Form 10-Q Shengda Network Technolo For: Sep 30

SHENGDA
NETWORK TECHNOLOGY INC. AND SUBSIDIARIES

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

SHENGDA
NETWORK TECHNOLOGY INC. AND SUBSIDIARIES

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

SHENGDA
NETWORK TECHNOLOGY INC. AND SUBSIDIARIES

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

SHENGDA
NETWORK TECHNOLOGY INC. AND SUBSIDIARIES

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

SHENGDA
NETWORK TECHNOLOGY INC. AND SUBSIDIARIES

Note
1 – Organization and Operations

Shengda
Network Technology Inc. (formerly known as “Soltrest Inc.” or the “Company”), was incorporated on March
14, 2018 under the laws of the State of Nevada. The Company’s principal business is the development of internet and personal
computer security software products. The Company is engaged in E- Commerce business.

On
April 20, 2020, the Company purchased 10,000 shares of common stock of Peaker International Trade Group Limited (“Peaker”)
for a total consideration of $1,330. These shares comprised of 100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the then issued and outstanding shares of common stock
of Peaker. Peaker was formed in 2018 in Hongkong.

On
May 15, 2020, Peaker set up a Company Zhejiang Jingmai Electronic Commerce Ltd., in China of which, Peaker is the sole shareholder.

Risk
and Uncertainty Concerning COVID-19 Pandemic

In
December 2019, an outbreak of a novel strain of coronavirus (COVID-19). On March 11, 2020, the World Health Organization characterized
COVID-19 as a pandemic. The Company is currently monitoring the outbreak of COVID-19 and the related business and travel restrictions
and changes to behavior intended to reduce its spread. While the Company’s operations are principally located outside the
United States, we utilize various consultants located in the United States, we participate in a global supply chain, and the existence
of a worldwide pandemic, the fear associated with COVID-19, or any, pandemic, and the reactions of governments around the world
in response to COVID-19, or any, pandemic, to regulate the flow of labor and products and impede the travel of personnel, may
impact our ability to conduct normal business operations, which could adversely affect our results of operations and liquidity.
Disruptions to our supply chain and business operations, or to our suppliers’ or customers’ supply chains and business
operations, could include disruptions from the closure of supplier and manufacturer facilities, interruptions in the supply of
raw materials and components, personnel absences, or restrictions on the shipment of our or our suppliers’ or customers’
products, any of which could have adverse ripple effects on our manufacturing output and delivery schedule. Any of these uncertainties
could have a material adverse effect on our business, financial condition or results of operations.

Note
2 – Basis of Presentation and Summary of Significant Accounting Policies

Basis
of Presentation

The
unaudited condensed consolidated financial statements included herein have been prepared by Shengda Network Technology Inc. and
Subsidiaries, including
its consolidated subsidiaries, the “Company”, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have
been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate
to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on
Form 10-K for the year ended June 30, 2020, filed with the SEC on November 13, 2020.

The
unaudited condensed consolidated financial statements included herein reflect all adjustments (consisting of normal, recurring
adjustments) which are, in the opinion of management, necessary to state fairly the results for the interim periods presented.
The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected
for any subsequent interim period or for the fiscal year.

The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
(1) the reported amounts of assets; (2) liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements; and (3) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from
those estimates

Principle
of Consolidation

The
unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary Peaker
International Trade Group Limited or “Peaker” and Peaker’s wholly owned subsidiary Zhejiang Jingmai Electronic
Commerce Ltd., in China. All significant inter-company accounts and transactions have been eliminated in consolidation.

Concentration
of Credit Risk

Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash deposited with banks. Substantially
all of the Company’s cash is held in bank accounts in the PRC and is not protected by FDIC insurance or any other similar
insurance.

The
Company’s bank account in the United States is protected by FDIC insurance. As of September 30, 2020 and June 30, 2020,
the Company’s bank account in the United States had no balances exceeding FDIC insurance of $250,000.

The
Company’s bank account in PRC is protected by FSD insurance. As of September 30, 2020 and June 30, 2020, the Company’s
bank account in PRC had $9,218,024 and $4,269,349, respectively, exceeding FSD insurance of RMB 500,000 as of September
30, 2020.

Major
Customer

The
Company has one major customer that accounted for 70{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of revenues totaling $3,616,204 for the three months ended September 30,
2020.

Major
Vendor

The
Company has one major vendor that accounted for 100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of cost of sales totaling $4,156,281 for the three months ended September
30, 2020.

Cash
Equivalents

The
Company considers all highly liquid debt instruments and other short-term investments with maturities of three months or less,
when purchased, to be cash equivalents.

Revenue
Recognition

The
Company recognizes revenues when control of the promised goods or services is transferred to the customer, in an amount that reflects
the consideration the Company expects to be entitled to in exchange for those goods or services. In that determination, under
ASC 606, the Company follows a five-step model that includes: (1) determination of whether a contract, an agreement between two
or more parties that creates legally enforceable rights and obligations, exists; (2) identification of the performance obligations
in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations
in the contract; and (5) recognition of revenue when (or as) the performance obligation is satisfied.

