, agreed not to continue GSTE and closed down with immediate effect.

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ZZLL INFORAMTION TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 DESCRIPTION OF BUSINESS – CONTINUED

Z-Line International E-Commerce Company Limited – E-Commerce Company

Z-Line International E-Commerce Company Limited (“Z-Line”) is a 55% owned subsidiary of the Company formed under the laws of Hong Kong and incorporated on August 17, 2016. Z-Line is a Hong Kong based e-Commerce company that provides consumer-to-consumer, business-to-consumer, and business-to-business-sales services via web portals.

Z-Line currently operates through the web portal www.zzll.win and has begun additional development, which will occur as the site evolves to increase its functionality, sales, service, support and product offerings. Z-line Mall currently carries daily necessities, cosmetic products and skin care products.

Hunan Syndicore Asia Limited – E-Commerce Company

On June 28, 2017, Hunan Syndicore Asia Limited (“HSAL”), a 100% owned subsidiary of Syndicore Asia Limited incorporated under the laws of PRC.  HSAL is a Wholly Foreign-Owned Enterprise (“WFOE”) in China, established in the National High-Tech Industrial Development Zone of Changsha, Hunan. HSAL is a PRC based e-Commerce company that will endeavor to develop its in E-Commerce, video content and video streaming capabilities. Additionally, HSAL has now launched Hua Wen Mall (“HWM”) - its first online member retail website at hwt.zzll.win. HWM is a platform that allows businesses to sell their products and services to HWM’s members through this business-to-business and business-to-consumer portal. All payments and processing will go through HWM, for which they will receive a transaction fee. The Mall will develop its own branded products, and is especially moving towards products which have smart functionality allowing the Company to capture a greater segment of the market with data and information analytics as social media becomes increasingly influential in the Chinese market.

Hua Wen Mall will also cooperate with ZZLL’s existing Hong Kong platform, Z-Line Mall (www.zzll.win) to share members, customers and products.

NOTE 3 GOING CONCERN

The financial statements at September 30, 2019, at December 31, 2018, and for the period from April 15, 2011 (date of inception), to Septemberperiods ended June 30, 2020 and December 31, 2019, have been prepared in accordance with generally accepted principles in the United States applicable to a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The Company, incurredwhich had an accumulated deficitsdeficit of $2,561,955$2,292,576 and a working capital deficit of $890,588 as of SeptemberJune 30, 2019 ($2,872,550 as of2020, incurred losses from inception until December 31, 2018),2019. The Company generated acomprehensive net incomelosses of $310,595$213,410 and $88,155 for the nine months periodthree-month and six-month periods ended SeptemberJune 30, 2019 (a net loss of $43,374 for comparable period ended September 30, 2018). As of September 30, 2019, the Company has its current liabilities exceed its current assets resulting in negative working capital of $607,998 ($913,534 as of December 31, 2018). In view of the matters described above,2020. The recoverability of a major portion of the recorded asset amounts and realization of the portion of current liabilities into revenue shown in the accompanying balance sheets are dependent upon continued operations of the Company, which in turn are dependent upon the Company'sCompany’s ability to raise additional financing and to succeed in its future operations. The Company maywill need additional cash resources to operate during the upcoming 12 months, and the continuation of the Company may be dependent upon the continuing financial support of investors, directors and/or shareholders of the Company. However, there is no assurance that efforts to raise equity or debt offerings will be successful in raising sufficient funds to assure the eventual profitability of the Company. These accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Management plans to support the Company in operationCompany’s operations and to maintain its business strategy is to raise funds through public and private offerings and to rely on officers and directors to perform essential functions with minimal compensation. If we do not raise all of the money we need from a public offering,such offerings, we will have to find alternative sources such as a private placement of securities, orincluding, loans from our officers, directors or others.

Moreover, management Management has actively taken steps to revise its operating and financial requirements, which believes thatthey believe will allow the Company to continue its operations throughout this fiscal year.

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ZZLL INFORAMTION TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 43 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and consolidation

The accompanying unaudited consolidated financial statements of the GroupCompany have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial reporting, and in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the unaudited consolidated financial statements contained in this report reflect all adjustments that are normal and recurring in nature and considered necessary for a fair presentation of the financial position and the results of operations for the interim periods presented. The year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. The results of operations for the interim period are not necessarily indicative of the results expected for the full year. These unaudited consolidated financial statements, footnote disclosures and other information should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.2019.

The unaudited consolidated financial statements are presented in US Dollars and include the accounts of the GroupCompany and its subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation.

The results of subsidiaries acquired or disposed of during the years are included in the consolidated statements of operations from the effective date of acquisition or up to the effective date of disposal.

The Company has limited operations and is considered to be in the development stage under ASC 915-15.

The following table depicts the identity of the Company’s subsidiaries:

(2) Wholly owned subsidiary of ZZLL (3) 55%

A wholly owned subsidiary of Syndicore Asia Limited since October 8, 2019 (previously 55% owned).

(4)

(3)	Wholly owned subsidiary of Syndicore Asia Limited
(4)	Wholly owned subsidiary of ZZLL that was formed in May 2020 (inactive at present).

NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Con’t)

Use of estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year.  These accounts and estimates include, but are not limited to, the valuation of accounts receivable, deferred income taxes and the estimation on useful lives of plant and equipment. Actual results could differ from those estimates.

Concentrations of credit risk

Financial instruments that potentially subject the GroupCompany to significant concentrations of credit risk consist principally of accounts receivable. In respect of accounts receivable, the GroupCompany extends credit based on an evaluation of the customer’s financial condition, generally without requiring collateral or other security. In order to minimize the credit risk, the management of the GroupCompany has delegated a team responsibility for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. Further, the GroupCompany reviews the recoverable amount of each individual trade debt at each balance sheet date to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the directors of the GroupCompany consider that the Group’sCompany’s credit risk is significantly reduced.

Cash and cash equivalents

Cash and cash equivalents include all cash, deposits in banks and other highly liquid investments with initial maturities of three months or less. The GroupCompany currently maintains bank accounts in HK and the PRC only.

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ZZLL INFORAMTION TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED

Accounts receivable

Accounts receivable are stated at original amount less allowance made for doubtful receivables, if any, based on a review of all outstanding amounts at the year end. An allowance is also made when there is objective evidence that the GroupCompany will not be able to collect all amounts due according to original terms of receivables. Bad debts are written off when identified. The GroupCompany extends unsecured credit to customers in the normal course of business and believes all accounts receivable in excess of the allowances for doubtful receivables to be fully collectible. The GroupCompany does not accrue interest on trade accounts receivable. The Group has aPursuant to the Company’s credit policy in place and the exposure to credit risk is monitored on an ongoing basison-going-basis where management performs credit evaluations are preferred on all customers requiring credit over a certain amount.that are sold services or products on account. The GroupCompany had not experienced any bad debts during the nine months periodsix-month periods ended SeptemberJune 30, 20192020 and 20182019, respectively.

Plant and equipment

Plant and equipment are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized.

Depreciation of plant and equipment is provided using the straight-line method over their estimated useful lives at the following annual rates:

Furniture and fixtures

20% - 50%

Office equipment

20%

Plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell and are no longer depreciated.

Revenue recognition

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), to update the financial reporting requirements for revenue recognition. Topic 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. It supersedes most current revenue recognition guidance, including industry-specific guidance. The guidance is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract.

In preparation for adoption of the standard, we have completed our impact assessment of implementing this guidance. We have evaluated each of the five steps in Topic 606, which are as follows: 1) identify the contract with the customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations; and 5) recognize revenue when (or as) performance obligations are satisfied.

Revenue was not affected materially in any period due to the adoption of ASC Topic 606 because: (1) we identified similar performance obligations under ASC Topic 606 as compared with deliverables and separate units of account previously identified; our performance obligation is to deliver the spirits and wine; (2) we determined the transaction price to be consistent; and (3) we recorded revenue at the same point in time, upon delivery under both ASC Topic 605 and ASC Topic 606, as applicable under the terms of the contract with the customer. Additionally, the accounting for fulfillment costs or costs incurred to obtain a contract were not affected materially in any period due to the adoption of Topic 606.

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ZZLL INFORAMTION TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 43 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED 

Revenue recognition - Continued

There are also certain considerations related to accounting policies, business processes and internal control over financial reporting that are associated with implementing Topic 606. We have evaluated our policies, processes, and control framework for revenue recognition, and identified and implemented the changes needed in response to the new guidance.

Lastly, disclosure requirements under the new guidance in Topic 606 have been significantly expanded in comparison to the disclosure requirements under the current guidance, including disclosures related to disaggregation of revenue into appropriate categories, performance obligations, the judgments made in revenue recognition determinations, adjustments to revenue which relate to activities from previous quarters or years, any significant reversals of revenue, and costs to obtain or fulfill contracts.

We conclude that the adoption of the standard has no material impact on our revenue recognition policy.

Cost of sales

Cost of sales includes the cost of direct labor, merchandise, materials and installation charges on the service being provided.

Operating lease rental

The Company did not have a lease that met the criteria of a capital lease. Leases that do not qualify as a capital lease are classified as an operating lease. Operating lease rental expenses included in selling, general and administrative expenses for the nine months ended September 30, 2019 and 2018 were $24,229 and $21,374, respectively.

Selling expenses

Selling expenses include store-related expense, other than store occupancy costs, as well as advertising, depreciation and amortization, and certain expenses associated with operating the Company’s corporate headquarters.

Retirement Benefit Plans

Full time employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require the Company to make contributions to the government for these benefits based on certain percentages of the employees’ salaries. The Company accounts the mandated defined contribution plan under the vested benefit obligations approach based on the guidance of ASC 715, Compensation - Retirement Benefits.

The total amounts for such employee benefits which were expensed were $11,904 and $4,979 for the nine months ended September 30, 2019 and 2018, respectively.

Product warranty

The company is the legal obligor for the warranties of the services provided to customers. Since our inception to present, we have not incurred any direct warranty expenses and accordingly, the accrual and associated expenses recognized in the financial statements has been recorded as zero.

