UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended September 30, 2020

 

OR

 

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

 

For the transition period from ________   to ________.

 

Commission File Number: 333-222829

 

Exent Corp.

(Exact name of registrant as specified in its charter)

 

Nevada   35-261167
(State or other jurisdiction   (IRS Employer
of incorporation or organization)   Identification No.)
     

Room 6B1-2, Block AB, Tianxiang Building

Che Gong Miao, Futian District

Shenzhen, Guangdong, People’s Republic of China

  517000
(Address of principal executive offices)   (Zip Code)

 

+86 755-83218411

(Registrant’s telephone number, including area code)

 

Not Applicable

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

 

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

 

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

 

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

 

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 ☐

 

As of November 20, 2020, there were 2,027,000 shares of the registrant’s common stock, par value $0.001 per share, outstanding.

 

 

 

 

 

 

TABLE OF CONTENTS

 

Cautionary Note Regarding Forward-Looking Statements ii
   
PART I – FINANCIAL INFORMATION 1
   
Item 1. Financial Statements 1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures About Market Risk 13
Item 4. Controls and Procedures 13
   
PART II – OTHER INFORMATION 14
   
Item 1. Legal Proceedings 14
Item 1A. Risk Factors 14
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Mine Safety Disclosures 14
Item 5. Other Information 14
Item 6. Exhibits 14
   
SIGNATURES 15

 

i

 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This 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 (“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,” “continues,” 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; and

 

  ● our ability to address and as necessary adapt to changes in foreign, cultural, economic, political and financial market conditions which could impair our future operations and financial performance (including, without limitation, the changes resulting from the global novel coronavirus outbreak of 2019-2020 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. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” in our periodic reports filed with the U.S. Securities and Exchange Commission (the “SEC”). 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. These risks and others described in our periodic reports are not exhaustive.

 

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this report. In addition, even if our results or operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in this report, those results or developments may not be indicative of results or developments in subsequent periods.

 

ii

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Exent Corp.

Condensed Balance Sheets

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

 

    September 30,
2020 		    December 31,
2019 		 
    (Unaudited)     (Audited)  
ASSETS                
Current Assets                
Cash   $ —     $ 10  
Prepaid expenses     7,200       2,747  
Total Current Assets     7,200       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     3,022       —  
Total Liabilities     3,022       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 September 30, 2020 and December 31, 2019     2,027       2,027  
Additional paid-in-capital     101,803       25,823  
Accumulated Deficit     (99,652 )     (46,994 )
Total Stockholders’ Equity (Deficit)     4,178       (19,144 )
                 
Total Liabilities and Stockholders’ Equity   $ 7,200     $ 7,380  

 

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

 

1

 

 

Exent Corp.

Condensed Statements of Operations

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

 

   

For the Three Months
Ended

   

For the Nine Months
Ended

 
    September 30,     September 30,  
    2020     2019     2020     2019  
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  
Revenue   $ —     $ —     $ —     $ —  
Cost of sales     —       —       —       —  
Gross profit     —       —       —       —  
                                 
Operating expenses                                
Professional fees     15,050       2,000       41,200       8,450  
Rent     —       —       —       1,750  
General & administrative expenses     2,928       1,100       6,835       4,127  
Total  operating expenses     17,978       3,100       48,035       14,327  
                                 
Loss from operations     (17,978 )     (3,100 )     (48,035 )     (14,327 )
                                 
Other expense                                
Other expenses – write off of property & equipment     —       —       (4,623 )     —  
Total other expense     —       —       (4,623 )     —  
                                 
Loss before income taxes     (17,978 )     (3,100 )     (52,658 )     (14,327 )
                                 
Provision for income taxes     —       —       —       —  
                                 
Net loss   $ (17,978 )   $ (3,100 )   $ (52,658 )   $ (14,327 )
                                 
Earnings (loss) per common share: basic and diluted     (0.01 )     *       (0.03 )     (0.01 )
                                 

Weighted average number of common shares basic and diluted

    2,027,000       2,027,000       2,027,000       2,027,000  

 

* Less than $0.01

 

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

  

2

 

 

Exent Corp.

