10-Q 1 sntw20231231.htm QTR. REPORT - DEC. 31, 2023
false Q1 2024 --09-30 0001619096 0001619096 2023-10-01 2023-12-31 0001619096 2023-12-31 0001619096 2023-09-30 0001619096 2022-10-01 2022-12-31 0001619096 us-gaap:CommonStockMember 2023-09-30 0001619096 us-gaap:AdditionalPaidInCapitalMember 2023-09-30 0001619096 us-gaap:RetainedEarningsMember 2023-09-30 0001619096 us-gaap:CommonStockMember 2023-10-01 2023-12-31 0001619096 us-gaap:AdditionalPaidInCapitalMember 2023-10-01 2023-12-31 0001619096 us-gaap:RetainedEarningsMember 2023-10-01 2023-12-31 0001619096 us-gaap:CommonStockMember 2023-12-31 0001619096 us-gaap:AdditionalPaidInCapitalMember 2023-12-31 0001619096 us-gaap:RetainedEarningsMember 2023-12-31 0001619096 2022-09-30 0001619096 2022-12-31 0001619096 2023-04-01 2023-04-13 0001619096 2023-04-13 0001619096 sntw:MrChaoxiaHuanMember 2023-10-01 2023-10-02 0001619096 sntw:MrChaoxiaHuanMember 2023-10-02 0001619096 us-gaap:FurnitureAndFixturesMember 2023-12-31 0001619096 us-gaap:FurnitureAndFixturesMember 2023-09-30 0001619096 2019-07-08 0001619096 us-gaap:CommonStockMember 2019-07-08 0001619096 us-gaap:PreferredStockMember 2019-07-08 0001619096 2019-07-01 2019-07-17 0001619096 sntw:MoralArrivalShareExchangeAgreementMember 2020-01-01 2020-01-07 0001619096 sntw:MsLiuMember 2020-11-01 2020-11-11 0001619096 sntw:CatalpaHoldingsIncMember 2021-02-03 0001619096 sntw:CatalpaHoldingsIncMember 2020-10-01 2021-09-30 0001619096 sntw:MrJunDuMember 2021-05-13 0001619096 sntw:MrJunDuMember 2020-10-01 2021-09-30 0001619096 sntw:YouyangJohnChengMember 2023-04-01 2023-04-13 0001619096 sntw:JianHuaJamesShuMember 2023-04-13 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q 

(Mark One)

 

Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

  For the quarterly period ended December 31, 2023

   

Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

  For the transition period from _______ to

 

Commission File Number: 333-199108

 

SUMMIT NETWORKS INC.

(Exact Name of Registrant as Specified in Its Charter)

 

Nevada   35-2511257

(State or Other Jurisdiction of

Incorporation or Organization)

  (I.R.S. Employer
Identification No.)

 

3010-8888 Odlin Cresent, Richmond, BC Canada   V6X 3Z8
(Address of principal executive offices)   (Zip Code)

 

-i-

 

 

(604) 232-3968

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)  

Name of each exchange on

which registered

None   None   None

 

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

 

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

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

 

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

 

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

 

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

 

The number of shares outstanding of each of the issuer’s classes of common stock, as of December 31, 2023 is as follows:

 

Class of Securities   Shares Outstanding
Common Stock, $0.001 par value   67,806,657

 

 

-ii-

 

 

SUMMIT NETWORKS INC.

TABLE OF CONTENTS

 

    PAGE
PART I    
     
Item 1. Condensed Consolidated Unaudited Financial Statements 2
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 12
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 13
     
Item 4. Controls and Procedures 13
     
PART II    
     
Item 1. Legal Proceedings 14
     
Item 1A. Risk Factors 14
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 15
     
Item 3. Defaults Upon Senior Securities 15
     
Item 4. Mining Safety Disclosures 15
     
Item 5. Other Information 15
     
Item 6. Exhibits 16
     
  Signatures 16

 

Cautionary Note Regarding Forward-Looking Statements

 

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the financial position, business strategy and the plans and objectives of management for future operations of Summit Networks Inc. (the “Company”), are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the “Risk Factors” section of the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on December 5, 2022. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

 

 -1- 

 

 

PART I

 

FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS.

