FORWARD LOOKING STATEMENTS
Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
Overview of the Business
The Company was incorporated onMarch 14, 2018 under the laws of theState of Nevada . The Company's principal business is the development of internet and PC security software products.
Restatement of Correction of an Error
For the three months endedSeptember 30, 2020 , the Company had sales and had an accounts receivable balance as ofSeptember 30, 2020 with a customer. In preparing the financial statements, management failed to identify and disclose the fact that the customer being a related party to the Company within the definition of ASC 850. The Company also failed to disclose this fact to the auditors of the Company.
Management has identified a material weakness in understanding and knowledge of US GAAP.
This Amendment No. 1 ("Amendment No. 1") on Form 10-Q/A amends the Quarterly Report on Form 10-Q ofShengda Network Technology, Inc. for the three months endedSeptember 30, 2020 , as filed with theSecurities and Exchange Commission ("SEC") onJanuary 11, 2021 (the "Original Filing"). Management concluded that the Original Filing, should be restated due to the missing disclosure of the related party transactions.
The financial statement misstatements reflected in the table below did not impact cash flows from operations, investing, or financing activities in the Company's statements of cash flows for any period previously presented.
Results of Operations
Three Months Ended
The following table summarizes the results of our operations during the three months endedSeptember 30, 2020 and 2019, respectively, and provides information regarding the dollar and percentage increase or (decrease) from the current three-month period to the prior three-month period: Percentage Increase Increase Line Item 9/30/20 9/30/19 (Decrease) (Decrease) (Restated) Revenues$ 5,143,578 $ -$ 5,143,578 n/a Operating expenses 42,447 4,404 38,043 864 % Net income (loss) 959,808 (4,404 ) 964,212 2,189 %
Income (Loss) per share of common stock 0.14 (0.00 ) - n/a We recorded net income of$959,808 for the three months endedSeptember 30, 2020 as compared with a net loss of$4,404 for the three months endedSeptember 30, 2019 due primarily to the commencement of operations in the current quarter.
Liquidity and Capital Resources
As ofSeptember 30, 2020 , we had total assets of$13,042,522 , working capital of$1,171,718 and an accumulated stockholders' equity of$1,247,692 . Our operating activities used$1,456,401 in cash for the three months endedSeptember 30, 2020 , while our operations used$5,159 cash in the three months endedSeptember 30, 2019 . We had$5,143,578 in revenues in the three months endedSeptember 30, 2020 , while we had no revenues in the three months endedSeptember 30, 2019 . Management believes that the Company's cash on hand will be sufficient to fund all Company obligations and commitments for the next twelve months. Historically, we have depended on loans from our principal shareholders and their affiliated companies to augment our working capital as required. There is no guarantee that such funding will be available when required and there can be no assurance that our stockholders, or any of them, will continue making loans or advances to us in the future. 3 AtSeptember 30, 2020 , the Company had loans and advances from a related party shareholder in the aggregate amount of$323,974 , which represents amounts loaned to the Company to pay the Company's expenses of operation. These advances are payable on demand.
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 or capital expenditures or capital resources that is material to an investor in our securities. Seasonality
Our operating results are not affected by seasonality.
Inflation
Our business and operating results are not affected in any material way by inflation.
Critical Accounting Policies
The Securities and Exchange Commission issued Financial Reporting Release No. 60, "Cautionary Advice Regarding Disclosure About Critical Accounting Policies" suggesting that companies provide additional disclosure and commentary on their most critical accounting policies. In Financial Reporting Release No. 60, theSecurities and Exchange Commission has defined the most critical accounting policies as the ones that are most important to the portrayal of a company's financial condition and operating results and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. The nature of our business generally does not call for the preparation or use of estimates. Due to the fact that the Company does not have any operating business, we do not believe that we do not have any such critical accounting policies. 4
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