UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

Form 10-K

 

(Mark One)

 

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

 

For the year ended December 31, 2020

 

or

 

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

 

Chengda Technology Co., Ltd.

(Exact name of registrant as specified in its charter)

 

Delaware		37-1863750
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

311-7, Tianyu Building, 11 Guangming Road Dongcheng District, Beijing, China 100051

(Address of Principal Executive Offices, including zip code)

 

+86 (10) 65014177

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Securities registered pursuant to Section 12(g) of the Act: None

 

Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐     No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐     No ☒ 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒     No ☐

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒     No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T ( 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒     No ☐

 

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

 

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act). Yes ☒     No ☐

 

The aggregate market value of the voting and non-voting common stock held by non-affiliates computed by reference to the average bid and asked price of such shares on the OTC markets as of June 30, 2020 was approximately $2,115,750.

 

As of April 15, 2021 there were 10,204,000 shares of common stock outstanding.

 

 

 

Part I
Item 1	Business		4
Item 1A	Risk Factors		5
Item 1B	Unresolved Staff Comments		5
Item 2	Properties		5
Item 3	Legal Proceedings		5
Item 4	Mine Safety Disclosures		5
Part II
Item 5	Market for Registrant’s Common Equity and Related Stockholder Matters		6
Item 6	Reserved		6
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations		7
Item 7A	Quantitative and Qualitative Disclosure about Market Risk		8
Item 8	Financial Statements and Supplementary Data		9
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures		16
Item 9A	Controls and Procedures		16
Part III
Item 10	Directors, Executive Officers of the Registrant		18
Item 11	Executive Compensation		19
Item 12	Security Ownership of Certain Beneficial Holders and Management		19
Item 13	Certain Relationships and Related Transactions		20
Item 14	Principal Accountant Fees and Services		20
Part IV
Item 15	Exhibits, Financial Statements Schedules		21
Signatures			22

 

2

  

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

 

This Annual Report on Form 10-K (the “Report”), including, without limitation, statements under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our ability to consummate any acquisition or other business combination and any other statements that are not statements of current or historical facts. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to:

 

·

our ability to establish our business in China and implement our business plan;

 

·

acceptance of our health-related products and services that we expect to develop and promote;

 

·

our ability to retain key employees;

 

·

adverse changes in general market conditions for health-related products and services in China;

 

·

our ability to continue as a going concern;

 

·

our future financing plans; and

 

·

our ability to address and as necessary adapt to changes in foreign, cultural, economic, political and financial market conditions which could impair our future operations and financial performance (including, without limitation, the changes resulting from the global novel coronavirus pandemic in China and around the world).

 

The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

3

Table of Contents

  

PART I

 

ITEM 1. BUSINESS

 

Overview

 

We were incorporated in the State of Delaware on June 1, 2017. We are a development stage company and have extremely limited financial resources. We have not commenced operation nor have we established a source of equity or debt financing.  Our original business focused on an online market and community connecting private United States companies and companies which are publicly traded in the U.S. with potential investors from all over the world, except for U.S. residents, with a goal of providing these companies with exposure to as many potential investors from outside the U.S. as possible, while providing those potential investors with different investment opportunities in the foregoing companies.

 

Pursuant to certain stock purchase agreement, entered into as of August 12, 2020, as amended, an individual investor purchased 1,500,000 shares of our common stock from our then majority stockholder and sole officer and director, Itzhak Ostashinsky, representing 78.4% of the voting securities of our company. Following this change of control, Xin Jiang was appointed to serve as our Chief Executive Officer, Chief Financial Officer, President, Secretary and director and we changed our business plan to engage in health-related business in the People’s Republic of China.

 

Effective November 6, 2020, our name was changed to “Chengda Technology Co., Ltd.” through the filing with the Secretary of State of the State of Delaware a Certificate of Amendment to the Certificate of Incorporation, which was approved by our Board of Directors.

