Attached files
| file | filename |
|---|---|
| EX-32.1 - EXHIBIT 32.1 - EXENT CORP. | e2628_ex32-1.htm |
| EX-31.1 - EXHIBIT 31.1 - EXENT CORP. | e2628_ex31-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2020
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File No. 333-222829
EXENT CORP.
(Exact name of registrant as specified in its charter)
| Nevada | 35-2611667 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Room 6B1-2, Block AB, Tianxiang Building Che Gong Miao, Futian District Shenzhen, Guangdong |
517000 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: +86 755-83218411
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 whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x
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 o No x
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 shorter period that the registrant as required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
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 x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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. (Check one):
| Large accelerated filer o | Accelerated filer o |
| Non-accelerated filer x | Smaller reporting company x |
| Emerging growth company x |
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. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes x No o
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 $1,054,000.
As of April 15, 2021, the registrant had 2,027,000 shares of common stock issued and outstanding.
1
TABLE OF CONTENTS
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 smart-home products and services that we expect to market; |
| ● | our ability to retain key employees; |
| ● | adverse changes in general market conditions for smart-home products and services in China; |
| ● | our ability to continue as a going concern; |
| ● | our future financing plans our future financing plans (including the availability of future funding from our majority shareholder); 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 ongoing COVID-19 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
We were incorporated in the State of Nevada on February 15, 2017. Our original business was the manufacturing and sales of drywall steel studs which were used principally in new developments, commercial and residential construction and in home improvement, remodeling and repair work in Kyrgyzstan. We distributed our drywall steel studs in the Kyrgyz market to wholesale customers. During the fiscal year ended December 31, 2019, we sold the machine we had utilized for studs manufacturing as it was outdated, and our production thereafter was put on hold until new equipment was purchased. Our then management actively searched for new equipment which would be more productive and cost effective, so the manufactured products could be more competitive in the market.
On February 3, 2020, pursuant to a stock purchase agreement dated on January 21, 2020, an individual investor (Weining Zheng) purchased 1,500,000 shares of our common stock from our then majority shareholder and sole officer and director, Marat Asylbekov, representing 74% of the voting securities of our company. In connection with the transaction, Mr. Asylbekov resigned from all his positions with our company and Mr. Zheng appointed Li Deng to serve as our President, Treasurer, Secretary and director (collectively, the “Change of Control”). Following the Change of Control, we changed our business plan to engage in smart-home business in the People’s Republic of China.
We plan to conduct smart-home business in the People’s Republic of China, with a focus on developing, promoting and executing high quality integrated smart-home systems and solutions. We are presently evaluating the optimal corporate and legal structures in China necessary to establish our business or to acquire and/or invest in existing smart home businesses. We aim to start the smart-home business in 2021 and the funds to financing the start-up of the new business or acquisition of and/or investment in existing smart home business will primarily come from our majority shareholder. However, our plan to operate in the smart home industry may be adversely impacted by the ongoing COVID-19 pandemic in China and around the world. Although China has made great efforts to contain the spread of the virus and had brought the outbreak under control, the economy, financial market and businesses in China have been suffering from the pandemic. We may change our plan to do business in other industries in China should we determine that the smart home industry is materially and adversely affected by the outbreak of coronavirus and it is no longer in the best interest of our stockholders and the Company to proceed with our original plan.
Not applicable.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
Our principal executive offices are located at Room 6B1-2, Block AB, Tianxiang Building, Che Gong Miao, Futian District, Shenzhen, Guangdong, China 517000.
We do not own or lease any property and use the office space provided by our sole officer and director free of charge.
We are not currently involved in any legal proceedings nor are we aware of any pending or potential legal actions.
ITEM 4. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
Our common stock is quoted on OTC Pink market operated by the OTC Markets under the symbol “EXNN.” 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.
As of April 15, 2021, there were 2,027,000 shares of common stock issued and outstanding and held by a total of 11 shareholders of record.
4
Dividends
We have never paid or declared any dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future.
Securities Authorized For Issuance Under Equity Compensation Plans
We currently do not have any equity compensation plans.