 

SUMMIT NETWORKS INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

           
   December 31,   September 30, 
   2023   2023 
ASSETS          
Current Assets:          
Cash & cash equivalents  $101,812   $149,614 
Deposits   12,545    12,545 
Prepayments   2,218    2,218 
Total Current Assets   116,575    164,377 
           
Non-Current Asset:          
Fixed assets, net   -    - 
Total Non-Current Asset   -    - 
           
TOTAL ASSETS  $116,575   $164,377 
           
LIABILITIES & STOCKHOLDERS’ DEFICIT          
Current Liabilities:          
Accounts payable and accrued expenses  $27,088   $123,847 
Due to related parties   579,000    579,000 
Total Current Liabilities   606,088    702,847 
           
Stockholders’ Deficit:          
Preferred stock, $0.001 par value, 10,000,000 shares authorized; 0 share issued and outstanding   -    - 
Common stock, $0.001 par value, 500,000,000 shares authorized; 67,806,657 and 67,139,990 issued and outstanding as of December 31, 2023 and September 30, 2023, respectively.   67,807    67,140 
Additional paid-in capital   688,200    588,867 
Accumulated deficit   (1,245,520)   (1,194,477)
Total Stockholders’ Deficit   (489,513)   (538,470)
TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT  $116,575   $164,377 

 

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

 

 -2- 

 

 

SUMMIT NETWORKS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

           
   For three months ended 
   December 31,   December 31, 
   2023   2022 
Revenue  $-   $- 
Other Income:          
Interest income   1,372    - 
Total Other Income  $1,372   $- 
Operating Expenses:          
General and administrative expenses   52,415    28,185 
Loss from operations   (52,415)   (28,185)
Net Loss  $(51,043)  $(28,185)
           
Basic Net loss per share  $(0.00)  $(0.00)
Diluted Net loss per share  $(0.00)  $(0.00)
           
Weighted average number of common shares outstanding   67,806,657    67,049,990 
           
Diluted weighted average number of common shares outstanding   67,806,657    67,049,990 

 

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

 

 -3- 

 

 

SUMMIT NETWORKS INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

(Unaudited)

 

                          
   Common Stock   Additional
Paid-in
   Accumulated     
   Shares   Amount   Capital   Deficit   Total 
Balance, September 30, 2023   67,139,990   $67,140   $588,867   $(1,194,477)  $(538,470)
Issuance of new shares   666,667    667    99,333    -    100,000 
Net loss   -    -    -    (51,043)   (51,043)
Balance, December 31, 2023   67,806,657   $67,807   $688,200   $(1,245,520)  $(489,513)

 

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

 

 -4- 

 

 

SUMMIT NETWORKS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

           
   For three months ended 
   December 31, 
   2023   2022 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(51,043)  $(28,185)
Changes in operating assets and liabilities:          
Accounts payable and accrued expenses   3,241    15,601 
Accounts payable - related parties   -    6,000 
Deposit   -    3,285 
Net cash used in operating activities   (47,802)   (3,299)
           
CASH FLOWS FROM FINANCING ACTIVITY:          
Proceeds from issuance of common stock  $-   $200,000 
Cash generated from financing activity   -    200,000 
           
Net (decrease)/increase in cash and cash equivalents   (47,802)   196,701 
Cash and cash equivalents at beginning of period   149,614    8,829 
Cash and cash equivalents at end of period  $101,812   $205,530 
           
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:          
Cash paid during the period for :          
Interest  $-   $- 
Income Taxes  $-   $- 

 

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

 

 -5- 

 

 

SUMMIT NETWORKS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Unaudited)

 

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Summit Networks Inc. (together with its subsidiary, the “Company”) was incorporated under the laws of the State of Nevada on July 8, 2014. Originally, the Company was formed to engage in the development and operation of a business engaged in the distribution of glass craft products produced in China. On May 8, 2018, the Company acquired Real Capital Limited, a Hong Kong company (“Real Capital”), to seek opportunities in the food and beverage industry. On March 31, 2019, the Company entered into a Share Purchase Agreement (the “Real Capital SPA”) pursuant to which it sold its interests in Real Capital. The closing of the Real Capital SPA occurred on April 10, 2019.

 

On July 17, 2019, the Company received FINRA approval to effect a 10-for-1 stock dividend to holders of its common stock as of June 1, 2019, the record date for the dividend. As a result, common stock figures, share capital, additional paid in capital, and earnings per share information have been retroactively adjusted to reflect the stock dividend.

