ZLME's Net Loss Widens to $8K Amidst Significant Equity Conversion

TL;DR

**ZLME is a highly speculative development-stage company with widening losses and a going concern warning, making it a risky bet for any investor.**

AI Summary

Zhanling International Ltd (ZLME) reported a net loss of $8,126 for the three months ended August 31, 2025, an increase from the $5,970 net loss in the same period of 2024. General and administrative expenses rose to $8,126 in Q3 2025 from $5,970 in Q3 2024. The company's total assets increased significantly to $1,050 as of August 31, 2025, from $166 as of May 31, 2025, primarily due to an increase in prepayments. Total liabilities decreased to $23,729 from $48,397, driven by a reduction in 'due to related parties' from $38,285 to $15,653 and 'other payables and accrued liabilities' from $9,122 to $3,813. The company converted $33,678 of payables into equity during the quarter, leading to a substantial increase in common stock shares outstanding from 73,200 to 3,441,000 and additional paid-in capital from $381,763 to $412,073. Despite these changes, ZLME continues to operate with a significant accumulated deficit of $438,193 and a stockholders' deficit of $22,679, raising substantial doubt about its ability to continue as a going concern.

Why It Matters

For investors, ZLME's persistent net losses and accumulated deficit of $438,193 signal significant financial instability, making it a high-risk investment. The substantial conversion of payables to equity, increasing shares outstanding from 73,200 to 3,441,000, indicates a dilutive strategy to manage debt, which could negatively impact existing shareholders. The company's 'development-stage' status and lack of clear operational revenue streams, coupled with frequent changes in control and management, suggest a highly speculative venture. Competitively, ZLME's inability to generate revenue or profit puts it far behind established players, and its going concern warning highlights a precarious market position.

Risk Assessment

Risk Level: high — The company incurred a net loss of $8,126 and a net operating cash outflow of $14,319 for the three months ended August 31, 2025. ZLME also has an accumulated deficit of $438,193 and a stockholders' deficit of $22,679 as of August 31, 2025, indicating severe financial distress and raising substantial doubt about its ability to continue as a going concern.

Analyst Insight

Investors should exercise extreme caution and consider avoiding ZLME given its persistent losses, significant accumulated deficit, and explicit 'going concern' warning. The recent large-scale conversion of payables to equity, while reducing liabilities, has massively diluted existing shares, and without a clear revenue-generating business, future prospects remain highly uncertain.

Financial Highlights

total Assets

$1,050

total Debt

$23,729

net Income

-$8,126

Key Numbers

• $8,126 — Net Loss (for the three months ended August 31, 2025, increased from $5,970 in 2024)
• $14,319 — Net Cash Used in Operation (for the three months ended August 31, 2025, increased from $7,996 in 2024)
• $438,193 — Accumulated Deficit (as of August 31, 2025, indicating significant historical losses)
• $22,679 — Stockholders' Deficit (as of August 31, 2025, improved from $48,231 as of May 31, 2025)
• 3,441,000 — Common Stock Shares Outstanding (as of August 31, 2025, a substantial increase from 73,200 as of May 31, 2025)
• $33,678 — Conversion of Payables to Equity (during the three months ended August 31, 2025)
• $1,050 — Total Assets (as of August 31, 2025, increased from $166 as of May 31, 2025)
• $23,729 — Total Liabilities (as of August 31, 2025, decreased from $48,397 as of May 31, 2025)

Key Players & Entities

• Zhanling International Ltd (company) — registrant
• Nevada (regulator) — state of incorporation
• Tan Sri Barry (person) — former President, CEO, Treasurer, Secretary, and Chairman of the Board of Directors
• Mr. Leung Chi Ping (person) — former President, CEO, CFO, and Chairman of the Board of Directors
• Mr. Liang Zhao (person) — former President, CEO, CFO, and Chairman of the Board of Directors
• Ms. NingNing Xu (person) — former President, CEO, CFO, and Chairman of the Board of Directors
• YongQing Liu (person) — current Chief Executive Officer, President, and Chairman of the Board of Directors
• ZhenSheng Li (person) — current Chief Financial Officer and Director
• Adventure Air Race Company Limited (company) — target for a terminated acquisition
• Shanghai Capital Resource Limited (company) — major shareholder

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The company reported a net loss of $8,126 for the three months ended August 31, 2025, and a significant accumulated deficit of $438,193. This, coupled with a stockholders' deficit of $22,679, raises substantial doubt about Zhanling International Ltd's ability to continue as a going concern.
• Increased Operating Expenses [medium — financial]: General and administrative expenses increased to $8,126 in Q3 2025 from $5,970 in Q3 2024. This rise in operational costs contributed to the widening net loss.
• Dilution from Equity Conversion [medium — financial]: The conversion of $33,678 of payables into equity resulted in a substantial increase in common stock shares outstanding from 73,200 to 3,441,000. This significant dilution could negatively impact existing shareholders.
• Dependence on Related Party Transactions [medium — financial]: A significant reduction in 'due to related parties' from $38,285 to $15,653 was a primary driver for the decrease in total liabilities. The company's reliance on related party financing or obligations warrants scrutiny.
• Asset Growth Driven by Prepayments [low — operational]: Total assets increased significantly to $1,050 from $166, primarily due to an increase in prepayments. The nature and recoverability of these prepayments are key considerations.