Recent Sales of Unregistered Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
ITEM 6. SELECTED FINANCIAL DATA
Not Applicable.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OR RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward- looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Report. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
We were incorporated in the state of Nevada on February 15, 2017. Our original business was manufacturing and selling steel drywall studs in the Kyrgyz market to wholesale customers. During the fiscal year ended December 31, 2019, we sold our stud manufacturing machine as it was outdated. Production thereafter was temporarily on hold until new equipment was purchased.
Following the Change of Control, we changed our business plan to engage in smart-home business in the People’s Republic of China.
We plan to conduct smart-home business in the People's Republic of China, with a focus on developing, promoting and executing high quality integrated smart-home systems and solutions. We are presently evaluating the optimal corporate and legal structures in China necessary to establish our business or to acquire and/or invest in existing smart home businesses. We aim to start the smart-home business in 2021 and the funds to financing the start-up of the new business or acquisition of and/or investment in existing smart home businesses will primarily come from our majority shareholder. However, our plan to operate in the smart home industry may be adversely impacted by the ongoing COVID-19 pandemic, which is now continuing to spread throughout the world. Although China has made great efforts to contain the spread of the virus and had brought the outbreak under control, the economy, financial market and businesses in China have been suffering from the pandemic. As a result of the epidemic and its socioeconomic impact in China, we may change our plan to do business in other industries in China should we determine that the smart home industry is materially and adversely affected by the COVID-19 pandemic and it is no longer in the best interest of our stockholders and the Company to proceed with our original plan.
5
Results of Operations
There was no revenue generated for the years ended December 31, 2020 and 2019.
During the year ended December 31, 2020, we incurred operating expenses of $65,082 as compared to $17,367 during the same period of 2019. The increase in 2020 was due to the increase in professional fees after the Change of Control. The increase in professional fees was due to the Company started using professional consultants, including lawyer and financial advisor to perform certain financial reporting functions in 2020 after the Change of Control. In 2019, these functions were mainly performed by management.
During the year ended December 31, 2020, we had other expense of $4,623 relating to the write-off of the Company’s property and equipment after the Change of Control.
As a result of the foregoing, our net loss for the year ended December 31, 2020 was $69,705 as compared to a net loss of $17,367 for the year ended December 31, 2019.
Liquidity and Capital Resources
As of December 31, 2020, our total assets were $nil compared to $7,380 in total assets at December 31, 2019. As of December 31, 2020, our total liabilities were $9,344 compared to $26,524 at December 31, 2019. Stockholders’ deficit was $9,344 as of December 31, 2020 compared to the stockholders’ deficit of $19,144 as of December 31, 2019.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities.
For the year ended December 31, 2020, net cash flows used in operating activities was $52,991 due to:
| ● | net loss of $69,705; |
| ● | non-cash write-off of fixed assets of $4,623; |
| ● | decrease in prepaid expenses of $2,747; |
| ● | increase in accounts payable of $9,344. |
Net cash flows used in operating activities was $20,681 for the same period of 2019 due to:
| ● | net loss of $17,367; |
| ● | non-cash depreciation expenses of $1,631; |
| ● | increase in prepaid expenses of $2,747; |
| ● | decrease in accounts payable of $2,198. |
Cash Flows from Investing Activities
There were no investing activities for the year ended December 31, 2020. For the same period of 2019, we received $15,000 proceeds from sales of fixed assets.
Cash Flows from Financing Activities
We have financed our operations primarily from either advances from stockholders or financing through the sales of securities. For the year ended December 31, 2020, we received capital contributions of $52,981 from our current majority stockholder for working capital uses. For the same period of 2019, we received loan proceeds of $10,844 from our then sole officer and director, which was offset by a repayment of $8,223 we made to this sole officer and director.
Plan of Operation and Funding
Our future capital requirements will depend on numerous factors including, but not limited to, the establishment and development of our new smart-home business opportunities in China. We expect to depend on financing from our majority stockholder to meet our current minimal operating expenses. As we are a start-up company, our operating expenses are limited and discretional based on the availability of its funds. Management believes that the financing from our majority stockholder will support our planned operations over the next 12 months.
