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| ☐ | Smaller reporting company | ||
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SHENGSHI ELEVATOR INTERNATIONAL HOLDING GROUP INC.
QUARTERLY REPORT ON FORM 10-Q
For the three months ended March 31, 2022
i
PART I FINANCIAL INFORMATION
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Information contained in this quarterly report on Form 10-Q contains “forward-looking statements.” These forward-looking statements are contained principally in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology. The forward-looking statements herein represent our expectations, beliefs, plans, intentions or strategies concerning future events, including, but not limited to: our ability to consummate the Merger, as such term is defined below; the continued services of the Custodian as such term is defined below; our future financial performance; the continuation of historical trends; the sufficiency of our resources in funding our operations; our intention to engage in mergers and acquisitions; and our liquidity and capital needs. Our forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that any projections or other expectations included in any forward-looking statements will come to pass. Moreover, our forward-looking statements are subject to various known and unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. These risks, uncertainties and other factors include but are not limited to: the risks of limited management, labor, and financial resources; our ability to establish and maintain adequate internal controls; our ability to develop and maintain a market in our securities; and our ability obtain financing, if and when needed, on terms that are acceptable. Except as required by applicable laws, we undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.
As used in this quarterly report on Form 10-Q, “we”, “our”, “us” and the “Company” refer to Shengshi Elevator International Holding Group Inc. a Nevada corporation unless the context requires otherwise.
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Item 1. Financial Statements.
Index to Financial Statements
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SHENGSHI ELEVATOR INTERNATIONAL HOLDING GROUP INC.
Balance Sheets
| March 31, 2022 | December 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Prepayment | $ | $ | ||||||
| Total current assets | ||||||||
| Total assets | ||||||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Advance from customers | ||||||||
| Accrued expenses and other liabilities | ||||||||
| Amount due to a director | ||||||||
| Amount due to third parties | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Long term payable | ||||||||
| Lease liability | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Stockholders’ Deficit | ||||||||
| Preferred stock $ par value, shares authorized, and shares outstanding as of March 31, 2022 and December 31, 2021, respectively | ||||||||
| Common Stock $ par value, shares authorized, 603,970,000 shares and shares outstanding as of March 31, 2022 and December 31, 2021, respectively | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements
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SHENGSHI ELEVATOR INTERNATIONAL HOLDING GROUP INC.
Statements of Operations and Comprehensive Loss
(Unaudited)
| For the three months ended | ||||||||
| March 31, | ||||||||
| 2022 | 2021 | |||||||
| Revenue | ||||||||
| Total revenue, net | $ | $ | ||||||
| Operating expenses | ||||||||
| General and administrative expenses | ||||||||
| Total operating expenses | ||||||||
| Loss from operations before income taxes | ( | ) | ( | ) | ||||
| Income tax expense | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of ordinary shares | ||||||||
| Basic and diluted | ||||||||
| Earnings per share | ||||||||
| Basic and diluted | $ | ( | ) | $ | ( | ) | ||
The accompanying notes are an integral part of these financial statements
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SHENGSHI ELEVATOR INTERNATIONAL HOLDING GROUP INC.
Statements of Changes in Shareholders’ Deficit
(Unaudited)
| Preferred Stock | Common Stock | Additional paid in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | capital | Deficit | Total | ||||||||||||||||||||||
| Balance, December 31, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, March 31, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Preferred Stock | Common Stock | Additional paid in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | capital | Deficit | Total | ||||||||||||||||||||||
| Balance, December 31, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, March 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these financial statements
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SHENGSHI ELEVATOR INTERNATIONAL HOLDING GROUP INC.
Statements of Cash Flows
(Unaudited)
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2022 | 2021 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepayment | ( | ) | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Net cash used in operating activities | $ | ( | ) | $ | ( | ) | ||
| Cash Flows From Investing Activities | ||||||||
| Net cash used in investing activities | ||||||||
| Cash Flows From Financing Activities | ||||||||
| Proceeds from related parties | $ | $ | ||||||
| Net cash provided by financing activities | $ | $ | ||||||
| Net (decrease) increase in cash and cash equivalents | ||||||||
| Cash and cash equivalents, beginning of year | ||||||||
| Cash and cash equivalents, end of year | $ | $ | ||||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for income tax expense | $ | $ | ||||||
| Cash paid for interest expense | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements
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SHENGSHI ELEVATOR INTERNATIONAL HOLDING GROUP INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Shengshi Elevator International Holding Group Inc. (formerly known as Galem Group, Inc.) (“Shengshi Holding”, or the “Company”), together with its subsidiaries, focus on elevator technology research and development, sales, maintenance, and installation.
