Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Apr. 30, 2019 | May 25, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Summit Networks Inc. | |
Entity Central Index Key | 0001619096 | |
Document Type | 10-Q | |
Document Period End Date | Apr. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --07-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 6,104,999 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Entity-Ex-Transition-Period | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Apr. 30, 2019 | Jul. 31, 2018 |
Current Assets | ||
Cash & Cash Equivalents | $ 17,729 | |
Receivable - Rick Jones - Escrow account | 4,556 | |
Total Current Assets | 22,285 | |
Property & Office Equipment, net | 11,172 | |
TOTAL ASSETS | 33,457 | |
Current Liabilities | ||
Accounts payable and accrued expenses | 3,855 | 15,011 |
Due to related party | 9,078 | 21,192 |
Amount due to shareholders | 36,846 | |
Loan from other parties | 23,167 | |
Total Liabilities | 12,933 | 96,216 |
Stockholders' Equity | ||
Common stock, ($0.001 par value, 75,000,000 shares authorized; 6,104,999 and 6,104,999 shares issued and outstanding as of April 30, 2019 and July 31, 2018 | 6,105 | 6,105 |
Additional Paid in Capital | 71,045 | 67,402 |
Income/(loss) accumulated during development stage | (90,083) | (136,266) |
Total Stockholders' Deficit | (12,933) | (62,759) |
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT | $ 33,457 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Apr. 30, 2019 | Jul. 31, 2018 |
Stockholders' Equity (Deficit) | ||
Common Stock Par Value | $ 0.001 | $ 0.001 |
Common Stock Shares Authorized | 75,000,000 | 75,000,000 |
Common Stock Shares Issued | 6,104,999 | 6,104,999 |
Common Stock Shares Outstanding | 6,104,999 | 6,104,999 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 58 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | |
Consolidated Statement Of Operations | |||||
Sales | $ 223,910 | ||||
Cost of Goods | 163,257 | ||||
Gross Profit | 60,653 | ||||
Selling, General & Administrative Expenses | 17,489 | 15,720 | 297,492 | 80,077 | 495,889 |
Income / (loss) from operations | (17,489) | (15,720) | (297,492) | (80,077) | (435,236) |
Loss on disposal of subsidiary | (5,092) | (5,092) | (5,092) | ||
Gain on debt forgiven | 348,767 | 348,767 | 348,767 | ||
Income before income taxes | 326,186 | (15,720) | 46,183 | (80,077) | (91,561) |
Income tax benefit (expense) | 1,478 | ||||
Net Income/ (Loss) | $ 326,186 | $ (15,720) | $ 46,183 | $ (80,077) | $ (90,083) |
Basic earnings per share | $ 0.05 | $ 0 | $ 0.01 | $ (0.02) | |
Diluted earnings per share | $ 0.05 | $ 0 | $ 0.01 | $ (0.02) | |
Weighted average number of common shares outstanding | 6,104,499 | 5,461,235 | 6,104,499 | 5,209,890 | |
Diluted Weighted average number of common shares outstanding | 6,104,499 | 5,461,235 | 6,104,499 | 5,209,890 |
STATEMENT OF STOCKHOLDERS_ DEFI
STATEMENT OF STOCKHOLDERS’ DEFICIT (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Beginning Balance, Shares at Jul. 31, 2017 | 5,000,000 | |||
Beginning Balance, Amount at Jul. 31, 2017 | $ 5,000 | $ 39,000 | $ (41,449) | $ 2,551 |
Stock issued for cash on 28-Nov-2017 @$0.03 per share, Shares | 250,000 | |||
Stock issued for cash on 28-Nov-2017 @$0.03 per share, Amount | $ 250 | 7,250 | 7,500 | |
Stock issued for cash on 15-Mar-18 @$0.03 per share, Shares | 399,999 | |||
Stock issued for cash on 15-Mar-2018 @$0.03 per share, Amount | $ 400 | 11,600 | 12,000 | |
Stock issued for cash on 24-Jul-18 @$0.03 per share, Shares | 455,000 | |||
Stock issued for cash on 24-Jul-2018 @$0.03 per share, Amount | $ 455 | 13,195 | 13,650 | |
Loss on acquisition of Real Capital Limited | (3,643) | (3,643) | ||
Net profit (loss) | (94,817) | (94,817) | ||
Ending Balance, Shares at Jul. 31, 2018 | 6,104,999 | |||
Ending Balance, Amount at Jul. 31, 2018 | $ 6,105 | 67,402 | (136,266) | (62,759) |
Net profit (loss) | 46,183 | 46,183 | ||
Disposal of Real Capital Limited | 3,643 | 3,643 | ||
Ending Balance, Shares at Apr. 30, 2019 | 6,104,999 | |||
Ending Balance, Amount at Apr. 30, 2019 | $ 6,105 | $ 71,045 | $ (90,083) | $ (12,933) |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | 58 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income (loss) | $ 46,183 | $ (80,077) | $ (90,083) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation Expense | 1,197 | 6,578 | |
Impairment on PPE | 11,172 | 11,172 | |
Provision (benefit) for deferred taxes | (1,478) | ||
Changes in operating assets and liabilities: | |||
Receivable - Escrow account | 4,556 | (4,556) | |
Accounts payable and accrued expenses | (7,513) | 16,731 | 19,735 |