We do not have lines of credit or other bank financing arrangements. In connection with our new business plan after the Change of Control, management anticipates operating expenses and capital expenditures relating to: (i) developmental expenses associated with a start-up business and (ii) marketing expenses will be funded primarily by debt or equity financings from our majority stockholder. 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.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
6
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Financial Statements
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Exent Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Exent Corp. (“the Company”) as of December 31, 2020 and 2019, and the related statements of operations, changes in stockholders’ equity, and cash flows for each of the years in the two-year 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 years in the two-year period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred net losses since inception, an accumulated deficit and further losses are expected. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. 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.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.
|
We have served as the Company’s auditor since 2018. Spokane, Washington | |
| April 15, 2021 | |
F-2
Exent Corp.
(US$, except share data and per share data, or otherwise noted)
| December
31, 2020 | December
31, 2019 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | — | $ | 10 | ||||
| Prepaid expenses | — | 2,747 | ||||||
| Total Current Assets | — | 2,757 | ||||||
| Non-current Assets | ||||||||
| Property and equipment, net of accumulated depreciation | — | 4,623 | ||||||
| Total Non-current Assets | — | 4,623 | ||||||
| Total Assets | $ | — | $ | 7,380 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Loan from a related party | $ | — | $ | 26,524 | ||||
| Accounts Payable | 9,344 | — | ||||||
| Total Liabilities | 9,344 | 26,524 | ||||||
| Commitments and Contingencies | — | — | ||||||
| Stockholders’ Deficit | ||||||||
| Common stock, $0.001 par value, 75,000,000 shares authorized; 2,027,000 shares issued and outstanding as of December 31, 2020 and December 31, 2019 | 2,027 | 2,027 | ||||||
| Additional paid-in-capital | 105,328 | 25,823 | ||||||
| Accumulated Deficit | (116,699 | ) | (46,994 | ) | ||||
| Total Stockholders’ Deficit | (9,344 | ) | (19,144 | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | — | $ | 7,380 | ||||
The accompanying notes are an integral part of these financial statements.
F-3
Exent Corp.
(US$, except share data and per share data, or otherwise noted)
| For the year ended December 31, 2020 | For the year ended December 31, 2019 | |||||||
| Revenue | $ | — | $ | — | ||||
| Cost of sales | — | — | ||||||
| Gross profit | — | — | ||||||
| Operating expenses: | ||||||||
| Professional fees | $ | 56,250 | $ | 10,450 | ||||
| Rent | — | 1,750 | ||||||
| General and administrative expenses | 8,832 | 5,167 | ||||||
| Total Operation Expenses | 65,082 | 17,367 | ||||||
| Loss from operations | (65,082 | ) | (17,367 | ) | ||||
| Other expenses | ||||||||
| Other expenses – write off of property & equipment | (4,623 | ) | — | |||||
| Total other expense | (4,623 | ) | — | |||||
| Loss before taxes | (69,705 | ) | (17,367 | ) | ||||
| Provision for taxes | — | — | ||||||
| Net loss | $ | (69,705 | ) | $ | (17,367 | ) | ||
| Loss per common share: Basic and Diluted | $ | (0.03 | ) | $ | (0.01 | ) | ||
Weighted Average Number of Common Shares Basic and Diluted | 2,027,000 | 2,027,000 | ||||||
The accompanying notes are an integral part of these financial statements.
F-4
Exent Corp.
Statements of Changes in Shareholders’ Equity
For the Years ended December 31, 2020 and 2019
(US$, except share data and per share data, or otherwise noted)
|
Number of Common Shares |
Amount |
Additional Paid-in- Capital |
Accumulated Deficit |
Total | ||||||||||||||||
| Balances as of December 31, 2018 | 2,027,000 | $ | 2,027 | $ | 25,823 | $ | (29,627 | ) | $ | (1,777 | ) | |||||||||
| Net loss for the year | — | — | — | (17,367 | ) | (17,367 | ) | |||||||||||||
| Balances as of December 31, 2019 | 2,027,000 | 2,027 | 25,823 | (46,994 | ) | (19,144 | ) | |||||||||||||
| Net loss for the year | — | — | — | (69,705 | ) | (69,705 | ) | |||||||||||||
| Forgiveness of related party loan | — | — | 26,524 | — | 26,524 | |||||||||||||||
| Contributions from stockholders | — | — | 52,981 | — | 52,981 | |||||||||||||||
| Balances as of December 31, 2020 | 2,027,000 | $ | 2,027 | $ | 105,328 | $ | (116,699 | ) | $ | (9,344 | ) | |||||||||
The accompanying notes are an integral part of these financial statements.