 

On May 8, 2020, Sumnet (Canada) Inc. (“Sumnet (Canada)”) was incorporated in Canada. Sumnet (Canada) issued all its ordinary shares to the Company so that Sumnet (Canada) became the wholly owned subsidiary of Company. On July 29, 2020, Smith Barney Enterprises Limited (“Smith Barney”) was incorporated in the British Virgin Islands. Smith Barney issued all its ordinary shares to the Company on July 29, 2020, so that Smith Barney became the wholly owned subsidiary of Company. On August 28, 2020, Green Energy (HK) Limited (“Green Energy”) was incorporated in Hong Kong. Green Energy issued all its ordinary shares to Smith Barney on August 28, 2020, so that Green Energy became the wholly owned subsidiary of Smith Barney. On September 27, 2020, Beijing Asian League Wins Technology Co., Ltd. (“Beijing ALW”) was incorporated in People’s Republic of China. Green Energy subscribed all capital stock of Beijing ALW on September 27, 2020, so that Beijing ALW became the wholly owned subsidiary of Green Energy.

 

On January 20, 2021, Beijing ALW and Green Energy entered into a series of contractual agreements (the “VIE Agreement”) with Hengshui Jingzhen Environmental Company Limited (“Hengshui Jingzhen”, or the “VIE”), whereby Beijing ALW gained control over Hengshui Jingzhen, a P.R. China company, which provides integrated hazardous waste management services, including collecting, transferring, disposing, and recycling of hazardous waste, primarily in Hebei, China. On March 29, 2021, the board of directors and a majority shareholder of the Company approved the termination of the VIE Agreements with Hengshui Jingzhen. On the same date, Beijing ALW, Hengshui Jingzhen, and Hengshui Jingzhen’s shareholders entered into a Termination Agreement (the “Termination Agreement”) to terminate all existing VIE Agreements signed on January 20, 2021. Pursuant to the Termination Agreement, all of the rights and obligations under the existing VIE Agreements were terminated and the Company no longer had control of Hengshui Jingzhen.

 

On January 20, 2021, the Company changed its fiscal year-end from July 31 to September 30.

 

On November 30, 2022, the Company signed a general agreement of cooperation with Future Era Tech Inc (hereinafter referred to as "FET"). In October 2023, SNTW and FET agreed to establish a new business model in the daily consumer goods segment, to organize suppliers to set up downstream companies and stores and direct supply chain to consumers, i.e. S2B2C. At present, we have completed our analysis of this model and a detailed business plan is being prepared. Management anticipates that the new business model will be funded through our next round of financing, if any deployment.

 

On April 13, 2023, the Company issued 90,000 shares of its common stock, par value $0.001 per share equitably allocated to Mr. Youyang (John) Cheng, the director, Mr. Jian Hua James Shu, the director and Mr. Weiwei (Ricky) Jiang, the director.

 

 -6- 

 

 

On October 2, 2023, the company issued 666,667 shares of common stock to Mr. Chaoxia Huang, par value $ 0.15 per share for $100,000.05 as the operating capital.

 

NOTE 2. GOING CONCERN

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

 

The Company had limited operations and has not generated any revenue since its inception July 8, 2014 resulting in accumulated deficit of 1,245,520 as of December 31, 2023. There is no guarantee that Company will generate revenue and net income in the future. Since a trial order on December 28, 2022, shows that the company has moved from no revenue to a functioning business model.

 

On December 31, 2023, the Company had a working capital deficiency of $489,513. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include adjustments that might result from the outcome of this uncertainty.

 

The ability of the Company to continue as a going concern is dependent on the undertaking of its shareholders to provide continuing financial support to enable the Company to meet its liabilities as and when they fall due.

 

The Company actively looks for new business opportunities, and its operating expenses are solely paid for by loans from the shareholders.

 

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation and Consolidation

 

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (GAAP).

 

Use of Estimates

 

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash and Cash Equivalents

 

Cash and cash equivalents are on deposit with financial institutions without any restrictions. As of December 31, 2023 and September 30, 2023, cash equivalents amounted to $101,812 and $149,614 respectively.

 

Fixed Assets

 

Property, plant and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related capitalized assets.

 

 -7- 

 

 

Related Parties

 

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

 

Share-Based Compensation 

 

The Company follows the provisions of ASC Topic 718, Compensation - Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, non-employee directors, and consultants. Stock compensation expense, which is based on the grant date’s fair value estimated in accordance with the provisions of ASC 718, is recognized as an expense over the requisite service period, and the Company made a policy election to recognize forfeitures when they occur.