 

We plan to operate in the field of health-related products, with a focus on the developing and promoting selenium-infused mineral water and energy mattress. In addition, we plan to offer health services, including health assessments, health consultations, and health recoveries. We are currently evaluating the optimal approaches to implement these plans, including through mergers and acquisitions of health products or services companies in China. Due to the dynamic nature and the global impact of the COVID-19 pandemic, we cannot reasonably estimate the timeline to implement our business plans. We aim to start the health-related business in 2021 and the funds to finance the start-up of the new business will primarily come from our major stockholder.

 

4

Table of Contents

  

ITEM 1A. RISK FACTORS

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

 

ITEM 1B. UNRESOLVED STAFF COMMENTS

 

None.

 

ITEM 2. PROPERTIES

 

Our principal executive offices are located at 311-7, Tianyu Building, 11 Guangming Road, Dongcheng District, Beijing, China 100051.

 

We do not own or lease any property and use the office space provided by our sole officer and director free of charge.

 

ITEM 3. LEGAL PROCEEDINGS

 

We are not currently involved in any legal proceedings nor are we aware of any pending or potential legal actions.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

5

Table of Contents

  

PART II

 

ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS

 

(a) Market Information

 

Our common stock is quoted on OTC Pink market operated by the OTC Markets under the symbol “SKMT.” There has been very limited trading in our shares of common stock. We cannot assure you that there will be an active market in the future for our common stock. 

 

(b) Holders

 

As of April 15, 2021, there were approximately 6 holders of record of our common stock.

 

(c) Dividends

 

We have not paid any cash dividends to date and do not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of our management to utilize all available funds for the development of the our business.

 

(d) Securities authorized for issuance under equity compensation plans

 

We currently do not have any equity compensation plans.

 

(e) Recent Sales of Unregistered Securities

 

None.

 

(f) Purchases of Equity Securities by the Issuer and Affiliated Purchasers

 

None.

  

ITEM 6. RESERVED

 

Not applicable.

 

6

Table of Contents

  

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

This discussion summarizes the significant factors affecting the operating results, financial condition, liquidity and cash flows of the Company for the fiscal year ended December 31, 2020. The discussion and analysis that follows should be read together with the section entitled “Forward Looking Statements” and our consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this annual report on Form 10-K.

 

Except for historical information, the matters discussed in this section are forward-looking statements that involve risks and uncertainties and are based upon judgments concerning various factors that are beyond the Company’s control. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report.

 

Overview

 

We were incorporated in the State of Delaware on June 1, 2017. We are a development stage company and have extremely limited financial resources. We have not established a source of equity or debt financing. Our financial statements include a note emphasizing the uncertainty of our ability to remain a going concern.

 

We plan to operate in the field of health-related products, with a focus on the developing and promoting selenium-infused mineral water and energy mattress. In addition, we plan to offer health services, including health assessments, health consultations, and health recoveries.  

 

We are currently evaluating the optimal approaches to implement these plans, including through mergers and acquisitions of health companies in China. Due to the dynamic nature and the global impact of the COVID-19 pandemic, we cannot reasonably estimate the timeline to implement its business plan.

 

Results of Operations

 

Revenues

 

We did not generate any revenue for years ended December 31, 2020 and 2019 and do not expect to generate any revenue until we commence our business plan.

 

General and Administrative Expenses

 

During the years ended December 31, 2020 and 2019, we incurred $61,193 and $77,140 of general and administrative expenses, respectively. Our general and administrative expenses primarily consisted of auditor fees, officer’s contributed corporate administrative service costs, professional fees and filing fees, which are routine costs associated with a public company. The decrease in the general and administrative expenses in the year ended December 31, 2020 compared to the same period of last year was due to one-time expenses of approximately $22,000 incurred in 2019 in connection with obtaining eligibility to deposit our equity securities with DTC, which facilitates electronic trading of securities.

 

Going Concern

 

The future of our company is dependent upon our ability to implement our new business plans and initiatives and our ability to generate positive net profits from implementation of our business plans. Management plans to seek additional funding through either equity or debt financings from its principal stockholder to support its operations for the next twelve months. However, there is no assurance that such funds will be available or available on acceptable terms. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. 

 

As the Company is currently a shell company, its operating expenses are limited. Management believes that the financing from its principal stockholder will provide it with the funding to continue as a going concern.

