SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
| | |
| (Mark One) |
| ☒ | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the fiscal year ended September 30, 2024 |
| | |
| ☐ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from ____________________ to _____________________ |
Commission File No. 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) |
Registrant’s telephone number, including area code: (604) 232-3968
| Securities registered pursuant to Section 12(b) of the Act: |
| None |
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 |
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☐
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
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 requirement for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☒ No ☐
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12(b)-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the common voting stock held by non-affiliates of the Registrant as of the last business day for the Registrants most recently completed third fiscal quarter was approximately $13,395,460.
As of September 30, 2024, there were 88,711,657 shares of common stock, par value $0.001 per share issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980). Not Applicable
Table of Contents
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (the “Report”), including, without limitation, statements under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our ability to consummate any acquisition or other business combination and any other statements that are not statements of current or historical facts. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to:
| ● | The ability to provide digital transformation consulting services to small businesses in British Columbia. |
| ● | The ability to promote our products and services that we expect to market; |
| ● | our ability to retain skilled professional employees; |
| ● | our ability to continue as a going concern; |
| ● | our future PRE-IPO financing plans and ability to be profitable. |
| ● | 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. |
The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Our financial statements are stated in United States dollars ($US) and are prepared in accordance with United States Generally Accepted Accounting Principles.
In this annual report, unless otherwise specified, all references to “common stock” refer to the common shares in our capital stock.
As used in this annual report, the terms “we,” “us,” “our,” “Summit” and “Summit Networks” mean Summit Networks Inc, unless the context clearly indicates otherwise.
PART I
ITEM 1. BUSINESS
Corporate Background and General Business Overview
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, 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.
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 on May 8, 2020 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.
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 Mrs. Chaoxia Huang, par value $ 0.15 per share for $100,000.05 to be used as operating capital.
On March 27, 2024, the company issued 625,000 shares of common stock to Mrs. Chaoying Huang, for $100,000 to be used as operating capital.
On April 8, 2024 Summit Networks, Inc. (“SNTW”) entered into a stock purchase agreement with the shareholders of 1103001 B.C. Ltd., dba St. Mega Enterprises, a Canadian corporation, located in British Columbia Canada , (“Mega”). The transaction was consummated on May 31, 2024, and SNTW acquired all the outstanding common stock of Mega. Due to this transaction, Mega became a wholly owned subsidiary of SNTW. The shareholders of Mega received 20,000,000 shares of the common stock of SNTW. Subsequently, on October 11, 2024 the parties agreed to terminate the transaction and they entered into a Reverse Merger Agreement, whereby the Mega transaction was rescinded and all previous actions in support of the transaction were reversed and the transaction was terminated.
On April 9, 2024, the company issued 200,000 shares of common stock to Ms. Luo Qun, par value $0.13 per share in exchange for $26,000 of consulting services.
On July 13, 2024, the company issued 30,000 shares of common stock to Mrs. He Chen at a price of $0.20 per share as consideration for providing IT-related services for a period of two years and 50,000 shares of common stock at a price of $0.20 per share to Mr. Xuezhi Ma for consideration for providing consulting services for a period of two years.
On December 12th, 2024, 20,000,000 shares of our common stock were returned to the Company’s share pool.
Until the expiration of the project contract with FET on December 31, 2024, the Company’s contract with FET will not be renewed as the product specifications do not meet local market requirements.
On October 14th, 2024, the Company’s Board of Directors resolved to approve the senior team’s project plan for year 2025-2026, agreeing on the plan for new entrepreneurial project, consisting of a plan to establish a new team of IT professionals. At this time the incentive plan was also agreed upon.
ITEM 1A. RISK FACTORS
Not applicable to a smaller reporting company.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2. PROPERTIES
Our principal executive offices are located at #3010-8888 Odlin Cresent, Richmond, British Columbia, Canada V6X 3Z8.
ITEM 3. LEGAL PROCEEDINGS
We are not currently involved in any material legal proceedings nor are we aware of any pending or potential legal actions.
ITEM 4. MINE SAFETY DISCLOSURE
Not applicable.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
Our common stock is quoted on OTCQB operated by the OTC Markets under the symbol “SNTW.” The OTCQB application was approved on 31st Aug 2023. There has been very limited trading in our shares of common stock to date. We plan to work to create an active market in our shares.
As of September 30, 2024, there were 88,711,657 shares of common stock issued and outstanding and held by a total of 58 shareholders of record.
Dividends
We have never paid nor declared any dividends on our common stock. We plan to retain any future earnings for use in our business. Any decision as to the future payment of dividends will depend on our earnings and financial position and such other facts as the Board of Directors deem relevant.
Securities Authorized for Issuance Under Equity Compensation Plans
We have not adopted an equity compensation plan and no securities have been authorized or reserved for issuance under any equity compensation plan.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
ITEM 6. SELECTED FINANCIAL DATA
Not Applicable to a smaller reporting company.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OR RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward- looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Report. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
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.