 

Income Taxes

 

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes''. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

 

Net Loss per share

 

The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

 

Fair Value

 

ASC 740 provides guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. If the Company determines that an uncertain tax position exists in which the Company could incur income taxes, the Company will evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities. A liability for uncertain tax positions would then be recorded if the Company determined it is more likely than not that a position would not be sustained upon examination or if a payment would have to be made to a taxing authority and the amount is reasonably estimable. The Company does not believe any uncertain tax positions exist that would result in the Company having a liability to the taxing authorities. The Company classifies interest and penalties related to unrecognized tax benefits, if and when required, as part of interest expense and other expense in the statements of operations. As of December 31, 2023, the Company did not have any amounts recorded pertaining to uncertain tax positions

 

Fair Value Measurements

 

The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

 

The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

 

 -8- 

 

 

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

 

Level 1 — quoted prices in active markets for identical assets or liabilities

 

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

 

Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

 

The Company has no assets or liabilities valued at fair value on a recurring basis.

 

Recent Accounting Pronouncements

 

The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date. The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations. 

 

NOTE 4. EXECUTION AND TERMINATION OF VIE AGREEMENTS

 

On January 20, 2021, Beijing ALW and Green Energy entered into a series of contractual arrangements, including Equity Pledge Agreement, Exclusive Technology Development, Consulting and Services Agreement, Exclusive Option Agreement, and Irrevocable Power of Attorney (collectively, the “VIE Agreements”) with Hengshui Jingzhen, whereby Beijing ALW gained control over Hengshui Jingzhen, a P.R. China company, which provides integrated hazardous waste management services, including collecting, transferring, disposing, and recycling of hazardous waste, primarily in Hebei, China. This transaction was accounted for as a reverse merger in which the Company was the legal acquirer and Hengshui Jingzhen was the accounting acquirer.

 

On March 29, 2021, due to changes of the Company’s business plan, the board of directors and a majority shareholder of the Company approved the termination of the VIE Agreements with Hengshui Jingzhen. On the same date, Beijing ALW, Hengshui Jingzhen, and Hengshui Jingzhen’s shareholders entered into a Termination Agreement to terminate all existing VIE Agreements signed on January 20, 2021. Pursuant to the Termination Agreement, all of the rights and obligations under the existing VIE Agreements were terminated and the Company had no control of Hengshui Jingzhen. Currently, two wholly-owned BVI subsidiaries, Smith Barney, Green Energy and Beijing ALW were terminated. Therefore, In order to avoid unforeseen risk, we ceased our waste disposal and pollution treatment business in China.

 

 -9- 

 

 

NOTE 5. FIXED ASSETS

 

Fixed assets consisted of the following: 

 

          
   December 31,
2023
   September 30,
2023
 
         
Office furniture  $5,536   $5,536 
    5,536    5,536 
Less: Accumulated depreciation   (5,536)   (5,536)
Property, plant, and equipment, net  $-   $- 

 

Depreciation expenses for the three months ended December 31, 2023 and September 30, 2023 were $Nil and $Nil, respectively.

 

NOTE 6. RELATED PARTY BALANCES AND TRANSACTIONS

 

Related Party Balances

 

(i) Amounts due to related parties:

 

As of December 31, 2023 and September 30, 2023, the amounts due to the shareholders of the Company, Shuhua Liu and Chiu Kin Wong, were $579,000 and $579,000, respectively, which were unsecured, non-interest bearing with no specific repayment terms. 

 

NOTE 7. STOCKHOLDERS’ EQUITY

 

On July 8, 2019, the Company filed an Amended and Restated Articles of Incorporation (the "Restated Charter") with the Secretary of State of the State of Nevada. Pursuant to the Restated Charter, the Company's capital stock consists of 510,000,000 shares, of which 500,000,000 are designated common stock and 10,000,000 are designated as preferred stock.

 

On July 17, 2019, the Company received FINRA approval to effect a 10-for-1 stock dividend to holders of its common stock as of June 1, 2019, the record date for the dividend. As a result, common stock figures, share capital, additional paid in capital, and earnings per share information have been retroactively adjusted for all periods presented to reflect the stock dividend.

 

On January 7, 2020, in connection with the MoralArrival Share Exchange Agreement, the Company issued 3,000,000 shares of common stock to Ms. Liu. On November 11, 2020, the Share Exchange Agreement with MoralArrival was terminated and the 3,000,000 shares issued to Ms. Liu were cancelled.