  

7

Table of Contents

  

Liquidity and Capital Resources

 

Cash Flows from Operating Activities

 

Net cash used in operating activities was $23,583 for the year ended December 31, 2020, compared to net cash used in operating activities of $39,060 for the same period of 2019, represented a decrease of $15,477 in the net cash outflow in operating activities. This is due to the decrease of our net loss in year ended December 31, 2020 compared to the same period of 2019.

 

Cash Flows from Financing Activities

 

For the year ended December 31, 2020, net cash generated by financing activities was $22,089, representing advances and capital contributions from the Company’s former and current major stockholders to support the operations of the Company. For the year ended December 31, 2019, net cash generated by financing activities was $19,547, representing advances from the former major stockholder to support the Company’s operations.

 

Commitments and Capital Expenditures

 

We presently have no material commitments for capital expenditures.  

 

Critical Accounting Policies Involving Management Estimates and Assumptions

 

Our discussion and analysis of our financial condition and results of operations is based on our financial statements. In preparing our financial statements in conformity with U.S. GAAP, we must make a variety of estimates that affect the reported amounts and related disclosures. See Note 3 of our financial statements included in this Report.  

 

Off-Balance Sheet Arrangements

 

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet financial arrangements.

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

8

Table of Contents

  

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

Index to Financial Statements

 

	Page
Financial Statements for the Years Ended December 31, 2020 and 2019
Report of Independent Registered Public Accounting Firm	9
Balance Sheets as of December 31, 2020 and 2019	10
Statements of Operations for the Years Ended December 31, 2020 and 2019	11
Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2020 and 2019	12
Statements of Cash Flows for Years Ended December 31, 2020 and 2019	13
Notes to Financial Statements	14

 

 

Reports of Independent Registered Public Accounting Firms

 

To the shareholders and the board of directors of Chengda Technology Co. Ltd.

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheets of Chengda Technology Co. Ltd. (formerly New Leap, Inc.) (the "Company") as of December 31, 2020 and 2019, the statements of operations, changes in stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States.

 

Going concern uncertainty

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company incurred recurring losses from operations, has net current liabilities and an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ B F Borgers CPA PC

We have served as the Company’s auditor since 2017.

Lakewood, Colorado

April 15, 2021

 

9

  

Chengda Technology Co., Ltd. (Formerly New Leap, Inc.) Balance Sheets
		December 31,				December 31,
		2020				2019
ASSETS
Current Assets:
Cash		$	—			$	1,494
Total Current Assets			—				1,494
Total Assets		$	—			$	1,494
LIABILITIES AND STOCKHOLDERS' DEFICIT
Account payable to related party		$	—			$	25,000
Accrued liabilities			18,550				5,510
Promissory note payable to stockholder			—				39,490
Total Current Liabilities			18,550				70,000
Total Liabilities			18,550				70,000
Stockholders’ Deficit:
Preferred stock; $0.0001 par value, 5,000,000 shares authorized, none issued and outstanding			—				—
Common stock; $0.0001 par value, 50,000,000 shares authorized, 10,204,000 shares issued and outstanding			10,204				10,204
Additional paid-in capital			237,624				126,475
Accumulated deficit			(266,378	)			(205,185	)
Total Stockholders’ Deficit			(18,550	)			(68,506	)
Total Liabilities and Stockholders’ Deficit		$	—			$	1,494

 

The accompanying notes are an integral part of these financial statements.

 

10

  

Chengda Technology Co., Ltd.

(Formerly New Leap, Inc.)