-13-(Con’t)

ZZLL INFORAMTION TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED 

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The FASB issued Accounting Standard Codification Topic 740 (ASC 740) “Income Taxes”. ASC 740 clarifies the accounting for uncertainty in tax positions. This requires that an entity recognized in the consolidated financial statements the impact of a tax position, if that position is more likely than not of being sustained upon examination, based on the technical merits of the position. The adoption of ASC 740 did not have any impact on the Group’s results of operations or financial condition for the nine months period ended September 30, 2019. As of the date of the adoption of ASC 740, the Group has no material unrecognized tax benefit which would favorably affect the effective income tax rate in future periods. The Group has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of income tax expense in the consolidated statements of operations.

Comprehensive incomeincome(loss)

The Company has adopted FASB Accounting Standard Codification Topic 220 (“ASC 220”) “Comprehensive income” (formerly known as SFAS No. 130, “Reporting Comprehensive Income”), which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Accumulated other comprehensive income (loss) represents the accumulated balance of foreign currency translation adjustments of the Company.

Leases

Our executive offices are located in the Carnival Commercial Building, 18 Java Road, North Point Hong Kong. Our current lease is from August 28, 2019 to August 27, 2021 at a monthly charge of HK$8,000 (approximately $1,040) per month. We have successfully renewed our lease in the past and do not expect any difficulty in renewing it again.

Our subsidiary, Hunan Syndicore Asia Limited, leases 682.5 square meters office space at Tower E1, Li Gu Yu Yuan, No. 27 Wen Xuan Road, Chang Sha, Hunan Province, China at a monthly charge of RMB 22,522.83 (approximately $3,217.55) per month. The term of the lease is from May 15, 2019 to May 14, 2024. The lease may be renewed upon three months prior written notice.

Our recently formed subsidiary, Ezekiel Technology Inc., leases 296.93 square meters office space at Xin Li Kang Tower, Nanshan District, Shenzhen, Guangdong Province, China at a monthly charge of RMB 36,440.55 (approximately $5,205) per month. The term of the lease is from April 1, 2020 to April 9, 2023. The lease may be renewed upon six months prior written notice.

Under Topic 842, operating lease expense is generally recognized evenly over the term of the lease. The Company has operating leases primarily consisting of facilities with remaining lease terms of approximately two to four years. The Company does not have the option to terminate the leases early.

Leases with an initial term of twelve months or less are not recorded on the balance sheet. For lease agreements entered into or reassessed after the adoption of Topic 842, the Company has combined the lease and non-lease components in determining the lease liabilities and ROU assets.

The Company’s lease agreements generally do not provide an implicit borrowing rate; therefore, an internal incremental borrowing rate is determined based on information available at lease commencement date for purposes of determining the present value of lease payments. The Company used the incremental borrowing rate on December 29, 2018 of 5.5% for all leases that commenced prior to that date.

NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Con’t)

ROU lease assets and lease liabilities for our operating leases were recorded in the balance sheet as follows:

Future lease payments included in the measurement of lease liabilities on the balance sheet as of June 30, 2020, for the following five fiscal years and thereafter are as follows:

Foreign currency translation

For financial reporting purposes, the financial statements of the GroupCompany which are prepared using the functional currency have been translated into United States Dollars (“US$”). The functional currencies of the Company’s subsidiary operating business unit based in Hong Kong and PRC are the Hong Kong Dollar (“HK$”) and Chinese Renminbi (“RMB”) respectively. Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements of operations. Monetary assets and liabilities denominated in foreign currency are translated at the functional currency rate of exchange ruling at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the consolidated statements of operations.

In accordance with ASC 830, Foreign Currency Matters, the Company translated the assets and liabilities into US $ using the rate of exchange prevailing at the applicable balance sheet date and the consolidated statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation are recorded in shareholders’ equity as part of accumulated other comprehensive income. The rate used in translation of Hong Kong dollars to US$ is a ratio of US$1.00=HK$7.80, a fixed exchange rate maintained between Hong Kong and United States derived from the Hong Kong Monetary Authority pegging HK$ and US$ monetary policy.

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ZZLL INFORAMTION TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 43 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED (Con’t)

Foreign currency translation - Continued

Below is a table with foreign exchange rates used for translation:

Fair value of financial instruments

The carrying values of the Group’s financial instruments, including cash and cash equivalents, other receivables, deposits, other payables approximate their fair values due to the short-term maturity of such instruments. The carrying amounts of borrowings approximate their fair values because the applicable interest rates approximate current market rates.

Stock-Based Compensation

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Share- Compensation (formerly, FASB Statement 123R), the Group measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the costs over the period the employee is required to

The Company does not provide service in exchange for the award, which generally is the vesting period.

During the nine months ended September 30, 2019 and 2018, the Group did not record any stock-based compensation expense respectively.compensation.