Galem Group, Inc. was incorporated in the State of Nevada on March 31, 2016. On September 5, 2019, Galem Group Inc. changed its name to Shengshi Elevator International Holding Group Inc.
On October 19, 2018, Shengshi International Holdings Co., Ltd. (“Shengshi International”) was incorporated under the law of Cayman Islands.
On September 30, 2019, Shengshi Holding entered into a share exchange agreement (the “Share Exchange Agreement”) with Shengshi International. Under the Share Exchange Agreement, One Hundred Percent (100%) of the ownership interest of Shengshi International was exchanged for shares of common stock of Shengshi Holding. The former stockholders of Shengshi International acquired a majority of the issued and outstanding common stock as a result of the share exchange transaction.
The following is the organization structure of Shengshi International along with ownership detail and its subsidiaries:
Shengshi Shengshun (Hong Kong) Co., Ltd. (“Shengshi Hong Kong”), was established in Hong Kong Special Administrative Region of the People’s Republic of China (the “PRC”) on September 18, 2018.
Shengshi Yinghe (Shenzhen) Technology Co. Ltd. was established as a wholly foreign owned enterprise on November 08, 2018 under the laws of the PRC.
Shenzhen Shengshi Elevator Co., Ltd. (“Shenzhen Shengshi”) was incorporated on April 2, 2014 under the laws of the PRC. Shenzhen Shengshi is an elevator provider company and provides one-stop service to its customers.
Sichuan Shengshi Elevator Technology Co., Ltd. (“Sichuan Shengshi”) was incorporated on July 13, 2018 under the laws of the PRC. Sichuan Shengshi is a wholly owned subsidiary of Shenzhen Shengshi, which has the same business scope and offers similar products and services as Shenzhen Shengshi.
The Company has been dormant since May 14, 2020.
On May 18, 2021, as a result of a receivership in Clark County, Nevada, Case Number: A-21-827642-F, CHENG, Sau Heung was appointed receiver of the Company.
On
July 28, 2021 the Company designated shares of Series A Preferred Stock with a par value of $. These shares were awarded
to Custodian Ventures managed by CHENG, Sau Heung in satisfaction of a judgement in the amount of $
On
December 22, 2021, a Stock Purchase Agreement was entered into between NYJJ (Hong Kong) Limited (the “Seller”) and Atlantis
Glory Company Limited (the “Purchaser”), whose controlling person is Ms. CHENG, Sau Heung, wherein the Purchaser purchased
shares of Series A Preferred Shares, par value $ per share (the “Shares”), of Shengshi Elevator International
Holding Group, Inc., a Nevada corporation (the “Company”). As a result, the Purchaser became an approximately 90% holder
of the voting rights of the issued and outstanding shares of the Company, on a fully-diluted basis, and became the controlling shareholder.
The consideration paid for the Shares was $
On January 3, 2022, the sole officer and director of the Company, CHENG, Sau Heung, tendered his resignations as Director, President, Chief Executive Officer, Secretary, and Treasurer of the Company, and appointed Ms. CHENG, Sau Heung as new President, Chief Executive Officer, Secretary, Treasurer, and Director of the Company, effective January 5, 2022.
The Company’s year-end is December 31.
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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States.
Management’s Representation of Interim Financial Statements
The accompanying unaudited financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These financial statements should be read in conjunction with the audited financial statements and notes thereto on December 31, 2021, as presented in the Company’s Annual Report on Form 10-K.
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 assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ from those estimates. Significant items subject to such estimates and assumptions include valuation of inventory, and recoverability of carrying amount and the estimated useful lives of long-lived assets.
Cash and cash equivalents
The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents as of March 31, 2022.
Income taxes
The Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes”. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FASB ASC 740-10-05, “Accounting for Uncertainty in Income Taxes” prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.
The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit.
8
Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.
Recent Accounting Pronouncements
There are no recent accounting pronouncements that impact the Company’s operations.