Condensed Statements of Changes in Stockholders’ Equity

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

 

For the Three Months Ended September 30, 2020

 

   

Number of

Common

Shares

    Amount     Additional paid-in capital     Accumulated Deficit     Total equity  
Balance as of June 30, 2020 (unaudited)     2,027,000       2,027       70,797       (81,674 )     (8,850 )
Net loss                             (17,978 )     (17,978 )
Forgiveness of related party loan     —       —       —       —       —  
Contributions from stockholders     —       —       31,006       —       31,006  
Balance as of September 30, 2020 (unaudited)     2,027,000       2,027       101,803       (99,652 )     4,178  

 

For the Nine Months Ended September 30, 2020

 

   

Number of

Common

Shares

    Amount     Additional paid-in capital     Accumulated Deficit     Total equity  
Balance as of January 1, 2020     2,027,000     $ 2,027     $ 25,823     $ (46,994 )   $ (19,144 )
Net loss                             (52,658 )     (52,658 )
Forgiveness of related party loan     —       —       26,524       —       26,524  
Contributions from stockholders     —       —       49,456       —       49,456  
Balance as of September 30, 2020 (unaudited)     2,027,000       2,027       101,803       (99,652 )     4,178  

 

For the Three Months ended September 30, 2019

 

   

Number of

Common

Shares

    Amount     Additional paid-in capital     Accumulated Deficit     Total equity  
Balance as of June 30, 2019 (unaudited)     2,027,000     $ 2,027     $ 25,823       (40,854 )     (13,004 )
Net loss                             (3,100 )     (3,100 )
Contributions from stockholders     —       —       —       —       —  
Balance as of September 30, 2019 (unaudited)     2,027,000     $ 2,027     $ 25,823       (43,954 )     (16,104 )

 

For the Nine Months ended September 30, 2019

 

   

Number of

Common

Shares

    Amount     Additional paid-in capital     Accumulated Deficit     Total equity  
Balance as of January 1, 2019     2,027,000     $ 2,027     $ 25,823       (29,627 )     (1,777 )
Net loss                             (14,327 )     (14,327 )
Contributions from stockholders     —       —       —       —       —  
Balance as of September 30, 2019 (unaudited)     2,027,000     $ 2,027     $ 25,823       (43,954 )     (16,104 )

 

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

 

3

 

 

Exent Corp.

Condensed Statements of Cash Flows

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

 

    For Nine Months Ended September 30,
2020 		   

For Nine Months Ended September 30,

2019

 
    (Unaudited)     (Unaudited)  
Operating Activities            
Net loss   $ (52,658 )   $ (14,327 )
Adjustments of non-cash items                
Depreciation expense     —       1,404  
Write-off of property & equipment     4,623       —  
Changes in working capital                
Decrease in accounts receivable     —       —  
Increase (decrease) in prepaid expenses     (4,453 )     (747 )
Increase (decrease) in accounts payable     3,022       (2,198 )
Net cash  used in operating activities     (49,466 )     (15,868 )
                 
Investing  Activities                
Proceeds from sales of capital assets     —       15,000  
Net cash provided by investing activities     —       15,000  
                 
Financing Activities                
Capital contributions from stockholders     49,456       —  
Proceeds from loan from stockholders     —       6,844  
Repayment of stockholder loan     —       (6,500 )
Net cash provided by financing activities     49,456       344  
                 
Net increase in cash and equivalents     (10 )     (524 )
Cash and equivalents at beginning of the period     10       3,030  
Cash and equivalents at end of the period   $ —     $ 2,506  
Supplemental cash flow information:                
Non-cash activities                
Forgiveness of related party loan   $ 26,524     $ —  
                 
Supplemental cash flow information:                
Cash paid for:                
Interest   $ —     $ —  
Income taxes   $ —     $ —  

 

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

 

4

 

 

Exent Corp.
Notes to the Condensed Financial Statements
For the Nine Months Ended September 30, 2020 and 2019

(Unaudited)

 

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 its 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 $99,652 as of September 30, 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.