Fair
Value Measurements

The
Company has established a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used
to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest
level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be
used to measure fair value:

Our
other current financial assets and current financial liabilities have fair values that approximate their carrying values.

Leases

The
Company determines if an arrangement is a lease or contains a lease at inception. Operating lease right-of-use assets and lease
liabilities are recognized at commencement based on the present value of lease payments over the lease term. As the implicit rate
is typically not readily determinable in the Company’s lease agreements, the Company uses its incremental borrowing rate
as of the lease commencement date to determine the present value of the lease payments. The incremental borrowing rate is based
on the Company’s specific rate of interest to borrow on a collateralized basis, over a similar term and in a similar economic
environment as the lease. Lease expense is recognized on a straight-line basis over the lease term. Leases with an initial term
of 12 months or less are not recognized on the balance sheet; the Company recognizes lease expense for these leases on a straight-line
basis over the lease term. Additionally, the Company accounts for lease and non-lease components as a single lease component for
its identified asset classes. As of September 30, 2020, the Company doesn’t have any finance lease.

Commitment
and Contingencies

None

Income
Tax

Income
tax returns are filed in federal, state, local and foreign jurisdictions as applicable. Provisions for current income tax liabilities
are calculated and accrued on income and expense amounts expected to be included in the income tax returns for the current year.
Income taxes reported in earnings also include deferred income tax provisions and provisions for uncertain tax positions.

Deferred
income tax assets and liabilities are computed on differences between the financial statement bases and tax bases of assets and
liabilities at the enacted tax rates. Changes in deferred income tax assets and liabilities associated with components of other
comprehensive income are charged or credited directly to other comprehensive income. Otherwise, changes in deferred income tax
assets and liabilities are included as a component of income tax expense. The effect on deferred income tax assets and liabilities
attributable to changes in enacted tax rates are charged or credited to income tax expense in the period of enactment. Valuation
allowances are established for certain deferred tax assets when realization is less than more likely than not.

Liabilities
are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions,
in our judgment, do not meet a more-likely-than-not threshold based on the technical merits of the positions. Additionally, liabilities
may be established for uncertain tax positions when, in our judgment, the more-likely-than-not threshold is met, but the position
does not rise to the level of highly certain based upon the technical merits of the position. Estimated interest and penalties
related to uncertain tax positions are included as a component of income tax expense.

Currency
Translation

The
assets and liabilities of the Company’s subsidiaries outside the U.S. are translated into U.S. dollars at the rates of exchange
in effect at the balance sheet dates, primarily from RMB. Income and expense items are translated at the average exchange rates
prevailing during the period. Gains and losses resulting from currency transactions are recognized currently in income and those
resulting from translation of consolidated financial statements are included in accumulated other comprehensive income (loss).

NOTE
3 – Recent Accounting Pronouncements

In
December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes.” ASU 2019-12 eliminates
certain exceptions within ASC 740, “Income Taxes,” and clarifies certain aspects of ASC 740 to promote consistency
among reporting entities. ASU 2019-12 is effective for interim and annual reporting periods beginning after December 15, 2020,
with early adoption permitted. Most amendments within the standard are required to be applied on a prospective basis, while certain
amendments must be applied on a retrospective or modified retrospective basis. The Company is evaluating the impact that adoption
of ASU 2019-12 will have on its consolidated financial statements.

Note
4 – Accounts Payable

As
of September 30, 2020 and June 30, 2020, accounts payable amounted to $1,146,174 and $47,085, respectively. Accounts payable mainly
comprise of professional fees.

Note
5 – Leases

The
Company has an operating lease for the rental of office space. Rent expense for the operating lease for the three months ended
September 30, 2020 and 2019, was $1,627 and $0, respectively. As of September 30, 2020, the Company has prepaid rent up until
December 10, 2020 in the amount of $1,283.

Note
6 – Advances and Deposits

Advances
and deposits amounted to $10,506,725 and $4,274,500, as of September 30, 2020 and June 30, 2020, respectively, of which $304,000
and $302,000 pertains to a related party (See Note 9).

As
of September 30, 2020, the advances and deposits comprise of the proceeds from the sale of 7,049,945 common stock at the
sale price range from $0.06 to $2 per share, to 436 unrelated and 1 related parties (See Note 9).Due to nature
of these agreements, the proceeds are reported as advances and deposits under current liabilities.

Note
7 – Other Payable

As
of September 30, 2020 and June 30, 2020, other payable amounted to $81,316 and $24,391, respectively. Other Payable as of June
30, 2020 includes $1,330 payable to related party (See Note 9). In September 2020, $1,330 payable to related party has been repaid.

Note
8 – Stockholders’ Equity

Shares
Authorized

On
March 30, 2020, the Company filed a Certificate of Amendment with the State of Nevada, increasing the number of authorized shares
to 1,020,000,000 par value $0.001; comprising of 1,000,000,000 common stock and 20,000,000 preferred stock.

Common
Stock

On
March 14, 2018 the Company exchanged 5,000,000 shares of common stock to the former President in return of her services valued
at $5,000.