Basic and diluted earnings per share

The Group computes

Basic earnings (loss) per common share (“EPS’) in accordance with FASB Accounting Standard Codification Topic 260 (“ASC 260”) “Earnings Per Share”, and SEC Staff Accounting Bulletin No. 98 (“SAB 98”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as thehas been computed by dividing net income or loss available to common shareholders divided(loss) by the weighted average number of common shares outstanding. Diluted earnings (loss) per common share for the periods ended June 30, 2020 and June 30, 2019 have been computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potentialand common shares (e.g. convertible securities,stock equivalents, which include options and warrants) as if they had been converted atconvertible notes outstanding during the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

The calculation of diluted weighted average common shares outstanding for three and nine months ended September 30, 2019 and 2018 are based on the estimate fair value of the Group’s common stock during such periods applied to options using the treasury stock method to determine if they are dilutive.

-15-same period.

ZZLL INFORAMTION TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED

Basic and diluted earnings per share - Continued

Effective on October 5, 2017, the Company executed a reverse stock split pursuant to which fifty (50) shares of the Company’s Common Stock, par value $0.0001 per share, issued and outstanding, was reclassified as and changed, into one (1) share of the Company’s outstanding Common Stock.

The following tables are a reconciliation of the weighted average shares used intable sets forth the computation of basic and diluted (loss) earnings per share for the periods presented:

No dilution effect due to negative stockholders’ equity for the nine months ended September 30, 2019 and 2018.share:

Related parties transactions

NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Con’t)

A related party is generally defined as (i) any person that holds 10% or more of the Group’s securities and their immediate families, (ii) the Group’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Group, or (iv) anyone who can significantly influence the financial and operating decisions of the Group. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

Commitments and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Adoption of new accounting standards

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with a term of more than one year. Accounting by lessors remains similar to pre-existing U.S. GAAP. Subsequent accounting standards updates have been issued, which amend and/or clarify the application of ASU 2016-02. The Company adopted Topic 842 effective January 1, 2019. See Note 17, operating leases arrangement for further details.

The adoption of the standard in the consolidated financial statements for the financial period ended September 30, 2019 will have no significant impact to the provision for income taxes and will have no impact to the net cash used in, or generated by, operating, investing, or financing activities in the Group’s consolidated statements of cash flows.  

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ZZLL INFORAMTION TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED

Recently issued accounting pronouncements not yet adopted

On January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments – Credit Losses on Financial Instruments,” which requires that expected credit losses relating to financial assets be measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. Also, for available-for-sale debt securities with unrealized losses, the standard eliminates the concept of other-than-temporary impairments and requires allowances to be recorded instead of reducing the amortized cost of the investment. The adoption by the Company of the new guidance did not have a material impact on the Company’s consolidated financial statements.

Our condensed consolidated financial statements for the six months ended June 30, 2020 are presented under the new standard, while comparative periods presented are not adjusted and continue to be reported in accordance with the Company’s historical accounting policy.

In February 2016, the Financial Accounting Standard Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842). The standard requires lessees to recognize almost all leases on the balance sheet as a right-of-use asset and a lease liability and requires leases to be classified as either an operating or a finance type lease. The standard excludes leases of intangible assets or inventory. In July 2018, the FASB issued amendments in ASU 2018-11, which provide another transition method in addition to the existing transition method, by allowing entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, and to not apply the new guidance in the comparative periods they present in the financial statements. We adopted the standard as of January 1, 2019, using a modified retrospective transition approach and elected to use the effective date as the date of initial application. As a result of the adoption of Topic 842 on January 1, 2019, we recorded operating lease right of use (“ROU”) assets of $3.26 million and operating lease liabilities of $3.25 million. The ROU assets include adjustments for prepayments and accrued lease payments. The adoption did not impact the Company’s beginning retained earnings, or its prior year consolidated statements of income and statements of cash flows.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), amending existing guidance on the accounting for credit losses on financial instruments within its scope. The guidance introduces an expected loss model for estimating credit losses, replacing the incurred loss model. The new guidance also changes the impairment model for available-for-sale debt securities, requiring the use of an allowance to record estimated credit losses (and subsequent recoveries). The new guidance is effective for the Company beginning after December 15, 2020. The Company is currently evaluating the impact of the adoption of this guidance on its condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework. The purpose of the update is to improve the effectiveness of the fair value measurement disclosures that allow for clear communication of information that is most important to the users of financial statements. There were certain required disclosures that have been removed or modified. In addition, the update added the following disclosures: (i) changes in unrealized gains and losses for the period included in other comprehensive income (loss) for recurring Level 3 fair value measurements held at the end of the reporting period and (ii) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The standard will become effective for the Company for its periods beginning after December 15, 2019; early adoption is permitted. The Company is currently evaluating the impact of ASU 2018-13 on its condensed consolidated financial statements.

Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or not significant to the condensed consolidated financial statements of the Company.

NOTE 5 AMOUNT DUE FROM NSML

Amount due from Network Service Management Limited (“NSML”) was the capital-in-arrear to be invested to Z-Line International E-Commerce Limited (“Z-Line”). Z-Line is a corporation formed and incorporated on August 17, 2016 by the Company and NSML under the laws of Hong Kong. The shareholdings of Z-Line are 55% for the Company and 45% for NSML. The shareholdings of Z-Line for NSML has $294,872 (HKD 2,300,000) not yet paid up as at September 30, 2019.