Cautionary Statement for the Purposes of the Safe Harbor under the Private Securities Litigation Reform Act of 1995
The statements contained in this Annual Report on Form 10-K may contain “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. All statements other than statements of historical fact included in this Report are forward-looking statements made in good faith by us and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. When used in this Report, or any other of our documents or oral presentations, the words “anticipate”, “believe”, “estimate”, “expect”, “forecast”, “goal”, “intend”, “objective”, “plan”, “projection”, “seek”, “strategy” or similar words are intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements relating to our strategy, operations, markets, services, and other factors all of which are difficult to predict and many of which are beyond our control. Accordingly, while we believe these forward-looking statements to be reasonable, there can be no assurance that they will approximate actual experience or that the expectations derived from them will be realized. Further, we undertake no obligation to update or revise any of our forward-looking statements whether as a result of new information, future events or otherwise.
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 year ended September 30, 2024, we generated $1,900 in passive revenues. We generated $1,900 in passive revenues during the period ending September 30, 2023. Our operating expenses for the same periods were comprised of general and administrative expenses of $230,550 and $165,362, respectively, resulting in a net loss of $216,150 the year ended September 30, 2024 compared to a net income of $23,778 the year ended September 30, 2023. Our general and administrative expenses consisted of mainly professional fees for the year ended September 30, 2024, and the year ended September 30, 2023. 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 September 30, 2024 were $2,679,796.
As of September 30, 2024, the Company had 88,711,657 shares of common stock issued and outstanding.
As of September 30, 2024 and 2023, there were total debts of $579,000 and $579,000 respectively, due to related parties. These debts are interest free, unsecured and payable on demand.
Liquidity and Capital Resources
As for the year ended September 30, 2024 and 2023, the Company had a negative cash flow of $103,288 and positive cash flow of $140,785, respectively. The Company’s principal sources and uses of funds were as follows:
For the year ended September 30, 2024, the Company used $345,288 in cash for operations as compared to $59,305 for the year ended September 30, 2023, respectively. Such increase was primarily due to higher net loss in the year ended September 30, 2024. The net cash provided by financing activities for the year ended September 30, 2024 was $242,000 as compared to$200,090 for the year ended September 30, 2023. Such increase was a result of capital raised from the issuance of common shares.
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. As of September 30, 2024, we had $46,326 in cash and the outstanding liabilities were $592,416. As of September 30, 2023 we had cash of $149,614 and there were outstanding liabilities of $702,847. Stockholders’ equity/(deficits) were $2,087,380 and $538,470, for September 30, 2024 and 2023, respectively. These factors raise concerns 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 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of Summit Networks Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Summit Networks Inc (the “Company”) as of September 30, 2024 and 2023, the related consolidated statements of operations, stockholders’ deficit and cash flows for each of the two years ended September 30, 2024 and 2023, and the related notes to the consolidated financial statements and schedule (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2024 and the results of its operations and its cash flows for the two years ended September 30, 2024 and 2023 in conformity with accounting principles generally accepted in the United States of America.
Substantial doubt about the Company’s ability to continue as a going concern
As discussed in Note 2 to the financial statements the accompanying consolidated financial statements and notes have been prepared assuming that the Company will continue as a going concern. The Company had limited operations during the period from July 8, 2014 (date of inception) to September 30, 2024 resulting in accumulated deficit of $1,410,627 and has not generated any revenue. There is no guarantee that Company will generate revenue and net income in the future. As of September 30, 2024, the Company had a working capital surplus of $2,087,380. The cash used in operating activities were $345,288. These factors, among others, raise substantial doubt regarding the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2 to the accompanying financial statements. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/ Assentsure PAC
We have served as the Company’s auditor since 2021.
Singapore
December 23, 2024
PCAOB ID No: 6783
SUMMIT NETWORKS INC.
CONSOLIDATED BALANCE SHEETS
(Audited)
| | | | | | | | | |
| | | September 30, | |
| | | 2024 | | | 2023 | |
| ASSETS | | | | | | |
| Current Assets: | | | | | | | | |
| Cash & cash equivalents | | $ | 46,326 | | | $ | 149,614 | |
| Deposits | | | 2,602,218 | | | | 2,218 | |
| Prepayments | | | 31,252 | | | | 12,545 | |
| Total Current Assets | | | 2,679,796 | | | | 164,377 | |
| | | | | | | | | |
| Non-Current Asset: | | | | | | | | |
| Plant & equipment, net | | | - | | | | - | |
| Total Non-Current Asset | | | - | | | | - | |
| | | | | | | | | |
| TOTAL ASSETS | | $ | 2,679,796 | | | $ | 164,377 | |
| | | | | | | | | |
| LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | | | | |
| Current Liabilities: | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 13,416 | | | $ | 123,847 | |
| Accounts payable - related parties | | | - | | | | - | |
| Due to related parties | | | 579,000 | | | | 579,000 | |
| Total Current Liabilities | | | 592,416 | | | | 702,847 | |
| | | | | | | | | |
| Commitments and Contingencies | | | - | | | | - | |
| | | | | | | | | |
| Stockholders’ Equity (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; 88,711,657 and 67,139,990 issued and outstanding as of September 30, 2024 and 2023, respectively. | | | 88,712 | | | | 67,140 | |
| Additional paid-in capital | | | 3,409,295 | | | | 588,867 | |
| Accumulated deficit | | | (1,410,627 | ) | | | (1,194,477 | ) |
| Total Stockholders’ Equity/ (Deficit) | | | 2,087,380 | | | | (538,470 | ) |
| TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY | | $ | 2,679,796 | | | $ | 164,377 | |
The accompanying notes are an integral part of these consolidated financial statements.