F-5
Exent Corp.
(US$, except share data and per share data, or otherwise noted)
| For the year ended December 31, 2020 | For the year ended December 31, 2019 | |||||||
| Operating Activities | ||||||||
| Net loss | $ | (69,705 | ) | $ | (17,367 | ) | ||
| Adjustments of non-cash items | ||||||||
| Depreciation expense | — | 1,631 | ||||||
| Write-off of property & equipment | 4,623 | — | ||||||
| Changes in working capital | ||||||||
| (Increase) decrease in prepaid expenses | 2,747 | (2,747 | ) | |||||
| Increase (decrease) in accounts payable | 9,344 | (2,198 | ) | |||||
| Net cash used in operating activities | (52,991 | ) | (20,681 | ) | ||||
| Investing Activities | ||||||||
| Proceeds from sales of capital assets | — | 15,000 | ||||||
| Net cash provided by (used in) investing activities | — | 15,000 | ||||||
| Financing Activities | ||||||||
| Capital contributions from stockholders | 52,981 | — | ||||||
| Proceeds from loan from stockholders | — | 10,884 | ||||||
| Repayment of stockholder loan | — | (8,223 | ) | |||||
| Net cash provided by financing activities | 52,981 | 2,661 | ||||||
| Net increase in cash and equivalents | (10 | ) | (3,020 | ) | ||||
| Cash and equivalents at beginning of the period | 10 | 3,030 | ||||||
| Cash and equivalents at end of the period | $ | — | $ | 10 | ||||
| Supplemental cash flow information: | ||||||||
| Forgiveness of related party loan | $ | 26,524 | $ | — | ||||
| Cash paid for: | ||||||||
| Interest | $ | — | $ | — | ||||
| Income taxes | $ | — | $ | — | ||||
The accompanying notes are an integral part of these financial statements.
F-6
Exent
Corp.
Notes to the Financial Statements
For the Years Ended December 31, 2020 and 2019
NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION
Exent Corp. (the “Company”) was incorporated under the laws of the State of Nevada on February 15, 2017. The Company was primarily engaged in manufacturing and sales of steel drywall studs since its inception.
During the fiscal year ended December 31, 2019, the Company sold the machine it was utilizing for studs manufacturing as it was outdated. Production was thus placed on hold until new equipment could be purchased.
On February 3, 2020, pursuant to a stock purchase agreement dated on January 21, 2020, an individual investor (Mr. Weining Zheng) purchased 1,500,000 shares of the Company's common stock from the Company's then majority stockholder, Marat Asylbekov, representing 74% of the voting securities of the Company. Following this change of control, the Company changed its business plan to engage in the "smart-home" business in the People's Republic of China.
The Company plans to conduct smart-home business in the People’s Republic of China, with a focus on developing, promoting and executing high quality integrated smart-home systems and solutions. The Company is presently evaluating the optimal corporate and legal structures in China necessary to establish its business. Given the impact of the novel coronavirus epidemic on the general economy of China and the smart-home industry in particular, the Company has delayed its plan to start the proposed smart-home business until 2021. The Company expects that the funds to finance the commencement of this new business or the acquisition of and/or investment in an existing smart home businesses in China will primarily come from its majority stockholder, Mr. Zheng.
In March 2020, the Word Health Organization has declared the spread of the novel coronavirus and related illness known as COVID-19 a pandemic. The global economy (including China, the Company’s base of operations) has been significantly impacted by the pandemic. The Company’s current business plans and initiatives have been and are expected to continue to be impacted by the pandemic. The extent of the impact of COVID-19 pandemic on the Company’s ability to execute its business plans and initiatives will depend upon the developments related to the pandemic, including the recurrence, duration and spread of the COVID-19 and lockdown restrictions imposed by the respective national and local governments and oversight bodies in China. All of these factors are uncertain and cannot be easily estimated given the novelty of the pandemic and the risk of outbreak recurrences even in places (such as in China) where initial outbreaks have subsided. Therefore, the Company cannot reasonably estimate the impact of COVID-19 on its future operational and financial performance and implementation of its business plans.