NOTE 6 INCOME TAXES

The Company and its subsidiaries file separate income tax returns. The Company and one subsidiary, which was discontinued in cooperation, were incorporated in the United States, and are subject to United States federal and state income taxes. The Company did not generate taxable income in the United States for the nine months ended September 30, 2019 and 2018. Two subsidiaries were incorporated in Hong Kong, and are subject to Hong Kong Profits Tax at 16.5% for the nine months ended September 30, 2019 and 2018. Provision for Hong Kong profits tax has not been made for the periods presented as the subsidiaries have no assessable profits during the periods. One subsidiary is incorporated in PRC, and is subject to PRC Income Tax at 25% for the nine months periods ended September 30, 2019 and 2018.  Provision for PRC Income Tax has not been made for the year presented as the subsidiary has no assessable profits during the year.

Deferred taxes are determined based on the temporary differences between the financial statement and income tax bases of assets and liabilities as measured by the enacted tax rates which will be in effect when these differences reverse. For the nine months periods ended September 30, 2019 and 2018, the Group has tax loss carrying-forwards, which does not recognize deferred tax assets as it is not probable that future taxable profits against which the losses can be utilized will be available in the relevant tax jurisdiction and entity.

-17-

ZZLL INFORAMTION TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 INCOME TAXES – CONTINUED

The Company did not have U.S, taxable income due to operating in Hong Kong SAR and PRC.

A reconciliation of the provision for income taxes with amounts determined by applying the Hong Kong profits rate of 16.5% to income before income taxes is as follows:

A reconciliation for the nine months ended September 30, 2019 and 2018, were attributed to operations in China, on the income tax expenses is as follows:

NOTE 74 OTHER PAYABLES AND ACCRUED LIABILITIES

The other payables and accrued liabilities were comprised of the following:

-18-

NOTE 5 INCOME TAXES

ZZLL INFORAMTION TECHNOLOGY, INC. AND SUBSIDIARIESThe Company and its subsidiaries file separate income tax returns. The Company was incorporated in the United States and is subject to United States federal and state income taxes. The Company did not generate taxable income in the United States for six months ended June 30, 2020 and 2019.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Two subsidiaries were incorporated in Hong Kong and are subject to Hong Kong Profits Tax at 16.5% for the six months ended June 30, 2020 and 2019. Provision for Hong Kong profits tax has not been made for the periods presented as the subsidiaries had no assessable profits during the periods. One subsidiary is incorporated in the PRC and is subject to PRC Income Tax at 25% for the six months periods ended June 30, 2020 and 2019.  Provision for PRC Income Tax has not been made for the year presented as the subsidiary had no assessable profits during the year.

Deferred taxes are determined based on the temporary differences between the financial statement and income tax bases of assets and liabilities as measured by the enacted tax rates which will be in effect when these differences reverse. For the six months periods ended June 30, 2020 and 2019, the Company has tax loss carrying-forwards, which does not recognize deferred tax assets as it is not probable that future taxable profits against which the losses can be utilized will be available in the relevant tax jurisdiction and entity.

A related party is generally defined as (i) any person and their immediate families that holds 10% or more of the Company’s securities, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

NOTE 8 AMOUNT DUE FROM (TO)6 RELATED PARTIESPARTY TRANSACTIONS

Amount

As of June 30, 2020 and December 31, 2019, the Company had received net advances of $638,705 and $523,375 from certain major shareholders and related parties for operating expenses as shown in the table below. These advances bear no interest, are not collateralized and do not have specified repayment terms.

Amounts due from (to) related parties are as follows:

As at SeptemberJune 30, 20192020 and December 31, 2018,2019, the amount due from (to) related parties represent advances from (to) shareholders of the GroupCompany and its related parties that are interest free, unsecured and have no fixed repayment terms.

(a) Major shareholder of the Company

(b) WithUnder common shareholdercontrol.

(c) With common control

NOTE 9 WARRANTS LIABILITIES

NOTE 10 STOCK OPTIONS

The Group has stock option plans that allow it to grant options to its key employees. During the nine months ended September 30, 2019 and 2018, the Company did not issue any stock options and there were no stock options being issued or outstanding.

-19-

ZZLL INFORAMTION TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 117 FAIR VALUE MEASUREMENTS

The Group adopted

FASB ASCAccounting Standards Codification Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), related to the Group’s financial assets and liabilities. ASC 820 definesprovides a single definition of fair value, establishes a frameworkhierarchy for measuring fair value in accordance with generally accepted accounting principles and expandsexpanded disclosures about fair value measurements. ASC 820 definesadjustments. Various inputs are used in determining the fair value as the price that wouldof assets and liabilities. Inputs may be receivedbased on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for an asset or paid to transfer a liability (an exit price) inwithin the principal or most advantageous market for the asset or liability in an orderly transaction between market participantsfair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement date. ASC 820 also describesin its entirety. The three levels of inputs that may be used to measurethe fair value:value hierarchy are as follows:

Level 1 — - Observable inputs such as unadjusted, quoted prices in active markets for identical assets and liabilities.or liabilities at the measurement date;

Level 2 — observable inputs other - Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable inputs for similar assets or liabilities. These include quoted prices for identical or similar assets or liabilities in active markets and quoted prices for identical or similar assets and liabilities.of liabilities in markets that are not active;

Level 3 — unobservable - Unobservable inputs in which there isthat are supported by little or no market data available, which require the reporting entityactivity and that are significant to develop its own assumptions.