Net cash provided by (used in) operating activities | 54,398 | (66,705) | (54,076) |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Acquisition of Property & Equipment | (17,750) | ||
Investment in subsidiary - Real Capital | (3,643) | ||
Net cash provided by (used in) investing activities | (21,393) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Advance from related party | (72,127) | 47,205 | (1,681) |
Issuance of common stock | 19,500 | 77,150 | |
Net cash provided by (used in) financing activities | (72,127) | 66,705 | 75,469 |
Net increase (decrease) in cash | (17,729) | ||
Cash at beginning of period | 17,729 | ||
Cash at end of period | |||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||
Cash paid during period for: Interest | |||
Cash paid during period for: Income Taxes |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS | Summit Networks Inc. (the “Company”) was incorporated under the laws of the State of Nevada on July 8, 2014. Originally, the Company was formed to engage in the development and operation of a business engaged in the distribution of glass craft products produced in China. On April 11, 2019, after selling its wholly subsidiary, Real Capital Limited, the Company acquired MoralArrival Environmental and Blockchain Technology Services Limited ("MoralArrival"), a corporation incorporated under the laws of the British Virgin Islands. As a result of this transaction, MoralArrival has become a wholly owned subsidiary of the Company. MoralArrival is a recently formed start-up company with nominal assets and no history of operations. MoralArrival is in the business of acting as an international agent for a Chinese environmental company, Hengshui Jingzhen Environmental Technology Company Limited of Hebei, China. The Company is in the development stage. Its activities to date have been limited to capital formation, organization, development of its business plan and minimal sales. The Company has commenced limited operations. As such, the Company is subject to all risks inherent to the establishment of a start-up business enterprise. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
NOTE 2. BASIS OF PRESENTATION | The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). On April 11, 2019, the Company acquired all the shares of MoralArrival in exchange for 300,000 shares of its common stock. As a result of this transaction, MoralArrival has become a wholly owned subsidiary of the Company. The accompanying consolidated financial statements includes the accounts of the company, and its wholly owned subsidiary, MoralArrival. All inter-company balances and transactions have been eliminated on consolidation. The Company has a July 31, year-end. Going Concern The accompanying financial statements and notes have been prepared assuming that the Company will continue as a going concern. The Company had limited operations during the period from July 8, 2014 (date of inception) to April 30, 2019 resulting in accumulated deficit of $90,083. There is no guarantee that Company will continue to generate revenues. At April 30, 2019, the Company had $nil in cash and there were outstanding liabilities of $12,933. This condition raises substantial doubt about the Company’s ability to continue as a going concern. Management does not believe that the company’s current cash position is sufficient to cover the expenses they will incur during the next twelve months. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | This summary of significant accounting policies is presented to assist in understanding the condensed consolidated interim financial statements. The condensed consolidated interim financial statements and notes are the representations of the Corporation’s management, who is responsible for their integrity and objectivity. The condensed consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 210 8-03 of Regulation S-X, and therefore do not include all the information necessary for a fair presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. These condensed consolidated interim financial statements should be read in conjunction with the annual consolidated financial statements and footnotes for the year ended February 28, 2018 included in the Corporation’s filed Form 10-K. Use of Estimates The preparation of condensed consolidated interim financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Recent Accounting Pronouncements The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date. The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations. |
DISPOSAL OF SUBSIDIARY
DISPOSAL OF SUBSIDIARY | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