Statements of Operations 

 

		For The Year Ended December 31,
		2020				2019
Operating expenses:
General and administrative expenses		$	61,193			$	77,140
Total operating expenses			61,193				77,140
Loss from operations			(61,193	)			(77,140	)
Net loss		$	(61,193	)		$	(77,140	)
Basic & diluted net income per share		*				*
Weighted average number of ordinary shares-basic and diluted			10,204,000				10,204,000

____________ 

* Less than $0.01

 

The accompanying notes are an integral part of these financial statements

 

11

  

Chengda Technology Co., Ltd. (Formerly New Leap, Inc.) Statements of Cash Flows
		For The Year Ended December 31,
		2020				2019
Cash flows from operating activities:
Net loss		$	(61,193	)		$	(77,140	)
Adjustments to reconcile net loss to net cash used in operating activities:
Contributed services			24,570				37,800
Changes in assets and liabilities:
Accrued liabilities			13,040				280
Net cash used in operating activities			(23,583	)			(39,060	)
Cash flows from investing activities:			—				—
Cash flows from financing activities:
Advances from related parties			10,229				19,547
Capital contributions from stockholder			11,860				—
Net cash provided by financing activities			22,089				19,547
Net decrease in cash			(1,494	)			(19,513	)
Cash, beginning of period			1,494				21,007
Cash, end of period		$	—			$	1,494
Supplemental cash flow information
Forgiveness of promissory notes by stockholder		$	49,719				—
Forgiveness of payable due to related party		$	25,000				—
Cash paid for interest expense			—				—
Cash paid for income tax			—				—

 

The accompanying notes are an integral part of these financial statements

 

12

  

Chengda Technology Co., Ltd.

(Formerly New Leap, Inc.)

Statements of Changes in Stockholders’ Equity

(US$, except share data and per share data, or otherwise noted)

 

		Shares				Shares amount				Additional paid-in capital				Accumulated Deficit				Total equity
Balance as of January 1, 2019			10,204,000			$	10,204			$	88,675			$	(128,045	)		$	(29,166	)
Net loss			-				-				-				(77,140	)			(77,140	)
Contributions from stockholders			-				-				37,800				-				37,800
Balance as of December 31, 2019			10,204,000			$	10,204			$	126,475			$	(205,185	)		$	(68,506	)
Net loss			-				-				-				(61,193	)			(61,193	)
Contributions from stockholders			-				-				36,430				-				36,430
Forgiveness of related party loan			-				-				25,000				-				25,000
Forgiveness of stockholder’s promissory note			-				-				49,719				-				49,719
Balance as of December 31, 2020			10,204,000			$	10,204			$	237,624			$	(266,378	)		$	(18,550	)

 

The accompanying notes are an integral part of these financial statements

 

13

 

Chengda Technology Co., Ltd.

(Formerly New Leap, Inc.)

Notes to Financial Statements

December 31, 2020

 

NOTE 1  –  ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Chengda Technology Co., Ltd., (formerly known as New Leap, Inc.) (the "Company") was incorporated on June 1, 2017 as a Delaware corporation. The Company has yet to start operational or research and development activities.

 

On August 12, 2020, pursuant to a Stock Purchase Agreement (the “SPA”) entered into by and between Xin Jiang (the “Purchaser”) and Itzhak Ostashinsky (the “Seller”), a controlling stockholder as well as Chief Executive Officer, Chief Financial Officer, President, Secretary and director of the Company, the Seller sold to the Purchaser 8,000,000 shares of common stock, par value $0.0001 per share, of the Company, representing 78.4% of the total issued and outstanding shares of common stock as of August 24, 2020, in consideration of $251,177 in cash from the Purchaser’s personal funds (the “Transaction”).  In connection with the Transaction, the Seller resigned as Chief Executive Officer, Chief Financial Officer, President, Secretary and director of the Company, effective immediately upon the consummation of the Transaction.  Xin Jiang was then appointed as Chief Executive Officer, Chief Financial Officer, President, Secretary and director of the Company. The Transaction resulted in a change in control of the Company.

 

Effective November 6, 2020, the Company’s name was changed to “Chengda Technology Co., Ltd.” through the filing with the Secretary of State of the State of Delaware a Certificate of Amendment to the Certificate of Incorporation of the Company, which was approved by the Company’s Board of Directors. 

 

After the change in control, the Company plans to implement a new business plan. The Company plans to operate in the field of health-related products, with a focus on developing and promoting selenium-infused mineral water and energy mattress. Also, the Company plans to offer health services, including health assessments, health consultations, and health recoveries.  

