Zhanling International Navigates China Risks, Governance Shifts in 2025 10-K

TL;DR

**ZLME is a high-risk shell company with no operations, facing significant Chinese regulatory headwinds and a history of executive churn, making it a speculative gamble at best.**

AI Summary

Zhanling International Ltd. (ZLME) filed its 10-K for the fiscal year ended May 31, 2025, revealing a company with no reported revenue or net income, indicating a pre-operational or shell status. The filing highlights significant corporate governance changes, including the appointment of Mr. Leung Chi Ping as President, CEO, CFO, and Chairman on May 4, 2021, followed by his resignation on December 3, 2021. Control of 92.54% of common stock was acquired by Mr. Leung and others on May 4, 2021, with subsequent shifts on December 3, 2021, where Mr. Liang Zhao acquired 19% and Xiangchen Li acquired 33.51%. A proposed acquisition of Adventure Air Race Company Limited (AARC) for 84,000,000 newly issued shares, representing 95.82% of ZLME's outstanding common stock, was terminated on September 30, 2021. The company's strategic outlook involves acquiring PRC operating entities, with funds raised by ZLME to be transferred to a Hong Kong entity and then to PRC subsidiaries. Significant risks include potential Chinese government intervention and the implications of the Holding Foreign Companies Accountable Act (HFCAA), despite the current U.S.-based auditor, Enrome LLP, not being subject to PCAOB inspection limitations as of the report date.

Why It Matters

This 10-K reveals Zhanling International (ZLME) as a pre-operational entity with no current business, making it a highly speculative investment. The frequent changes in executive leadership and significant shifts in stock control, such as Mr. Leung Chi Ping's brief tenure and the subsequent acquisitions by Mr. Liang Zhao and Xiangchen Li, signal instability and a lack of clear strategic direction for investors. Furthermore, the company's stated intent to acquire PRC operating entities exposes it to substantial regulatory and political risks from the Chinese government, which could significantly impact its future operations and the value of its common stock, especially given the ongoing scrutiny under the Holding Foreign Companies Accountable Act. This competitive context suggests ZLME faces an uphill battle to establish a viable business model and attract long-term capital.

Risk Assessment

Risk Level: high — The risk level is high due to ZLME's pre-operational status, with no reported revenue or net income, and its stated plan to acquire PRC operating entities. The filing explicitly highlights 'various legal and operational risks and uncertainties relating to our subsidiaries' operations in China,' including potential Chinese government intervention and the implications of the Holding Foreign Companies Accountable Act (HFCAA), which could lead to delisting if the PCAOB cannot inspect its auditor for two or three consecutive years. The company's aggregate market value of common stock held by non-affiliates is stated as '$0', indicating extreme illiquidity and lack of public interest.

Analyst Insight

Investors should exercise extreme caution and avoid ZLME given its pre-operational status, lack of revenue, and significant exposure to Chinese regulatory and delisting risks. This filing provides no evidence of a viable business model or stable management, suggesting capital would be better deployed in companies with established operations and clearer growth prospects.

Financial Highlights

revenue

$0

total Assets

$0

total Debt

$0

net Income

$0

eps

$0.00

cash Position

$0

revenue Growth

N/A

Executive Compensation

Key Numbers

• $0 — Aggregate market value of common stock held by non-affiliates (Indicates lack of public trading and liquidity as of May 31, 2025)
• 73,200 — Shares of Common Stock outstanding (As of May 31, 2025)
• 92.54% — Percentage of common stock acquired by Mr. Leung and others (On May 4, 2021, indicating a change of control)
• 19% — Percentage of common stock acquired by Mr. Liang Zhao (On December 3, 2021)
• 33.51% — Percentage of common stock acquired by Xiangchen Li (On December 3, 2021)
• 84,000,000 — Newly issued shares for AARC acquisition (Representing 95.82% of ZLME's outstanding shares, but the agreement was terminated)
• May 31, 2025 — Fiscal year end date (Reporting period for this 10-K)

Key Players & Entities

• Zhanling International Ltd. (company) — registrant issuer
• ZLME (company) — ticker symbol
• Mr. Leung Chi Ping (person) — former President, CEO, CFO, and Chairman
• Mr. Liang Zhao (person) — acquired 19% of common stock on December 3, 2021
• Xiangchen Li (person) — acquired 33.51% of common stock on December 3, 2021
• Adventure Air Race Company Limited (company) — target of terminated acquisition
• Enrome LLP (company) — current auditor
• Public Company Accounting Oversight Board (regulator) — PCAOB
• Chinese government (regulator) — source of significant regulatory risk
• Holding Foreign Companies Accountable Act (regulator) — HFCAA