 

5

 

 

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 Company’s unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The accompanying unaudited condensed financial statements reflect all adjustments, consisting of only normal recurring items, which, in the opinion of management, are necessary for a fair statement of the results of operations for the periods shown and are not necessarily indicative of the results to be expected for the full year ending December 31, 2020. These unaudited condensed financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

 

Basic Earnings (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 September 30, 2020 and December 31, 2019.

 

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.

 

6

 

 

Advertising Costs

 

The Company’s policy regarding advertising is to expense advertising when incurred. The Company did not incur any advertising expenses for the three and nine months ended September 30, 2020 and 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 three and nine months ended September 30, 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.

 

Revenue is recognized when the following criteria are met:

 

  ● Identification of the contract, or contracts, with a 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 three and nine months ended September 30, 2020 and 2019.

 

7

 

 

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.

 

Subsequent Events

 

The Company follows the guidance in ASC 855-10-50 for the disclosure of subsequent events. The Company evaluates subsequent events from the date of the balance sheet through the date when the financial statements are issued.

 

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.

 

8

 

 

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.

 

NOTE 3 – PROPERTY AND EQUIPMENT

 

Property and equipment, net consist of the following:

 

    September 30,
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  

 

9

 

 

Depreciation expenses were recorded in general and administrative expenses. For the nine months ended September 30, 2020, depreciation expense was nil, compared to $1,404 for the same period ended September 30, 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 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 nine months ended September 30, 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 three and nine months ended September 30, 2020 and 2019, there was no securities issued.

 

During the nine months ended September 30, 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 three and nine months ended September 30, 2020, the Company received capital contribution of $31,006 and $49,456, respectively, 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 nine months ended September 30, 2020.

 

During the three and nine months ended September 30, 2020, the Company received capital contribution of $31,006 and $49,456, respectively, from its new majority stockholder, Weining Zheng, for working capital uses.

 

During the nine months ended September 30, 2019, the Company’s former sole officer and director, Marat Asylbekov, provided office space to the Company. The Company did not pay any rent to Mr. Asylbekov. Following the change of control, Li Deng, the Company’s sole executive officer and director, provides office space to the Company free of charge. As a result, there was no rent expense for the three and nine months ended September 30, 2020.

 

NOTE 6 - SUBSEQUENT EVENTS

 

In accordance with ASC 855-10, the Company has analyzed its operations subsequent to September 30, 2020 has determined that it does not have any material subsequent events to disclose in these financial statements.

 

10

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion and analysis of our results of operations and financial condition should be read together with our unaudited condensed financial statements and the notes thereto, which are included elsewhere in this report and our Annual Report on Form 10-K for the year ended December 31, 2019 (the “Annual Report”) filed with SEC. Our financial statements have been prepared in accordance with U.S. GAAP.

 

Exent Corp. (the “Company,” “we” or similar terminology) was 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 of 2019, we sold machine for studs manufacturing as it was outdated. Production thereafter was temporarily on hold until new equipment was to 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 our common stock from our then majority stockholder, Marat Asylbekov, representing 74% of the voting securities of the Company (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 a business aimed at providing high quality integrated technologies and solutions like sensors, Internet and automation control to create a centralized, digital system for homes. 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. Given the impact of the novel coronavirus epidemic on the general economy of China and the smart-home industry in particular, we have decided to delay our plan to start our smart-home business until 2021. We expect that the funds to finance the commencement of this new business or acquisition of and/or investment in existing smart home businesses in China will primarily come from our major stockholder.