Industry Context

Zhanling International Ltd operates in a sector that often requires significant capital investment and faces competitive pressures. The company's current financial distress, marked by increasing losses and a going concern warning, suggests it is struggling to gain market traction or manage its operational costs effectively within its industry.

Regulatory Implications

The company's financial condition, particularly the doubt about its ability to continue as a going concern, may attract scrutiny from regulatory bodies. Failure to address these issues could lead to delisting or further regulatory actions.

What Investors Should Do

1. Monitor the company's ability to secure additional funding or improve operational efficiency to address the going concern issue.
2. Analyze the nature and recoverability of the significant increase in prepayments, which drove asset growth.
3. Evaluate the impact of substantial share dilution on future earnings per share and shareholder value.
4. Seek clarity on the company's strategy to reduce operating expenses and achieve profitability.

Key Dates

• 2025-08-31: End of Q3 2025 — Reporting period for the 10-Q, showing increased net loss and significant balance sheet changes including asset growth and liability reduction through equity conversion.
• 2025-05-31: End of Q2 2025 — Prior period balance sheet data, showing lower total assets ($166) and higher total liabilities ($48,397) compared to August 31, 2025.

Glossary

Accumulated Deficit

The cumulative net losses of a company that have not been offset by net income or other gains. (Indicates significant historical unprofitability for Zhanling International Ltd, standing at $438,193 as of August 31, 2025.)

Stockholders' Deficit

Occurs when a company's total liabilities exceed its total assets, resulting in a negative net worth for shareholders. (Zhanling International Ltd has a stockholders' deficit of $22,679 as of August 31, 2025, though it improved from the previous quarter.)

Prepayments

Expenses paid in advance of the period in which they are used or consumed. (The primary driver for the significant increase in Zhanling International Ltd's total assets, from $166 to $1,050.)

Due to Related Parties

Amounts owed by the company to its related parties, such as parent companies, subsidiaries, or affiliated entities. (A substantial reduction in this liability ($38,285 to $15,653) contributed to the overall decrease in Zhanling International Ltd's total liabilities.)

Additional Paid-in Capital

The amount of capital contributed by investors in excess of the par value of the stock. (Increased from $381,763 to $412,073 due to the conversion of payables to equity.)

Year-Over-Year Comparison

Compared to the prior period (May 31, 2025), Zhanling International Ltd has seen a significant increase in total assets to $1,050, driven by prepayments, and a substantial decrease in total liabilities to $23,729, largely due to payables conversion. However, the net loss widened to $8,126 for the quarter ended August 31, 2025, and general and administrative expenses rose, exacerbating the going concern uncertainty.

Filing Documents

• form10-q.htm (10-Q) — 323KB
• ex31-1.htm (EX-31.1) — 12KB
• ex32-1.htm (EX-32.1) — 6KB
• 0001493152-25-017888.txt ( ) — 1803KB
• zlme-20250831.xsd (EX-101.SCH) — 17KB
• zlme-20250831_cal.xml (EX-101.CAL) — 18KB
• zlme-20250831_def.xml (EX-101.DEF) — 53KB
• zlme-20250831_lab.xml (EX-101.LAB) — 127KB
• zlme-20250831_pre.xml (EX-101.PRE) — 100KB
• form10-q_htm.xml (XML) — 161KB

Financial Information

Part I. Financial Information 4 Item 1.

Financial Statements

Financial Statements 4 Condensed Balance Sheets as of August 31, 2025 (Unaudited) and May 31, 2025 4 Condensed Statements of Operations (Unaudited) - Three months ended August 31, 2025 and 2024 5 Condensed Statements of Stockholders' Deficit (Unaudited) - Three months ended August 31, 2025 and 2024 6 Condensed Statements of Cash Flows (Unaudited) - Three months ended August 31, 2025 and 2024 7 Notes to Condensed Financial Statements (Unaudited) - Three months ended August 31, 2025 and 2024 8-12 Item 2.

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

Management's Discussion and Analysis of Financial Condition and Results of Operations 13 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 15 Item 4.

Controls and Procedures

Controls and Procedures 15

Other Information

Part II. Other Information 16 Item 1.

Legal Proceedings

Legal Proceedings 16 Item 1A.

Risk Factors

Risk Factors 16 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 16 Item 3. Defaults Upon Senior Securities 16 Item 4. Mine Safety Disclosures 16 Item 5. Other Information 16 Item 6. Exhibits 17

Signatures

Signatures 18 2 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q of Zhanling International Ltd, a Nevada corporation (the "Company"), contains "forward-looking

forward-looking statements by terminology such as "may", "will", "should", "could", "expects",

forward-looking statements by terminology such as "may", "will", "should", "could", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of such terms and other comparable terminology. These forward-looking expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Our management has included projections and estimates in this Form 10-Q, which are based primarily on management's experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. 3 PART I. FINANCIAL INFORMATION ITEM 1. CONDENSED FINANCIAL STATEMENTS. ZHANLING INTERNATIONAL LIMITED CONDENSED BALANCE SHEETS AS OF AUGUST 31, 2025 AND MAY 31, 2025 (Expressed in U.S. Dollars) August 31, 2025 -$- May 31, 2025 -$- (Unaudited) (Audited) ASSET Current asset Prepayments 1,050 166 Total current asset 1,050 166 TOTAL ASSET 1,050 166 LIABILITIES AND STOCKHOLDERS' DEFICI

financial statements

financial statements. Recently issued ASUs by the FASB, except for the ones mentioned above, are not expect

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