ASC 820 also provides guidance for determining the fair value of a financial asset when the market for that asset is not active, and for determining fair value when the volume and level of activity for an assetassets or liability have significantly decreased and includes guidance on identifying circumstances that indicate when a transaction is not orderly.liabilities.

The effective date for certain aspects of ASC 820 was deferred and currently being evaluated by the Group. Areas impacted by the deferral relate to non-financial assets and liabilities that are measured at fair value, but are recognized or disclosed at fair value on a non-recurring basis. The effects of these remaining aspects of ASC 820 are to be applied by the Group to fair value measurements prospectively beginning November 1, 2010. The adoption of the remaining aspects of ASC 820Company’s derivative warrant liability is not expected to have a material impact on its financial condition or results of operations.

The following table details the fair value measurements of assets and liabilitiesclassified within the three levelsLevel 3 of the fair value hierarchy at September 30, 2019,because their fair values are estimated by utilizing valuation models and December 31, 2018:significant unobservable inputs.

Fair Value Measurements at reporting date using

Fair Value Measurements at reporting date using

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ZZLL INFORAMTION TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 COMMITMENTS AND CONTINGENCIES

The Company has operating lease agreements for office premises, which expiring through June 2020. Future minimum rental payments under agreements classified as operating leases with non-cancellable terms forThere were no transfers between Level 3 and other Levels in the next 12 months and thereafter as follows:

Rental expense paid for the ninesix months ended SeptemberJune 30, 2019 and 2018 were $24,229 and $21,374, respectively.

NOTE 13.- RELATED PARTY TRANSACTIONS

As of September 30, 2019 and December 31, 2018, the Company had received net advancement of $276,156 and $321,504 from the shareholders and its related parties2020 or for operating expenses. These advancements bear no interest, no collateral and have no repayment term.

During the nine months ended September 30, 2019, there is a related party transaction of $27,783 in the form of service income provided by the Company to Hunan Zong Hui Information Technology Company Limited.

During the nine months ended September 30, 2019, there is a related party transaction of $81,542 in the form of service income provided by Shenzhen Zong Wang Internet information Limited Company.

During the nine months ended September 30, 2019, there is a related party transaction of $57,232 in the form of consultancy service expenses provided by Hunan Zhang Zhong Wan Fu Company Limited.

During the year ended December 31, 2018, there is a related party transaction of $264 in the form of service income provided by the Company to Hunan Zong Hui Information Technology Company Limited.2019. 

NOTE 148 SEGMENT INFORMATION

FASB Accounting Standard Codification Topic 280 (ASC 280) “Segment Reporting” establishes standards for reporting information about operating segments in financial statements. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group,Company, in deciding how to allocate resources and in assessing performance.

For the ninethree and six months ended SeptemberJune 30, 20192020 and 2018,June 30, 2019, the Company is regarded as a single operating segment, being engaged in the online retail sales and website development business. This principal activity and geographical market are substantially based in Hong Kong and the Mainland China,PRC; accordingly, no operating or geographical segment information areis presented.

NOTE 15 SUBSEQUENT EVENTS

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

CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS

ThisThe following is management’s discussion and analysis of certain significant factors which have affected our financial conditionposition and operating results during the periods included in the accompanying financial statements.

The discussion and analysis which follows in this Quarterly Report and in other reports and documents and in oral statements made on our behalf by our management and others may contain trend analysis and other forward-looking statements within the meaning of operations includes “forward-looking” statements thatSection 21E of the Securities Exchange Act of 1934 which reflect our current views with respect to future events and financial performance. We use words such as “expect,” “anticipate,” “believe,”results. These include statements regarding our earnings, projected growth and “intend”forecasts, and similar expressionsmatters which are not historical facts. We remind stockholders that forward-looking statements are merely predictions and therefore are inherently subject to identify forward-looking statements. You should be aware thatuncertainties and other factors which could cause the actual results may differ materially from our expressed expectations because of risks and uncertainties inherent in future events and you should not rely unduly on these forward looking statements. We disclaim any obligationor results to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. Reference in the following discussion to “our”, “us” and “we” refer to the operations of the Corporation and its subsidiaries (“We”), except where the context otherwise indicates or requires. The following discussion of our financial condition and results of operations should be read in conjunction with the audited financial statements and the notes to the audited financial statements included in this annual report. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those anticipateddescribed in thesethe forward-looking statements. These uncertainties and other factors include, among other things, the impact of the spread of the COVID-19 pandemic, business conditions affecting our business and general economic conditions; our ability to generate sufficient revenues to reach profitable operations; and our need to obtain additional financing. The forward-looking statements contained in this Quarterly Report and made elsewhere by or on our behalf should be considered in light of these factors.