Pursuant
to a Form S-1 Registration Statement, in June, 2020, the Company sold 1,960,000 shares of Common Stock, par value of $0.001 per
share, for the total aggregate proceeds of $19,600. As a result of all common stock issuances, the total issued and outstanding
shares of common stock were 6,960,000 as of September 30, 2020 and June 30, 2020.

Note
9 – Related Party Transactions

Related
parties with whom the Company had transactions are:

On
June 16, 2020, the Company issued 300,000 shares of common stock to a related party (the Company’s CEO’s father) at
$1.00 per share which was subsequently cancelled on June 30, 2020. The consideration of $300,000 is recorded as advances and deposits
under current liabilities in the consolidated balance sheets. (Note 6)

On
June 20, 2020, the Company issued 10,000,000 shares of common stock to HangJin Chin, the Company’s CEO at $0.0002
per share which were subsequently cancelled on June 30, 2020. The consideration of $2,000 is recorded as advances and deposits
under current liabilities in the consolidated balance sheets. (Note 6)

On
July 1, 2020, the Company received a deposit of $2,000 from a related party Youcheng Chen. This deposit is recorded as advances
and deposits under current liabilities. (Note 6)

Loan
from related party represent the advances to the Company by former President and Director in the amount of $19,974 as of September
30, 2020 and June 30, 2020, respectively. The loan is unsecured, non-interest bearing and due on demand. The Company has not recorded
any imputed interest expense for the three months ended September 30, 2020 and 2019.

Note
10 – Subsequent Events

In
accordance with ASC 855-10, the Company has analyzed its operations subsequent to September 30, 2020 to the date these consolidated
financial statements were available to be issued and has determined that there were no significant subsequent events or transactions
that would require recognition or disclosure in the consolidated financial statements.

On
November 2, 2020, the Company issued 7,049,945 shares of common stock at the sale price range from $0.06 to $2 per share, to 436
unrelated and 1 related parties.

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 on March 14, 2018 under the laws of the State of Nevada. The Company’s principal business is the
development of internet and PC security software products.

Results
of Operations

Three
Months Ended September 30, 2020 Compared to September 30, 2019

The
following table summarizes the results of our operations during the three months ended September 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:

We
recorded net income of $959,808 for the three months ended September 30, 2020 as compared with a net loss of $4,404 for the three
months ended September 30, 2019 due primarily to the commencement of operations in the current quarter.

Liquidity
and Capital Resources

As
of September 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 ended September 30, 2020, while our
operations used $5,159 cash in the three months ended September 30, 2019. We had $5,143,578 in revenues in the three months ended
September 30, 2020, while we had no revenues in the three months ended September 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.

At
September 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, the Securities 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.

As
a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information
required by this Item.

Evaluation
of Disclosure Controls and Procedures

Under
the supervision and with the participation of our management, including our principal executive officer and principal financial
officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and
Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of September 30, 2020. Based
on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls
and procedures are not effective to ensure that information required to be disclosed by us in the reports we file or submit under
the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange
Commission’s rules and forms and that our disclosure and controls are not designed to ensure that information required to
be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management,
including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate
to allow timely decisions regarding required disclosure.

The
matters involving internal controls and procedures that our management considered to be material weaknesses under the standards
of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee, resulting in ineffective oversight
in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent
with control objectives; (3) ineffective controls over period end financial disclosure and reporting processes and (4) lack of
timely communications with vendors and proper accrual of expenses.

Management
believes that the material weaknesses set forth in items (2), (3) and (4) above did not have an effect on our financial results.
However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on
our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and
procedures, which could result in a material misstatement in our financial statements in future periods.

Changes
in Internal Control Over Financial Reporting

There
were no changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal
controls over financial reporting that occurred during the three months ended September 30, 2020 that has materially affected,
or is reasonably likely to materially affect, our internal control over financial reporting.

Management
is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties.
As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding,
or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending
or that have been threatened against us or our properties.

No
report required.

No
report required.

No
report required.

No
report required.

SIGNATURES

Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of Beijing, China on January 11, 2021.

In
accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons
in the capacities and on the dates stated.

EXHIBIT
31.1

CERTIFICATION
OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302

OF
THE SARBANES-OXLEY ACT OF 2002

I,
HangJin Chin, certify that:

EXHIBIT
31.2

CERTIFICATION

I,
HangJin Chin, certify that:

EXHIBIT
32.1

CERTIFICATIONS
PURSUANT TO

SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002

(18
U.S.C. SECTION 1350)

Pursuant
to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States
Code), the undersigned officer of Shengda Network Technology, Inc., a Nevada corporation (the “Company”), does hereby
certify, to such officer’s knowledge, that:

The
quarterly report on Form 10-Q for the period ended September 30, 2020 (the “Form 10-Q”) of the Company fully complies
with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form
10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

A
signed original of this written statement required by Section 906 has been provided to SHENGDA NETWORK TECHNOLOGY, INC. and will
be retained by SHENGDA NETWORK TECHNOLOGY, INC. and furnished to the Securities and Exchange Commission or its staff upon request.