SUMMIT NETWORKS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Audited)
| | | | | | | | | |
| | | For years ended, | |
| | | September 30, | |
| | | 2024 | | | 2023 | |
| Revenue | | $ | - | | | $ | - | |
| Cost of sales | | | | | | | | |
| Operating Expenses: | | | | | | | | |
| General and administrative expenses | | | 230,550 | | | | 165,362 | |
| | | | | | | | | |
| Loss from operations | | $ | (230,550 | ) | | $ | (165,362 | ) |
| | | | | | | | | |
| Other Income(expenses): | | | | | | | | |
| Rental income | | | - | | | | 1,250 | |
| Interest income | | | 1,900 | | | | 1,900 | |
| Miscellaneous income | | | - | | | | 3,324 | |
| Gain on debt forgiveness | | | - | | | | 182,666 | |
| Reversal of over-accrued salary | | | 12,500 | | | | - | |
| | | | | | | | | |
| Net (Loss) Income | | $ | (216,150 | ) | | $ | 23,778 | |
| | | | | | | | | |
| Basic Net Income (loss) per share | | $ | 0.00 | | | $ | 0.00 | |
| Diluted Net Income (loss) per share | | $ | 0.00 | | | $ | 0.00 | |
| | | | | | | | | |
| Basic weighted average number of common shares outstanding | | | 88,711,657 | | | | 67,139,990 | |
| | | | | | | | | |
| Diluted weighted average number of common shares outstanding | | | 88,711,657 | | | | 67,139,990 | |
The accompanying notes are an integral part of these consolidated financial statements.
SUMMIT NETWORKS INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Audited)
| | | | | | | | | | | | | | | | | | | | | |
| | | Common Stock | | | | | | | | | | |
| | | Shares | | | Amount | | | Additional
Paid-in
Capital | | | Accumulated
Deficit | | | Total | |
| Balance, September 30, 2022 | | | 62,049,990 | | | $ | 62,050 | | | | 393,867 | | | $ | (1,218,255 | ) | | $ | (762,338 | ) |
| Net income | | | - | | | | - | | | | - | | | | 23,778 | | | | 23,778 | |
| Issuance of new shares | | | 5,090,000 | | | | 5,090 | | | | 195,000 | | | | - | | | | 200,090 | |
| Balance, September 30, 2023 | | | 67,139,990 | | | $ | 67,140 | | | | 588,867 | | | $ | (1,194,477 | ) | | $ | (538,470 | ) |
| Net loss | | | - | | | | - | | | | - | | | | (216,150) | | | | (216,150) | |
| Issuance of new shares | | | 21,571,667 | | | | 21,572 | | | | 2,820,428 | | | | - | | | | 2,842,000 | |
| Balance, September 30, 2024 | | | 88,711,657 | | | $ | 88,712 | | | | 3,409,295 | | | $ | (1,410,627 | ) | | $ | 2,087,380 | |
The accompanying notes are an integral part of these consolidated financial statements.
SUMMIT NETWORKS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Audited)
| | | | | | | | | |
| | | For years ended | |
| | | September 30, | |
| | | 2024 | | | 2023 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | |
| Net (loss)/income | | $ | (216,150) | | | $ | 23,778 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
| Gain on debt forgiveness | | | - | | | | (182,666 | ) |
| Changes in operating assets and liabilities: | | | | | | | | |
| Prepayments | | | (18,707 | ) | | | (12,545 | ) |
| Deposits | | | - | | | | (2,218 | ) |
| Accounts payable and accrued expenses | | | (110,431 | ) | | | 114,346 | |
| Net cash used in operating activities | | | (345,288 | ) | | | (59,305 | ) |
| | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITY: | | | | | | | | |
| Proceed from share issuance | | $ | 242,000 | | | $ | 200,090 | |
| Net cash generated from financing activity | | | 242,000 | | | | 200,090 | |
| | | | | | | | | |
| Net (decrease)/increase in cash and cash equivalents | | | (103,288 | ) | | | 140,785 | |
| Cash and cash equivalents at beginning of year | | | 149,614 | | | | 8,829 | |
| Cash and cash equivalents at end of year | | $ | 46,326 | | | $ | 149,614 | |
| | | | | | | | | |
| 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.