Current Operating Results

In the three and nine months ended September 30, 2019, we derived $291,257 and $359,325 revenues fromWe are a development stage company. We currently operate our current business operations, respectively. For the comparative three and nine months ended September 30, 2018, we derived $28,206 and $42,287 revenues fromthrough our current business operations, respectively.

subsidiary, Hunan Syndicore Asia Limited (“HSAL”). HSAL is an e-Commerce company operating through its self-developed online application “Bibishengjia

”. Syndicore Asia LimitedBibishengjia (“SAL”) is a wholly-owned subsidiary ofshopping search engine that concurrently searches many shopping sites, preliminarily based in China, including major shopping sites such as Taobao.com, Tmall.com, JD.com and Pinduoduo.com, and helps customers meet their one-stop online shopping needs. Bibishengjia also runs its own online shopping platforms - Bibi Mall and Lianlian Nongyuan Agricultural Products Store. Bibishengjia was launched on August 18, 2019 and is currently available for download at the Company incorporate under the Law of HKSAR. SAL is an online media company that syndicates video in a cloud-based, multimedia conduit serving a growing, global community of content creators, news outletsApple APP Store and leading brands. SAL will be a provider of syndicated video media to news organizations in the Asia Pacific region. In addition, SAL plans to aggregate content from the Asia Pacific region and provide it to news organizations around the world.other major mobile download stores.

On September 26, 2019, Syndicore Asia Limited (“SAL), a corporation incorporated and existing under the laws of Hong Kong, and a wholly owned subsidiary of ZZLL Information Technology, Inc. (traded in the OTC Market under the symbol “ZZLL”)Company, through SAL, entered into an Agreement (the “Pretech Agreement”) with Pretech International Co., Limited (“Pretech”), a company incorporated under the laws of Hong Kong.Kong (“HK”).  Pretech is a software, hardware and digital company that also specializes in the development and manufacture of consumer electronics. Under the terms of the Pretch Agreement, Pretech has agreed to act as SAL’s sales agent in order to make sales through the use of SAL’s software application (“App”) Bibishengjia.Bibishengjia.  Pretech has agreed to pay SALpaid $1 million for the use of Bibishengjia and SAL hasthe Company agreed to pay Pretech 5% of all sales made in Peoples Republic of Chinathe PRC and Hong KongHK through the use of the Bibishengjia App..  The term of the Pretch Agreement is for 24 months from the date the Pretech Agreement iswas entered into, extendable for another 24 months, unless a party decides to cancel at the end of the 24-month period. In addition, Technical, System, Security and Maintenance support shall last separately for 60 months total, subject to renegotiation.The Pretech Agreement is currently being performed.

ZZLL is developer and marketer of software and E-Commerce platforms

Critical Accounting Policies

Our financial statements have been prepared in accordance with accounting principles generally accepted in the Asia Pacific Region. In addition, they provide consumer-to-consumer, business-to-consumerUnited States. The preparation of these financial statements requires management to make estimates and business-to-business-sales services via its web portalsassumptions that affect the reported amounts of assets and liabilities and the Bibishengjia APP.disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The policies discussed below are considered by management to be critical to an understanding of our financial statements because their application places the most significant demands on management’s judgment, with financial reporting results relying on estimation about the effect of matters that are inherently uncertain. Specific risks for these critical accounting policies are described in the following paragraphs. For all of these policies, management cautions that future events rarely develop exactly as forecast, and the best estimates routinely require adjustment.

Pretech

Revenue Recognition. We are an e-Commerce company whose business is based on the use of Bibishengjia, a self-developed online application. Bibishengjia is a software, hardwareshopping search engine that searches many shopping sites, primarily based in China, at once, including major shopping sites such as Taobao.com, Tmall.com, JD.com and digital companyPinduoduo.com, and helps customers meet their one-stop online shopping needs. Bibishengjia also runs its own online shopping platforms Bibi Mall and Lianlian Nongyuan Agricultural Products Store. Bibishengjia was launched on August 18, 2019 and is currently available for download at the Apple APP Store and other major mobile download stores.

Known or expected pricing or revenue adjustments, such as trade discounts, rebates or returns, are estimated at the time of sale. We base these estimates of expected amounts principally on historical utilization and redemption rates. Estimates that also specializesaffect revenue, such as trade incentives and product returns, are monitored and adjusted each period until the incentives or product returns are realized.

Cost of sales. Cost of sales includes the cost of direct labor, merchandise, materials and installation charges on the service being provided.

Selling expenses. Selling expenses include store-related expense, other than store occupancy costs, as well as advertising, depreciation and amortization, and certain expenses associated with operating the Company’s corporate headquarters

Accounts Receivable. The majority of our accounts receivable are due from distributors (domestic and international) and retailers. Credit is extended based on evaluation of a customers’ financial condition and, generally, collateral is not required. Accounts receivable are most often due within 30 to 90 days and are stated at amounts due from customers net of an allowance for doubtful accounts. Accounts outstanding longer than the contractual payment terms are considered past due. We determine whether an allowance is necessary by considering a number of factors, including the length of time trade accounts receivable are past due, our previous loss history and the condition of the general economy and the industry as a whole. We write off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the bad debt expense account. We do not accrue interest on accounts receivable past due.