GOING CONCERN
The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred a loss since inception (February 15, 2017) resulting in an accumulated deficit of as of December 31, 2020 and further losses are anticipated in the development of its business. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.
The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months primarily through financings from the Company’s major stockholder.
These financial statements do not reflect adjustments that would be necessary if the Company were unable to continue as a “going concern.” While management believes that the actions already taken or planned will mitigate the adverse conditions and events which raise doubt about the validity of the “going concern” assumption used in preparing these financial statements, there can be no assurance that these actions will be successful. If the Company were unable to continue as a “going concern,” then substantial adjustments would be necessary to the reported amounts of its liabilities, the reported expenses and the balance sheet classifications used.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).
Basic Income (Loss) Per Share
The Company computes earnings (loss) per share in accordance with “ASC-260”, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. There were no dilutive shares outstanding as of December 31, 2020 and 2019.
F-7
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.
Dividends
The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during any of the periods shown.
Income Taxes
The Company follows the liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences). The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
Advertising Costs
The Company’s policy regarding advertising is to expense advertising when incurred. The Company did not incur any advertising expenses for the years ended December 31, 2020 and December 31, 2019.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Stock-Based Compensation
The Company will follow Accounting Standards Codification (“ASC”) 718-10, Stock Compensation, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.
For the years ended December 31, 2020 and 2019, the Company has not issued any stock-based payments to its employees. To date, the Company has not adopted a stock option plan and has not granted any stock options.
Revenue Recognition
On January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers that supersedes most current revenue recognition guidance. The updated guidance, and subsequent clarifications, collectively referred to as ASC 606, require an entity to recognize revenue when it transfers control of promised 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. Previously we recorded revenue based on ASC Topic 605. Adoption of new accounting standard did not have any material impact on our reported revenue.
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Revenue is recognized when the following criteria are met:
| ● | Identification of the contract, or contracts, with customer; |
| ● | Identification of the performance obligations in the contract; |
| ● | Determination of the transaction price; |
| ● | Allocation of the transaction price to the performance obligations in the contract; and |
| ● | Recognition of revenue when, or as, we satisfy performance obligation. |
The Company did not generate any revenue during the years ended December 31, 2020 and 2019.
Property and equipment
Property and equipment are recorded at cost, less accumulated depreciation and impairment. Depreciation of property and equipment is calculated on a straight-line basis, after consideration of expected useful lives and estimated residual values. The estimated annual deprecation rate of these assets are generally as follows:
| Category | Depreciation
years |
Estimated
residual value | ||
| Machinery & equipment | 10 | Nil | ||
| Furniture and fixtures | 10 | Nil | ||
| Computers | 3 | Nil |
Expenditures for maintenance and repairs are expensed as incurred. Gains and losses on disposals are the differences between net sales proceeds and carrying amount of the relevant assets and are recognized in the consolidated statements of operations and comprehensive income.
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
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Taxation
Current income taxes are provided on the basis of net profit for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions.
Deferred income taxes are recognized for temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements, net operating loss carry forwards and credits. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in which temporary differences are expected to be reversed or settled. The effect on deferred tax assets and liabilities of changes in tax rates is recognized in the statement of comprehensive income in the period of the enactment of the change.
The Company considers positive and negative evidence when determining whether a portion or all of its deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry-forward periods, its experience with tax attributes expiring unused, and its tax planning strategies. The ultimate realization of deferred tax assets is dependent upon its ability to generate sufficient future taxable income within the carry-forward periods provided for in the tax law and during the periods in which the temporary differences become deductible. When assessing the realization of deferred tax assets, the Company has considered possible sources of taxable income including (i) future reversals of existing taxable temporary differences, (ii) future taxable income exclusive of reversing temporary differences and carry-forwards, (iii) future taxable income arising from implementing tax planning strategies, and (iv) specific known trend of profits expected to be reflected within the industry.
The Company recognizes a tax benefit associated with an uncertain tax position when, in its judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority. For a tax position that meets the more-likely-than-not recognition threshold, the Company initially and subsequently measures the tax benefit as the largest amount that the Company judges to have a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority. The Company’s liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances, such as the progress of tax audits, case law developments and new or emerging legislation. Such adjustments are recognized entirely in the period in which they are identified. The Company’s effective tax rate includes the net impact of changes in the liability for unrecognized tax benefits and subsequent adjustments as considered appropriate by management. The Company classifies interest and penalties recognized on the liability for unrecognized tax benefits as income tax expense.