SUMMIT NETWORKS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2024
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 May 8, 2020, Sumnet (Canada) Inc. (“Sumnet (Canada)”) was incorporated in Canada. Sumnet (Canada) issued all its ordinary shares to the Company on May 8, 2020, 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. See NOTE 4. EXECUTION AND TERMINATION OF VIE AGREEMENTS.
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 January 20, 2021, the Company changed its fiscal year-end from July 31 to September 30.
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 Mrs. Chaoxia Huang, par value $ 0.15 per share for $100,000.05 as the operating capital.
On March 27, 2024, the company issued 625,000 shares of common stock to Mrs. Chaoying Huang, for $100,000 as the operating capital.
On April 8, 2024 Summit Networks, Inc. (“SNTW”) entered into a stock purchase agreement with the shareholders of 1103001 B.C. Ltd., dba St. Mega Enterprises, a Canadian corporation, located in British Columbia Canada , (“Mega”). The transaction was consummated on May 31, 2024 and SNTW acquired all the outstanding common stock of Mega. Due to this transaction, Mega has become a wholly owned subsidiary of SNTW. The shareholders of Mega received 20,000,000 shares of the common stock of SNTW. Subsequently, on October 11, 2024 the parties agreed to terminate the transaction and they entered into a Reverse Merger Agreement, whereby the Mega transaction was rescinded and all previous actions in support of the transaction were reversed and the transaction was terminated.
On October 16th 2024, the company publicly disclosed all documents of the reverse merger, including Stephen Kok Koon Tan’s resignation from the board of directors.
On December 12th 2024 , 20 millions stock certificates were returned to the company’s share pool.”
On April 9, 2024, the company issued 200,000 shares of common stock to Ms. Luo Qun, par value $0.13 per share in exchange for $26,000 of consulting services.
On July 13, 2024, the company issued 30,000 shares of common stock to Mrs. He Chen at a price of $0.20 per share as consideration for providing IT-related services for a period of two years and 50,000 shares of common stock at a price of $0.20 per share to Mr. Xuezhi Ma for consideration for providing consulting services for a period of two years.
On September 30, 2024, the Company changed its fiscal year-end from September 30 to December 31.
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 during the period from July 8, 2014 (date of inception) to September 30, 2024, resulting in accumulated deficit of $1,410,627 and has not generated any revenue. There is no guarantee that Company will generate revenue and net income in the future.
At September 30, 2024, the Company had a working capital surplus of $2,087,380. 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 relied on 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 September 30, 2024 and 2023, cash equivalents amounted to $46,326 and $149,614 respectively.
Plant and Equipment, net
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.
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.
Deferred Tax
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 provide 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 carry forwards. 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.
Income Tax
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 would 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 September 30, 2024 and 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.
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.
NOTE 5. PLANT & EQUIPMENT, NET
Plant & equipment, net consisted of the following:
| Schedule of plant & equipment, net | | | | | | | | |
| | | September 30,
2024 | | | September 30,
2023 | |
| Office furniture | | $ | 5,536 | | | $ | 5,536 | |
| | | | 5,536 | | | | 5,536 | |
| Less: Accumulated depreciation | | | (5,536 | ) | | | (5,536 | ) |
| Plant & equipment, net | | | - | | | | - | |
Depreciation expense for the year ended September 30, 2024 and 2023 were 0 $Nil and 0 $Nil, respectively.
NOTE 6. DEPOSITS
| Schedule of deposits | | | | | | | | |
| | | September 30,
2024 | | | September 30,
2023 | |
| Rental deposit | | | 2,218 | | | | 2,218 | |
| Shares application money* | | | 2,600,000 | | | | - | |
| | | $ | 2,602,218 | | | $ | 2,218 | |
| * | This represents share application money to acquire St. Mega Enterprises’ shares by issuing 20 million shares of the company. |
NOTE 7. RELATED PARTY BALANCES AND TRANSACTIONS
Related Party Balances
(i) Accounts payable – related party
On September 30, 2024 and 2023, accounts payable to related party of $Nil 0 and $Nil 0 respectively, pertains to payable in respect to the office facility rental paid by Zenox Enterprises Inc. (“Zenox Enterprises”) on behalf of the Company. Zenox Enterprises is a Canadian company controlled by the Company’s former CFO. The amounts which were unsecured, non-interest bearing with no specific repayment terms.
(ii) Amounts due to related parties:
As of September 30, 2024 and 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 8. 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.
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 Mrs. Chaoxia Huang, par value $ 0.15 per share for $100,000.05 as the operating capital.
