NOTES
TO CONDENSED FINANCIAL STATEMENTS
FOR
THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(Expressed
in U.S. Dollars)
(Unaudited)
NOTE
1. BASIS OF PRESENTATION
Unaudited
Interim Financial Statements
These
unaudited interim financial statements may not include all information and footnotes required by US GAAP for complete financial statement
disclosure. However, except as disclosed herein, there have been no material changes in the information contained in the notes to the
audited financial statements for the eleven months ended December 31, 2021, included in the Company’s Transition Report Form 10-KT
and filed with the Securities and Exchange Commission. These unaudited interim financial statements should be read in conjunction with
the audited financial statements included in the Transition Report Form 10-KT. In the opinion of management, all adjustments considered
necessary for fair presentation and consisting solely of normal recurring adjustments have been made. Operating results for the three
and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December
31, 2022.
NOTE
2 - ORGANIZATION AND BUSINESS BACKGROUND
Zhanling
International Ltd (formerly known as Odenza Corp.) (the “Company” or “we”) was incorporated in the State of Nevada
on July 16, 2009 and the Company is a development-stage company which intended to acquire companies in large consumption platform in
China. The Company’s sole purpose currently is to target and complete a merger or acquisition with a private entity.
On
May 4, 2021, Tan Sri Barry resigned from all positions with the Company, including but not limited to, that of President, Chief
Executive Officer, Treasurer, Secretary and Chairman of the Board of Directors. The resignation was not the result of any disagreement
with the Company on any matter relating to the Company’s operations, policies or practices. Tan Sri Barry has been the President,
Chief Executive Officer, Treasurer, Secretary and Chairman of the Board of Directors since February
2013.
On
May 4, 2021, Mr. Leung Chi Ping (“Mr. Leung”), was appointed as the President, Chief Executive Officer, Chief Financial Officer
and Chairman of the Board of Directors of the Company.
On
May 4, 2021, Mr. Leung, Alexander Patrick Brazendale, Christopher David Brazendale, Adventure Air Race Investment Limited, Adventure
Air Race Talents Limited, and William Alexander Cruickshank acquired control of 67,736 shares of the Company’s restricted Common
Stock, representing approximately 92.54% of the Company’s total issued and outstanding Common Stock, from the certain sellers in
accordance with common stock purchase agreements (collectively, the “Stock Purchase Agreements”). The Stock Purchase Agreements
were negotiated in arm’s length transactions.
On
May 7, 2021, the Company received written consents in lieu of a meeting of Stockholders from holders of Common Stock voting securities
representing 92.54% of the total issued and outstanding voting power of the 73,200 shares of Common Stock of the Company (the “Majority
Stockholders”) to authorize the Company’s Board of Directors to approve an increase of authorized shares of Common Stock
from 75,000,000 to 500,000,000 (the “Increase”), par value $0.001 per share.
On
May 7, 2021, the Board of Directors of the Company approved the Increase, subject to Stockholder approval. The Majority Stockholders
approved the Increase by written consent in lieu of a meeting on May 7, 2021.
On June 17, 2021 the Company entered into a binding letter of intent (the “LOI”) for the purpose of doing a Share Exchange
Agreement (“the Agreement”) to acquire Adventure Air Race Company Limited (“AARC”), a Nevada corporation. The
acquisition is subject to (i) the consent of a majority ODZA’s shareholders and to the consent of each of AARC’s shareholders,
and (ii) the completion of a two-year audit of AARC. The Share Exchange Agreement will result in a change of control. The Share Exchange
Agreement contains, among other things, representations and warranties of the aforementioned Parties and covenants of the companies and
the shareholders of AARC. Among other terms, ODZA will own all of the equity of AARC, equaling 130,329,341 shares of AARC’s stock,
and representing all of its issued and outstanding shares. The AARC shareholders (the “Shareholders”) will own 84,000,000
newly issued shares of common stock of ODZA (the Common Stock”) representing approximately 95.82% of ODZA’s outstanding shares
of Common Stock. As the result, AARC will hold no common shares of ODZA, as the wholly owned subsidiary of ODZA. As AARC did not complete
the two years’ audit, ODZA and AARC terminated this agreement on 30 September, 2021. As a result, the closing of the AARC Equity
Transfer has not occurred.
On
December 3, 2021, Mr. Liang Zhao acquired control of 28,548 shares of the Company’s restricted common stock, representing approximately
39% of the Company’s total issued and outstanding common stock; and Xiangchen Li acquired control of 24,532 shares of the Company’s
restricted common stock, representing approximately 33.51% of the Company’s total issued and outstanding common stock, from the
certain sellers in accordance with common stock purchase agreements (collectively, the “Stock Purchase Agreements”). The
Stock Purchase Agreements were negotiated in arm’s- length transactions.
On
December 3, 2021, Chi Ping Leung resigned from all positions with the Company, including but not limited to, that of the President, Chief
Executive Officer, Chief Financial Officer and Chairman of the Board of Directors of the Company. The resignation was not the result
of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Mr. Chi Ping Leung
has been the President, Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors of the Company since
May 2021.
On
December 3, 2021, Mr. Alexander Patrick Brazendale resigned from the Chief Marketing Officer of the Company. Mr. Christopher David Brazendale
resigned from Chief Operating Officer of the Company. Mr. William Alexander Cruickshank resigned from Chief Racing Officer of the Company.