 

The Company is currently evaluating the optimal approaches to implement these plans, including through mergers and acquisitions of health companies in China. Due to the dynamic nature and the global impact of the COVID-19 pandemic, the Company cannot reasonably estimate the timeline to implement its business plan. Until the Company is able to implement its business plan, the Company will remain a shell company.

 

NOTE 2 – GOING CONCERN

 

The accompanying financial statements have been prepared in conformity with United States generally accepted accounting principles (“U.S. GAAP”), which contemplate continuation of the Company as a going concern. As a start-up, the Company has not generated any revenues and has accumulated losses through December 31, 2020. The Company currently has limited working capital and does not expect to generate revenues in the near term. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

 

Management anticipates that the Company will be dependent, for the near future, on additional financing to fund operating expenses, primarily loans and/or capital contribution from its principal stockholder. As the Company is a shell company, its operating expenses are limited. Management believes that the financing from its principal stockholder will provide it with the funding to continue as a going concern. These financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.

 

 NOTE 3  –  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The Company’s financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and expenses during the reporting period.  Actual results could differ from those estimates. The Company currently does not have significant estimates and assumptions. 

 

14

 

Recent Accounting Pronouncements

 

The Company has reviewed the recent accounting pronouncements and concluded that they were either not applicable or had no impact to the Company’s financial statements.

 

NOTE 4 – SHARE CAPITAL

 

There were no transactions of common stock and preferred stock during the years ended December 31, 2020 and 2019.

 

During the years ended December 31, 2020 and 2019, the former CEO and major stockholder, Itzhak Ostashinsk, contributed corporate administrative work services of $24,570 and $37,800, respectively, to the Company and these amounts were recorded as capital contributions. No additional shares of common stock were issued for these contributions.

 

During the year ended December 31, 2020, the former CEO and major stockholder, Itzhak Ostashinsk and the new CEO and major stockholder, Xin Jiang, made capital contributions of $1,510 and $10,350, respectively, to the Company for working capital. No additional shares of common stock were issued for these contributions.

 

NOTE 5 – PROMISSORY NOTE PAYABLE TO SHAREHOLDER

 

Promissory notes payable represented loans advanced from the Company’s former major stockholder to support the operations of the Company. The note was interest free and due on demand. As of December 31, 2019, the outstanding balance under the note was $39,490. During the year ended December 31, 2020, an additional $10,229 was advanced from the former major stockholder to the Company. In August 2020, in connection with the Transaction, the former major stockholder forgave the promissory note payable with a cumulated balance of $49,719, which was recorded as a capital contribution to the Company. No additional shares of common stock were issued for these contributions.

 

NOTE 6 – RELATED PARTY TRANSACTIONS

 

In addition to the capital contribution disclosed in Note 4 and promissory note forgiveness disclosed in Note 5, the Company had the following related party transactions during the years ended December 31, 2020 and 2019:

 

·

As at December 31, 2019, the Company had a related party payable balance of $25,000 due to the son of the former major stockholder. The balance was interest free and due on demand. In August 2020, the $25,000 related party payable balance was forgiven by the related party in connection with the Transaction. Therefore, the forgiven amount was recorded as a capital contribution to the Company.

  

NOTE 7 – SUBSEQUENT EVENTS

 

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date when the financial statements were issued, and determined that no subsequent events occurred that would require adjustment to or disclosure in the financial statements.

 

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Table of Contents

  

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

There are not and have not been any disagreements between the Company and its accountants on any matter of accounting principles, practices or financial statement disclosure.

 

ITEM 9A. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our Certifying Officer or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

 

Under the supervision of our Principal Executive Officer and Principal Financial Officer (the “Certifying Officer”), we evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this Report due to the material weakness in our internal control over financial reporting discussed below.

 

Management's Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal controls are provided by executive management's review and approval of all transactions. Our internal control over financial reporting also includes those policies and procedures that:

 

	(1)	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
	(2)	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management; and
	(3)	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

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Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2020. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations ("COSO") of the Treadway Commission in Internal Control-Integrated Framework. Management's assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of these controls.