On March 27, 2024, the company issued 625,000 shares of common stock to Mrs. Chaoying Huang, for $100,000 as the operating capital.
On April 8, 2024 Summit Networks, Inc. (“SNTW”) entered into a stock purchase agreement with the shareholders of 1103001 B.C. Ltd., dba St. Mega Enterprises, a Canadian corporation, located in British Columbia Canada , (“Mega”). The transaction was consummated on May 31, 2024 and SNTW acquired all the outstanding common stock of Mega. Due to this transaction, Mega has become a wholly owned subsidiary of SNTW. The shareholders of Mega received 20,000,000 shares of the common stock of SNTW. Subsequently, on October 11, 2024 the parties agreed to terminate the transaction and they entered into a Reverse Merger Agreement, whereby the Mega transaction was rescinded and all previous actions in support of the transaction were reversed and the transaction was terminated.
On October 16, 2024, the company publicly disclosed all documents of the reverse merger, including Stephen Kok Koon Tan’s resignation from the board of directors.
On December 12, 2024, 20 million stock certificates were returned to the company’s share pool.”
On April 9, 2024, the company issued 200,000 shares of common stock to Ms. Luo Qun, par value $0.13 per share in exchange for $26,000 of consulting services.
On July 13, 2024, the company issued 30,000 shares of common stock to Mrs. He Chen at a price of $0.20 per share as consideration for providing IT-related services for a period of two years and 50,000 shares of common stock at a price of $0.20 per share to Mr. Xuezhi Ma for consideration for providing consulting services for a period of two years.
As of September 30, 2024, the Company had 88,711,657 shares of common stock issued and outstanding.
NOTE 9. INCOME TAXES
The reconciliation of income tax expense/(benefit) at the U.S. statutory rate of 21% for the year ended September 30, 2024, September 30, 2023 to the Company’s effective tax rate is as follows:
| Schedule of reconciliation of income tax benefit | | | | | | | | |
| | | September 30, 2024 | | | September 30, 2023 | |
| US statutory rate | | | 21 | % | | | 21 | % |
| Income tax (benefit)/expense at statutory rate | | $ | (45,392) | | | $ | 4,993 | |
| Change in valuation allowance | | | 45,392 | | | | (4,993) | |
| Income tax expense | | $ | - | | | $ | - | |
NOTE 10. SUBSEQUENT EVENTS
In accordance with FASB ASC 855-10 Subsequent Events, the Company has analyzed its operations subsequent to September 30, 2024, 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:
Summit Networks Inc. is undertaking a comprehensive digital transformation initiative designed to enhance operational efficiency, financial transparency, and market competitiveness through technological advancements. This initiative aligns with SEC and OTC Markets regulatory requirements for compliance and disclosure, reflecting the Company’s commitment to transparency and stakeholder responsibility.
The primary objectives of this transformation include:
| 1. | Streamlining Operations: |
| o | Digitizing and automating key workflows to reduce manual processes, improve efficiency, and lower operational costs. |
| o | The transformation supports enhanced internal controls and transparency, consistent with SEC standards. |
| 2. | Enhancing Financial Transparency: |
| o | Integrating the financial systems of the parent and subsidiary companies to enable real-time data sharing and the accurate generation of consolidated financial statements. |
| o | Adopting best practices under International Financial Reporting Standards (IFRS) and the Sarbanes-Oxley Act (SOX) to ensure high-quality financial reporting and provide a clear picture of the Company’s financial health to shareholders and investors. |
| 3. | Improving Compliance and Disclosure Quality: |
| o | Ensuring the project design adheres to SEC requirements for document management and secure access to sensitive financial and operational records. |
| o | Timely updates on project progress and outcomes will be included in quarterly reports and subsequent disclosures to provide comprehensive insight into the Company’s strategic direction. |
| 4. | Driving Profitability through Entrepreneurial Projects: |
| o | The transformation includes the development of entrepreneurial digital projects, such as enterprise financial digitalization consulting services and document management tools, aimed at diversifying revenue streams and enhancing profitability. |
| o | By December 31, 2024, the first phase of the entrepreneurial project is expected to be successfully delivered, setting the stage for further optimization to meet broader market demands. |
| 5. | Fostering Long-Term Growth: |
| o | The digital transformation creates conditions for deeper collaboration between the parent and subsidiary companies in the digital economy. |
| o | Leveraging these results, the Company is positioned to attract institutional investors by demonstrating sustained profitability from entrepreneurial projects, paving the way for Pre-IPO financing and potential uplisting initiatives. |
To execute this initiative, the Company has contracted its wholly owned subsidiary, Sumnet Networks (Canada) Inc., to deliver critical components, including financial software design, document digitization, and process automation. By December 31, 2024, the first phase of the project is expected to be completed successfully, laying the foundation for improved operational efficiency and showcasing the Company’s ability to adapt to the evolving modern business landscape.