Ms. Wing Man Fok resigned from the Secretary and Treasurer of the Company.
On
December 3, 2021, Mr. Liang Zhao was appointed as the President, Chief Executive Officer, Chief Financial Officer and Chairman of the
Board of Directors of the Company.
As
of June 20, 2022, Mr. Xiangchen Li was appointed as the Chief Marketing Officer of the Company.
NOTE
3 - GOING CONCERN
The
accompanying condensed 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. As reflected in the accompanying condensed financial
statements, for the nine months ended September 30, 2022, the Company incurred a net loss of $27,309, and at September 30, 2022, had
a shareholder’s deficit of $31,648. These factors, among others, raise substantial doubt about the Company’s ability to continue
as a going concern within one year of the date that these financial statements are issued. In addition, the Company’s independent
registered public accounting firm, in its report on the Company’s December 31, 2021 financial statements, raised substantial doubt
about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might
be necessary should the Company be unable to continue as a going concern.
Management
has plans to seek additional capital through a private placement of its Common Stock or further director loans as needed. These financial
statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and
classification of liabilities that might be necessary in the event the Company cannot continue.
NOTE
4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of presentation
The
accompanying condensed financial statements are prepared in accordance with generally accepted accounting principles in the United States
of America (“US GAAP”).
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 of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its
estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual
of costs and expenses that are readily apparent from other sources. The actual results experienced by the Company may differ materially
from the Company’s estimates. To the extent there are material differences, future results may be affected.
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, disclosures of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ
from those estimates. Significant estimates include estimates for the accruals of potential liabilities.
Cash
and cash equivalents
Cash
and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions
and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.
Financial
instruments
The
Company follows the guidance of Accounting Standards Codification (“ASC”) 820-10, “Fair Value Measurements and Disclosures”,
with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy
that prioritizes the inputs used in measuring fair value as follows:
Level
1 : Observable inputs such as quoted prices in active markets;
Level
2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level
3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions
The
Company believes the carrying amount reported in the balance sheet for accrued liabilities, and due to related party, approximate their
fair values because of the short-term nature of these financial instruments.
Income
taxes
The
provision of income taxes is determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”).
Under this method, 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 basis. Deferred tax assets and liabilities
are measured using enacted income tax rates expected to apply to taxable income in the periods in which those temporary differences are
expected to be recovered or settled. Any 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.
ASC
740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements
uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the
financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax
positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of
being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
Net
loss per share
The
Company calculates net loss per share in accordance with ASC Topic 260 “Earnings per share”. Basic loss per share
is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted loss per
share is computed similar to basic loss 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.
Stock-based
compensation
The
Company has not adopted a stock option plan and therefore has not granted any stock options. Accordingly, no stock- based compensation
has been recorded to date.
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 operating decisions. Companies are also
considered to be related if they are subject to common control or common significant influence.
Imputed
Interest
The
Company owned director and related parties some loans which are unsecured, interest-free with no fixed payment term, for working capital
purpose. Imputed interest is considered insignificant.
Recent
Accounting Pronouncements
In
June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”).
The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables.
The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies
will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect
adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is
effective for interim and annual reporting periods beginning after December 15, 2022. The adoption of ASU 2016-13 is not expected to
have a material impact on the Company’s financial position, results of operations, and cash flows.
Other
recent accounting pronouncements issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants,
and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s
present or future financial statements.
NOTE
5 - RELATED PARTY TRANSACTIONS
During
the nine months ended September 30, 2022, the Company’s Chief Executive Officer, Mr. Liang Zhao (appointed on December 3, 2021)
advanced $20,984 to the Company. The amounts are unsecured, are non-interest bearing, and are payable on demand. During the period ended
September 30, 2022, related party imputed interest expense of $321 is considered insignificant.
NOTE
6 - PREPAYMENTS AND DEPOSITS
Prepayments
and deposits consisted of the following:
SCHEDULE OF PREPAYMENTS AND DEPOSITS
| | |
As of
September 30, 2022
(Unaudited) | | |
As of
December 31, 2021
(Audited) | |
| Prepayments and deposits | |
$ | - | | |
$ | 2,039 | |
As
of September 30, 2022, the balance was $0 and as of December 31, 2021, the balance of $2,039 was represented prepayment which mainly
professional fee.
NOTE
7 - REVERSE STOCK SPLIT
Effective
on March 16, 2022, the Company has approved a reverse stock split of the Company’s authorized and issued and outstanding shares
of common stock, par value $0.001 per share, at a ratio of 1-for-50 (the “Reverse Stock Split”). The par value of the Company’s
common stock remained unchanged at $0.001 per shares as a result of the reverse stock split, resulting in a decrease to the aggregate
par value of common stock and corresponding increase to paid-in capital in the Company’s unaudited condensed financial statements,
which was retrospectively applied to all periods presented in the unaudited condensed financial statements. The par value remains unchanged
at $0.001 per share, which resulted in a reclassification of capital from par value to additional paid-in capital in excess of par value.
All share and per share data included within the unaudited condensed financial statements and related footnotes have been adjusted to
account for the effect of the Reverse Stock Split.