 

Based on this assessment, management has concluded that as of December 31, 2020, our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles due to the existence of the following material weaknesses:

 

	·	Lack of segregation of duties
	·	Lack of audit committee and independent directors
	·	Management is dominated by a single individual without adequate compensating controls providing for multiple levels of supervision and review

 

Although we are unable to meet the standards under COSO because of the limited resources available to a company of our size, we are committed to improving our financial organization. As funds become available, we will undertake to: (1) create a position to segregate duties consistent with control objectives, (2) increase our personnel resources and technical accounting expertise within the accounting function (3) appoint one or more independent directors to our board of directors who shall be appointed to a Company audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; and (4) prepare and implement sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of U.S. GAAP and SEC disclosure requirements.

 

We will continue to monitor and evaluate the effectiveness of our disclosure controls and procedures and our internal control over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

 

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this annual report.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

ITEM 9B. OTHER INFORMATION

 

None.

 

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PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

Directors and Executive Officers

 

The following table contains information regarding our sole officer and director.

 

Name		Age		Title
Xin Jiang		72		President, CEO, CFO, Secretary and Director

 

Xin Jiang – Ms. Jiang has served as our Chief Executive Officer, Chief Financial Officer, President, Secretary and Director since August 2020. She served as Chairwoman of Chengda Technology Co., Ltd., a company engaged in the production and sales of health supplements in China, since June 2020. Prior to that, Ms. Jiang was a vendor selling health products on Taobao, a leading online e-commerce marketplace in China, since 2016. From 2003 to 2016, Ms. Jiang worked at the Tianjin Municipal Archives Bureau. Prior to that she taught at various middle schools in China from 1976 to 2003, including Heilongjiang Fuyu Forest Machinery Factory Children's Middle School, Tianjin Petrochemical Fiber Factory Middle School, Tianjin Hexi District Xingguo School and Tianjin Nankai District Sixty Six Middle School (now known as Affiliated High School of Nankai University).

 

Director Independence

 

We do not have any independent directors. We are not required to maintain a majority of independent directors under the rules applicable to companies that do not have securities listed or quoted on a national securities exchange or national quotation system.

 

The Board and Committees  

 

Our Board of Directors at this time does not maintain a separate audit, nominating or compensation committee.  Functions customarily performed by such committees are performed by the Board as a whole.  We are an early stage company with very limited operations, therefore our Board of Directors does not deem it necessary to have more than one director or a nominating or compensation committee. We have not paid any compensation to any officer or director. Decisions relating to director nominations or compensation can be made on a case by case basis by the Board of Directors. Our Board of Directors would consider any shareholder nominee at such time as it is made. Our Board of Directors does not believe that a defined policy with regard to the consideration of candidates recommended by stockholders is necessary at this time because it believes that, given the limited scope of our operations, a specific nominating policy would be premature and of little assistance until our business operations are at a more advanced level. There are no specific, minimum qualifications that the Board believes must be met by a candidate recommended by the Board of Directors. We do not pay any fee to any third party or parties to identify or evaluate or assist in identifying or evaluating potential nominees.

 

We have not adopted practices or polices regarding employee, officer and director hedging in accordance with Item 407(i) of Regulation S-K.

 

Legal Proceedings

 

To the knowledge of our management, there are no material proceedings to which any of our director, officer or affiliate is a party adverse to our company or has a material interest adverse to our company.

 

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Code of Ethics

 

We intend at some point to adopt a code of ethics that applies to our officers, directors and employees. We will file copies of our code of ethics in a current report on Form 8-K.

 

ITEM 11. EXECUTIVE COMPENSATION

 

There are no current employment agreements between us and our sole officer. We have never paid any compensation to any of our executive officers or directors. Our current officer has agreed to work with no remuneration until such time as we commence business operations and receive sufficient revenues necessary to provide management salaries. At this time, we cannot accurately estimate when sufficient revenues will occur to implement this compensation, or what the amount of the compensation will be. There are no annuity, pension or retirement benefits proposed to be paid to the officer or director or employees in the event of retirement at normal retirement date pursuant to any presently existing plan provided or contributed to by our company. 