This digital transformation highlights Summit Networks Inc.’s strategic focus on compliance, operational excellence, and competitiveness, underscoring its long-term commitment to improving profitability and creating value for shareholders.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
At the end of the period covered by this Annual Report on Form 10-K, an evaluation was carried out under the supervision of and with the participation of our management, including the Principal Executive Officer and the Principal Financial Officer of the effectiveness of the design and operations of our disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and the Principal Financial Officer have concluded that our disclosure controls and procedures were not effective in ensuring that: (i) information required to be disclosed by the Company in reports that it files or submits to the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in applicable rules and forms and (ii) material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.
Disclosure controls and procedures were not effective due primarily to a material weakness in the segregation of duties in the Company’s internal control of financial reporting as discussed below.
Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company (including its consolidated subsidiaries) and all related information appearing in our Annual Report on Form 10-K. 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 accounting principles generally accepted in the United States of America.
Management conducted an evaluation of the design and operation of our internal control over financial reporting as of the end of the period covered by this report, based on the criteria in a framework developed by the Company’s management pursuant to and in compliance with the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, walkthroughs of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, management has concluded that our internal control over financial reporting was not effective, because management identified a material weakness in the Company’s internal control over financial reporting related to the segregation of duties as described below.
While the Company does adhere to internal controls and processes that were designed and implemented based on the COSO report, it is difficult with a very limited staff to maintain appropriate segregation of duties in the initiating and recording of transactions, thereby creating a segregation of duties weakness. Due to: (i) the significance of segregation of duties to the preparation of reliable financial statements; (ii) the significance of potential misstatement that could have resulted due to the deficient controls; and (iii) the absence of sufficient other mitigating controls, we determined that this control deficiency resulted in more than a remote likelihood that a material misstatement or lack of disclosure within the annual or interim financial statements may not be prevented or detected.
Management’s Remediation Initiatives.
Management has evaluated, and continues to evaluate, avenues for mitigating our internal controls weaknesses, but mitigating controls to completely mitigate internal control weaknesses have been deemed to be impractical and prohibitively costly, due to the size of our organization at the current time. Management expects to continue to use reasonable care in following and seeking improvements to effective internal control processes that have been and continue to be in use at the Company.
Changes in internal controls over financial reporting
There were no changes in the Company’s internal control over financial reporting that occurred prior to the Company’s most recent financial quarter that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
The following table sets forth information regarding directors and officers. All directors hold office until the next annual meeting of stockholders or until their successors have been elected or qualified.
| Name | | Age | | Positions | | Date First Appointed | | Date Resigned |
| Shuhua Liu | | 52 | | Chair of the Board | | June 17, 2019 | | April 10, 2024 (resigned CEO) |
| Xian Nan (Delia) Zheng | | 43 | | Director, Secretary | | March 22, 2023 | | |
| You Yang (John) Cheng | | 68 | | Independent Director | | March 22, 2023 | | |
| Jianhua James Shu | | 73 | | Independent Director | | March 22, 2023 | | |
| Weiwei (Ricky) Jiang | | 33 | | Independent Director | | March 22, 2023 | | |
| Chao Long (Charlene) Huang | | 72 | | Chief Executive Officer | | October17, 2024 | | |
| Xuezhi (George) Ma | | 56 | | Chief Financial Officer | | October17, 2024 | | |
Ms. Liu, aged 52, has served as a Director of the Company since June 2019. She has also been serving as the President of Hebei Jingxin Group, a construction company in China, since 2015. Prior to that, Ms. Liu served as the Executive Deputy General Manager of Hebei Jingxin Group from 2010 to 2015. In 2016, Ms. Liu received her Bachelor of Arts degree from National Open University located in China. She received an MBA degree from Business School Netherlands of Tsinghua University of Beijing in 2017.
Ms. Zheng, aged 43, was employed from 2014 through 2018 as General Manager for Shanghai Timeless International Co., Ltd (“STIT”) in Shanghai, China. STIT is in the business of arranging transportation for freight and cargo. In 2008 Ms. Zheng earned a Master’s degree in Business Administration at Northwestern Polytechnic University, USA, district located in Vancouver, Canada.
Mr. Cheng, aged 68, is a Managing Director of Asia Region for Global Steering System, LLC (“ARGSS’), which is located in Changshu, China. Mr. Cheng has held this position since October 2012. ARGSS is in the business of designing and manufacturing steering systems for various types of vehicles. In 1982, Mr. Cheng earned a bachelor’s degree in Science & Technology from the University of Shanghai, Located in Shanghai, China.
Mr. Shu, aged 73, was employed as a Head of Operations at Cara Operations Limited (“COL”) from May 1990 to June 2016. COL is in the airline services business. In 1985 Mr. Shu earned a degree in industrial Economics Management at Shanghai University of Finance and Economics, located in Shanghai, China.