NOTE 4.- DISPOSAL OF SUBSIDIARY | On March 31, 2019 the Company entered into a Share Purchase Agreement with Hang Dennis Cheung, wherein the Company sold 100 ordinary shares of its wholly owned subsidiary, Real Capital Limited (“Real Capital”), for a nominal consideration of One US Dollar (US$1.00). The 100 ordinary shares represent all of the issued and outstanding shares of Real Capital. Real Capital has had no sales revenue for the past three years and a net assets value of US$19,685 as of the closing date of the Share Purchase Agreement. The closing of the Share Purchase Agreement occurred on April 10, 2019. This transaction is not considered a “significant transaction” as that term is defined in the Exchange Act. Carrying amount of net assets of Real Capital: Cash and cash equivalents 1,450 Loan to shareholder 18,235 Net Assets 19,685 Loss on disposal: Consideration Received 1 Net Asset of Real Capital (19,685) Loan from Real Capital 18,235 Loss recognized in APIC (3,643) Loss on disposal (5,092) |
BUSINESS COMBINATION
BUSINESS COMBINATION | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
NOTE 5.- BUSINESS COMBINATION | On April 9, 2019 Summit Networks, Inc. (the "Company") entered into a Share Exchange Agreement with MoralArrival Environmental and Blockchain Technology Services Limited ("MoralArrival"), a British Virgin Islands company and the shareholder of MoralArrival. Under the terms of that Share Exchange Agreement, the Company agreed to exchange 300,000 shares of its common stock for all the outstanding shares of common stock of MoralArrival. As a result of this transaction, MoralArrival will become a wholly owned subsidiary of the Company. MoralArrival is a recently formed startup company with nominal assets and no history of operations. This transaction is not considered a “significant transaction” as that term is defined in the Exchange Act. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
NOTE 6. PROPERTY AND EQUIPMENT | During the period ended January 31, 2019, the Company has made impairment of $11,172 for the property consisting of an office and shop located in Latvia and office equipment thereof due to no revenue being generated from the operation. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
NOTE 7. RELATED PARTY TRANSACTIONS | The director of the Company, Mr. Riggs Cheung, may, in the future, become involved in other business opportunities as they become available, he may face a conflict in selecting between the Company and his other business opportunities. The Company has not formulated a policy for the resolution of such conflicts. As of April 30, 2019, amount due to related parties was $9,078, which were unsecured, non-interest bearing with no specific repayment terms. During the three-month period ended April 30, 2019, the Company recognized debt forgiveness of $348,767. Of this amount, $21,192 and 292,841 were due to related parties and shareholders, respectively. During the three-month period ended April 30, 2019, and during the period from July 8, 2014 (date of inception), payroll expense of $nil and $81,000 were charged with respect to director fee respectively. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
NOTE 8. STOCKHOLDERS' EQUITY | Transactions, other than employees’ stock issuance, are in accordance with ASC No. 505. Thus issuances shall be accounted for based on the fair value of the consideration received. Transactions with employees’ stock issuance are in accordance with ASC No. 718. These issuances shall be accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, or whichever is more readily determinable. As of August 1, 2017, the stockholders’ equity section of the Company contains Common stock, $ 0.001 par value: 75,000,000 shares authorized; 5,000,000 shares issued and outstanding. On November 28, 2017 and on March 15, 2018, the Company issued a total of 649,999 shares of common stock to one independent investor and two shareholders for cash consideration totally of $19,500. The purchase price for the common stocks was $0.03 per common share. On July 24, 2018, the Company issued a total of 455,000 shares of common stock to one independent investor and two shareholders for cash consideration totally of $13,650. The purchase price for the common stocks was $0.03 per common share. As of April 30, 2019, and July 31, 2018, the Company had 6,104,999 shares of common stock issued and outstanding, respectively. |
WARRANTS AND OPTIONS
WARRANTS AND OPTIONS | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
NOTE 9. WARRANTS AND OPTIONS | There are no warrants or options outstanding to acquire any additional shares of common. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