NOTE 3 – GOING CONCERN
As
of March 31, 2022, the Company had $-0- in cash and cash equivalents. The Company has net loss of $
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. The Company may raise additional capital through the sale of its equity securities, or through borrowings from financial institutions and related parties. Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern.
NOTE 4 – LIABILITIES AND RELATED PARTY NOTES PAYABLE
As
of March 31, 2022, and December 31, 2021, there were $
NOTE 5 – EQUITY
Common Stock
As of March 31, 2022 and December 31, 2021, the Company has authorized shares of $ par value, common stock, respectively.
As of March 31, 2022 and December 31, 2021, there were shares of Common Stock issued and outstanding, respectively.
Preferred Stock
On
July 28, 2021, the Company designated shares of Series A Preferred Stock with a par value of $. These shares
were awarded to Custodian Ventures managed by David Lazar in satisfaction of a judgment for $
9
Dividend Provisions.
Subject to the rights of any existing series of Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, the holders of shares of Series A Preferred Stock shall be entitled to receive dividends, out of any assets legally available therefor, upon any payment of any dividend (payable other than in Common Stock or other securities and rights convertible into or entitling the holder thereof to receive, directly or indirectly, additional shares of Common Stock of the Corporation) on the Common Stock of the Corporation, as and if declared by the Board of Directors, as if the Series A Preferred Stock had been converted into Common Stock.
Liquidation Preference. In the event of any liquidation, dissolution, or winding up of the Corporation, either voluntary or involuntary, the holders of the Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Corporation to the holders of Common Stock, or any other series or class of common stock of the Corporation, whether now in existence or hereafter created by an amendment to the articles of incorporation of the Corporation or by a certificate of designation.
Conversion.
The holders of the Series A Preferred Stock, shall have conversion rights as follows (the “Conversion Rights”): (a) Right to Convert. Subject to Section 4(c), the holder of issued and outstanding shares of Series A Preferred Stock shall be entitled to convert the Series A Preferred Stock, at the option of the holder(s) thereof, at any time after the date of issuance of such shares, at the office of the Corporation or any transfer agent for such stock, into such number of fully paid and nonassessable shares of Common Stock that are equal to ninety percent (90%), post conversion, of the total number of issued and outstanding shares of Common Stock of the Corporation, as if all i) Series A Preferred Stock, ii) other issued and outstanding classes or series of common or preferred stock of the Corporation convertible into Common Stock of the Corporation, and iii) outstanding warrants, notes, indentures and/or other instruments, obligations or securities convertible into Common Stock of the Corporation are converted (the “Conversion Shares”), with the shares of Series A Preferred Stock so converted to be converted into the number of common shares equal to the Conversion Shares multiplied by the quotient of the number of the shares of Series A Preferred Stock converted by a holder divided by the number of all Series A Preferred Stock issued and outstanding.
As of March 31, 2022 and December 31, 2021, there were Series A Preferred Stock issued and outstanding, respectively.
NOTE 6 – COMMITMENTS AND CONTINGENCIES
The
Company did
NOTE 7 – SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements.
NOTE 8 – SIGNIFICANT EVENTS
On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally.
The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on our financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on our financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, we are not able to estimate the effects of the COVID-19 outbreak on our results of operations, financial condition, or liquidity for the period ended March 31, 2022.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Organizational History of the Company and Overview
Plan of Operation
The Company has no operations from a continuing business other than the expenditures related to running the Company and has no revenue from continuing operations as of the date of this Report.
Management intends to explore and identify business opportunities, including a potential acquisition of an operating entity through a reverse merger, asset purchase or similar transaction. Our ability to effectively identify, develop and implement a viable plan for our business may be hindered by risks and uncertainties which are beyond our control, including without limitation, the continued negative effects of the coronavirus pandemic on the U.S. and global economies. For more information about the risk of coronavirus on our business, see Item 1A “Risk Factors”.
We do not currently engage in any business activities that provide revenue or cash flow. During the next 12-month period we anticipate incurring costs in connection with investigating, evaluating, and negotiating potential business combinations, filing SEC reports, and consummating an acquisition of an operating business.
Given our limited capital resources, we may consider a business combination with an entity which has recently commenced operations, is a developing company or is otherwise in need of additional funds for the development of new products or services or expansion into new markets, or is an established business experiencing financial or operating difficulties and is in need of additional capital. Alternatively, a business combination may involve the acquisition of, or merger with, an entity which desires access to the U.S. capital markets.