Mr. Jiang, aged 33, is a Manager at Purewest Property Investment Ltd. (“PPI”) located in Vancouver, British Columbia, Canada. He has held this position since September 2022, PPI is in the real estate development business. In 2009, Mr. Jiang earned a Bachelor of Commerce degree at the University of British Columbia.
Mrs. Huang - aged 72. Ms. Huang graduated from Huangshan Forestry College in Anhui, China with a degree in Forestry in 1975 and from Nanjing Normal University in Nanjing, China with a degree in Chinese Language and Literature in 1991. From 1975 to1980, Ms. Huang worked as Forestry Technical Engineer for the Qingyang Forestry Bureau in Anhui, China. From 1980 to 1993, Ms. Huang worked for Meishan Metallurgical Newspaper Company. From 1993 to 2017, Ms. Huang worked as the Chief Executive Officer for various companies, including Shanghai Timeless International Transportation Co., Ltd., Hongkong Magic Dragon Shipping & Enterprises, Co., Ltd. and Shanghai Starlink Transportation and Forwarding Co. Ltd. From 2019 to 2021, Ms. Huang has previously served as the Chief Financial Officer for the Company.
Mr. Ma – aged 56. Mr. Ma graduated from Langara College in Vancouver, British Columbia, Canada with a degree in International Business in May 2000. Mr. Ma also attended the Canadian Securities Institute in Vancouver, British Columbia from March 1999 to May 2001 and received a certificate as a futures and options broker. Mr. Ma attended Tongji University in Shanghai, China from 1987 to 1991 and received a bachelor’s degree in mechanical engineering. From 1991 to 1995 he worked for the Beijing Railway Bureau as a mechanical engineer, designing and installing new equipment and supervising and administering a technical team. From 2001 through 2006 he worked for HCL Derivatives, Inc. in Vancouver, Canada where he provided instant market information to clients and executed their orders; explained fundamental, technical analysis and trading psychology to clients, developed and maintained a customer database and source for new customers, and designed a detailed trading and investment plan. From 2008 to 2010 he worked for Swifttrade, Inc. in Vancouver, Canada as a day trader. From 2011 to the present he works as a family fund manager and oversees risk management for private funds.
Director Independence
Our Company has three independent directors and all directors also serve as members of the audit committee.
The Board and Committees
Our Company does not have separately designated standing audit, nominating or compensation committees in place. Instead, our Company’s entire board of directors has served, and currently serves, in that capacity. This is due to the small number of executive officers involved with the Company and the fact that the Company operates with few employees. Our board of directors will continue to evaluate, from time to time, whether a separately designated standing audit committee should be put in place. We do not have an audit committee financial expert as that term is defined by the rules promulgated by the Securities and Exchange Commission. We currently have limited working capital and limited revenues. Management does not believe that is would be in our best interests at this time to retain independent directors to sit on an audit, nominating or compensation committee. If we are able to generate sufficient revenues in the future, then we will likely seek out and retain independent directors and form an audit committee.
We have not adopted practices or polices regarding employee, officer and director hedging in accordance with Item 407(i) of Regulation S-K.
Legal Proceedings
To the knowledge of our management, there are no material proceedings to which any of our directors, officers or affiliates are a party adverse to our Company.
Code of Ethics
We intend at some point to adopt a code of ethics that applies to our officers, directors and employees. We will file copies of our code of ethics in a current report on Form 8-K. You will be able to review these documents by accessing our public filings at the SEC’s website at www.sec.gov. In addition, a copy of the code of ethics will be provided without charge upon request to us. We intend to disclose any amendments to or waivers of certain provisions of our code of ethics in a current report on Form 8-K.
ITEM 11. EXECUTIVE COMPENSATION
There are no current employment agreements between us and our directors and officers. We have never paid any compensation to any of our executive officers or directors. Our current officers have agreed to work with no remuneration until such time as we receive sufficient revenues necessary to provide management salaries. At this time, we cannot accurately estimate when sufficient revenues will occur that will allow us to begin paying this compensation, or what the amount of the compensation will be. The Company currently has no annuity, pension or retirement benefits proposed to be paid to our officers, directors or employees.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information regarding the beneficial ownership of our common stock as of the date of this Annual Report by (i) each stockholder known by us to be the beneficial owner of more than 5% of our common stock, (ii) by each director and executive officer of our company and (iii) by all executive officers and directors of our company as a group. Each of the persons named in the table has sole voting and investment power with respect to common stock beneficially owned.