 

However, our plan to operate in the smart-home industry may be adversely impacted by the novel coronavirus epidemic, which was first reported to have surfaced in Wuhan, China, in December 2019, and is now continuing to affect the world. Although China has made great efforts to contain the spread of the virus and has appeared to bring the outbreak under control, the economy, financial market and businesses in China have suffered 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 it is no longer in the best interest of our stockholders and the Company to proceed with our original plan.

 

Results of Operations

 

There was no revenue generated for the three and nine months ended September 30, 2020 and 2019.

 

During the three months ended September 30, 2020, we incurred operating expenses of $17,978 as compared to $3,100 during the same period of 2019. The increase in 2020 was due to the increase in professional fees after the Change of Control.

 

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During the nine months ended September 30, 2020, we incurred operating expenses of $48,035 as compared to $14,327 during the same period of 2019. The increase in 2020 was also due to the increase in professional fees after the Change of Control.

 

There were no other expenses incurred during the three and nine months ended September 30, 2020 and 2019.

 

During the nine months ended September 30, 2020, we had other expense of $4,623 relating to the write-off of the Company’s property & equipment after the Change of Control.

 

As a result of the foregoing, our net loss for the three and nine months ended September 30, 2020 was $16,300 and $52,658, respectively, as compared to a net loss of $4,578 and $14,327 for the three and nine months ended September 30, 2019, respectively.

  

Liquidity and Capital Resources

 

As of September 30, 2020, our total assets were $7,200 compared to $7,380 in total assets at December 31, 2019. As of September 30, 2020, our total liabilities were $3,022 compared to $26,524 at December 31, 2019. Stockholders’ equity was $4,178 as of September 30, 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 nine months ended September 30, 2020, net cash flows used in operating activities was $49,466 due to:

 

  ● net loss of $52,658;
  ● non-cash write-off of fixed assets of $4,623;
  ● Decrease in prepaid expenses of $4,453;
  ● Increase in accounts payable of $3,022.

 

Net cash flows used in operating activities was $15,868 for the same period of 2019 due to:

 

  ● net loss of $14,327;
  ● non-cash depreciation expenses of $1,404;
  ● Decrease in prepaid expenses of $747;
  ● Decrease in accounts payable of $2,198.

 

Cash Flows from Investing Activities

  

There were no investing activities for the nine months ended September 30, 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 nine months ended September 30, 2020, we received capital contributions of $49,456 from our current major stockholder for working capital uses. For the same period of 2019, we received loan proceeds of $6,844 from our then sole officer and director, which was offset by a repayment of $6,500 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.

 

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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.

 

Material Commitments

 

Since February 15, 2017 (inception) through December 31, 2019, our former sole officer and director loaned us $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. In connection with the Change of Control in January 2020, the loan in the aggregate principal of $26,524 was forgiven by the former officer and director in full.

  

Off-Balance Sheet Arrangements

 

As of the date of this report, 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 are material to investors.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

 

Not applicable.

  

Item 4. 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 September 30, 2020 due to the material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (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 after we acquire or form an operating business and when such resources required for implementing proper internal controls for financial reporting are available.

 

Changes in Internal Control over Financial Reporting

 

There have not been any changes in our internal controls over financial reporting that occurred during our fiscal quarter ended September 30, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 

 

13

 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

None.

 

Item 1A. Risk Factors.

 

We are a smaller reporting company and accordingly we are not required to provide information required by this Item.

 

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.

 

Not applicable.

 

Item 6. Exhibits.

 

Number   Description
     
31.1*   Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**   Certification pursuant to 18 U.S.C. Section 1350, as adopted 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.

 

14

 

  

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.

 

  Exent Corp.
     
Dated:  November 20, 2020 By: /s/ Li Deng 
    Name: Li Deng
   

Title:   President, Treasurer and Secretary

(Principal Executive Officer and Principal
Financial and Accounting Officer)

 

15

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