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

The following table sets forth certain information, regarding the beneficial ownership of our common stock as of the date of this Annual Report by (i) each stockholder known by us to be the beneficial owner of more than 5% of our common stock, (ii) by each director and executive officer of our company and (iii) by all executive officers and directors of our company as a group. Each of the persons named in the table has sole voting and investment power with respect to common stock beneficially owned. The business address of each person listed below is 311-7, Tianyu Building, 11 Guangming Road, Dongcheng District, Beijing, China 100051.

 

						Percentage
		Number of				of Shares
Name and Address		Shares Owned				Owned
5% Stockholders
Zhou Sun			2,101,960				21	%
Xin Jiang			8,000,000				78	%
Directors and Officers
Xin Jiang			8,000,000				78	%

 

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

During the years ended December 31, 2020 and 2019, our former CEO and major stockholder, Itzhak Ostashinsk, contributed corporate administrative work services of $24,570 and $37,800, respectively, to the Company and these amounts were recorded as capital contributions. During the year ended December 31, 2020, Mr. Ostashinsk and our new CEO and major stockholder, Xin Jiang, made capital contributions of $1,510 and $10,350, respectively, to the Company for working capital. No shares of common stock were issued for these contributions. During the years ended December 31, 2020 and 2019, Mr. Ostashinsk extended loans under a promissory note to support the operations of the Company. The note was interest free and due on demand. As of December 31, 2019, the outstanding balance under the note was $39,490. During the year ended December 31, 2020, an additional $10,229 was advanced from the former major stockholder to the Company. In August 2020, in connection with the Change of Control, Mr. Osttashinksk forgave the promissory note payable with a cumulated balance of $49,719, which was recorded as a capital contribution to the Company.

 

As at December 31, 2019, we had a related party payable balance of $25,000 due to the son of Mr. Osttashinksk. The balance was interest free and due on demand. In August 2020, the $25,000 related party payable balance was forgiven by the related party in connection with the Change of Control. Therefore, the forgiven amount was recorded as a capital contribution to the Company.

 

Our former officer and director, Itzhak Ostashinsky, provided office space until the consummation of the Change of Control. We did not pay any rent to Mr. Ostashinsky for the office space. Following the Change in Control, Ms. Jiang, our now sole executive officer and director, provides office space to us free of charge.

 

Our Board of Directors is responsible to approve all related party transactions. We have not adopted written policies and procedures specifically for related person transactions.

  

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

The following table presents the fees for professional audit services for the audit of our annual financial statements for the fiscal years ended December 31, 2020 and 2019 and fees billed for other services during those periods.

 

		December 31, 2020				December 31, 2019
Audit fees		$	9,700			$	10,000
Audit-related fees			0				0
Tax fees			0				0
All other fees			0				0
Total Fees		$	9,700			$	10,000

  

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PART IV

 

ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 

(a)	The following documents are filed as a part of this Report:

 

1.	Financial Statements.   The financial statements of Chengda Technology Co., Ltd. are included in Item 8.

  

2.	Financial Statement Schedule(s):
	All schedules are omitted for the reason that the information is included in the financial statements or the notes thereto or that they are not required or are not applicable.

  

3.

Exhibits:

 

3.1		Certificate of Incorporation (1)
3.2		Certificate of Amendment to Certificate of Incorporation (2)
31		Certification of Chief Executive Officer and Principal Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act of 1934.*
32		Certification of Chief Executive Officer and Principal Financial Officer to 18 U.S.C Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.**
101		XBRL Interactive Data Files*

_____________ 

* Filed herewith.

** Furnished herewith.

(1) Incorporated herein by reference from our Form S-1 filed with the Securities and Exchange Commission on August 8, 2017.

(2)  Incorporated herein by reference from our Current Report on Form 8-K filed with the Securities and Exchange Commission on November 9, 2020.

 

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SIGNATURES

 

In accordance with Section 13 or 15(d) of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

April 15, 2021	/s/ Xin Jiang
	Xin Jiang
	Chief Executive Officer, Chief Financial Officer and President
	(Principal Executive Officer and Principal Financial and Accounting Officer)

 

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