NOTE 10. COMMITMENTS AND CONTINGENCIES | The Company has no commitments and contingencies liabilities to be disclosed. |
LEGAL MATTERS
LEGAL MATTERS | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
NOTE 11. LEGAL MATTERS | The Company has no known legal issues pending. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Apr. 30, 2019 | |
Summary Of Significant Accounting Policies | |
Use of Estimates | The preparation of condensed consolidated interim financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date. The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations. |
DISPOSAL OF SUBSIDIARY (Tables)
DISPOSAL OF SUBSIDIARY (Tables) | 9 Months Ended |
Apr. 30, 2019 | |
Disposal Of Subsidiary | |
Carrying amount of net assets of Real Capital | Consideration Received 1 Net Asset of Real Capital (19,685) Loan from Real Capital 18,235 Loss recognized in APIC (3,643) Loss on disposal (5,092) |
Loss on disposal | Cash and cash equivalents 1,450 Loan to shareholder 18,235 Net Assets 19,685 |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) | 9 Months Ended |
Apr. 30, 2019 | |
Organization And Description Of Business | |
State of Incorporation | Nevada |
Date of Incorporation | Jul. 8, 2014 |
BASIS OF PRESENTATION (Details
BASIS OF PRESENTATION (Details Narrative) - USD ($) | Apr. 30, 2019 | Apr. 11, 2019 | Jul. 31, 2018 | Apr. 30, 2018 | Jul. 31, 2017 | Jul. 07, 2014 |
Accumulated deficit | $ (90,083) | $ (136,266) | ||||
Cash | 17,729 | |||||
Total liabilities | $ 12,933 | $ 96,216 | ||||
MoralArrival [Member] | ||||||
Common stock shares issued for exchange of shares | 300,000 |
DISPOSAL OF SUBSIDIARY (Details
DISPOSAL OF SUBSIDIARY (Details) - USD ($) | Apr. 30, 2019 | Apr. 10, 2019 | Jul. 31, 2018 | Apr. 30, 2018 | Jul. 31, 2017 | Jul. 07, 2014 |
Cash and cash equivalents | $ 17,729 | |||||
Net Assets | $ 33,457 | |||||
Real Capital Limited [Member] | ||||||
Cash and cash equivalents | $ 1,450 | |||||
Loan to shareholder | 18,235 | |||||
Net Assets | $ 19,685 |
DISPOSAL OF SUBSIDIARY (Detai_2
DISPOSAL OF SUBSIDIARY (Details 1) - USD ($) | Apr. 10, 2019 | Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 |
Loss on disposal | $ (5,092) | $ (5,092) | $ (5,092) | |||
Real Capital Limited [Member] | ||||||
Consideration Received | $ 1 | |||||
Net Asset of Real Capital | (19,685) | |||||
Loan from Real Capital | 18,235 | |||||
Loss recognized in APIC | (3,643) | |||||
Loss on disposal | $ (5,092) |
DISPOSAL OF SUBSIDIARY (Detai_3
DISPOSAL OF SUBSIDIARY (Details Narrative) - USD ($) | 1 Months Ended | |||
Mar. 31, 2019 | Apr. 30, 2019 | Apr. 10, 2019 | Jul. 31, 2018 | |
Net Assets | $ 33,457 | |||
Hang Dennis Cheung [Member] | ||||
Common stock shares sold | 100 | |||
Price per share | $ 1 | |||
Real Capital Limited [Member] | ||||
Net Assets | $ 19,685 |
BUSINESS COMBINATION (Details N
BUSINESS COMBINATION (Details Narrative) | Apr. 09, 2019shares |
MoralArrival Environmental and Blockchain Technology Services Limited [Member] | |
Common stock shares issued for exchange of shares | 300,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 9 Months Ended | 58 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | |
Impairment on PPE | $ 11,172 | $ 11,172 | |
Latvia property [Member] | |||
Impairment on PPE | $ 11,172 |
RELATED PARTY TRANSACTIONS (De
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 58 Months Ended | |||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Jul. 31, 2018 | |
Due to related party | $ 9,078 | $ 9,078 | $ 9,078 | $ 21,192 | ||
Gain on debt forgiven | 348,767 | 348,767 | 348,767 | |||
Directors fee | $ 81,000 | |||||
Related Party [Member] | ||||||
Gain on debt forgiven | 21,192 | |||||
Shareholders [Member] | ||||||
Gain on debt forgiven | $ 292,841 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |
Jul. 24, 2018 | Apr. 30, 2019 | Jul. 31, 2018 | |
Common Stock Par Value | $ 0.001 | $ 0.001 | |
Common Stock Shares Authorized | 75,000,000 | 75,000,000 | |
Common Stock Shares Issued | 6,104,999 | 6,104,999 | |
Common Stock Shares Outstanding | 6,104,999 | 6,104,999 | |
August 1, 2017 [Member] | |||
Common Stock Par Value | $ 0.001 | ||
Common Stock Shares Authorized | 75,000,000 | ||
Common Stock Shares Issued | 5,000,000 | ||
Common Stock Shares Outstanding | 5,000,000 | ||
Independent Investor And Two Shareholders [Member] | |||
Common Stock Shares Issued | 455,000 | ||
Proceeds from issuance of common stock | $ 13,650 | ||
Share price | $ 0.03 | ||
Independent Investor And Two Shareholders [Member] | November 28, 2017 and on March 15, 2018 [Member] | |||
Common Stock Shares Issued | 649,999 | ||
Proceeds from issuance of common stock | $ 19,500 | ||
Share price | $ 0.03 |