As of the date of this Report, our management has not had any discussions with any representative of any other entity regarding a potential business combination. Any target business that is selected may be financially unstable or in the early stages of development. In such event, we expect to be subject to numerous risks inherent in the business and operations of a financially unstable or early-stage entity. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk or in which our management has limited experience, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.
Our management anticipates that we will likely only be able to effect one business combination due to our limited capital. This lack of diversification will likely pose a substantial risk in investing in the Company for the indefinite future because it will not permit us to offset potential losses from one venture or operating territory against gains from another. The risks we face will likely be heightened to the extent we acquire a business operating in a single industry or geographical region.
We anticipate that the selection of a business combination will be a complex and risk-prone process. Because of general economic conditions, including unfavorable conditions caused by the coronavirus pandemic, rapid technological advances being made in some industries and shortages of available capital, management believes that there are a number of firms seeking business opportunities at this time at discounted rates with which we will compete. We expect that any potentially available business combinations may appear in a variety of different industries or regions and at various stages of development, all of which will likely render the task of comparative investigation and analysis of such business opportunities extremely difficult and complicated. Once we have developed and begun to implement our business plan, management intends to fund our working capital requirements through a combination of our existing funds and future issuances of debt or equity securities. Our working capital requirements are expected to increase in line with the implementation of a business plan and commencement of operations.
Based upon our current operations, we do not have sufficient working capital to fund our operations over the next 12 months. If we are able to close a reverse merger, it is likely we will need capital as a condition of closing that acquisition. Because of the uncertainties, we cannot be certain as to how much capital we need to raise or the type of securities we will be required to issue. In connection with a reverse merger, we will be required to issue a controlling block of our securities to the target’s shareholders which will be very dilutive.
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Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences, or privileges senior to our Common Stock. Additional financing may not be available upon acceptable terms, or at all. 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.
We anticipate that we will incur operating losses in the next 12 months, principally costs related to our being obligated to file reports with the SEC. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development. Such risks for us include, but are not limited to, an evolving and unpredictable business model, recognition of revenue sources, and the management of growth. To address these risks, we must, among other things, develop, implement, and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain, and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business prospects, financial condition, and results of operations.
Results of Operations
The following summary of our results of operations should be read in conjunction with our financial statements for the three months ended March 31, 2022 and 2021, which are included herein.
Our operating results for the three months March 31, 2022 and 2021, and the changes between those periods for the respective items are summarized as follows:
| Three months ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Revenues | - | - | ||||||
| Operating expenses | ||||||||
| General and administrative expenses | 29,959 | 2,000 | ||||||
| Total operating expenses | 29,959 | 2,000 | ||||||
| Loss from operations before income taxes | (29,959 | ) | (2,000 | ) | ||||
| Income tax expense | - | - | ||||||
| Net Loss | (29,959 | ) | (2,000 | ) | ||||
| Unrealized gain on currency translation adjustment | - | - | ||||||
| Total Comprehensive loss | (29,959 | ) | (2,000 | ) | ||||
| Weighted average number of ordinary shares, Basic and diluted | 603,970,000 | 603,970,000 | ||||||
| Earnings per share, Basic and diluted | (0.00 | ) | (0.00 | ) | ||||
Comparison of the three months ended March 31, 2022 and 2021
Revenues
Revenues were $0 for the three months ended March 31, 2022 and 2021.
Operating Expenses
Our general and administrative expenses increased from $2,000 for the three months ended March 31, 2021 to $29,959 for the three months ended March 31, 2022. The increase was mainly attributed to the professional fee to different parties during the period.
Net Loss
Our net loss increased from $2,000 for the three months ended March 31, 2021 to $29,959 for the three months ended March 31, 2022. The increase was mainly attributed to the professional fee to different parties during the period.
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Liquidity and Capital Resources
Since the inception of the Company, we have incurred significant net losses and negative cash flows from operations. During the three months ended March 31, 2022 and 2021, we had net losses of $29,959 and $2,000, respectively. As of March 31, 2022, we had an accumulated deficit of $9,300,039. As discussed in our financial statements for the three months ended March 31, 2022, these factors raise substantial doubt about our ability to continue as a going concern.
