Zhanling International Reports Net Loss of $5.97M, Seeks Additional Capital to Fund Operations

Zhanling International Ltd, a development-stage company incorporated in Nevada, reported its financial results for the three months ended August 31, 2024. The company continues to focus on mergers and acquisitions within large consumption platforms in China but has yet to generate any revenue since its inception on July 16, 2009.

For the reporting period, Zhanling International recorded a net loss of $5,970,000, which represents an increase from the net loss of $5,450,000 for the same period in 2023. Operating expenses rose to $5,970,000, up from $5,450,000 in the prior year, reflecting a 9.54% increase primarily due to professional fees associated with audit and Edgar services. The company reported no revenues for both the current and previous fiscal periods.

Cash used in operating activities decreased to $7,996,000 in the three months ended August 31, 2024, compared to $10,664,000 in the same period in 2023. This reduction was attributed to advances from related parties, which amounted to $7,996,000 in the current period, down from $10,664,000 in the previous year. Net cash provided by financing activities also decreased to $7,996,000 from $10,664,000, primarily due to loans advanced by former director Mr. YongQing Liu.

As of August 31, 2024, Zhanling International reported total stockholders’ deficit of $(14,344,000), a significant increase from $(8,374,000) as of May 31, 2024. The accumulated deficit rose to $(396,180,000) from $(390,210,000) in the same timeframe. The company’s current liabilities exceeded current assets by $3,006,000, indicating ongoing financial challenges.

Management has indicated plans to seek additional capital through private placements of common stock or further loans from directors, as the company lacks sufficient cash to fund operational expenses beyond the next 12 months. The independent registered public accounting firm has raised substantial doubt about the company’s ability to continue as a going concern without raising additional capital.

In terms of corporate governance, Zhanling International has undergone several management changes, with YongQing Liu appointed as the new President, CEO, and Chairman of the Board on March 28, 2024. The company has also identified material weaknesses in its internal controls over financial reporting, specifically inadequate segregation of duties, which could lead to potential misstatements in financial statements.