ZLME.OTC.PinkZhanling International LTD
10-Q: Zhanling International Reports Q1 2025 Results: Losses Continue Amidst Going Concern Uncertainty
Sentiment:
Quarterly Report
Zhanling International reports a net loss for the three months ended August 31, 2024, with ongoing concerns about its ability to continue as a going concern.
Capital raiseManagement plans to seek additional capital through a private placement of its Common Stock or further director loans as needed.The company's additional capital may be supported by related party.
Worse than expectedThe company reported a net loss, has an accumulated deficit, and faces substantial doubt about its ability to continue as a going concern.
Summary
- Zhanling International Ltd reported its financial results for the three months ended August 31, 2024.
- The company incurred a net loss of $5,970 for the quarter, compared to a net loss of $5,450 for the same period in 2023.
- General and administrative expenses were $5,970, slightly higher than the $5,450 reported in the previous year.
- The company's accumulated deficit has increased to $396,180 as of August 31, 2024.
- There is substantial doubt about the company's ability to continue as a going concern due to its financial condition.
- Management plans to seek additional capital through private placements or director loans.
- The company had no cash on hand as of August 31, 2024.
- The company is in the process of evaluating potential business opportunities.
- The company's disclosure controls and procedures were deemed ineffective due to material weaknesses in internal control over financial reporting.
Sentiment
Score: 2
Explanation: The sentiment is very negative due to the company's losses, accumulated deficit, going concern warning, and ineffective internal controls. The need for a capital raise further underscores the company's financial distress.
Positives
- The company is actively seeking additional capital to fund its operations.
- The company is evaluating potential business opportunities.
Negatives
- The company incurred a net loss of $5,970 for the three months ended August 31, 2024.
- The company's accumulated deficit reached $396,180 as of August 31, 2024.
- There is substantial doubt about the company's ability to continue as a going concern.
- The company's current liabilities exceeded its current assets by $3,006.
- The company had no cash on hand as of August 31, 2024.
- The company's disclosure controls and procedures were deemed ineffective due to material weaknesses in internal control over financial reporting.
Risks
- The company's ability to continue as a going concern is uncertain.
- The company may not be successful in raising additional capital.
- The company's internal control over financial reporting is weak.
- The company has no revenues and is dependent on securing a merger or acquisition.
- Existing shareholders will experience dilution if the company completes an equity financing.
Future Outlook
The company plans to seek additional capital through a private placement of its Common Stock or further director loans as needed, and the company's additional capital may be supported by related party.
Management Comments
- Management has plans to seek additional capital through a private placement of its Common Stock or further director loans as needed.
- Additionally, the Company's additional capital may be supported by related party.
Industry Context
As a development-stage company, Zhanling International's performance is heavily reliant on its ability to identify and complete a merger or acquisition. The lack of revenue and recurring losses are typical for companies in this stage, but the going concern warning signals significant challenges.
Comparison to Industry Standards
- It is difficult to compare Zhanling International to industry standards due to its unique situation as a development-stage company seeking a merger or acquisition.
- Many companies in similar situations are private and do not disclose financial information.
- The company's lack of revenue and negative equity are concerning when compared to more established companies in the broader investment or holding company sectors.
- Without a specific target industry for acquisition, benchmarking against industry peers is not feasible.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Chief Executive Officer, President, and Chairman of the Board of Directors | NingNing Xu | YongQing Liu | 2024-03-28 | Private transactions resulted in a change of controlling shareholder. |
| Chief Financial Officer and Director | NA | ZhenSheng Li | 2024-03-28 | Appointment |
Related Party Transactions
- As of August 31, 2024, the Company owed $ 11,338 to the Company's former Chief Executive Officer Mr.YongQing Liu.
- During the three months ended August 31, 2024, Mr.YongQing Liu advanced $ 7,996 to the Company.
- The amounts are unsecured, are non-interest bearing, and the company does not intend to repay the amounts owed to related party in next 12 months.
Stakeholder Impact
- Shareholders face significant risk of further dilution if the company raises capital through equity financing.
- The company's ability to continue operations is uncertain, which could impact employees and creditors.
Next Steps
- The company needs to secure additional capital to fund its operations.
- The company needs to improve its internal control over financial reporting.
- The company needs to identify and complete a merger or acquisition.