FAQ

Risk Factors

• Chinese Government Intervention [high — regulatory]: The company's strategy involves acquiring PRC operating entities, which exposes it to potential intervention by the Chinese government. This intervention could impact the company's operations, profitability, and ability to repatriate funds.
• Holding Foreign Companies Accountable Act (HFCAA) [high — regulatory]: Despite having a U.S.-based auditor (Enrome LLP) not currently subject to PCAOB inspection limitations, the company's reliance on PRC operating entities could still subject it to the HFCAA. This act could lead to delisting from U.S. exchanges if audit requirements are not met.
• Pre-operational Status and Lack of Revenue [high — operational]: As of May 31, 2025, Zhanling International Ltd. has no reported revenue or net income. This indicates a pre-operational or shell status, meaning the company has not yet established a viable business model or generated any income.
• Dependence on Future Funding and Fund Transfer Structure [medium — financial]: The company's strategic outlook relies on funds raised to be transferred through a Hong Kong entity to PRC subsidiaries. This complex structure introduces financial risks related to currency conversion, regulatory approvals, and potential delays or losses in fund transfer.
• Termination of AARC Acquisition [medium — legal]: The proposed acquisition of Adventure Air Race Company Limited (AARC) for 84,000,000 newly issued shares was terminated on September 30, 2021. This termination signifies a failure to execute strategic growth initiatives and may indicate challenges in deal structuring or due diligence.
• Significant Corporate Governance Changes [medium — corporate governance]: The company experienced significant corporate governance changes, including the appointment and subsequent resignation of Mr. Leung Chi Ping from key executive and chairman roles within a short period (May 2021 to December 2021). This indicates potential instability in leadership.
• Lack of Public Trading and Liquidity [high — market]: The aggregate market value of common stock held by non-affiliates is $0 as of May 31, 2025. This strongly suggests a lack of public trading and liquidity for the company's shares, making it difficult for investors to buy or sell.

Industry Context

Zhanling International Ltd. appears to be operating in a nascent stage, with a strategy focused on acquiring operating entities in the People's Republic of China (PRC). The broader industry context for such companies often involves navigating complex cross-border regulatory environments, particularly concerning foreign investment and capital repatriation. Companies in this space are increasingly scrutinized under evolving geopolitical and trade relations between the U.S. and China.

Regulatory Implications

The company faces significant regulatory hurdles due to its planned operations in the PRC and its U.S. listing. The Holding Foreign Companies Accountable Act (HFCAA) poses a direct threat of delisting if audit transparency requirements are not met. Furthermore, potential Chinese government intervention in its subsidiaries could impact operations and financial reporting.

What Investors Should Do

1. Monitor regulatory developments concerning HFCAA and U.S.-China trade relations.
2. Seek clarity on the company's strategy for acquiring and integrating PRC operating entities.
3. Evaluate the stability of the company's leadership and ownership structure.
4. Assess the liquidity of the company's stock.

Key Dates

• 2021-05-04: Mr. Leung Chi Ping appointed President, CEO, CFO, and Chairman; Mr. Leung and others acquired 92.54% of common stock. — Indicates a significant change in control and leadership of the company.
• 2021-09-30: Termination of proposed acquisition of Adventure Air Race Company Limited (AARC). — Represents a failed strategic growth initiative, potentially impacting future plans.
• 2021-12-03: Mr. Leung Chi Ping resigned; Mr. Liang Zhao acquired 19% and Xiangchen Li acquired 33.51% of common stock. — Signifies further shifts in control and ownership structure shortly after the initial change.
• 2025-05-31: Fiscal year end date for the 10-K filing. — The reporting period for the financial and operational information presented.

Glossary

10-K

An annual report required by the U.S. Securities and Exchange Commission (SEC) that gives a comprehensive summary of a company's financial performance. (This document provides the detailed financial and operational information for Zhanling International Ltd.)

Pre-operational status

A company that has not yet begun its primary business operations or generated revenue. (Describes Zhanling International Ltd.'s current financial state, with no reported revenue.)