Plant and equipment. Plant and equipment are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized. Depreciation of plant and equipment is provided using the straight-line method over their estimated useful lives at the following annual rates.

Income Taxes. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the developmentyears in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and manufacturingliabilities of consumer electronics. Pretech operatesa change in both Hong Kongtax rates is recognized in income in the period that includes the enactment date.

Recent accounting pronouncements

Our company considers the applicability and impact of all Accounting Standard Updates (“ASUs”). ASUs not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on our balance sheets or statements of operations.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments.  The amendments in this Update require a new topic to be added (Topic 326) to the Accounting Standards Codification (“ASC”) and removes the thresholds that entities apply to measure credit losses on financial instruments measured at amortized cost, such as loans, trade receivables, reinsurance recoverables, and off-balance-sheet credit exposures, and held-to-maturity securities.  Under current U.S. GAAP, entities generally recognize credit losses when it is probable that the loss has been incurred.  The guidance under ASU 2016-13 will remove all current recognition thresholds and will require entities under the new current expected credit loss (“CECL”) model to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the PRC, with a sister company locatedamount of amortized cost that an entity expects to collect over the instrument’s contractual life.  The new CECL model is based upon expected losses rather than incurred losses. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.  We are currently evaluating the effect that this new guidance will have on our financial statements and related disclosures.

Recent Developments

The COVID-19 outbreak has resulted in Shenzhen, Guangdong Province, China.travel restrictions, closed international borders, enhanced health screenings at ports of entry and elsewhere, disruption of and delays in healthcare service preparation and delivery, prolonged quarantines, cancellations, supply chain disruptions, and lower consumer demand, layoffs, defaults and other significant economic impacts, as well as general concern and uncertainty.

During the three months period ended September 30, 2019 and 2018, SAL has earned revenue of $250,000 and $nil, respectively, and SAL has earned $250,000 revenue during the period from its incorporation to September 30, 2019.

Green Standard Technologies Enterprises, Inc.

On August 1, 2014, the Company formed Green Standard Technologies Enterprises, Inc. (F/K/A Green Standard Technologies, Inc.)(“GSTEI”) as a wholly owned subsidiary incorporated under the lawsThe current severity of the statepandemic and the uncertainty regarding the length of Nevada. The Company’s second line of business is carried out by this subsidiary. On June 6, 2015, Green Standard Technologies Inc. filed articles of amendment to change its name to “Green Standard Technologies Enterprises, Inc.

On Dec 29, 2017,effects could have negative consequences for our company. To date, the best interesteffects of the Company,pandemic have not materially affected our company’s operations.

Most of our administrative functions are being performed remotely. A small crew maintains the Board decidedoffice for those functions that cannot be handled remotely. Our ability to eliminate all costscollect money, pay bills, handle customer and consumer communications, schedule production, and order ingredients necessary for our production has not been impacted.

To date, the pandemic has had minimal impact on our sales. The majority of our sales are made online. We experienced a slight decline in connection with GSTE, agreed not to continue and closed down GSTE with immediate effect.

Z-Line International E-Commerce Limited.

On August 17, 2016, Z-Line International E-Commerce Company Limited (“Z-Line”), a 55% owned subsidiarysales at the beginning of the Company incorporated underimposition of restrictions to mitigate the lawsspread of Hong Kong. Z-Line isCOVID-19. To date we have not experienced a Hong Kong based e-Commerce company that provides consumer-to-consumer, business-to-consumer,significant change in the timeliness of payments of our invoices and business-to-business-sales services via web portals.

Z-Line has no revenues earned during theour cash position remains stable with approximately $842,987 of cash and nine months period ended Septembercash equivalents as of June 30, 2019 and 2018, and from its incorporation to September 30, 2019.2020.

-22-Current Operating Results

Hunan Syndicore Asia Limited

Hunan Syndicore Asia Limited (“HSAL”), a 100% owned subsidiary of Syndicore Asia Limited incorporated underThree Months Ended June 30, 2020 Compared with the laws of PRC. HSAL is a Wholly Foreign-Owned Enterprise (“WFOE”) incorporated under the Foreign Enterprise Law of People Republic of China, established in the National High-Tech Industrial Development Zone of Changsha, Hunan. HSAL is a PRC based e-Commerce company that will endeavor to develop its in E-Commerce, video content and video streaming capabilities.

During the nine months period ended SeptemberThree Months Ended June 30, 2019 and 2018, HSAL has earned revenue of $109,325 and $42,287, respectively.

HSAL has earned $205,697 revenue during the period from its incorporation to September 30, 2019.

Results of Operations for the three months ended September 30, 2019 compared to the three months ended September 30, 2018

The following table sets forth a summary of our consolidated statements of operations for the periods indicated.