Key Dates
| Date | Description |
|---|---|
| 2009-07-16 | Zhanling International Ltd was incorporated in the State of Nevada. |
| 2010-04-15 | Reference to the Company's Registration Statement on Form S-1, as amended (File No. 333-166076), as filed with the Securities and Exchange Commission. |
| 2013-02 | Tan Sri Barry has been the President, Chief Executive Officer, Treasurer, Secretary and Chairman of the Board of Directors since February 2013. |
| 2021-05-04 | Tan Sri Barry resigned from all positions with the Company. |
| 2021-05-04 | Mr. Leung Chi Ping was appointed as the President, Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors of the Company. |
| 2021-05-04 | Mr. Leung, Alexander Patrick Brazendale, Christopher David Brazendale, Adventure Air Race Investment Limited, Adventure Air Race Talents Limited, and William Alexander Cruickshank acquired control of 67,736 shares of the Company's restricted Common Stock. |
| 2021-05-07 | The Company received written consents in lieu of a meeting of Stockholders from holders of Common Stock voting securities representing 92.54 % of the total issued and outstanding voting power of the 73,200 shares of Common Stock of the Company (the Majority Stockholders) to authorize the Companys Board of Directors to approve an increase of authorized shares of Common Stock from 75,000,000 to 500,000,000 (the Increase), par value $ 0.001 per share. |
| 2021-05-07 | The Board of Directors of the Company approved the Increase, subject to Stockholder approval. |
| 2021-06-17 | The Company entered into a binding letter of intent (the LOI) for the purpose of doing a Share Exchange Agreement (the Agreement) to acquire Adventure Air Race Company Limited (AARC), a Nevada corporation. |
| 2021-09-30 | The Share Exchange Agreement was terminated. |
| 2021-12-03 | Mr. Liang Zhao acquired control of 13,908 shares of the Company's restricted common stock, representing approximately 19 % of the Company's total issued and outstanding common stock; and Xiangchen Li acquired control of 24,532 shares of the Company's restricted common stock, representing approximately 33.51 % of the Company's total issued and outstanding common stock. |
| 2021-12-03 | Chi Ping Leung resigned from all positions with the Company. |
| 2021-12-03 | Mr. Alexander Patrick Brazendale resigned from the Chief Marketing Officer of the Company. |
| 2021-12-03 | Mr. Christopher David Brazendale resigned from Chief Operating Officer of the Company. |
| 2021-12-03 | Mr. William Alexander Cruickshank resigned from Chief Racing Officer of the Company. |
| 2021-12-03 | Ms. Wing Man Fok resigned from the Secretary and Treasurer of the Company. |
| 2021-12-03 | Mr. Liang Zhao was appointed as the President, Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors of the Company. |
| 2022-02-17 | The Board of Directors of Zhanling International Ltd approved a resolution changing the Company's fiscal year from January 31 to December 31 of each calendar year, effective as of the same date. |
| 2022-06-20 | Mr.Xiangchen Li was appointed as the Chief Marketing Officer of the Company. |
| 2022-06-22 | Liang Zhao was the sole director and the sole shareholder of Shanghai Capital Resource Limited, which was the major shareholder of the Company owning beneficially 20 % of the Company common shares. |
| 2023-04-10 | 13,908 shares of Common Stock were transferred from Liang Zhao to NingNing Xu; and 24,532 shares of Common Stock were transferred from Xiangchen Li to NingNing Xu. |
| 2023-04-10 | Mr.Liang Zhao resigned from President, Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors of the Company. |
| 2023-04-10 | Mr.Xiangchen Li resigned from the Chief Marketing Officer of the Company. |
| 2023-04-10 | Ms.NingNing Xu was appointed as President, Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors of the Company. |
| 2024-03-28 | 38,440 shares of Common Stock were transferred from NingNing Xu to YongQing Liu; the beneficial owner of Shanghai Capital Resources Ltd was transferred from NingNing Xu to YongQing Liu. |
| 2024-03-28 | NingNing Xu, serving as a director and an officer, ceased to be the Company's Chief Executive Officer, Chief Financial Officer, President, and Chairman of the Board of Directors. |
| 2024-03-28 | YongQing Liu consented to act as the new Chief Executive Officer, President, and Chairman of the Board of Directors of the Company. |
| 2024-03-28 | ZhenSheng Li was appointed as the Chief Financial Officer and Director of the Company. |
| 2024-05-31 | Date of audited financial statements included in the Company's Annual Report Form 10-K T. |
| 2024-08-26 | Date of filing of the Company's most recent Transition Report on Form 10-KT for the year ended May 31, 2024 (File No. 000-54301), as filed with the SEC. |
| 2024-08-31 | End of the quarterly period. |
| 2024-10-09 | Date of report signature. |
Keywords
financial statements, going concern, net loss, Zhanling International, quarterly report, Form 10-Q, deficit, liquidity, capital resources, internal control
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