Shell status

A company that has few or no assets or operations, often used for financial transactions or as a vehicle for acquisitions. (Indicates Zhanling International Ltd.'s lack of revenue and operations suggests it might be a shell company.)

Holding Foreign Companies Accountable Act (HFCAA)

A U.S. law that can lead to the delisting of foreign companies from U.S. stock exchanges if they fail to comply with U.S. auditing standards for three consecutive years. (A significant regulatory risk for Zhanling International Ltd. due to its potential operations in China.)

PCAOB

The Public Company Accounting Oversight Board, a non-profit corporation established by Congress to oversee the audits of public companies in order to protect the interests of investors. (The PCAOB's inspection status of auditors is relevant to compliance with the HFCAA.)

Aggregate market value of common stock held by non-affiliates

The total market value of a company's shares held by investors who are not company insiders or major shareholders. (A value of $0 indicates a severe lack of public trading and liquidity for ZLME's stock.)

Year-Over-Year Comparison

As Zhanling International Ltd. is in a pre-operational or shell status, direct year-over-year comparisons of revenue, net income, or margins are not applicable, as the company reported $0 for all these metrics in the current fiscal year ending May 31, 2025. The primary changes from previous periods, as indicated by the 10-K, revolve around significant shifts in corporate governance, executive leadership, and stock ownership, alongside the termination of a key acquisition. New risks related to the HFCAA and potential Chinese government intervention are highlighted, while the lack of public trading liquidity remains a persistent concern.

Key Financial Figures

• $2,500 — chase price was par value or a total of $2,500. The cash received was used as working
• $0.001 — 500,000,000 (the "Increase"), par value $0.001 per share. On May 7, 2021, the Board
• $53,080 — e consideration paid for the Shares was $53,080. The source of the cash consideration f

Filing Documents

• form10-k.htm (10-K) — 567KB
• ex31-1.htm (EX-31.1) — 15KB
• ex31-2.htm (EX-31.2) — 9KB
• ex32-1.htm (EX-32.1) — 6KB
• ex32-2.htm (EX-32.2) — 6KB
• 0001641172-25-025006.txt ( ) — 2217KB
• zlme-20250531.xsd (EX-101.SCH) — 16KB
• zlme-20250531_cal.xml (EX-101.CAL) — 23KB
• zlme-20250531_def.xml (EX-101.DEF) — 39KB
• zlme-20250531_lab.xml (EX-101.LAB) — 168KB
• zlme-20250531_pre.xml (EX-101.PRE) — 133KB
• form10-k_htm.xml (XML) — 135KB

Business

Business 3 Item 1A.

Risk Factors

Risk Factors 5 Item 1B. Unresolved Staff Comments 13 Item 2.

Properties

Properties 13 Item 3.

Legal Proceedings

Legal Proceedings 13 Item 4. Mine Safety Disclosure 13 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 14 Item 6.

Selected Financial Data

Selected Financial Data 15 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 15 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 18 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 18 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 19 Item 9A.

Controls and Procedures

Controls and Procedures 19 Item 9B. Other Information 20 PART III Item 10. Directors, Executive Officers and Corporate Governance 21 Item 11.

Executive Compensation

Executive Compensation 22 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 23 Item 13. Certain Relationships and Related Transactions, and Director Independence 24 Item 14. Principal Accounting Fees and Services 24 PART IV Item 15. Exhibits, Financial Statement Schedules 25

SIGNATURES

SIGNATURES 26 i EXPLANATORY NOTE As used in this annual report, unless the context otherwise requires the terms "we," "us," or "our," "Zhanling" and the "Company,"are references to Zhanling International Limited., a Nevada corporation. Our principal executive offices are located in China and our sole executive officer and director is a resident of and is physically located in and has significant ties to China. We plan to conduct operations in China and to acquire Chinese companies as subsidiaries to carry out our plan of operation, and as a result, the Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and/or the value of our ordinary shares. Recent statements by the Chinese government have indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investments in China based issuers. Any future action by the Chinese government expanding the categories of industries and companies whose foreign securities offerings are subject to government review could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and could cause the value of such securities to significantly decline or be worthless. Recently, the PRC government initiated a series of regulatory actions and made a number of public statements on the regulation of business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using a variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding efforts in anti-monopoly enforcement. We do not believe that we are directly subject to these regulatory actions or statements, as we do not have a varia

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