As of March 31, 2022, we had cash and cash equivalents of $0. To date, we have financed our operations principally through borrowings from our related parties. Depending on our future operational results, we may need to conduct one or more equity or debt financings within the next 12 months.
We could potentially need our available financial resources sooner than we currently expect, and we may incur additional indebtedness to meet future financing needs. Adequate additional funding may not be available to us on acceptable terms or at all. In addition, although we anticipate being able to obtain additional financing through non-dilutive means, we may be unable to do so. Our failure to raise capital as and when needed could have significant negative consequences for our business, financial condition and results of operations. Our future capital requirements and the adequacy of available funds will depend on many factors, many of which are beyond our control.
Operating Activities
Net cash used in operating activities for the three months ended March 31, 2022 and 2021 were $31,830 and $2,000, respectively.
Investing Activities
Net cash used in investing activities for the three months ended March 31, 2022 and 2021 were $0.
Financing Activities
Net cash provided by financing activities for the three months ended March 31, 2022 and 2021 were $31,830 and $2,000, respectively.
Critical Accounting Policies and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or “GAAP.” The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. In accordance with GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
Our significant accounting policies are fully described in Note 2 to our financial statements appearing elsewhere in this Quarterly Report, and we believe those accounting policies are critical to the process of making significant judgments and estimates in the preparation of our financial statements.
Off-Balance Sheet Arrangements
None.
Item 3. Quantitative And Qualitative Disclosures About Market Risk.
As a “smaller reporting company”, we are not required to provide the information required by this Item.
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Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures.
Our management is responsible for establishing and maintaining a system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
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 control over financial reporting includes those policies and procedures that:
| ● | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; | |
| ● | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and | |
| ● | 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 policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting based on the parameters set forth above and has concluded that as of March 31, 2022, 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 as a result of the following material weaknesses:
| ● | The Company does not have sufficient segregation of duties within accounting functions due to only having one officer and limited resources. | |
| ● | The Company does not have an independent board of directors or an audit committee. | |
| ● | The Company does not have written documentation of our internal control policies and procedures. |
We plan to rectify these weaknesses by implementing an independent board of directors, establishing written policies and procedures for our internal control of financial reporting, and hiring additional accounting personnel at such time as we complete a reverse merger or similar business acquisition.
Changes in Internal Control over Financial Reporting.
There have been no change in our internal control over financial reporting during three months ended March 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II OTHER INFORMATION
Item 1. Legal Proceedings.
The Company may be involved in certain legal proceedings that arise from time to time in the ordinary course of its business. Legal expenses associated with any contingency are expensed as incurred. The Company’s officers and directors are not aware of any threatened or pending litigation to which the Company is a party or which any of its property is the subject and which would have any material, adverse effect on the Company.
Item 1A. Risk Factors.
Reference is made to the risks and uncertainties disclosed in Item 1A (“Risk Factors”) of our Annual Report on Form 10-K for the period ended December 31, 2021 filed March 15, 2022 which sections are incorporated by reference into this report, as the same may be updated from time to time. Prospective investors are encouraged to consider the risks described in our 2021 Form 10-K, and our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Report and other information publicly disclosed or contained in documents we file with the Securities and Exchange Commission before purchasing our securities.
As a smaller reporting company, the Company is not required to disclose material changes to the risk factors that were contained in the 2021 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
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Item 6. Exhibits.
The exhibits listed on the Exhibit Index below are provided as part of this report.
| Exhibit No. | Description | |
| 31.1* | Certification of principal executive and financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended. | |
| 32.1* | Certification of principal executive officer and principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended. | |
| 101.INS* | XBRL INSTANCE | |
| 101.SCH* | XBRL TAXONOMY EXTENSION SCHEMA | |
| 101.CAL* | XBRL TAXONOMY EXTENSION CALCULATION | |
| 101.DEF* | XBRL TAXONOMY EXTENSION DEFINITION | |
| 101.LAB* | XBRL TAXONOMY EXTENSION LABELS | |
| 101.PRE* | XBRL TAXONOMY EXTENSION PRESENTATION |
| * | Filed herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SHENGSHI ELEVATOR INTERNATIONAL HOLDING GROUP INC. | ||
| Dated: May 16, 2022 | By: | /s/ CHENG, Sau Heung |
| CHENG, Sau Heung | ||
Chief Executive Officer (Principal
Executive Officer and | ||
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