Recent Accounting Pronouncements
The Company has reviewed all the recent accounting pronouncements issued to date of the issuance of these financial statements, and does not believe any of these pronouncements will have a material impact on the Company.
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NOTE 3 – PROPERTY AND EQUIPMENT
Property and equipment, net consist of the following:
| December 31, 2020 | December 31, 2019 | |||||||
| US$ | US$ | |||||||
| Machinery and equipment | — | — | ||||||
| Furniture and fixtures | — | 4,900 | ||||||
| Computer | — | 1,250 | ||||||
| Total | — | 6,150 | ||||||
| Less: Accumulated depreciation | — | (1,527 | ||||||
| Property and equipment, net | — | 4,623 | ||||||
Depreciation expenses were recorded in general and administrative expenses. For the year ended December 31, 2020, depreciation expense was $nil compared to $1,631 for the year ended December 31, 2019.
On January 22, 2020, the Company wrote off all furniture and fixtures and computer as a result of the change of control. These fixed assets were still in the use by the Company's previous major stockholder after the change of control and it was determined not worthwhile to collect and transfer these fixed assets from the hand of the previous major stockholder to the Company. The total book value of $4,623 of the furniture and fixtures and computer therefore was wrote off and recorded as a loss in the year ended December 31, 2020.
NOTE 4 – EQUITY
The Company has 75,000,000 shares of common stock authorized with a par value of $0.001 per share. During the year ended December 31, 2020 and 2019, there was no securities issued.
During the year ended December 31, 2020, a related party loan of $26,524 was forgiven by the Company’s former sole officer and director. This debt forgiveness was treated as a capital transaction and hence was recorded into additional paid-in-capital. See Note 5 below for details.
During the year ended December 31, 2020, the Company received capital contributions of $52,981, from its new majority stockholder, Weining Zheng, for working capital uses. The capital contribution was recorded in additional paid-in-capital.
NOTE 5 – RELATED PARTY TRANSACTIONS
In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by officers, directors, or stockholders. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note.
Since its inception through December 31, 2019, the Company’s former sole officer and director, Marat Asylbekov, loaned the Company an aggregate of $26,524 to pay for incorporation costs and operating expenses. As of December 31, 2019, the amount outstanding was $26,524. The loan was non-interest bearing, due upon demand and unsecured. On January 22, 2020, the Company and Mr. Asylbekov entered into a debt forgiveness agreement pursuant to which Mr. Asylbekov forgave the loan with the principal amount of $26,524 that the Company owed to him. Therefore, the Company recorded the $26,524 forgiven loan as a capital transaction in the year ended December 31, 2020.
During the year ended December 31, 2020, the Company received capital contribution of $52,981, from its new majority stockholder, Weining Zheng, for working capital uses.
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NOTE 6 – INCOME TAX
The Company is subject to income tax in the U.S., as well as state of Nevada jurisdictions. As of December 31, 2020, the Company had net operating loss of $116,699 that may be carried forward indefinitely to reduce future years’ taxable income. As of December 31, 2019, the Company had net operating loss carry forwards of $46,994.
Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and the change of control may affect the Company's ability to recognize the net operating losses. Therefore, the Company has recorded full valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.
NOTE 7 - SUBSEQUENT EVENTS
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to December 31, 2020 has determined that it does not have any material subsequent events to disclose in these financial statements.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
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 Controls over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over our financial reporting. In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. A material weakness is a deficiency or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following material weaknesses, which are indicative of many small companies with small staff, as of December 31, 2020: (i) lack of proper segregation of duties and risk assessment process; (ii) lack of formal documentation in internal controls over financial reporting; (iii) lack of multi-level review and oversight in internal control structure and (iv) lack of independent directors and an audit committee. We will devote resources to remediate these material weaknesses as we grow and such resources required for implementing proper internal controls for financial reporting are available.
Because of these material weaknesses, management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2020, based on the criteria established in “2013 Internal Control-Integrated Framework” issued by COSO.
This Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.
Changes in Internal Controls over Financial Reporting
There has been no change in our internal control over financial reporting occurred during this fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
None.
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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
The following table sets forth information regarding our sole director and officer:
| Name | Age | Positions | Date First Appointed | |||
| Li Deng | 35 | President, Treasurer, Secretary and director | February 3, 2020 |
Li Deng has acted as our Chairwoman, President, Treasurer and Secretary since February 3, 2020. Ms. Deng has served as the executive director at Shenzhen Jinguowei Electronic Communication Co., Ltd., a company engaged in manufacture, branding and sales of mobile phones, since May 2015. Prior to that, she was assistant to the general manager and business planning manager at Shenzhen Liandian Art Engineering Co., Ltd., a design company, from April 2007 to March 2015. She received her associate degree in commerce English from Hunan Normal University in China and is pursuing a bachelor’s degree in human resources in South China Normal 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.
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. You will be able to review these documents by accessing our public filings at the SEC’s website at www.sec.gov. In addition, a copy of the code of ethics will be provided without charge upon request to us. We intend to disclose any amendments to or waivers of certain provisions of our code of ethics in a current report on Form 8-K.
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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 Room 6B1-2, Block AB, Tianxiang Building, Che Gong Miao, Futian District, Shenzhen, Guangdong, China 517000.
| Percentage | ||||||||
| Number of | of Shares | |||||||
| Name and Address | Shares Owned | Owned | ||||||
| 5% Stockholders | ||||||||
| Weining Zheng | 1,500,000 | 74 | % | |||||
| Directors and Officers | ||||||||
| Li Deng | — | — | ||||||
ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by officers, directors, or stockholders. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note.
Since its inception through December 31, 2019, the Company’s former sole officer and director, Marat Asylbekov, loaned the Company an aggregate of $26,524 to pay for incorporation costs and operating expenses. As of December 31, 2019, the amount outstanding was $26,524. The loan was non-interest bearing, due upon demand and unsecured. On January 22, 2020, the Company and Mr. Asylbekov entered into a debt forgiveness agreement pursuant to which Mr. Asylbekov forgave the loan with the principal amount of $26,524 that the Company owed to him. Therefore, the Company recorded the $26,524 forgiven loan as a capital transaction in the year ended December 31, 2020.
During the year ended December 31, 2020, the Company received capital contribution of $52,981, from its new majority stockholder, Weining Zheng, for working capital uses.
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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 | $ | 11,250 | $ | 10,000 | ||||
| Audit-related fees | 0 | 0 | ||||||
| Tax fees | 0 | 0 | ||||||
| All other fees | 0 | 0 | ||||||
| Total Fees | $ | 11,250 | $ | 10,000 | ||||
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
| (a) | The following documents are filed as part of this Report: | |
| (1) | Financial Statements | |
| (2) | Financial Statements Schedule | |
All financial statement schedules are omitted because they are not applicable or the amounts are immaterial and not required, or the required information is presented in the financial statements and notes thereto in is Item 15 of Part IV below.
| (3) | Exhibits | |
We hereby file as part of this Report the exhibits listed in the attached Exhibit Index. Exhibits which are incorporated herein by reference can be retrieved from SEC website at www.sec.gov.
Not applicable.
EXHIBIT INDEX
| 3.1 | Articles of Incorporation, incorporated by reference to Exhibit 3.1 to Form S-1, filed with the Commission on February 2, 2018. | |
| 3.2 | Bylaws, incorporated herein by reference to Exhibit 3.2 to Form S-1, filed with the Commission on February 2, 2018 | |
| 31.1* | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1** | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS* | XBRL Instance Document | |
| 101.SCH* | XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | |
| * | Filed herewith. |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| EXENT CORP. | ||||
| Date: April 15, 2021 | By: | /s/ | Li Deng | |
| Name: | Li Deng | |||
| Title: | President, Treasurer and Secretary | |||
| (Principal Executive Officer and Principal Financial and Accounting Officer) | ||||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacities and on the date indicated.
| Name | Position | Date | ||
| /s/ Li Deng | President, Treasurer and Secretary and director | April 15, 2021 | ||
| Li Deng | (Principal Executive Officer and Principal Financial and Accounting Officer) |
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