 

On February 3, 2021, the Company issued 500,000 shares of common stock to Catalpa Holdings, Inc., a third party, as compensation for its consulting services. The fair value of 500,000 was determined to be $15,000 and was recognized as stock- based compensation for the year ended September 30, 2021.

 

On May 13, 2021, the Company issued 500,000 shares of common stock to Mr. Jun Du, the Chief Operating Officer. The fair value of 500,000 was determined to be $15,000 and was recognized as stock-based compensation for the year ended September 30, 2021.

 

 -10- 

 

 

On November 30, 2022, the Company and Future Era Tech (“FET”) signed a master agreement for cooperation. FET purchased 5,000,000 shares for $0.04 and acquired the independent management rights and management rights of the company's subsidiary, SUMNET. FET mainly operates clean energy methanol flameless boilers, as well as the research and development and sales of automated production lines. By December 29, the $200,000 investment had been fully credited to the transaction. The first trial order has also been executed by December 29, 2022.

 

On April 13, 2023, the Company issued 90,000 shares of its common stock, par value $0.001 per share equitably allocated to Mr. Youyang (John) Cheng, the director, Mr. Jian Hua James Shu, the director and Mr. Weiwei (Ricky) Jiang, the director.

 

On October 2, 2023, the company issued 666,667 shares of common stock to Mr. Chaoxia Huang, par value $ 0.15 per share for $100,000.05 as the operating capital.

 

As of December 31, 2023, the Company had 67,806,657 shares of common stock issued and outstanding.

 

NOTE 8 - INCOME TAXES

 

The reconciliation of income tax benefit at the U.S. statutory rate of 21% for three months ended December 31, 2023 and 2022 to the Company’s effective tax rate is as follows:

 

Schedule of reconciliation of income tax benefit          
   Three Months Ended 
   December 31, 
   2023   2022 
US statutory rate   21%   21%
Income tax benefit at statutory rate  $(10,719)  $(5,919)
Change in valuation allowance   10,719    5,919 
Income tax expense  $-   $- 

 

NOTE 9. SUBSEQUENT EVENTS

 

In accordance with FASB ASC 855-10 Subsequent Events, the Company has analyzed its operations subsequent to December 31, 2023, to the date these consolidated financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements, except as follow:

 

On November 30, 2022, Summit Networks Inc (hereinafter referred to as "SNTW") and Future Era Tech Inc (hereinafter referred to as "FET"), signed a general agreement of cooperation. In October 2023, SNTW and FET jointly discussed and decided to set up a new business model platform, in the daily consumer goods segment, to organize the suppliers to set up downstream companies and stores and direct supply chain to consumers, i.e. S2B2C models, businesses partner with other companies to reach new customers. At present, the investigation work of this plan has been completed and a detailed business plan is being prepared. As the start-up project needs financial support, SNTW’s next round of financing is already being deployed.

 

 -11- 

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 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.

 

This section provides management’s discussion of the financial condition, changes in financial condition and results of operations of Summit Networks, Inc. with specific information on results of operations and liquidity and capital resources. It includes management’s interpretation of our financial results, the factors affecting these results, the major factors expected to affect future operating results and future investment and financing plans. This discussion should be read in conjunction with our consolidated financial statements and notes thereto.

 

Several factors exist that could influence our future financial performance and some of those are discussed below and elsewhere in this report. They should be considered in connection with evaluating forward-looking statements contained in this report or otherwise made by us or on our behalf since these factors could cause actual results and conditions to differ materially from those set out in such forward-looking statements.

 

Background

 

Summit Networks Inc. (together with its subsidiary, the “Company”) was incorporated under the laws of the State of Nevada on July 8, 2014. Originally, the Company was formed to engage in the distribution of glass craft products produced in China. On May 8, 2018, we acquired Real Capital Limited, a Hong Kong company (“Real Capital”), to seek opportunities in the food and beverage industry. On March 31, 2019, the Company entered into a Share Purchase Agreement (the “Real Capital SPA”) pursuant to which it sold its interests in Real Capital. The closing of the Real Capital SPA occurred on April 10, 2019.

 

Results of Operations

 

During the three-month period ended December 31, 2023 and 2022, we generated no revenues. Our operating expenses for the same periods were general and administrative expenses of $52,415 and $28,185, respectively. Our general and administrative expenses consisted of mainly professional fees for the year ended December 31, 2023 and the three months ended December 31,2022. The increase of general and administrative expenses was mainly due to the increase of salaries and wages, rent, and professional fees.