| Name and Address | | Number
of Shares
Owned | | | Percentage
of Shares
Owned(1) | |
| 5% Stockholders | | | | | | | | |
| Hass Group, Inc.(2) | | | 42,753,504 | | | | 48.17 | % |
| Super Dragon Shipping & Trading Limited | | | 4,328,496 | | | | 4.88 | % |
| Future Era Tech Ltd. | | | 5,000,000 | | | | 5.64 | % |
| Stephen Kok Koon Tan(3) | | | 20,000,000 | | | | 22.54 | % |
Directors and Officers: | | | | | | | | |
| Zenox Enterprises Inc.(4) | | | 1,809,665 | | | | 2.04 | % |
| Shijian Zheng | | | 1,097,933 | | | | 1.24 | % |
| Chao Long Huang(5) | | | 71,732 | | | | 0.08 | % |
| Royal Stanley Consulting (Canada) Inc.(6) | | | 1,034,174 | | | | 1.17 | % |
| You Yang Cheng(8) | | | 30,000 | | | | 0.03 | % |
| Weiwei(Ricky) Jiang(10) | | | 30,000 | | | | 0.03 | % |
| Jianhua James Shu(9) | | | 30,000 | | | | 0.03 | % |
| Xuezhi (George)Ma(7) | | | 50,000 | | | | 0.06 | % |
| Directors and Officers as a Group | | | 4,153,504 | | | | 4.68 | % |
(1) Applicable percentage ownership is based on 88,711,657 shares outstanding on September 30, 2024. There are no options, warrants, rights, conversion privilege or similar right to acquire the common stock of the Company outstanding as of September 30, 2023.
(2) Juli Enterprises Inc., a company organized under the laws of British Virgin Islands, owns 100% of the shares of the Hass Group, Inc. Shuhua Liu, a citizen of people’s Republic of China is the owner and serves as the sole director of Juli Enterprises Inc. As such, both Juli Enterprises Inc. and Shuhua Liu may be deemed to be the beneficial owners of all shares of common stock held by the Hass Group, Inc.
(3) As St. Mega’s merger was aborted, the share issued to Mr. Stephen Kok Koon Tan should be cancelled. Mr. Stephen Kok Koon Tan’s shares were cancelled on 12th Dec 2024.
(4) The Chief Executive Officer, Chao Long(Charlene) Huang, owns 1,809,665 shares of common stock in the company under her name,Zenox Enterprises Inc,
(5) The Chief Executive Officer, Chao Long(Charlene) Huang, shares a joint ownership interest in the brokerage account with her spouse, Shijian Zheng including 1,097,933 shares of common stock.
(6) The Secretary, Xian Nan (Delia)Zheng, owns shares of common stock in the company under her name, Royal Stanely Consulting (Canada) Inc.
(7) The Chief Financial Officer, Xuezhi(George)Ma, owns 50,000 shares of common stock.
(8) Independent Director, You yang Cheng, owns 30,000 shares of common stock.
(9) Independent Director, Jianhua James Shu, owns 30,000 shares of common stock.
(10) Independent Director, Weiwei (Ricky) Jiang, owns 30,000 shares of common stock.
ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
On June 15, 2020, the Company entered into loan agreements with Shuhua Liu and Chiu Kin Wong for an aggregate loan of $400,000 with no interest. Shuhua Liu agreed to lend $280,000 to the Company and Chiu Kin Wong agreed to lend $120,000, both for the Company’s working capital in connection with going public, merger and acquisition. The Company agrees to repay the loan balance after its first financing activity. Shuhua Liu is the Chief Executive Officer and Director of the Company. Chiu Kin Wong is a shareholder of the Company. The amount of principal outstanding as of November 13, 2020, is $400,000. No principal or interest has been paid by the Company during the fiscal year ended September 30, 2021. During the period ended September 30, 2021, the company has borrowed $179,000 from its shareholders to pay certain expenses.
Starting from October 2022, the company started to raise a modest amount of money, which ensured the normal operation of the company. By September 30, 2024, $400,000 was successfully financed.
Advances From related parties
Our Board of Directors is responsible to approve all related parties transactions. We have not adopted written policies and procedures specifically for related person transactions.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table presents the fees for professional audit services for the audit of our annual financial statements for the fiscal years ended September 30, 2024 and September 30, 2023 and fees billed for other services during those periods.
| | | September 30, 2024 | | | September 30, 2023 | |
| Audit fees (1) | | $ | 21,778 | | | $ | 18,500 | |
| Audit-related fees | | | 15,000 | | | | - | |
| Total Fees | | $ | 36,778 | | | $ | 18,500 | |
(1) Audit fees consist of audit and review services, consent and review of documents filed with the SEC. For fiscal years ended September 30, 2024, and September 30, 2023, respectively.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this Report:
(1) Financial Statements
(2) Exhibits
We hereby file as part of this Report the exhibits listed in the attached Exhibit Index. Exhibits which are incorporated herein by reference can be retrieved from SEC website at www.sec.gov.
ITEM 16. FORM 10-K SUMMARY
Not applicable.
EXHIBIT INDEX
*Filed herewith
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
By:/s/Chao Long Huang
Chao Long Huang
Chief Executive Officer
By:/s/ Xuezhi Ma
Xuezhi Ma
Chief Financial Officer
Date: December 23, 2024