 

Our total assets as of December 31, 2023 were $116,575.

 

As of December 31, 2023, the Company had 67,806,657 shares of common stock issued and outstanding.

 

As of December 31, 2023 and September 30, 2023, there are a total of $579,000 and $579,000 in amounts respectively, due to related parties and shareholders were interest free, unsecured and payable on demand.

 

Based on our current operating plan, we may need to obtain additional financing to operate our business. Additional financing, whether through public or private equity or debt financing, or if available.

 

Liquidity and Capital Resources

 

The Company had a negative cash flow of $47,802 for the three months ended December 31, 2023, and a positive cash flow of $196,701 for the three months ended December 31, 2022. Such decrease was primarily due to lower net loss in the year ended December 31, 2023. The net cash provided by the financing activities for the three months ended December 31, 2023 and 2022, was $nil and $200,000 and $nil from related parties.

 

 -12- 

 

 

The Company’s financial statements have been prepared on a going-concern basis which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company’s liquidity and capital needs relate primarily to working capital and other general corporate requirements. The Company’s operations currently provide cash flow. The business will require significant amounts of capital in the near term to sustain operations and make the investments it needs to continue operations and execute its longer-term business plan. As of December 31, 2023, we had $101,812 in cash and cash equivalents. The working capital deficits were $489,513 and $538,470 for the three months ended December 31, 2023 and September 30, 2023, respectively. These factors raise confidence about our ability to continue as a going concern as discussed in the footnotes to our financial statements. However, the company’s management team has established a new plan for financing the Company’s operations in the short run, consisting of financial support by our current shareholders and management. The Company is currently working with other entities to develop a new business plan.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Not applicable.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

Evaluation of Disclosure Controls and Procedures

 

Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. 

 

Based on our evaluation, our Principal Executive Officer and Principal Financial Officer, after considering the existence of material weaknesses identified, determined that our internal control over disclosure controls and procedures were not effective as of December 31, 2023.

 

Evaluation of 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 Securities Exchange Act of 1934, as amended. 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 U.S. generally accepted accounting principles.

 

Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets, (ii) 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 the authorization of our management and directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

 

 -13- 

 

 

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

 

Management, including our Principal Executive Officer and Principal Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. 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 (2013).

 

We identified the following deficiencies which together constitute a material weakness in our assessment of the effectiveness of internal control over financial reporting as of December 31, 2023: 

 

  - The Company has inadequate segregation of duties in the preparation of our financial statements.

 

  - During the period ended December 31, 2023 the Company internally performed all aspects of its financial reporting process, including, but not limited to the underlying accounting records and the recording of journal entries and for the preparation of financial statements. This process was deficient, because these duties were performed often times by the same people, and therefore a lack of review was created over the financial reporting process that might result in a failure to detect errors in spreadsheets, calculations, or assumptions used to compile the financial statements and related disclosures as filed with the SEC. These control deficiencies could result in a material misstatement to our interim or annual financial statements that would not be prevented or detected.

 

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of the control system, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

This report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

 

We regularly review our system of internal control over financial reporting to ensure that we maintain an effective internal control environment. If deficiencies appear in our internal controls, management will make changes that address those deficiencies.

 

Changes in Internal Control Over Financial Reporting

 

There have been no changes in the Company’s internal control over financial reporting that occurred during the reporting period ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

PART II

OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

 

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

 

ITEM 1A. RISK FACTORS.

 

As a smaller reporting company, the Company is not required to provide this information.

 

 -14- 

 

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

There were no sales of unregistered securities of the Company during the quarter ended December 31, 2023.

 

ITEM 3 DEFAULTS UPON SENIOR SECURITIES.

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not applicable.

 

ITEM 5. OTHER INFORMATION.

 

None.

 

 -15- 

 

 

ITEM 6. EXHIBITS.

 

The following exhibits are included with this quarterly filing:

 

Exhibit No.   Description
31.1*   Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a)
31.2*   Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a)
32.1*   Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350
32.2*   Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350
101*   XBRL Instance Document (XBRL tags are embedded within the Inline XBRL document)
104*   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

 

* Filed herewith.

 

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.

 

  Summit Networks Inc.
   
Date: February 9, 2024 By /s/ Shuhua Liu
    Shuhua Liu
    Chief Executive Officer
    (Principal Executive Officer)

 

 -16-